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The Price Of Puff

It is still one of the biggest businesses in Africa despite all the efforts from the government trying to stamp it out. The tobacco industry makes over $700 billion a year and seems to survive advertising bans and restrictions. Part of this business is African children who work for a dollar a day.

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It’s 5AM in the northern hills of Malawi where its tobacco is grown. Chifundo Ndilowe is awake and ready for the day. Dressed in grey shorts and a blue NBA vest, still filthy from yesterday’s long day on the farm, Ndilowe has hours of hard labor ahead. He is just 15 years old and has been planting and picking tobacco since he was 10.

“I came here in 2011 because rural life is hard. We were battling at home and I had to start contributing for us to survive. I stopped going to school to work. It is very tough working under these conditions because it is hot and we easily get tired and I am often sick,” he says.

Ndilowe moved 567 kilometers from Mulanje to Mpherembe, 300 kilometers north of Malawi’s capital, Lilongwe, to work in a tobacco farm five years ago. It means long hours, missing school and breaking the law for little pay. He earns a little more than $140 and $280 a year depending on the harvest.  That’s less than $1 a day.

“We work for the year and only get paid after harvest. During the year, we get 20 kilograms of maize for 12 days because we don’t grow crops for consumption. They also give us salt and then we have to figure out the rest ourselves. I get to eat once a day and I take whatever is there,” he says.

Ndilowe is just one of an estimated 800,000 youngsters in the tobacco fields; voices that are seldom heard. One of an army of children who sweat for millions of cigarettes lit all over Africa.

A study on child labor in the tobacco industry in two areas of Malawi, Suza in the Kasungu district and Katalima in the Dowa district, found 57% of all children were being used as child labour in the tobacco fields.

George Kube, an adult tobacco worker, works with Ndilowe and two other children.

“There is no money for the children to go to school and if they don’t work to help we wouldn’t survive. We farm on two acres of land and the produce is auctioned to tobacco companies. You have to be very strong if you are going to do this job because sometimes we have to cut down trees and look for water,” says Kube.

 

A study, published by the British Medical Association, says contract farmers, like Kube and Ndilowe, cultivating tobacco in Malawi, live below national poverty lines, while independent farmers operate at a loss.

“Even when labor is excluded from the calculation of income less costs, farmers’ gross margins place most households in the bottom income [groups] of the overall population. Tobacco farmers appear to contract principally as a means to obtain credit, which is consistently reported to be difficult to obtain,” says the study.

Tobacco farmers may struggle to make a living but tobacco manufacturers thrive. The world tobacco industry is worth billions of dollars. Cigarette retail values in 2014 were worth $744 billion and over 5.6 trillion cigarettes were sold to more than one billion smokers according to the Campaign for Tobacco-Free Kids. But, very few farmers make money from it.

The market is controlled by a few international companies; China National Tobacco Corporation, Philip Morris International, British American Tobacco, Japan Tobacco International and Imperial Brands. They buy tobacco from cheap emerging markets, like Malawi, for profit.

For years, governments around the world have been trying to clamp down on smoking because of its health implications, through stringent laws and higher taxes, yet tobacco use is increasing in some countries, says Zambian economist Grieve Chelwa.

“African incomes have been rising over the last couple of years and we know that tobacco consumption responds to rising incomes. Further, tobacco companies have put in place strategies (subtle advertising) to take advantage of rising incomes.”

And they flourish.

This year, British American Tobacco (BAT) announced its revenue went up 8.1% at constant rates of exchange, cigarette volume from subsidiaries was 497 billion, up by 2.2%, cigarette market share in key markets increased by 40 basis points and its brands performed exceptionally well with cigarette volume up 9.8% year ending September 30.

BAT plans to merge with its US partner R.J. Reynolds Tobacco Company, the company behind the famous camel cigarette brand, in a deal valued at $47 billion. It hopes to create a stronger global presence and move into new ventures like e-cigarettes.

Grieve Chelwa

In its third quarter, Philip Morris International reported net revenues of $19.9 billion, up by 2.6%, net revenues, excluding excise taxes, of $7 billion, up by 0.8%, operating income of $3 billion, up by 0.6%, and operating company’s income of $3.1 billion, up by 1.2%. In Africa, companies thrive because of weak regulation.

The World Health Organization (WHO) has a 75% benchmark of tax on the retail price, yet the African average is way below. Nigeria taxes cigarettes at only 20% of the retail price. Chelwa says ideally increasing taxes to reduce tobacco use should work anywhere because of the law of demand, increasing price reduces demand.

