Entrepreneur Middle East, an international franchise of Entrepreneur Media posted this article written by Sindhu Hariharan about Egypt’s young entrepreneurs moving into new food production systems thus impacting the food security concerns of not only the country but even the region if this particular initiative were to be nurtured and spread around.
Egypt-Based Bustan Aquaponics Is Taking A Socially Responsible Route Towards Food Security
Entrepreneurship is often considered to be a means to personal wealth creation, but then again, every once in a while, you also come across business propositions that have the potential to be considered national assets.
Consider Egypt as an example. While it has been historically hailed as the “gift of the Nile,” the country is today facing a severe water crisis, even as it tackles a rising population. According to a Guardian analysis back in 2015, Egypt is said to be “below the United Nations’ (UN) water poverty threshold,” with the UN predicting that by 2025, the country may approach a state of “absolute water crisis.” Now, if all this is too drastic and negative for you to handle, here’s a ray of hope. With a strong conviction that Egypt is in dire need of modern forms of agriculture that help in water conservation, food security, and production of clean healthy food, entrepreneur Faris Farrag decided to ease the pressure on the country’s already stressed natural resources by setting up his enterprise, Bustan Aquaponics.
In simple terms, aquaponics is a farming methodology combining the systems of producing aquatic creatures (aquaculture), and plants without soil (hydroponics). In aquaponics, plants are fed the aquatic animals’ waste, and in turn, the plants clean the water that goes back to the fish. Additionally, microbial organisms also provide nutrition for the plants- effectively ensuring a sustainable, quality and healthy crop production. While it may sound like an experimental concept, its potential in terms of commercial use cannot be understated. “It is my strong belief that there is massive potential for the expansion of aquaponics, both regionally and in other locations that have issues with food security and water,” Farrag says. “Many island nations (Puerto Rico as a good example) have a natural need for these types of systems as one of many different approaches to reduce their dependence on imported food without doing significant damage to the very finite resource of clean water.”
Having launched officially in 2014 (although it had already been operating since late 2011 as a pilot), Bustan, which currently only serves Egypt market, is exploring various avenues of partnerships and private equity funding for expansion into other export markets. Farrag claims that Bustan is today the largest bayleaf salad producer in Egypt, and the company’s farm, which is located just outside Cairo, grows a number of other products on a seasonal basis- basil during the summer, kale, and other leafy greens during the cooler winter months, herbs such as rosemary, thyme, and mint, among other kinds of produce.
With sales channels that are both B2B and B2C in nature, Bustan counts many of the top gourmet restaurants and supermarkets in the country as customers, owing to its reputation in the market. “Our major customer groups are high quality restaurants and supermarkets, while also expanding in the home fruit and vegetable package delivery business, through a partnership with another high-quality producer,” says Farrag. While Cairo brings in most of the revenue for Bustan, the company’s products, which are pesticide free and grown using 90% less water than traditional farming practices, are also available in Alexandria, Hurghada, and the North Coast of Egypt through their retail partners.
As an MBA from UK’s Warwick University, having worked in investment banking, private banking, and having also been involved in two architecture and design start-ups, Farrag’s entrepreneurial move to Bustan was largely fuelled by a strong passion to feed Egypt’s growing population sustainably. Besides being an area that’s quite alien to his background, Bustan is also part of a highly capital intensive and niche industry, which is often not the easiest starting point for an entrepreneur. Farrag agrees with this notion, and lists a few key hurdles that he had to cross (and still faces) in running the venture. “Some of the key challenges we face are very tight financial management, cost control, logistics management, employee training and retention, and staying current with new technologies that can help reduce costs and/or increase productivity,” he says. But it’s not just his business’ scale that keeps Farrag awake at night.
The agri-entrepreneur is also keen to take the concept of a healthier, qualitative, and more sustainable food production (which is how he believes food consumption everywhere should be) to a wider audience. For this purpose, Bustan also started providing aquaponic farming consulting services throughout the Middle East. “We specialize in desert farming solutions to help build environmentally sustainable communities and work closely with non-profit organizations and culinary institutions to strengthen our local food movement. We have also made a significant push into the sustainable urban development market with a new partnership that is currently in the works,” says Farrag.
Today, there is quite a bit of action that MENA’s agricultural sector is seeing with both the government and entrepreneurs working towards identifying new systems to impact the food security concerns of the region. While it would be a tough ask for the region to produce majority of its food needs due to the environment and resource constraints, backing innovation in agriculture is one way to help mitigate vulnerability to a large extent. However, the difference between the entrepreneurial action in this sector relative to others, is clearly the lack of buzz around it, and consequently, this affects the investor interest that it attracts compared to tech counterparts. But Farrag isn’t bogged down with this less-glamorous state of agri-innovation. “The tech-focused interest of investors is inevitable, whether regionally or globally,” he says. “Many of these investors are looking for the next big thing at the expense of taking a longer-term view of the benefits that agriculture investments provide, both financially and socially. Eventually, our time will come. Having said that, there has been a significant increase in interest in our sector although usually in traditional agricultural investment.”
Of course, the entrepreneur has come to this opinion after quite a bit of experience of his own. While currently self-funded -both through an initial investment and thereafter through retained earnings- Bustan has been on the lookout for external investment, he says. Speaking about how fundraising has been treating him, he says, “Often investors are very interested in the idea of aquaponics, but [they] have a limited understanding of the complexity and need for intimate knowledge of the design, build, and operate parts of the business. These are our core competencies that puts us ahead of many other startups, as we have been in the business for some time now, and are constantly updating our designs and operating know-how.”
As for specific responses from investors he’s pitched to, Farrag says they vary from “deep interest, to a fear of the unknown. We constantly stress that at this stage we are innovative but not experimental as we have operated the business for some time now, and built a significant brand that is trusted and demanded by our clients.” And Farrag is right when he says that there are just few direct competitors to Bustan’s offerings, as the growth of aquaponics, with the current state of things, tends to be centered around local markets rather than exports.
At this point, I ask him if his almost impulsive decision to start Bustan has served him well. “Though one can say that all startups are challenging regardless of geographic location, some of the particular challenges we have faced in Egypt have been [in] finding competent and professional staff, and a very unstable market,” he replies, adding that the company has managed to convert these challenges to opportunities over the years. Having a small and efficient team has been a great advantage to Bustan, he says. “Our team is relatively small in view of our production. We are a total of 15-18 employees across all aspects of the business. The strength of a small team is our ability to move and react quickly to changing market conditions.” With a wealth of professional experience on his side, I reckon his words of advice for the region’s aspiring entrepreneurs may be a useful one to emulate: “Believe, and be passionate about what you are doing, don’t take no for an answer, and work harder than you’ve ever worked before.”
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