How Victory Farm took full control of fish supply chain

When Joseph Rahman started his aquaculture company, the biggest hurdle was finding employees.

The co-founder of Victory Farms along with his partner decided to create a pipeline of qualified workers for their fish business in Homa Bay County.

“The aquaculture industry was small and couldn’t provide a large talent pool of trained professionals. We had to focus on training first,” he said of the company when it started eight years ago.

Since their business includes fish feed production, fish farming, hatchery, processing, cold chain distribution, and retail, they needed more workers. “The lead was the hardest part,” he says.

They have started a college placement program called Graduate Aquaculture for Learning and Training (GALT) which has seen the graduation of 40 trainees.

Half of them now work for Victory Farms and the training investment has paid off.

“It is the future of aquaculture in East Africa,” says Mr. Reiman, adding that Victory Farms has one of the most efficient hatchery systems run by the Kenyans.

They encountered another hurdle. There was a preexisting notion that Lake Victoria was not suitable for aquaculture (the raising of fish in controlled areas) because it was too cold, shallow and full of sapphires.

“We knew there were challenges associated with geography but we did our own technical work and concluded that Lake Victoria would be suitable for commercial aquaculture. So we took a chance.”

Unlike many startups built by entrepreneurs who have little knowledge about the industry they are venturing into, which is the biggest reason for failure, the Victory Farms co-founder has over 15 years of experience in the aquaculture business in Africa.

“Some grounding in experience can mitigate the risk,” says Reiman, adding, “I bring business skills and bring technical skills to aquaculture and I’m a big believer in a team of two or three. Individual teams can work but it’s hard to get it all in one person.” .

The art of fundraising

Just like most entrepreneurs, raising the first round of capital wasn’t easy. But today, the company has mastered the art of fundraising, receiving billions of shillings from venture capitalists to grow its existence.

This week, Victory Farms received Sh4.7 billion ($35 million) for expansion.

Mr. Rehmann says they were fortunate to have a champion of the aquaculture industry, Hans Den Bieman, founder of Sealand Aquaculture, the world’s largest salmon farm and who has been instrumental in the fundraising effort.

His credibility attracted other investors.

He advises that when you have a vertically integrated business (where the company controls all stages along the supply chain rather than relying on outside suppliers), it is less risky because you control the entire value chain, ensuring quality of products, scalability, and appropriate use of assets.

“Many investors prefer to invest in one piece, either in cold chain, processing or retail, and when you put the whole package together you end up alienating other investors,” he says.

path to success

Over the years, the business has grown from the 100 tons of fish it was producing. In 2022, they produced 7,000 tons and this year 10,000 tons are expected.

“With our latest round of fundraising of $35 million, the plan is to increase production capacity for Kenya to 20,000 tons per year,” he says.

In Rwanda, they are also looking to build a fully vertically integrated unit. We are also exploring investment opportunities in Uganda, Tanzania and Ethiopia over the next few years.

In pursuit of sustainable business practices, he says Victory Farms is focused on becoming the premiere renewable aquaculture platform.

“Kenya has the opportunity to be a world leader in tilapia production, and this fundraising round enables us to put capital into research and development to understand how to replace foreign feed ingredients with domestic ones that has a massive multiplier effect on job creation,” CEO of Top 100 Company small and medium sized in kenya before The daily business and KPMG in 2022.

The next feed plant that will be commissioned soon will also be the world’s first geothermal hydroponic mill. It will ease the burden of importing fodder from Egypt.

“During the pandemic, we were severely affected by global supply chain disruptions because we were importing the majority of feed from Egypt. Dependence on other regions has come to the fore, which is why we need to have local food systems to meet local demands,” says Mr. Rehman.

In the markets, the fish investor says the Homa Bay-based company is focused on underserved Kenyan consumers, who buy fish from local markets.

Their suppliers face challenges in sourcing the fish – fresh and readily available. We have partnered with thousands of fishmongers,” he says, adding that they have 79 sub-locations across Kenya.

→ (email protected)