Clare Namanya & Sebidde Kiryowa
Seyed Mohammad, an Iranian Ugandan investor, came to Uganda from Ethiopia in search of arable land in 1999. He had gone to Ethiopia seven years earlier as a young passionate university graduate to seek better opportunities with savings worth $60,000 (sh155m) from Iran.
In Uganda, he started out by organising the first Iranian exhibition, which has since grown into a showroom, Iran Permanent Trade Centre on Jinja Road, Kampala. But soon, he started seeing more opportunities.
Today, with the help of financing from both abroad and within, he is setting up the first silk production project from which he hopes to reap $60m (sh155b) annually as well as a $40m (sh103b) meat processing plant for export.
He is one of the biggest maize and sunflower growers and has also invested in real estate. He shared his success story.
Who is Seyed Mohammad?
I am an Iranian, born 48 years ago to Kobra, a house wife and Seyed Hesamdina, a university lecturer in Tehran, Iran. I am married with two children. At 24, I graduated with a degree in Islamic Economy from Tohit University and thereafter I went for military training for two years. Back home, military training is compulsory for every man above 18 years.
After that training, I set out to look for a job and got a four-year contractual one with the Government of Iran.
It was a project concerning job creation for the youth. Since unemployment was a big issue during those days, the government started programmes to curb the problem.
When the contract ended, I opted for self-employment.
Starting out in business
In 1988, there was a food crisis in Russia and I saw that as an opportunity. With a sum of $15,000 (about sh38.7m) which I had saved, I stocked 11 small containers with spaghetti and took them to Russia. From each container,
I reaped $60,000 (sh15.5m) profit. This was my breakthrough.
Mohammed Ali on his Malberry plantation for silk worm production. ALL PHOTOs/Lillia Babirye
However, I was forced to look elsewhere for a livelihood because I was not culturally compatible with the Russians. Just when I was still debating on what to do with the money I had made, a friend came up with an idea that we could go to Ethiopia and seek new opportunities there.
Since I always loved Africa, when that idea was broached, I did not hesitate.
While in Ethiopia, we organised the first Iranian exhibition and all we had was 15 containers of plastics. That was in 1992. With proceeds from that exhibition, I started importing and exporting materials such as household items from Iran to Ethiopia. I stayed there for seven years.
Coming to Uganda
I came to this country in 1999 after I read up about it. I might have had Ethiopia at heart, but I was looking for more than the country was offering at the time — the suitable arable land.
After setting my foot here, I realised this was the place I was looking for. The safety and security was unquestionable and the people are hospitable.
Uganda seemed to be teeming with opportunity because of the government’s policy of supporting foreign investors. That would be relevant to Iranian technology in reference to embracing sectors of agriculture like crop cultivation, animal husbandry and fisheries.
Starting the Iran-Uganda Establishments Company Limited
I began by forming the Iran-Uganda Establishments Company Limited, which organised the first Iranian exhibition in Uganda in 1999-2000 with the help of the Uganda National Chamber of Commerce (UNCC).
My aim was to boost trade and investment between the two countries. From home, about 4,000 varieties of goods were bought including tinned foods, household items, construction, agricultural machinery, fertilisers, plastic raw materials and medicine. Ugandans sold over 50,000 handicrafts and agricultural products at that exhibition.
Today, that company is the umbrella company of my subcomponent businesses.
Pars Construction Company
I established this company in 2005 and it is running on the strength of shareholders. We construct estates like the one in Najjera (a Kampala city suburb) and other housing projects. I am currently in negotiations to build 3,000 estate homes in Kampala.
The first of these companies is the Iran Agro-Industrial Group, which I formed upon realising that Uganda had a lot of unexploited resources like fertile soils and favourable climate. I started the company with a motive of making a difference in the agricultural sector in Uganda.
I acquired 10,000 acres (17 square miles) of farm land in Kisozi, Gomba district. On this, I inter-crop beans on 350 acres, sunflower and canola (both oil plants) and soya on 300 acres.
