Lutz Hartmann is an International lawyer who specializes on corporate law, sales and acquisitions. He is also a farmer in Sodo, in Ethiopia. Here, he reflects with The Reporter’s Samuel Getachew on his adventurous journey in Ethiopia, a nation he knew little about few years ago, some of the projects he is involved in, the challenges and on the partnership he has created for himself. Excerpts:
You are a lawyer and currently you are involved in farming in Ethiopia. How did that come about?
I advised some investments in Africa as a lawyer and always had the wish to someday do a personal investment somewhere in Africa (I did not know Ethiopia at the time) as well. I made lists of what mistakes not to make, so I avoided some, but made many others…that’s the life of an entrepreneur. Then by coincidence I came to Ethiopia and saw its beauty and its potential. I also passed through Soddo on this trip, without knowing that I will one day be here every 6 weeks and feel a little bit home.
On this trip the idea was born to do something in agriculture. It was difficult to find the land (the then existing land bank was not really of help), I had to convince investors to join me, we had to bring irrigation, a generator etc. So that was the start.
What are some of the challenges of being a farmer in Ethiopia?
Good staff, weather, infrastructure (in many different ways).
It is hard to find committed and practically minded employees. I had so many bad experiences or deceptions. And we had to train those persons that we found in basic skills on how to write mails, respond to clients etc. Then there is a tendency of many graduates to be too theoretical. But the everyday business of a company is not theory; it is solving a lot of small problems, being imaginative and still respecting the basic rules of the company.
But we also have these great things happening, like when our driver died young with wife and kid of cancer, we employed his wife as service lady, we discovered a strong working ethic and skills so today she is our Farm Administrator and Store Keeper, she multiplied her salary by 4 and is highly respected by the man and women working on the field!
Today we have a good group of people but need to strengthen the organization around this core team!
Weather: the last 4 years, the rainy season was different every year from the years before, it is hard to plan. You never know when will the rainy seasons start, will there be a small and a big one… This is probably the hardest factor in agriculture.
Infrastructure: besides the obvious: we needed to build a road, road conditions, power lines, internet,… the infrastructure also for purchasing and services is not yet developed. In Europe in a town of the size of Sodo, you can buy everything needed for farming and construction and you find pump engineers and other service provider. In Ethiopia, this is a different challenge, every day! I first did not want to have an internal accounting (I do not have in Germany, I have outsourced it), but the service I received was so bad, that we had to hire internal staff.
You have now partnered with Siemens Africa on a project. Tell me about that?
The idea is: we need power and the villages around the farm do not have power either. The connection to the grid would take long and would still be inconsistent supply. So we are developing with Siemens and the local community, including the Woreda and the Wolaita University a plan to install a 500KW solar power plant, managed and owned by the community (know how transfer from Siemens), selling power to us (greener and at least not more expensive than diesel generated power) and selling power to the families living around (over 150 households).
We hope that this will contribute to the development of an economic activity around the farm (small craftsmanship, eventually processing of products from the farm, stores,…) and will give us the supply security for green energy. As the Woreda Administrator has put it the other day: this will change the structure of the Kebele and will make it more attractive for people to stay here.
Where are your products sold in Addis Ababa for instance?
You can find them in several international hotels and restaurants, in supermarkets like Fresh Corner and Queens, but also in smaller shops. We deliver 2 to 3 times a week from our own distribution warehouse in Addis. As foreign investors we are not allowed to sell our product directly to end consumers, so we do not have an own store. We also deliver to construction camps around Soddo and some smaller stores in town.
In reflection of your experience working in Ethiopia, what are some of the challenges faced by foreign investors?
As I said before: infrastructure and HR. And I guess this is obvious to everyone: foreign exchange. Sure, coming from Germany procedures and bureaucracy have been challenging to understand, but I follow the philosophy that I do not expect anything coming to an office, so deceptions are smaller. But it would be nice to have more consistency in administrative procedures (you often come to an office for something you did last week and are told that the check list for documents has changed,…). But meanwhile I became quite a specialist in dealing with the notary office in Mexico for example (last time I made it in less than 1 hour for 2 shareholder decisions, those who know the place know the challenges).
Further I can only advise foreign investors not to expect things to be the same as back home and to listen carefully. Many things are not openly communicated but very much between the lines and you have to discover that. Often I would like to get a NO, but it seems not to be in the culture so much.
What is your long term vision of your investments in the country? Any expansion?
We need to secure our basis today, we have now launched some processing (like moringa powder, chili flakes and powder, soon honey). We want to create some premium products under an own trademark to be delivered to Europe.
The Siemens project will give us some work and also some further development as we will extend the surface, nearly double the number of employees, install a cold store at the farm. All that will occupy us a lot. In connection with this, we want to support if possible some businesses to implement processing ideas next to the farm.
We also would like to add a nursery for trees but also for vegetable seedlings. We would then implement an out grower program so that smallholder farmers around could become co-producer with us for those crops and products that we can bring to market in Addis or Europe. We do this only on a very small scale today.
Finally I can imagine that in some years we try to duplicate the experience we have made in a different region that would allow us to grow other crops.