“But, the important point is the increases have to be real-inflation adjusted increments,” he says.

In Africa, high tobacco taxes are rare. WHO says only 33 countries, with 10% of the world’s population, have introduced taxes on tobacco products of more than 75%. Tobacco tax revenues are on average 269 times higher than spending on tobacco control.

Tobacco companies are also good at finding new markets, with new smokers and weak regulations. According to an article published by The Lancet, a UK medical journal, tobacco use is declining in higher income countries, but nearly 80% of the world’s smokers live in low and middle income countries.

“Tobacco control regulations are not strong across most of the continent. Countries have ratified the Framework Convention on Tobacco Control (FCTC) but that’s all they have done. And sadly the tobacco industry is an important player in the setting of tobacco control policy in most African countries,” says Chelwa.

For years, tobacco companies argue they market merely to convince smokers to switch brands, but evidence published by the National Center for Biotechnology Information shows advertising drives smoking.

Christo Van Staden

According to a WHO study, smoking has increased in 27 countries over the past 15 years. Seventeen of these are in Africa. In Cameroon, smokers more than doubled from 7% in 2000 to 22% last year. Congo-Brazzaville has seen the biggest spike. Nearly half of Congolese men smoke. Last year, 22% of its people admitted to smoking regularly, up from 6% in 2000.

“Only 42 countries, representing 19% of the world’s population, meet the best practice for pictorial warnings, which includes the warnings in the local language and cover an average of at least half of the front and back of cigarette packs,” says WHO.

In South Africa, cigarette advertising is banned. There are also restrictions on point of sale product display, vending machines and sponsorship of events, activities, individuals, organizations or governments. Now, Health Minister Aaron Motsoaledi has pledged to take it further by strengthening the Tobacco Products Control Act.

Motsoaledi says there should be no branding, no logos and no colors on cigarettes to discourage smoking. If the law is introduced, all cigarettes will be in a brown package with graphics that show the damage they can cause.

This is worrying for the tobacco industry. Christo van Staden heads the only primary tobacco processing factory in South Africa, Limpopo Tobacco Processors, that processes 12 million kilograms of tobacco. He says the effects could be catastrophic.

“The biggest impact [of tougher regulations] is the increase in illicit cigarettes which is a huge dent in the business of BAT and in the whole market. About 20 to 30 percent of cigarettes in Gauteng are illicit and they are paid way below the price,” he says.

As we meet, in Rustenburg, a two-hour drive from Johannesburg, Van Staden’s farmers have lost 30 hectors of tobacco to a passing storm. On this day, the sun blazes down from a cloudless azure sky. A sprinkler keeps the glossy lawns and flowers alive. Inside the factory, it is dark and you can hear a pin drop. The silence is almost tangible. There is no bustle and machines that usually crackle stand still. It is not tobacco season. All employees are upstairs in the offices working. Dressed in khaki shorts and shirt, Van Staden says tobacco farming is hard.

“For every hector, you need two people to work there and pick it by hand, it is very expensive. One hector costs about R130,000 ($9,500) to plant and the farmer needs to make at least 20 to 25 percent profit. Last year was a very tough year. There were very tough conditions and an average farmer did not make any profit at all.”

“Now they are supporting the local market but if they don’t get any benefit out of that, they have to compete with everyone else in plain packaging, then there is no reason for them to buy South African tobacco, they will literally walk out of here overnight and source their product from Brazil, India and China where they can buy a lot cheaper. We are not ready for that. We would close these doors,” he says.

For Van Staden, closing doors means 10,000 farmers lose their income. He thinks there should be more education about the dangers of tobacco and efforts to keep youngsters away from smoking.

“I am a non-smoker and will not advise anyone to smoke. Most of my staff members don’t smoke. Unfortunately, people smoke everyday but see the warning on the packets and turn a blind eye.  Because it’s such an unhealthy product, the governments around the world will try and eradicate it but I don’t think it will happen in the next 20 years. There are laws in this country that allow people to smoke and to close down the primary sector is not going to stop smoking overnight,” adds Van Staden.

South Africa will follow the UK, Ireland, Australia and France in banning branded packaging.

 

In Uganda, 4,800 kilometers from South Africa, it’s even tougher. If you light up in bars, restaurants or hotels, you will be fined $60 or jailed for up to two months. Smokers must be at least 50 meters away from public spaces, such as schools, hospitals and taxi ranks.