Maize is on 1,000 acres, but next year, I plan to plant 4,000 acres. During the harvest season, I employ 700 temporary workers to harvest 1,500 metric tonnes of maize. I do not export any of it because everything is bought and exhausted by local buyers.
Harvested maize on his Kisozi farm in Gomba district.
I believe that when the Government puts more effort in mechanising agriculture, Uganda alone can produce sufficient maize to feed the whole of Africa. This is because, according to my research, there are 18 million hectares of virgin land for cultivation in Uganda.
However, presently, only six million is in use. Yet, from the production of the six tonnes, which is largely not mechanised, we are able to satisfy local demand and export some. So, imagine the bigger picture — when the available land is optimally utilised.
I hold agriculture close to my heart because comparing it to trade; it is like breast milk, while the other is like dairy milk.
Halal Meat Company
Over time, I came to notice that many abattoirs in Uganda were not up to standard. But also, in Iran, meat is highly valued. While a kilogramme of meat in Uganda costs sh8,000, in Iran it costs $8.75 (sh22,575). I saw an opportunity there.
So, I contacted a meat company in Iran and the Export Development Bank of Iran for financing. We have invested $40m (about sh103b) in a modern abattoir that meets international standard called Halal Meat Company.
We have acquired a 52 acre piece of land, situated 17km out of Kampala on Masaka Road next to St. Lawerence Paris Palais campus at sh700m.
We should be already running it, but the project is stalling due to bureaucracies in the system.
We will have an animal market where traders will come and sell their cattle to us. We will also be slaughtering and packaging meat both for local and international export. We will be slaughtering 200 cows and 1,000 goats daily.
No truck ferrying animals from western Uganda will pass by that place. That will be their ultimate destination. This will help us meet the demand for cows. I am also hoping that the appropriate government bodies and ministries take the cue and start encouraging Ugandans to rear these animals for a better livelihood now that we are providing a ready market at a good price.
Pictured here in his sunflower plantation on the Kisozi Farm in Gomba.
Iran-Uganda trade and investment promotion services
I established this with an aim of giving a service that follows up on Iranian private sector investments in Uganda. This was with the endorsement of the Chamber of Commerce of Iran and the Ugandan Government.
Under this company, I have acquired a 6.4 acre piece of land in Namanve from Uganda Investments Authority.
On this, I want to set up a Kampala trade zone and distribution hub for Iranian products. This will be done by building permanent office space, showrooms and a warehouse. This is to save many East Africans the costs and inconvenience of travelling to Dubai for them.
It will be the biggest park for machinery and tools, fertilisers and seeds. The park will display the latest agro-processing technology and construction materials. All this will be with the participation of the Iranian government.
At the same time, it will also be dealing in helping Ugandans export their commodities and offering transportation services from Mombasa port.
Last year, I bought 100 Boer goats of the Kashagama breed from a friend. Now they are 200 and I am plan to increase the number to 1,000. I am also into cattle rearing, which I hope will eventually increase in number to supply the abattoir.
Like anyone dealing in agriculture, we have to deal with vagaries of nature such as unpredictable weather conditions and the losses that come with that. For example, you can grow different crops expecting rain and it does not happen.
At times, when the crops are ready for harvest and I am in need of sunshine, it rains instead.
Business is stressful. Every process you have to go through to make an investment is stressful – from conceiving an idea to planning, sourcing for financing, acquiring the requisite permits, management and sustaining a business.
Many Ugandans are ignorant about silk production. So, training them is expensive and time-consuming.
The market nowadays is slow, but while this problem is international, business, particularly around here, is not so good at the moment.
The Boer goats on his Kisozi farm
Nevertheless, the Government is cooperative and helpful so there are not as many problems as I would be facing if they were not.
Advice to entrepreneurs
Have a good relationship with your God? This I ask because he is your major support. Ask Him with a sincere heart and you shall receive. There is an Ethiopian saying that ‘A lion cannot be your friend with a stick, but meat.’
