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When Joseph Rehmann started his aquaculture company, the aquaculture industry was small and couldn’t provide a big talent pool of trained professionals. "We had to focus on training first,” he talks of the business when it started eight years ago.

Because their business involves fish feed production, breeding, hatchery, processing, cold chain distribution, and retail, they needed more workers. They started a college hire programme called Graduate Aquaculture for Learning and Training (GALT) which has seen 40 trainees graduate.

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

There was also a challenge of the pre-existing notion that Lake Victoria is not suitable for aquaculture [rearing of fish in controlled spots] because it is too cold, shallow, and hyacinth-infested.

Nevertheless, the company did their own technical work and concluded that Lake Victoria would be suitable for commercial aquaculture and, took the risk.

The Victory Farms co-founder had over 15 years of aquaculture experience in Africa.

Art of fundraising

Just like most entrepreneurs, raising the first round of capital was not easy. But today, the firm has mastered the art of fundraising, receiving billions of shillings from venture capitalists to grow its presence.

This week, April 2023, Victory Farms received Sh4.7 billion ($35 million) for expansion.

An aquaculture industry champion, Hans Den Bieman, founder of Sealand Aquaculture, the world’s largest salmon farm was instrumental in their fundraising efforts. 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 instead of relying on external suppliers] it is less risky because you control the whole value chain, guaranteeing quality products, scale-up, and proper asset utilization.

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

 Success trajectory

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

“With our recent round of fundraising of $35 million, the plan is to scale Kenya's production capacity to 20,000 tons annually,” he says.

In Rwanda, they are looking at building a fully vertically integrated unit too. “We are also exploring investment opportunities in Uganda, Tanzania and Ethiopia for the next few years."

On its quest for sustainable business practises, he says Victory Farms is focused on becoming the first regenerative aquaculture platform.

“Kenya has the opportunity to be the world leader in tilapia production and this fundraising round enables us to deploy capital into research and development to understand how to substitute foreign feed ingredients with local ingredients which has a massive multiplier effect on job creation,” says the CEO of the company feted among the top 100 SMEs in Kenya by the Business Daily and KPMG in 2022.

Their upcoming feed mill which will go live soon will also be the world’s first geothermal-powered aqua mill. It will ease the burden of importing feed from Egypt.

“During the pandemic, we were heavily impacted by the global supply chain disruptions because we were importing the majority of our feeds from Egypt. Dependency on other regions was brought to the fore and that’s why we need to have our local food systems to supply local demands,” says Mr. Rehmann.

On markets, the fish investor says the Homa Bay-based firm focuses on underserved Kenyan consumers, who buy fish from local markets.

“Their suppliers have challenges sourcing fish – fresh and readily available. We’ve partnered with thousands of fish traders,” he says, adding that they have 79 branch locations across Kenya.

 

Source: https://www.businessdailyafrica.com/bd/corporate/enterprise/how-victory-farm-took-full-control-of-fish-supply-chain--4213984