Huge lessons on producing seedlings from Israeli firm

Paul Kathuli crafted oranges seedlings as taught by JKUAT on 30/05/2019. [Jenipher Wachie, Standard)

About 75km North West of Nairobi, along the Nairobi – Nakuru highway, is the Flower Business Park: an expansive complex that hosts several agribusinesses.

At the entrance, you will see a signboard with names of companies operating from inside the enclosure. Plantech Kenya Limited is one of them.

One cannot help but notice the company’s massive greenhouses shining under the bright Naivasha sun. You would need to be blind not to spot the wavy roofs.

“How big is this space?” we ask Elad Bouton, Plantech’s Managing Director.

“We are operating on 6 acres of land but soon it will be 9 acres.”

The business is just over four years old. But a quick walkthrough reveals a thriving enterprise whose achievements are well past start-up challenges.

Past start-up challenges

Plantech is a seedling propagation organisation. The company’s core business mandate is to produce seedlings for farmers to grow into crops.

“We are the largest automated nursery in Africa today,” says Idan Salvy, the Sales and Marketing Director at Plantech.

“Our clients range from large scale farmers who order as much as 300, 000 seedlings to small scale farmers who order just 1, 000,” Bouton says.

Every month 20 million seedlings leave Plantech nursery tables to farming fields all over Kenya. This magnitude of production places Plantech on a league of its own.

It is therefore funny when one learns how the company came to being: “It started over beer,” Bouton says, to a raucous laughter.

Indeed, the realisation of the Plantech dream took the aggregation of vision, focus, knowhow and commitment. Most importantly though, it took steely dedication by three men.

Steely dedication

In 2013, Salvy and Bouton both Israelis met in Kenya. 

“I had been in Kenya for almost three years when our paths crossed. I came as an employee of a flower farm. Then I transitioned into an exporter of vegetables from Kenya to overseas,” Salvy says.

Bouton on the other hand came to Kenya in 2011 to take up a short-term position which saw him set up and manage a rose (the flower) seedlings propagation unit.

“Seedlings propagation is my area of expertise: this is what I studied at the school of agronomy at Hebrew University back in Israel,” Bouton says.

Just as fate was about to bring them together Salvy had found himself a house of shore from Lake Naivasha. Bouton needed to have a nursery unit set up in Naivasha for his employer when the two got introduced to each other.

“He (Salvy) hosted me at his house for a few nights and we had beers on the lakeside in the evenings,” Bouton says.

Tranquil nights

It was during those tranquil nights that banter ensued – over beer – that the two men got to know more about each other’s odyssey leaving their motherland, Israel, for Kenya.

“We got talking,” Salvy says. “I learnt that Elad – even though he was propagating roses in Kenya – had been propagating vegetables for eight years back in Israel before coming to Kenya.

“I was then working, helping local businesses find markets, to export vegetables. The businesses were struggling to produce enough vegetables for export.

“I shared this with Elad and we started contemplating if we could start a company to produce good quality vegetable seedlings to bolster production in Kenya,” Salvy says.

Bouton was in the cusps of completing a project for his employer and therefore could not jump ship immediately.

 He says: “I needed to get my employer’s project up and running before I could move on to other endeavours. I actually took the approach of asking my employer to diversify into vegetable seedlings but they did not have confidence in the idea.”

The idea – to start a seedling propagation company for vegetables – was moot. They needed a third party to invest money into the project as neither man had such capability.

“We approached several people but no one was willing to put their money into the idea,” Bouton says. And so, for some months, the idea went dormant.

The idea when mute

Luckily, there had been one more person, a friend of Salvy’s, that they hadn’t enticed yet: Igal Elfezuaty: a Kenyan of Israeli origin – at least according to Bouton.

“I first met him alone and broached the topic. We agreed to hold another meeting with Elad present in a week or so. We explained to him the business model and he agreed to invest immediately,” Salvy says.

According to Bouton, Elfezuaty’s exact words were: ‘We have a winner here. Let’s get this done.’

Elfezuaty, it turned out, was just the right investor that the two men were looking for. To start with, he had the money. He also owned land in Naivasha – the land from which Plantech operates today.

Bouton says: “We agreed to be three equal partners. Each of us was unique and brought to the table what neither of the other two could.

“I was the scientist: I was the man behind the technology of seedlings propagation. Elfezuaty was injecting capital and assets into the business.

“Beyond that, owing to a wealth of experience in real estate and agriculture, he offered strategic thinking and carried the vision for the company. He is in charge of the overall operations.

“Idan had a background in exporting vegetables from Kenya to overseas. He was an amazing people’s person. He is in charge of sales and marketing.

“We complement each other and work like one complete system. Each person knows their jurisdiction and each person sticks to it.”

By February 2016 Plantech had pitched its first greenhouse in the complex. By April they were selling to their first clients.

Business model

The company’s business model is to produce pre-ordered seedlings. “The client orders a specific variety of crop, they pay half of the costs involved, we proceed with propagation, and when the seedlings are ready the client clears the remaining 50 per cent debt then picks the seedlings,” Salvy says.

This model, Bouton argues, is good for client and for the business. The client is in charge of determining what variety they want, he says, and when they need it. “I will never choose a variety for the farmer. He or she has to tell me what they want and we produce it,” he says.

With this business model Plantech mitigates against possible losses that would be caused by seedlings not being bought before losing vigour.

Despite their success Salvy notes that it was all a gamble that paid off. “We had a business idea but none of us was 100 per cent certain that it would work. It could have gone either way,” he says.

How they do it

At Plantech, a seed is propagated using peat moss – the quality standard for seed propagation. The company employs use of high-tech machines to give the seed (or vegetative propagation material) just the right amount of water, temperature, sunlight and nutrients to root and shoot.

“The biggest quality we give our clients is called ‘uniformity’. All the seedlings – ordered by one client – are propagated to attain uniformity. The seedlings look the same in stature and dimensions,” Bouton says.

Uniformity is important for a farmer because the crop ought to be mature uniformly and thus harvested in the same period.

Does a farmer have to buy seedlings?

“No,” Bouton replies. “You can propagate the seedlings yourself: anyone can, actually, because seeds – by their very nature – want to grow and do not need to be forced to sprout.”

But it is important that this propagation is done by an expert because. By self-propagating seeds a farmer risks starting with bad quality seedlings which then lead to poor yields.

As we leave the Plantech complex Bouton tells us the secret of a good quality seedling: “A good root system,” he says. “Without that the seedling will likely fail in the field.”

 


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