When Abdullahi Abdi decided to venture into the livestock and meat business in 2021, he realised that most of the entrepreneurs in the sector focused on slaughtered animals (carcasses) with few exporting live animals.
Together with his brother, they founded Najibs Livestock International to tap into this relatively new market.
“Live animal export is a niche market and a very cash-intensive business. We realised that we could support livestock farmers from arid and semi-arid areas (ASALS) farmers more when we buy live animals from them compared to carcasses,” says Mr Abdi, who is the CEO of Najibs.
“We export livestock, both live animals and carcasses, though we specialise more in live animals which we sell to the Middle East through Lamu Port.”
On starting the business, the 30-year-old who studied procurement and supply chain says they raised funds from savings, family members, and friends. As the business grew, they started using local purchase orders (LPOs).
LPOs and aggregation
With the LPOs from their aggregators and buyers overseas, they were guaranteed payments, and also the banks were assured of getting back their repayments.
With a typical shipment costing between $1.3 million (Sh176.9 million) and $1.5 million (Sh204.2 million), Mr Abdi says they managed to raise half of it and with the off-take on the buyer side, they were able to create a revolving fund.
Mr Abdi was a former banker before he quit formal employment. He says he has never harboured any fear of failure or regret.
“You can never be successful when you have fear unless you are involved in illegal business. It takes time, hard work, and determination and if you don’t take risks, you will never know whether you are going to make money or not,” he says, adding that for him, the mentality was," if the business picks up fine, and if it does not, I'll live to try again.”
When they began, they could hardly do 5,000 animals to fill a full vessel with a capacity of 15,000 animals (cows, camels, and sheep).
But two years down the line, they do two shipments at ago, which translates to 30,000 to 40,000 animals per month.
As demand for live animals from Kenya grows, so are their growth plans.
“Our main market is largely to Middle East but we have our eyes set on the European Union and West African markets,” he says.
Although profitable, one of the challenges is sourcing the animals.
With the scattered nature of livestock farmers in Kenya, Mr Abdi says that they have had to build a strong relationship with livestock keepers and aggregators, allocating each farmer and aggregator a specific quota.
They also go for market days to source livestock.
Just like any business, growth comes with bigger challenges. The entrepreneur says the biggest challenge right now is logistics because they source animals from various regions, including neighbouring countries.
“We do not have animal carriers in Kenya, so instead of using double or triple decker, we use one truck carrying only 200 animals and the same truck is used to bring animals for slaughter in Nairobi,” he says.
On lessons learned, the entrepreneur who believes that the future of wealth and employment creation in Kenya in agriculture points to having a strong work ethic.
Most business people, he says, lack work ethic and believe that one can start and grow a business and become rich overnight. You need to build the groundwork and foundation, he says.
“Most importantly, you need to separate the business money from your personal money. Pay yourself a salary then manage yourself with that salary. Do not take money from the business for personal expenditure,” he says.