Uganda’s new laws also ban the sale of electronic cigarettes, flavored tobacco for water pipes, the sale of single cigarettes and tightened rules on labeling, advertising and selling tobacco to under-21s.

“We are strongly opposed to plain packing as we feel that there hasn’t been enough consultation and research on it. Our concern is the serious adverse consequences that it will have on the economy, jobs and investment; as well as potentially making counterfeit easier. It trounces fundamental intellectual property rights and freedoms guaranteed by the constitution,” says Joe Heshu, Acting Head of External Affairs at BAT.

According to Heshu, counterfeit cigarettes are a bigger issue. In 2015, South Africa’s Treasury lost R5.1 billion ($373 million) due to illicit trade. The trade accounts for about 24% of the market.

South Africa has been increasing tobacco taxes since 1994 and the big impact has been the reduction in consumption and prevalence, but Chelwa agrees there has been a minimal impact of the taxes on illicit trade.

“Illicit trade often has to do with tax administration and not taxes. Even if taxes were a cent, you’d still have illicit trade showing that it is not a tax level or tax rate issue but a tax administration issue,” he says.

On jobs, Chelwa argues “there are very few tobacco manufacturing jobs, very few given how mechanized manufacturing of cigarettes is.”

The big worry he says is in the field.

“Governments have to consciously find ways of transitioning tobacco farmers into growing other types of crops. This will require a lot of work,” says Chelwa.

Asked if he thinks cigarettes are killers, Heshu argues his company has launched e-cigarettes, which are supposedly less harmful products, in the UK, France, Germany, Italy and Poland.

“We are committed to the research and development of Next Generation Products (NGPs) and globally have invested over half a billion pounds during the past five years. There is a growing body of evidence that NGPs do pose significantly fewer risks than cigarettes.”

For now, tobacco companies continue to thrive. Only 29 countries, representing 12% of the world’s population, have completely banned all forms of tobacco advertising, promotion and sponsorship, according to WHO.

Some of Malawi’s tobacco, grown by the likes of Ndilowe and Kube, is shipped 2,000 kilometers south of Mpherembe. In South Africa, 19% of the population, over the age of 15, smokes according to the World Bank. That’s almost one in five people and it is dangerous.

Tobacco is responsible for six million deaths each year. Of those, 600,000 die from the effects of second-hand smoke. This number is expected to increase to eight million by 2030 if current trends continue, says WHO.

Alexandra chain smoker, Mpho Ndlovu, knows this, yet he goes through three packs of cigarettes a day.

“I have been smoking since I was 15. It started as just playing with friends at school because we knew we weren’t allowed to. It was a way of being cool. I got hooked and have been smoking for 40 years,” says Ndlovu.

What started as a game became a habit and then an addiction.

“Smoking helps me when I’m nervous and I just enjoy it. I have tried to stop many times but have failed. I know this might one day kill me but, at this point, there is nothing I can do.”

Ndlovu spends R110.50 ($8) per day on cigarettes. That’s R766.50 ($56) per week and R3,066 ($225) per month and R36,792 ($2,700) per year and R183,960 ($13,500) in five years. If he continues smoking the same number of cigarettes per day for another 40 years, at this current price, he will spend around $100,000 on cigarettes. If invested, he could buy a house.

Ndlovu spends close to half of his R7,000 ($500) salary he makes working as a driver for a logistics company in Sandton.

“By the last week of the month, I would be out of money and sometimes I have to ask people if I can borrow or take some on credit from the spaza shop,” he says.

“When I smoke, especially on weekends, I drink as well. So the money I earn is never enough. My children get angry because they think I should be using the money on them. I don’t know how to stop.”

Ndlovu buys his cigarettes from Ntando Debeza, a hundred metres from his home.

Debeza’s spaza shop sells cigarettes, pipe tobacco, snuff, chewing tobacco, hookah and shisha.

“I make about R6,000 ($440)  a month from this small shop. Most of the money comes from tobacco sales but I also sell other day-to-day products like bread and milk. People come to buy and sometimes on credit and I collect money at the end of the month,” says Debeza.

This means Ndlovu’s debt grows. But, that’s not all. Smoking does not only affect the smoker. High levels of nicotine exposure from handling tobacco leaves may cause nicotine poisoning called Green Tobacco Sickness, with symptoms including nausea and vomiting.

Back in Mpherembe in Malawi, Kube says he is aware of the dangers of working in a tobacco field without protective clothing, and mostly its effects on minors. “I know children can get sick but what can we do? We need a lot of hands on the farm because this isn’t an easy crop to plant and prepare. It needs three times more people than corn but we don’t make enough money at all,” says Kube.

