Investing in Somalia

[I've spoken]

Say I have a significant amount of money, what is the best way I could use that money to help my people? I don't want to make it donations because *give a man a fish and you'll feed him for a day; teach a man how to fish and you'll feed him for a lifetime*. So I want to invest and make a lasting solution. What would you do if you had alot of money and wanted to invest it in Somalia? Where would you start? Where and how would you invest it?

 

[Ras]

Cold chain logistics and storage for farmers, fisheries and animal products.

Farmers in Somalia are only able to sell their products just after harvesting them. This decreases the leverage they have as the market is oversaturated in harvest season; forcing them to sell at low prices.

Also the market they can sell to is limited in distance as non frozen products can only be sold locally ATM in Somalia.

Build some cheap cold storage facilities (10k-50k) and get cheap labour to prepare and move the produce from the farms to the local storage facilities (or educate the farmers to do it themselves).

You don't need to purchase the produce yourself but could act as a middleman and help them triple the value of their products.

If you decide to manufacture the components of the cold storage facilities yourself; you could look into pivoting and sell air conditioning hardware for buildings and cold logistics trucks.

Both are huge markets in East Africa as everything is imported at ridiculous prices from abroad (a fairly old technology).

For example - Potatoes are sold at $80-$100 per tonne in Somalia at the moment while frozen potato products go for $300-$900 per tonne in East Africa.

A $20-30k facility should be able to dry and freeze store over 1,000 tonnes.

You could also build a smaller facility for fisheries but unfortunately there isn't much money in Fish products in Somalia.

 

[cantspeak]

Cold chain logistics and storage for farmers, fisheries and animal products.

Farmers in Somalia are only able to sell their products just after harvesting them. This decreases the leverage they have as the market is oversaturated in harvest season; forcing them to sell at low prices.

Also the market they can sell to is limited in distance as non frozen products can only be sold locally ATM in Somalia.

Build some cheap cold storage facilities (10k-50k) and get cheap labour to prepare and move the produce from the farms to the local storage facilities (or educate the farmers to do it themselves).

You don't need to purchase the produce yourself but could act as a middleman and help them triple the value of their products.

If you decide to manufacture the components of the cold storage facilities yourself; you could look into pivoting and sell air conditioning hardware for buildings and cold logistics trucks.

Both are huge markets in East Africa as everything is imported at ridiculous prices from abroad (a fairly old technology).

For example - Potatoes are sold at $80-$100 per tonne in Somalia at the moment while frozen potato products go for $300-$900 per tonne in East Africa.

A $20-30k facility should be able to dry and freeze store over 1,000 tonnes.

You could also build a smaller facility for fisheries but unfortunately there isn't much money in Fish products in Somalia.

Electricity prices would rape you before then.

Cheap energy is the foundation for everything

 

[Ras]

Electricity prices would rape you before then.

Cheap energy is the foundation for everything

Not really. It all comes down to margins. If you can get an exclusivity agreement to sell those produce and find an electricity source that's less than 50 cents per kWh you're good to go.

However you have to make up the margins by looking further down the value chain of the products you're marketing to get better prices.

For example... Get a French fries cutting machine from China and put your own packaging on it before selling it to regional supermarkets or restaurant.

That's what Turkey did initially. The bare minimum to increase the position in the value chain of their raw produce.

There are a dozen frozen potato products varieties that don't require additional ingredients and complex machinery.

It's a shame that fridges aren't common in Somalia so most products for sale domestically would probably go to restaurants for immediate consumption.

However; products set at global standards would easily allow you to ship to bigger markets in the gulf and Red Sea a lot cheaper than East Africa capital cities. There is always a demand for cold chain products as it's pretty rare in Africa.

 

[somaliaristocrat]

Not really. It all comes down to margins. If you can get an exclusivity agreement to sell those produce and find an electricity source that's less than 50 cents per kWh you're good to go.

However you have to make up the margins by looking further down the value chain of the products you're marketing to get better prices.

For example... Get a French fries cutting machine from China and put your own packaging on it before selling it to regional supermarkets or restaurant.

That's what Turkey did initially. The bare minimum to increase the position in the value chain of their raw produce.

There are a dozen frozen potato products varieties that don't require additional ingredients and complex machinery.

It's a shame that fridges aren't common in Somalia so most products for sale domestically would probably go to restaurants for immediate consumption.

However; products set at global standards would easily allow you to ship to bigger markets in the gulf and Red Sea a lot cheaper than East Africa capital cities. There is always a demand for cold chain products as it's pretty rare in Africa.

im not a business guy although im interested..

but....DAMN..after reading all you wrote my brain begun to turn to musheasy there.

its still cool watching someone explain break down the whole progress of how things are done in a more economically viable option for somalis in general.

p.s. i threw some of those big words in there if they dont make sense dont come at me.

 

[Mr.Haggis]

Khat

 

[somaliaristocrat]

Say I have a significant amount of money, what is the best way I could use that money to help my people? I don't want to make it donations because *give a man a fish and you'll feed him for a day; teach a man how to fish and you'll feed him for a lifetime*. So I want to invest and make a lasting solution. What would you do if you had alot of money and wanted to invest it in Somalia? Where would you start? Where and how would you invest it?

Also invest in building education centres

 

[Haji]

I think something very very simple, that requires 0 electricity is hydroponics using the kratky method.

Watch this video. It's literally plants in containers of water with nutrients.


You could sell it on your own, but if you could find a way package it, and refrigerate that would add a lot value.

