Timi Oke secured the first client for his fledgling Nigerian export trading business through LinkedIn. At the time, in 2012, the Nigerian-born Oke was working a nine-to-five job at a bank in the UK and decided to follow the advice of an import-export trader he had become acquainted with.
“I had always been interested in agriculture and trading from a young age. Even while I was working at the bank, I would research different agricultural products that could be viable for trade,” he says.
The trader told Oke to attend as many trade fairs as he could and recommended a few industry groups on LinkedIn to join.
“For about six to twelve months, I was constantly on these groups, asking questions, eliciting responses and then contacting those individuals directly. Eventually an importer from Mexico asked me if I could supply five containers of dried hibiscus flowers.”
Oke took a career break, not officially quitting just yet, and asked his brother and a good friend to join him in the newly registered company called AgroEknor.
It was a scramble to deliver that first order. The partners crowdfunded and used their own money to raise enough working capital to purchase the hibiscus flowers from middlemen who procured it from small-scale farmers in Nigeria’s northern states.
Oke emphasises the importance of integrity in business. He was upfront with this first client, admitting that the company had not done a deal before.
“What I could assure him of, though, was that he would not face any issues getting his product out of the ports. We had connections at the Nigerian Ports Authority. At the beginning of every business, you always need one person to believe in you. Either your investor or your client,” Oke notes.
The shipment was dispatched. Oke still remembers the day the first payment for 60 tonnes of dried hibiscus was transferred into the company’s account. “It was a celebration. I gave notice at the bank and settled permanently in Nigeria to do this full-time,” he says.
The importance of research
One mistake many entrepreneurs make when trying to start a trading business, says Oke, is not having adequate industry knowledge.
While working at the bank, he read up and learnt everything he could about hibiscus and the industry, not just in Nigeria.
“Hibiscus is not the product I originally wanted to go into. I liked the drink, but did not know that it is a cash crop which is in demand worldwide and that people paid good money for,” he says.
He learnt about the international hibiscus market, the main importing countries and the biggest producers.
“Organic hibiscus is grown in Africa – mainly in Nigeria, Burkina Faso and Sudan. When we started, there were a lot of trade restrictions in Sudan. They were in the middle of a civil war. Essentially there was a global supply gap,” he says.
Oke also knew that the big hibiscus growers in northern Nigeria were unable to get their products out of the country as local traders did not want to deal with the tension and unrest in the area. It was a gap AgroEknor could capitalise on.
“We essentially said: Let’s be brave about this. Let’s go into the north, get it packaged and get it out,” he says.
His investment in getting to know the industry has delivered results.
“Sometimes I feel like a walking hibiscus encyclopaedia, but knowing the product helps. When you can speak about your product and industry with a lot of knowledge, clients are more inclined to trust you with supply contracts.”
Defining target markets
Oke says it was beneficial that the company’s first client was from Mexico.
“I have discussions with newcomers all the time who just want to get products into the EU or US. In the beginning, you cannot target the most sophisticated countries.”
Oke explains that a mistake in a shipment’s documentation or an issue with fumigation, could, in some ports such as the US, lead to the destruction of the entire cargo. A start-up cannot accommodate such losses.
“There are other countries where you can refumigate or reprocess the cargo elsewhere in the harbour, for example, Mexico or China. If you don’t know this and simply aim for the US market first, you are doing yourself a disservice.”
The company was fortunate, says Oke, to grow quite quickly. From 60 tonnes in year one to 120 in year two and 540 tonnes in year three. The growth came from clients in Latvia, Germany and Belgium…