He is one of the few rural farmers who know this. And it gets worse. A 2009 survey in China revealed that only 38% of smokers knew that smoking causes coronary heart disease and only 27% knew that it can cause strokes.

“Among smokers who are aware of the dangers of tobacco, most want to quit. Counseling and medication can more than double the chance that a smoker who tries to quit will succeed. National comprehensive cessation services with full or partial cost coverage are available to assist tobacco users to quit in only 24 countries, representing 15% of the world’s population,” says WHO.

Cape Town-based entrepreneur Gareth Carter saw this crisis as an opportunity. He founded WeDoRecover, a company that helps patients who suffer from psychiatric and addiction problems.

“Finding the right addiction program to meet someone’s specific needs is a complex process. The crisis and chaos synonymous with active addiction are overwhelming and the multitude of choices in the marketplace adds to the confusion,” says Carter.

According to Carter, people who smoke are more likely to drink alcohol and vice versa. He says alcoholics frequently present with a co-morbid nicotine addiction.

“As many as 80 percent of people addicted to alcohol and other drugs are frequent smokers, but the bulk will die of smoking-related disease rather than alcohol and drug-related disease…”

The damage doesn’t stop there. Carter adds that major depressive episodes among adults are highest in those addicted to nicotine and lowest in those who have quit or never started smoking.

“With nearly 80 percent of the world’s one billion smokers living in low- and middle-income countries, this is a very real public health care problem for us in Africa. Making nicotine addiction prevention and treatment readily accessible to the youth counteracts a wide range of potential mental, physical and mood-disorder problems with far-reaching ramifications to families, communities and our economy,” he says.

Carter thinks if tobacco was “invented” today it would be classed with other illegal drugs. That’s not the case. The lucrative industry in Africa puffs on unfettered.

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Entrepreneurs

Packing Light In School Bags

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Former South African rugby star John Mametsa provides alternative energy solutions for the state. With his wife Tumi, he says their future in the business is bright.


In his prime, former Blue Bulls winger John Mametsa had rugby fans screaming in delight at his try-scoring exploits at Loftus Versfeld Stadium. Between 2001 to when he retired in 2010, he had brought smiles on people’s faces.

Hidden beneath the rugby bravura on display on a weekly basis were Mametsa’s entrepreneurial exploits, which led him to co-found Soltech, a solar technology company he started with his wife Tumi.

Soltech has bridged the gap between solar technology and user-friendly consumer products by creating school backpacks, outdoor umbrellas and lifestyle bags custom-fitted with solar power.

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The smiles are back but Mametsa has brought them in a different form.

Soltech’s main aim is to help companies achieve their corporate social investment targets and make a real difference in the lives of school children who might not have electricity at home, or whose access to electricity is limited.

“Generally, I love giving back. Just to see the kids smile brings joy to me,” Mametsa says.

“It is the best space I could have asked for. Other than when I was involved in rugby, this is the best thing I could have ever been a part of.

John Mamemtsa. Picture: Supplied

Putting smiles on kids’ faces is the best thing. Because we are dealing with children, we have aligned ourselves with people that want to make a difference.

“We don’t stop at just giving them the bags where they can charge phones and study at night but we also educate them about the social ills that come with roaming on the internet and social media.”

During this period of Eskom blackouts, uncertainty about South Africa’s energy and a widening chasm between the haves and have-nots, he says Soltech’s products make a difference in the lives of ordinary citizens.

In a sense, they’ve taken the might of solar technology and put it right in people’s hands. The school bags come with a solar-powered battery, which has a night lamp and cellular phone battery charger installed.

“With everything that’s going on at Eskom now, they (citizens) are using millions of liters of diesel per month, just to keep the lights on,” Mametsa says.

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“Hence, it’s coming back to hit our pockets and they (Eskom – South Africa’s national energy provider) are raising the electricity prices again. Such things we have to read about so that, as we grow, we educate the people that we are selling the bags to.

“At some point, you need to convert [to reusable energy sources], you need to start using solar energy. We are still fortunate that there’s an Eskom in the first place. What about those countries that don’t even have electricity at all?

“Yes, we have power cuts but the people that really need the bags are people in the rural areas.”

Admittedly, Mametsa was the pretty face and Tumi conceptualized the idea when they started. But their partnership was perfect in more ways than one. Tumi, just like her husband, had a massive entrepreneurial drive.