More value would be added if it was part of a supermarket. I think that's what somalia is missing especially. A dedicated supermarket with a variety of produce. You could process meat for people and charge them for it. You can also charge them for stocking it in the supermarket

 

[Haji]

Another idea is something very simple, vending machines.

Think about it, I've never seen any vending machines when I was in somalia. If you can stock it with foreign snacks, I think locals would be very intrigued by it.

Or you could go with a fun gumball machine, I think kids would like it. Something like this maybe

 

[DR OSMAN]

Say I have a significant amount of money, what is the best way I could use that money to help my people? I don't want to make it donations because *give a man a fish and you'll feed him for a day; teach a man how to fish and you'll feed him for a lifetime*. So I want to invest and make a lasting solution. What would you do if you had alot of money and wanted to invest it in Somalia? Where would you start? Where and how would you invest it?

As suggested by others there are some pitfalls that need filling in the farming sector but the electricity provider will be a huge problem as you will be using huge amounts of energy and half your profits or more will go to just electricity and forget about all the other costs such as the building and it's rent, maintaince, workers, transport of products. Just weigh it all up and see what you get and how much u lose to bills and if it's worth it in the long-run or not.

I would also suggest going into the mechanic business, I am seriously considering investing into an established mechanic store who is already operating and is well known(no marketing needed) and tell him i'll be an angel investor and dump my money into his business and upgrade all his equipment to 'modern' standard, bring good technical mechanics to train them on the best methods on a contract basis like 3 months. I like this business cause there is so many cars in Somalia and the roads are terrible hence 'more damage' to vehicles and a reliable consumer demand.

I honest wouldn't bother with 'professional' or 'retail' in somalia as that is choco bloc full. What's lacking and where there is no competitor is in the 'hands' game or anything to do with 'hand' related thing, you own the WHOLE market!!! I would have close ties with tumaal and workers and pay them well!!!

 

[Haji]

As suggested by others there are some pitfalls that need filling in the farming sector but the electricity provider will be a huge problem as you will be using huge amounts of energy and half your profits or more will go to just electricity and forget about all the other costs such as the building and it's rent, maintaince, workers, transport of products. Just weigh it all up and see what you get and how much u lose to bills and if it's worth it in the long-run or not.

I would also suggest going into the mechanic business, I am seriously considering investing into an established mechanic store who is already operating and is well known(no marketing needed) and tell him i'll be an angel investor and dump my money into his business and upgrade all his equipment to 'modern' standard, bring good technical mechanics to train them on the best methods on a contract basis like 3 months. I like this business cause there is so many cars in Somalia and the roads are terrible hence 'more damage' to vehicles and a reliable consumer demand.

I honest wouldn't bother with 'professional' or 'retail' in somalia as that is choco bloc full. What's lacking and where there is no competitor is in the 'hands' game or anything to do with 'hand' related thing, you own the WHOLE market!!! I would have close ties with tumaal and workers and pay them well!!!

This is something that's definitely needed. I've seen it myself when I went to Hargeisa. Roads are horrendous and the mechanics are low quality. There can be a lot of value added from a proper setup

 

[RasCanjero-]

im not a business guy although im interested..

but....DAMN..after reading all you wrote my brain begun to turn to musheasy there.

its still cool watching someone explain break down the whole progress of how things are done in a more economically viable option for somalis in general.

p.s. i threw some of those big words in there if they dont make sense dont come at me.

Let me know what didn't make sense and I'll try to clear it up.

The only important thing you have to keep in mind in investing in Somalia is figuring out where the demand is and what your profit will be after all the expenses.

Since we're missing a lot of infrastructure; you'll have to get really creative and dig deep for potential markets.

For example:

Basic agriculture in Somalia isn't as profitable because of 1. cheap imports, 2. food aid and 3. high production costs.

The only way to make it work is by taking those raw produce i.e grains and turning it into cereal.

While wheat goes for $150/tonne you can sell a tonne of branded cereal for $1,000+.

It's the only way we can get around the high electricity and logistics costs at the moment.

 

[Haji]

Let me know what didn't make sense and I'll try to clear it up.

The only important thing you have to keep in mind in investing in Somalia is figuring out where the demand is and what your profit will be after all the expenses.

Since we're missing a lot of infrastructure; you'll have to get really creative and dig deep for potential markets.

For example:

Basic agriculture in Somalia isn't as profitable because of 1. cheap imports, 2. food aid and 3. high production costs.

The only way to make it work is by taking those raw produce i.e grains and turning it into cereal.

While wheat goes for $150/tonne you can sell a tonne of branded cereal for $1,000+.

It's the only way we can get around the high electricity and logistics costs at the moment.

That is some real real.

I heard from somewhere that african's give all the raw materials, and it has low value. Developed countries then take that raw material and turn into something else which adds alot of value.

Easy example is cocoa beans from congo and west africa, that is turned into belgian chocolate. Instead of selling underpriced cocoa, process and create the chocolate and you will make much more money.

 

[RasCanjero-]

That is some real real.

I heard from somewhere that african's give all the raw materials, and it has low value. Developed countries then take that raw material and turn into something else which adds alot of value.

Easy example is cocoa beans from congo and west africa, that is turned into belgian chocolate. Instead of selling underpriced cocoa, process and create the chocolate and you will make much more money.

One of the million examples unfortunately.

Worst example is Nigeria exporting unrefined crude oil and buying back refined petroleum products.

It takes just a fraction of their annual oil revenue (Nigeria's government share) to build a modern refinery.

I guess it's not worth the 10s of billions they lose a year...