A year ago Gugu Mlihpa was named South Africa’s emerging farmer of the year. Gugu is a born entrepreneur. She’s always on the lookout for a gap in the market and even joined a professional kitchen to learn first-hand from the chef how to deliver market-ready produce.
Not only has she doubled her turnover on an annual basis, but Gugu Mlipha has set her sights on expanding into the game industry. The jump from 12-year-old cattle herder and vegetable seller to a farmer-cum-businesswoman running a company with a turnover of more than K3,65 million (R5 million) a year sounds impossible. But once you hear Gugu Mlipha’s tale of her journey to entrepreneurial success, you realise she has an inborn knack for business.
This entrepreneur, who owns land south of Johannesburg, was named Agricultural Writers SA’s New Entrant to Commercial Agriculture for 2015-2016.
Even as a child she was prepared to tackle the difficult things that other people would shy away from. “We didn’t have tractors in our village, Ngagane, near Newcastle in KwaZulu-Natal. If we wanted to plough, we had to use our cattle. I would always choose that one bull that no one was able to harness and then we would plough deep furrows together,” she says with a chuckle.
In Ngagane she first worked as a cattle herder, all the while dreaming up plans for a major enterprise in the future. At school, she sold sweets and knick-knacks to her friends. “I wasn’t very keen on attending school, I preferred to build up my business,” she says.
I would always choose that one bull that no one was able to harness and then we would plough deep furrows together
By the age of 12 she started selling vegetables at taxi ranks. Later, she moved to Johannesburg with her mother, where they lived in Katlehong on the East Rand. Gugu eventually obtained her matric at Dawnview High School in Germiston and then received a diploma in banking from Damelin.
In 2002, she and her husband, Naphtali, saved up to buy a 6ha farm near Walkerville, south of Johannesburg.
HOSPITALITY SECTOR OFFERS BREAKTHROUGH
“It was a very small beginning, with a few chickens and some vegetables that I initially grew for our own use. I never imagined I would farm commercially – I simply wanted to be independent. Gradually, however, I began to sell some of my vegetables at the taxi ranks.”
At first, she only sold tomatoes and spinach in Meyerton, and this went very well. “However, when I expanded my offering to broccoli and cauliflower, no one was interested. I was told that broccoli and cauliflower were white people’s food so I decided to go out and find that market for myself,” she says.
Gugu decided to work her way through the Yellow Pages and call every hotel to find out if they would be interested in her produce. “The Birchwood Hotel was my first breakthrough. There I met Auret Morolo, a very patient chef. He invited me to bring my produce to his kitchen. Back then, I had a Corsa pick-up truck so I loaded all my produce onto the back and drove it to the Birchwoord Hotel to show Auret what I was capable of delivering.”
Auret gave her invaluable advice. “He taught me how to package my produce and how to present it properly. I realised I had a lot to learn, so I asked him if I could come and work in his kitchen for a week to gain the knowledge I needed. I learned how to slice the various vegetables and how to package them, and that chefs preferred to get vegetables pre-sliced, ready for cooking.
“I realised that to be successful, I would have to impress the chefs. Every chef is a perfectionist and they are very passionate about fresh produce,” says Gugu.
At that stage, she had a 9 x 12m processing plant but quickly realised that improvements would have to be made. “I showed my staff how to slice and package the produce.
I realised that to be successful, I would have to impress the chefs.
“Suddenly we had to comply with a lot of regulations, my delivery vehicles had to be equipped with refrigeration units and I had to arrange cold storage facilities. This was achieved a little at a time – and it cost a lot of money – but eventually our processing plant was finished.”
The customer base for Gugu & Daughters, the eventual name of their business, consists of about 80% hospitality sector and 20% government contracts, specifically government hospitals. “Currently my customers include the Birchwood Hotel and Conference Centre, the Soweto Hotel and the Maslow Sun International Hotel.
“We also supply produce to the Chris Hani Baragwanath Hospital, the Zola Jabulani Hospital, the Heidelberg, Pholosong and Sebokeng Hospitals, the Department of Social Development’s Zanele Mbeki Frail Care Centre, Boksburg Correctional Services and Pick n Pay stores in Heidelberg, Meyerton and Brackenhurst.”