While Mametsa was playing rugby, he would dabble in taxi and printing businesses – an uncommon trait among sportsmen and sportswomen who are at the peak of their powers. Tumi was no different. As a student, she would sell hair and cosmetics products, something that sharpened her business senses.

READ MORE | John Smit leaves everything on the field

And despite a successful 11-year career in corporate as an accountant and financial manager for companies such as Alexander Forbes and the Film and Publication Board, Tumi took a bet on herself and dedicated her time fully to building Soltech.

The result was that, in just the company’s second year, they have signed a memorandum of understanding with Finland solar technology company Tespack. Tespack founders Caritta Seppä and Yesika Robles were last year named in Forbes ’s 30 Under 30 Europe.

The joint venture will see Soltech come out, among other things, with a solar-powered, fast-charging power bank, which should totally disrupt the smartphone accessories market.

Tumi Mametsa. Picture: Supplied

“There’s going to be skills and knowledge transfer,” Tumi says.

“The DTI (Department of Trade and Industry) is also backing us on the partnership because we need them and their funding to assist us. We will be hiring South Africans to work the machinery, which was something that was very attractive to the DTI.

“The Tespack partnership confirmed my belief that our company could grow from a small tree to a forest someday. Once we manufacture in-house we can streamline the process. And there are so many other ideas for products I have, such as ladies’ handbags and stuff.”

Here at home, Soltech has partnered in CSI projects with Liberty and Exxaro and they hope to grow their client base in the next couple of years. It is a huge endorsement of their products and should see them salve some of the hurt from the country’s electricity crisis, especially to those who need it the most.

-Sibusiso Mjikeliso

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‘Worth Millions And Billions’

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Terence Terenzo, the award-winning South African hairdresser and founder of hair salon group Terenzo Suites, on his biggest investment decisions and blunders.


What is your investment philosophy?

One of my philosophies is to really analyse ‘is this an investment or is it a money pit… Are you sure you got a good investment and not a liability?’… Over the last 10 years, I’ve tried to invest in things that don’t absorb all my time and energy.

So if someone were to say to me, ‘you can work your butt off seven days a week and we will give you a million rand a month, or you can take it super easy and do the absolute minimum but you can have R400,000 ($27,700) a month’, I would rather take the R400,000 because that would free me up so much more.

I would have time to do things that are important and other projects. So, for me, it is about setting up passive income businesses instead of creating businesses that need huge amounts of management.

What are some of the big investments you have made over the years?

Most of them were in property but this, Terenzo Suites, is one of the biggest investments I have ever made. It was many many millions. And then on the stock market, I’ve played around on the Johannesburg Stock Exchange where we have invested quite heavily. I would use it, then look at the market and sometimes pull the money out and move it. I have also invested in Naspers.

Have you had any regrets?

If any entrepreneur tells you that he hasn’t had that [an investment blunder], he is lying. So, what happened was I bought a property in 2008, just before the [recession]. I was stuck with it for years and even when I sold it, I sold it many years later at the same price I bought it.

I bought it in an absolute inflated stop end, and it was really at an all-time high and I had to sell it at an all-time low… But the main thing for me about those kind of things is that you learn from them and you must not beat yourself up for too long.

Try and see what you learned from them.

Why did you invest in the hair business?

I think the hair industry is going to explode in South Africa and the whole continent, if you just think of the possibilities of wigs, hair pieces, hair colors and relaxers. Millions of women before weren’t so worried about their hair but as the world has changed so much, all of them want to look amazing and they want to look current, fresh, sexy, and that is all a part of the hair industry.

What should you consider first before you invest in your hair?

I think the one thing is to have a professional conversation with someone instead of just doing your own thing and, usually, hairdressers are quite happy to consult with you without charging you before you make a serious investment in hair pieces or wigs.

How big do you think the hair industry is in Africa?

I think it is worth millions and billions… and I think it is an undiscovered industry that is still going to explode. I don’t think we have scratched the tip of the iceberg with this.

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Entrepreneurs

A Germ Of An idea

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The microbiologist-turned-entrepreneur Babajide Ipaye started making good-looking shoes to fit his size 48 feet but decided to create them for others as well.


Selling shoes was probably the last thing Babajide Ipaye, a microbiology graduate, envisioned doing. But when by the age of 10, he was already wearing his father’s shoes, a size 44, he knew that some day that he would step in that world.

The only child of his parents, who passed away in a car accident when he was only 11, Ipaye was raised by his grandparents and extended family members who shaped the early years of his life.

