Entrepreneur puts his mind to developing African business model
WILDGEESE: EMIGRANT BUSINESS LEADERS ON OPPORTUNITIES ABROAD: David O'Halloran, Founder of BusinessMinds, Africa
FOR IRISH entrepreneur David O’Halloran, adhering to a sustainable business model that helps develop and protect local communities and their environment is the key to enjoying long-term success in Africa’s emerging markets.
In late 2006, the Galway man, along with three former colleagues, rejuvenated a business development consultancy called BusinessMinds by turning it into an incubator company that develops, finances and operates sustainable commercial ventures in Africa.
The idea behind the enterprise is to offer investors a socially responsible approach to doing business on the continent, while also making a profit.
“Historically, many investors in Africa have used a more short- term, exploitative business model, one which has existed since the days of colonialism,” O’Halloran says.
“Unfortunately, for some investors this remains the modus operandi even today. As in, they take what resources they can and then get out without giving much back to the local economies.”
However, O’Halloran says he believes people are starting to realise that such an approach is inherently unstable and increases risk. Not only that, he adds, but many countries in Africa have significant development challenges such as poverty and high rural unemployment.
He says BusinessMinds has shown that “by focusing on how you can maximise the benefit for local communities and the environment, businesses can help to address some of these challenges while also increasing returns for their shareholders”.
Since 2007, O’Halloran and his partners have established africaJUICE, a company that produces, processes and delivers juice and vegetable products in Ethiopia and has exported to Europe since 2009, and africaFISH, an aquaculture business in Uganda that has just finalised financing for a large- scale catfish and tilapia producer that will supply east African markets.
“Both companies are models of sustainability with community ownership, outgrower schemes, low environmental impact and efficient natural resource – like land, water and soil – usage,” says O’Halloran.
“We spend a lot of time setting up the businesses, which minimises problems down the line, and have a very commercial mindset.
“We align with NGOs, donors, and ensure our contract farmers get access to FairTrade markets and are up to speed with all the best practices to grow better crops.”
The model the company uses is not reliant on grants as, he says, the business has to be a viable, profitable venture.
“In Ethiopia, where we employ around 3,000 people, we are about to see our venture turn a profit. Currently we do around $300,000 [€212,000] a month but we expect this to grow by a factor of six long-term.”
After graduating as an engineer from University College Galway in 1992, O’Halloran worked around the world for several major energy companies, including Shell International, developing power and gas projects in emerging economies.
It was during this time that he began to develop his ideas on sustainable business practices.
“I started out in Holland, but I was soon sent to more tricky countries to work in, like Iran and Nigeria, and it was here that I first encountered real poverty, the type of which you don’t get in Ireland,” he recalls. “This triggered something in me I guess.
“I wasn’t born with this social conscience, but the idea there had to be a way to do business that was good for communities as well as the environment began to grow throughout this stage of my career, and it has taken me to where I am today.”
O’Halloran has lived in Dunmore East, Co Waterford, with his wife and three children since returning to Ireland in 2008, but he travels between Africa and Europe every month to keep an eye on the operations of BusinessMinds.
He believes that for Irish people involved in agriculture, especially those who are seasoned professionals, there is huge potential to secure employment across the continent, where many countries are actively seeking experienced farmers to work the land.
“Farmers in Ireland have had it tough for the past while and it’s a difficult job to do well in at the moment,” he says, “but they have a massive amount of experience in terms of management and technical expertise.
“We would love to have more interest from experienced hands- on farmers with fruit and vegetable cultivation experience or experienced aquaculture mangers.”
O’Halloran says there are also opportunities to manage plantations in many countries, while young, less experienced farmers “have a role to play if they are prepared to go to tricky, out- of-the-way places because if you grow up on a farm, in Ireland you already have a valuable amount of work experience by the time you are 18”.
He adds: “They might not get the same salary as at home, but they must remember the cost of living is so much less here, so the real yardstick is how much they can save. I guess the main stumbling block for Irish people is can they handle the change in environment, which can be extreme in many cases.”
O’Halloran believes similar opportunities exist in Africa for Irish people who were involved in the construction industry, whether they are tradespeople or project managers.
He says Irish people’s oft- mentioned natural ability to communicate would help them form positive business relationships with Africans.
“We [Irish people] also don’t have the colonial baggage that other nationalities bring with them. Unfortunately the issue of racism often crops up.
“In Africa, many people will assume that because you are white you are racist, but Irish people have a better understanding of how to deal with this attitude due to our own colonial past.”