squeezing juicy profits from juice
Posted Tuesday, July 8 2014 at 01:00
Juicy profits. Two decades ago, Dan Jakana could not imagine that Ugandans’ thirst for fruit juice would keep growing. He is now mesmerised by the millions accruing from the fruit juice packaging business.
He found a delicious yet convenient way of making consumption of fruits a sustainable lifestyle.
Dan Jakana, the CEO of Jakana Fruits Limited, says the idea of starting to process Ugandan fruits was born in Houston, Texas in the United States of America while he worked at Joka Cafeteria Incorporated, a food processing factory which packs fruit juice, cured meat, barbequed meat, smoked meat and sliced fruits. These would be packed in long life packs and shipped to North America.
That experience encouraged him to study agricultural business in Uganda as a thesis for his Master’s degree in International Business which he attained from the US in 1994. When President Museveni visited Texas in 1994, he shared his dream of setting up a factory in Kampala which the president gave a nod immediately.
Starting production from the kitchen
In 2001, he received a Shs2.6 million ($1,000) grant which he used to start the factory from his mother’s kitchen where he was bottling juice in jerrycans. In 2006, he started making passion, mango, banana and passion-banana flavours. He learnt that passion fruits were bitter and bananas had high natural sugar content which made them good natural sweeteners that gave birth to Tonto juice as another product. As it turned out, the banana flavour became his biggest money spinner.
But empowering farmers to deliver requires cash. “Working capital is a challenge but we process 40 tonnes of bananas every month and 20 tonnes of other fruits every month,” says Jakana who employs 42 people both in the farm and the factory.
Profits from business
Jakana who earns more than Shs25 million in a month explains how that happens.
“In terms of our monthly revenue, it depends on the in-puts we inject into the production which affects the quality of the product but it can be anything between Shs25 million to Shs35 million.”
Mr Jakana says the 135 million East Africans is the first market to be tapped into before venturing into other foreign markets since the demand will be unbearable.
“We know where the market is and we know how to process the food. But is the farmer producing enough to sustain the demand by the factories? Let us pack the food nicely and sell it on Alibaba.com then you wait for the response,” he muses.
Currently, the juice which is packed in jerrycans is sold within supermarkets in Kampala, Entebbe and Mukono and there is a truck which moves around Kawempe schools selling it in small quantities at Shs200.
Advice to government
He advises government to empower farmers and youth to take fruit production seriously by zoning the fruit production areas in the country because in the US, many youth have employment opportunities in the food processing sector rather than make people dump everything here simply because they are investors.
“85 per cent of our fruits go to waste. Agriculture is the major undertaking in Uganda. Take an example of a country like Vietnam and Thailand which have exploited agriculture by partnering with business people who have the knowledge,” he says, adding that farmers can partner with manufacturing companies which know the market.
“I worked in Joka Cafeteria Incorporated which produced fruit juices, cured meat, smoked meat, barbecued meat and we packed them in long shelf packs to ship them to North America. It is a shame that after 50 years of independence, we still ship whole pineapples yet a pineapple is 40 per cent juice while 60 per cent goes to waste.”
How fruit juice is processed
The bananas are bought from farmers growing the fruits within a radius of 180km around Lake Victoria to maintain the flavour, sugar and quality of juice which the plants suck from the minerals and water from Lake Victoria.
The fruits are ripened to increase the sugar and juice content before peeling them and placing them in a juice extractors or pulpers to extract the juice. The juice is boiled at 92degrees centigrade to pasteurize it before vacuum sealing it in case of the doy-pack or the plastic jerrycans and it is ready for consumption.
Jakana asks government to promote food processing industry “Do not tax the goose which is laying the golden egg, tax its off springs. We need the doy-pack technology here. In the US, it is being used to pack meat, fruit, juices, fish and flour,” he says.
He adds that the tomatoes which are rotting in markets could be transported to the processors to make tomato ketch up after some time. This is the advice he gave Gen Salim Saleh and he is doing wonders with veterans in Nakaseke District where he is setting up a tomato processing factory.
“There is a source called salsa which has overtaken tomato ketch up and the ingredients include tomato, onion, garlic and celery. We have all these ingredients in Uganda. With smoked meat, you will be surprised how much the Americans consume it as a snack,” he says.
Food processors can tap into that market by smoking the meat and marketing it on different airlines and countries.
“The smoke carbonates the meat and it gets cooked in the process. There are passenger planes landing at Entebbe Airport every day and the passengers have to eat food when flying. Where does the food come from? Nairobi, because we do not have the standards. But it is cheaper for the airlines to get the food from Entebbe than Nairobi.”
UN missions have been to the same factory and Koreans are asking the company to assist them to set up a fruit factory in Soroti but there is not much financial support coming through.
The challenge, according to Jakana, is, “Uganda is a cash economy where one needs cash all the time to oil the wheels of the business.”
Good packaging gives Jakana products an edge
After 20 years in fruit juice production, Jakana believes the food business thrives on image which is derived from the mode of packaging.
“If Uganda is to reach its greatness in agriculture, we have to get the packaging right. Our fruits have two seasons in a year but when you look at the post-harvest losses, it just kills you,” he laments.
He says Uganda’s fruit sector is one of the most competitive in the world because of the organic methods of production unlike the biggest producers like Philippines, Vietnam, India and Thailand which use fertilisers to produce the fruits in bulk so that they make pulp and concentrates which are exported.
“When you taste most of the juice in the supermarket, you can hardly taste any natural fruit flavour. That is why they use tetra-packs. The doy pack is an internationally recognised pack because it has a silver foil which deflects ultra-violet light from the juice,” he explains.
The same applies to flours like coffee, packed soups and other food items which require packaging to remain fresh.
He says after introducing the doy-pack technology in 2003, Jakana fruits were among the first natural juices to land in the outer space in 2011 because astronauts prefer to pack fresh food which can only be preserved using the stand-up pouch thanks to its longshelf life. With the doy pack, the juice can remain fresh between nine and 12 months in the shelf.
He regrets a deal he recently lost to supply a UN mission in Central African Republic with 50,000 units of the packed juices because the company lacked the capacity to produce the number yet the factory can produce more than 1,000 litres of natural juice daily.
“We have the capacity to produce 7,000 litres of juice per day but right now we are producing between 1,000 and 2,000 litres a day,” Jakana said.
Jakana who has been trying to import the equipment has been put off by the 170 per cent tax.
numbers about jakana’s business
Number of people employed by Jakana Shs2.6 million
Average amount of money he invested in the company at the start.
Average production capacity of Jakana fruits Limited daily.
Minimum amount of money Jakana earns in a month from the fruit processing business.