“I had a lot of people who were trying to nurture me and they had different professions. So for example, one was an artist and I was endeared to him, another one was a medical doctor, so my granddad wanted me to study medicine and another uncle was a computer scientist, so I was kind of confused growing up. I wasn’t sure what I wanted to do, so I kind of lived the life of almost everyone that influenced me,” says Ipaye.

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That confusion helped Ipaye cut his teeth in various industries early on in his career. His medical doctor uncle influenced his career as a microbiologist where he worked with Ideas International Bio Technology Services, spending his days cleaning up oil spills and bacteria.

Then followed a stint in Information Technology (IT), a move also inspired by another uncle, where he worked with Tranter IT Infrastructure Services and Computer Warehouse as an analyst deploying managed technology services for multinationals like Guinness, Total and KPMG.

“At this point in time, IT was very hip and we happened to be one of the early pioneers in the tech space which was a very exciting time and considering where I was coming from in microbiology, it was a new field for me, I was working with multinationals and the exposure was amazing, it gave me a very broad sense of how organizations function.”

But Ipaye soon became dissatisfied with being put in a silo. There was too much structure and rigor due to the size of these multinationals and he became bogged down with a lot of systems and processes, which ultimately stifled his creative juices. His solution was to start his own IT company, Torque Technologies.

The company began providing IT equipment and technology services in its early days to multinationals before quickly creating a niche for itself in the fiber optics space. In early 2003 to 2005, the Nigerian telecoms era had just started booming and Ipaye and his partner saw a first-mover advantage in fiber optics by providing training to firms in Nigeria, which they did for the next 10 years.

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By 2015, Ipaye decided he wanted a new challenge outside the IT world. After parting ways with his partner, he began to ponder about his life-long struggle with footwear.

“So I said to myself ‘why don’t I make my own shoes?’ So I went on the internet, did a bit of research and came across a school in the Netherlands called SLEM. I called them up and found out about the shoe-making course and I said since I was on holiday, why don’t I take some time off the business and explore how to make my own shoes and I went to the Netherlands.”

Keexs was born. The goal was to make shoes that fit Ipaye’s size 48 feet but also looked aesthetically pleasing. But making shoes for him alone would prove to be too costly.

Ipaye decided to make shoes for others as well. He would focus on the athleisure market, which is a portmanteau of ‘athletic’ and ‘leisure’, a market that has grown to the stage where it is no longer a trend but a mainstay in Nigerian fashion.

To stand out in the competitive footwear market, Ipaye decided to add some African elements to his innovative footwear brand and focused on outsourcing the production to a factory in the Netherlands while he focused on the product and design to save on cost.

The aim in the long run was to move production to Nigeria where he could fulfill the brand’s social mission of providing employment and skills training to unemployed youth. However, to make the business viable, he had to make a minimum of 1,000 pairs of shoes to achieve economies of scale. Next came the challenge of securing startup funding.

“From my previous experience of starting my technology business in Nigeria, I came to realize that the cost of funding in Nigeria is very high and also there are a lot of businesses chasing funding and the risk level of most potential investors in Nigeria is very conservative and they don’t want to invest in stuff they are not sure about.

“So I read about crowdfunding and consulted a company in the Netherlands and I came across a site called kick-starter which is a US-based platform that offers a global crowdfunding platform to innovative ideas and projects, hence we started the first innovative and social focused brand in Africa,” says Ipaye.

In just over two years Ipaye has managed to grow the business through leading e-commerce sites like Jumia and Konga as well as via its own website which receives orders from countries around the world. The shoes sell for anywhere from $40 to $60, with over 8,000 pairs of shoes sold till date.

Keexs has about 18 outlets in Nigeria with retail partners in Kenya, South Africa and Guadeloupe and Nairobi.

The company also sells through social media channels where they boast over 15,000 followers on Instagram. The long-term goal for Ipaye is to secure enough funding to set up a factory in Nigeria, which he is looking to raise through an amalgamation of funding sources including grants and loans.

“We realized very quickly that economies of scale is critical to drive the growth of this business therefore there is a need for a lot of capital. There are four sides to this chain; production, design, distribution and retail. The problem with a lot of businesses in Africa is that they are expected to do everything from start to finish along that entire value chain and what that does is, it stifles the growth of the business,” says Ipaye.

The big-time hit when CNN profiled Keexs on its African Voices show. Since then, they have managed to establish themselves as an innovative social brand focused on empowering unemployed youth in Nigeria. Next on the to-do list for Ipaye is establishing a production line in Nigeria, and then taking his brand global.

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