Setting up in Ghana- The Koudijs Story

During her visit, minister Schouten performed the groundbreaking of the state of the art multipurpose feed mill of Koudijs / De Heus. After years of flying back and forth Hugo Visscher moved with his family to Ghana to lead his company’s transition from Dutch exporter to big local player with regional ambitions. He tells us about the internal process that led up to this decision, the realities and lessons of becoming a local player and some steps that need to be made moving forward.

Could you describe the process leading up to this big investment in Ghana and the lessons you learned along the way?

Koudijs-De Heus has been active in Ghana for over ten years, initially as an exporter of animal feed and more recently as  a local player to offer customized feed solutions that can help the local agricultural sector. Around 2015 we came to a crossroads, do we want to continue with the export model to Ghana or do we want to become active ourselves? Obviously, we kind of knew the market through our own sales and data. So we conducted a market research in which we also included the embassy’s commissioned poultry and aquaculture studies. Based on these figures we initially  looked for a small processing operation. Throughout time however, we decided that we didn’t want to become one of the small players in the market, but really enter as the global player that we are. With that comes a big investment, but based on what we think we can sell in Ghana, knowing that there is a big potential and gap to fill, we expect to become successful in time.  An exporting model is based on relative high margins within the market. Our strategy however is lower margins but higher volumes. Also to become a more interesting dialogue partner for farmers. So, we can’t earn back the investment very quick but it fits in our world portfolio and international strategy. We are not here for this generation only.

In 2017 we did the business registration and got everything approved by our board and in 2019 I moved to Ghana with the family and we started construction of our state of the art feed mill in Tema. This meant two years between registration and groundbreaking. But you really need that time for a process like this. For example, the process of separating with our former importer took time. Our relationship was built mainly on gentleman agreements and that makes a separation even harder because there is a lot of emotion and pride involved. In short, you obviously need a good local partner when you enter a new market, but you also have to think about exit strategies early on if you start thinking about becoming active yourself after a while! But also within your own organization you have to get everyone ready. At the end the fact that I needed clarity for me and my family was also an important factor. You get to a “go / no go decision” and luckily we got a go! And only then did things become really clear.

Hugo Visscher at groundbreaking ceremony of Koudijs factory in Ghana

How would you describe the first months of living and working in Ghana permanently?

The impasse created during the process of separating from our former importer also resulted in stock outs, our product was simply not available because we as a company didn’t have the import licenses for our own products in Ghana. And we lost a lot of customers with that. Now we see people coming back! They see: they’re back, they have a warehouse and are even investing in a mill.  People appreciate that. Moreover, we used to be more expensive but have been able to reduce prices and are already at the same price as our competitors.

There is also a huge difference between being here permanently or flying in and out. When people know you are here you have more people passing by. To make acquaintances which is good for network but also to do concrete business. This is obviously very different from just being here for a week. When I used to do that basically every minute was planned in advance and everything was super-efficient. And yes, that’s possible in Ghana. But you have to bring down the pace if you are here to stay. You see the shortcoming of everyone including yourself. While flying in and out you don’t have to worry about people management. As an organization you are slower, you have to organize internal processes, buy cars, write money policies etc. We are basically building our network and market knowledge while we are already fully operational.

I compare it to racing: you have to almost lose control in the bend of the circuit. If not, you’re simply not going fast enough! If you have full control here in Ghana something is going wrong. You never have full control not even in the Netherlands, but you definitely have more control in a European setting. That is why we are used to make fully informed decisions based on data.

But you have to move so fast in this first period and expect that you have to expect the unexpected.

What are the main things you still have to work on looking ahead?

We have to keep building our network and understanding of the market. Also because the market is fragmented and relatively unorganized. Traditionally there is a very low level of trust within the sector. So going back to our desire for data: if I have 30 companies in my database, how can I be sure I am not missing 300 more. To do that, we are working on clear structures and targets. If my guys have spent a day in the field, they have to make visit reports. I want pins in google maps. All this in order to paint a more complete picture and to get the feeling of control and knowing what is going on.

Another very important goal for us is to train our guys to really become a trusted and respected sparring partner for the farmers. They shouldn’t only promote our product but really help the farmer to develop. Through our own feed academy we want these guys to become the bridge between our Dutch reality and way of thinking and the local Ghanaian reality. That takes time! Ghanaian farmers need to become more professional in terms of farm management, hygiene etc. But simultaneously we need to become more flexible and recognize the constraint of the local farmers.

Based on all of this what would be some of your tips and tricks for people interested in investing in West Africa?

Most important: just start, get your boots dirty. Don’t get trapped in doing research and reading reports since you can’t get anything done here from behind your desk.

But also, don’t come here for a quick buck. Doing business in Ghana or West Africa for that matter is not cheap! You have to have a long term vision for your company and involvement.

And lastly: hire a pit-bull in your team! A local go getter who knows the terrain is essential to get things going.

Tree planted by Minister Schouten during groundbreaking ceremony

Fact and Figures Koudijs - De Heus

  • Koudijs Animal Nutrition was founded in 1920 as "NV Koudijs' Voederfabrieken BK", with a specialization in poultry feed.
  • With the acquisition by parent company De Heus in 1998, Koudijs-De Heus suddenly became one of the largest feed producers in the Netherlands.
  • De Heus is a family business, founded in 1911. The two De Heus brothers, the current CEOs, are the fourth generation at the helm of the company.
  • Today, feed is produced for all types of farm animals.
  • Following the acquisition in 1998, Koudijs ’activities also started on the international market, and nowadays Koudijs functions as the international export branch of De Heus Animal Nutrition.
  • Koudijs-De Heus is active in 15 countries around the world. The company exports to more than 60 countries worldwide.
  • The goal is Combining Global Knowledge with Local Intelligence and sourcing local raw materials to not only be close to the market, but to be part of the market.
  • The multi-purpose feed mill that will be built in Tema, near Accra, fits in this context. The production capacity will be 90,000 metric tons per year. This is currently 25% of the total animal feed produced in Ghana. The factory will be mainly focusing on the production of Poultry and Aqua Feed but has the possibility to produce other feeds as well.
  • The goal is to source at least 50% of all used macro-ingredients locally.