The Government should set up entrepreneur development centres or offices in different sects of the economy. These are where people go for advice on projects that they have in mind. This is practised in Iran and it is helping a lot.
Aim at starting businesses that can employ a considerable number of people. It is not good to give one person a job that should be done by 15 people.
Many people worry about capital yet they do not know what they want it for. In this generation, ideas do not come easy, so worry about conceiving your idea first and the money will come later.
People should embrace agriculture. Many continue to look down on it because they seek office jobs yet it is one of the few income-generating activities where money abounds.
It is not good to get into a country with all your money and do things in isolation. Have some local partners.
After our first harvest of silk, I plan to add value. Like many insect species, silkworm pupae are eaten in some cultures. I could cash in on that or let the pupae develop into silkmoths then I can have my own eggs.
I am looking forward to an out grower support system where I will take those willing into a learning process from growing the mulberry plant to harvesting the silk cocoon.
The interior decor at Iran Permanent Traders shop along Jinja rd in Kampala.
I hope to cooperate with vocational schools and universities to train students in this project because I want to see Uganda among the leading countries in silk exportation.
If I can get the Government’s finance guarantee on agricultural equipment, with my connections in the Iranian government, we can achieve mechanisation of agriculture on a larger scale. Farmers with vast lands will acquire farm implements and then pay up at their own pace.
I want to reach a stage in life when money can no longer satisfy me, but rather seeing people who work for me happy. Of the seven billion people in the world, only 350, 000 are in charge of the rest of the population.
So, if I create a livelihood for as few as 20 people, it is a great achievement.
The silk production project
Last year, I dedicated 350 acres of land to breeding silkworms for the production of raw silk for export.
For the pilot project, I intend to import Mulberry silkworm eggs from Japan. These eggs are packed in boxes of 20,000 each and take about 14 days to hatch into larvae, which eat continuously.
After molting, the larvae enters the pupa phase and enclose themselves in a cocoon made up of raw silk produced by their salivary glands.
This cocoon provides a vital layer of protection during the vulnerable, almost motionless pupal state.
It is from this cocoon that we harvest the silk. The cocoon is made from a thread of raw silk 300 to 900 metres long. The fibres are fine and lustrous, about 10 micrometres in diameter.
About 4,420 to 6,630 dry cocoons (roughly 2.5kg) are required to make a kilo of silk yarn. We expect to harvest 50kg of dry cocoon from each box imported; that is about 20kg of silk yarn from each box.
To pull this off, we need construction on a large scale. Each box of 20,000 eggs of silk worms requires 17 square metres of space. All this requires manual labour; which creates job opportunities for people.
Mohammed's apartments in Kira.
Growing mulberry plants
In order to rear the worms, we require mulberry on which they feed.
Currently, of the 10,000 acres, we are utilising 70 acres for the mulberry crop mother garden from which we are getting stem tubers to plant. We are targeting 350 acres of mulberry by 2015. But at optimum utilisation in two years, we will have 1,000 hectares (2471.05 acres) of mulberry.
One hectare of mulberry, which contains 3,000 trees, can feed 30 boxes of silk worm eggs six times a year; that is if we harvest every 45 days. These in turn produce 1,500kg of cocoon.
So, at optimum utilisation, we expect to have three million mulberry trees and employ 5,000 workers because we require five workers to take care of a hectare.
This was my primary inspiration for this project. Besides making money, it will improve the livelihoods of the local people.
The project will cost about $5m (about sh13b) most of which came in from shareholders and returns from other businesses. We did not get any bank financing.
So far, we have planted 1.5 million trees. This, I hope, will increase and promote silk production in Uganda.
I understand that silk production has decreased yet the demand is high and there is ready market.
A metric tonne of silk yarn costs $60,000 on the international market.
If we can hit 1,000 hectares of mulberry, this project will earn this country $60m in forex every year. Imagine that kind of money from such a simple procedure.
I urge Ugandans to take interest in this project because it is a gold mine.