THE DRIVING FORCE
Gugu believes her greatest talent lies in spotting a gap in the market and seizing the opportunity with both hands. Plus, she has many satisfied customers in the hospitality industry.
“I handle my own marketing and I have, over the years, set out my business principles: a minimum amount for orders, good communication with my clients and an emphasis on specialisation. I simply strive to be the best at what I do,” she says.
In 2014, Gugu & Daughters’ turnover was about R2.5 million and in 2015 that turnover doubled. Her goal for 2016 was R8 million.
“There’s a difference between being a good farmer and being a good entrepreneur. Just because you’re an excellent farmer, doesn’t mean you’ll be a good business person,” she says.
The secret, says Gugu, lies in having goals. “I know that to generate an annual turnover of R8 million, the business must make about R666 000 a month. This means I can set a monthly or even a weekly target. If we see that we will not reach this week’s target, we need to step up our game and work harder next week. It’s all about how well you plan, how meticulously you develop your marketing strategy and how well you deliver your products.”
‘There’s a difference between being a good farmer and being a good entrepreneur’
Did her experience as a vegetable vendor years ago give her a head start? “Definitely! It gave me an understanding of my clients. And with every transaction I ask myself how I can increase the revenue from that transaction. A chef once told me that I’m never satisfied – I always want to know if there are any other products that I can provide. This is one of the cornerstones of my business philosophy: to always be on the lookout for another opportunity to improve my business.”
Gugu’s husband, Naphtali, is fully engaged in the business. He is the production manager on the farm, while she handles the marketing and sales.
About 60% of their produce is supplied by other farmers in the Walkerville area. She also produces some of the vegetables herself and regularly buys fruit and vegetables from the Johannesburg Fresh Produce Market.
“We process stir-fry ingredients and soup mixes consisting of carrots, butternut, green beans, celery and leeks. We also prepare and slice produce according to customers’ specifications at the plant,” says Gugu.
Her next plan is to expand the plant so they can process more potatoes. “I would like to outsource to some of the farmers in my area to provide me with potatoes. We want to process them into hash browns and frozen chips for the takeaway food market. The plant will also provide powdered potatoes for instant mash.”
FINANCING – NOT GRANTS
Gugu says she has submitted an application for a loan from the National Empowerment Fund to finance the expansion. She says she doesn’t believe in grants, but rather in getting funding through loans and credit. “If you spoon-feed people it has disastrous consequences,” she says.
Her role models are commercial farmers – both white and black. “I love reading about them, seeing what they are doing and learning from them. Their secret is that they plan for profitability. There are too many farmers today who focus only on production and completely overlook profitability. Everything starts with the profitability of your business.
“If I see an idea is not going to be profitable, I discard it. It’s simple. Plan for profitability first, and then work towards productivity.”
She has an ordinary bank overdraft facility but also uses loans to expand her business. “It was not easy to get this business started and several financial institutions snubbed me. However, I believe that each rejection made me stronger. People tend to put obstacles in their own paths before seeing the opportunities that are right in front of them. I’d like to believe that I think differently.”
It should be about what you can first do for your business yourself before you go begging at the door of others, says Gugu.
“The biggest problem still lies with the person in the mirror. Stay humble and if there is an area of your business you don’t understand, ask for help from the experts. I spend a large portion of my capital on research and I also take my staff for training. Everyone with a role to play in the business should have an intimate knowledge of the industry.”
GAME INDUSTRY IN HER SIGHTS
Her medium- and short-term goals are to expand her business, says Gugu, but in the long term she wants to enter the game industry. “I like a business with high entry levels; it gives me a challenge. I believe there is a great opportunity to export venison and I’d like to get involved.”
The words “can’t” don’t exist in her vocabulary, says Gugu. “I am a Christian, and when I look at the amazing things that God created in nature, then I tell myself He’s my Father and I have his DNA in me. I am thus able to achieve anything.” Given the sharp growth that Gugu & Daughters has achieved over the past few years, this belief is spot-on.
ENQUIRIES: Gugu Mlipha, cell 002783 420 4856.