Econo Foods poised for growth: Soares

Lesotho Times
21 Min Read


BUSINESSMAN Kenny Soares, who runs Econo Foods Lesotho, epitomises the importance of hard work and perseverance. From selling sweets in his school days, he now runs the thriving multi-million maloti meat wholesale business. Econo Foods has become a giant in the meat industry, the just rewards for determination. Mr Soares recently sat down with the Lesotho Times (LT) to discuss the business, his life and outlook going forward. Below are excerpts of the interview.

LT: Who is Kenny, give us a brief background about yourself?

Mr Soares: I was born and bred in Lesotho. I was born in 1974, which makes me 47 this year. I attended primary school at Maseru Prep and proceeded to Machabeng High School. From there, I went to St Stephen’s High School, where I did my Form E.  From there I went to Johannesburg to study interior decorating and design, which I never finished because my heart and mind were already in business which I started while I was still at St Stephens in Mohale’s Hoek. I started off selling sweets at school, cutting students’ hair and anything else to put some money on the table. By the time I finished high school, I was already owning a couple of taxis purchased from my business profits. So, coming back from Johannesburg, I went full time into the taxi business for close to 10 years.

My second passion was cooking and I found that a lot of products that we needed to use were unavailable. These were mostly spices. I then started importing spices from Durban, Cape Town, Bloemfontein and Johannesburg. The day I started selling spices I only made M15. You can imagine how traumatic that was. However, because it was my passion, I pursued it and pushed hard.

Two years down the line I felt that I now needed other products to complement the spices because our supply was limited. I then approached Econo Foods and met with Antonio de Covea, the founding director of Econo Foods and we had talked about what could be done for close to eight months in 2008. Then one day he just showed up at my spices shop. So, he came and we set up three Econo Foods branches in 2008. We had Mafeteng, Maputsoe and Maseru branches but had to close down Mafeteng as it wasn’t performing well.

LT: Was there anything strategic about the location here close to the bus stop area?

Mr Soares: Yes. We came to the bus stop area specifically to attract the taxi commuters, the market guy, the guy selling on the street because I believe that the lowest market actually gives you the biggest turnover because they buy on a daily basis. Whereas the upper end market buys like once a month. So, you we needed to generate cash on a daily basis.

LT: Any plans to expand?

In terms of expansion, we’re looking at setting up shop at Maseru Mall to target Thetsane, Hills View, Maseru West for those people who don’t usually come to the bus stop area. We are also expanding production, which will be an abattoir processing plant. We had started investigations on setting up an abattoir but we paused them when Covid-19 started. We are still going to explore that once the pandemic eases, I don’t know if it’s going to disappear completely.

LT: You are talking about plans to open a shop at Maseru Mall, do you have a timeframe in which that will be done?

Mr Soares: It should be after the winter this year, either August or September.

LT: Where do you source your products? Are they produced by Basotho farmers?

Mr Soares: At the moment 99 percent of our products are coming from South Africa. I’m really trying to source locally and I’ve got good cattle supplier, who gives me a lot of cattle in Lesotho. I’ve got two suppliers who give me chicken. The biggest challenge there is that it’s difficult for the suppliers to comply with our requirements. We service a broad market, we also supply the supermarket chains in Lesotho, we supply hotels, we supply the mines who need accreditation or certification for their products. So, our challenge is that suppliers can’t comply with those requirements. And if some of them do, they cannot sustain the supply. So, you find that we need to change suppliers constantly. Sometimes they also change the type of feed that they use for their stock and that changes the quality of the meat because if you if you service, a broad base of clientele, you must give them consistency in every product. If there’s no consistency, then they run away from the product and the product doesn’t sell. So, that is one of the challenges that you will find that we have with our local suppliers.

LT: What is required when you’re talking about certification and accreditation? What are the standards?

Mr Soares: Certification requires an accredited abattoir to slaughter for you so that the test the product. If it’s if it’s maybe A grade, B grade or C grade, it must be labelled so that when you take it to the market, you present the exact quality for the meat. Whether it is beef, pork or chicken; it all works the same.

LT: So, what is your advice to local producers who would want to do business with you?

Mr Soares: My advice would be that they get professional help in their fields be it from learned candidates from our Agriculture College, or be it from existing farmers who have been doing this commercially for longer because Basotho are mostly subsistence farmers; they just farm to consume. So, on the commercial side, they know what must be done. If one is growing chickens, he must secure feeds in the same area because once you need to travel to get feed, then the product becomes expensive. Then there is also need for product knowledge…You have to come to Econo Foods or go to Pick n Pay or Shoprite and ask those in charge of fresh produce what grade, quality and what time they want the product. Often you find farmers trying to secure a market when their chickens are five weeks old or nearing slaughter dates. It becomes difficult at that stage.

Farmers must also know how to price their products so that when they come to the market, their price would be market-related so that they can compete with other players. If your price is higher, the product will only sell when the quality is exceptionally better than that of the competitor.

LT: Lesotho has a small population of just 2, 1 million people but we largely import food, you have already said you import 99 percent of your merchandise. Why do you think we are failing to feed ourselves and what needs to be done?

Mr Soares: We are failing to feed ourselves because we are not being given enough tools to work with. For instance, we lack the knowledge about soil conservation and it clear that there is little being done to preserve our soil. Our soil is being eroded along with the minerals into South Africa. So, nothing has been done to preserve it.

Secondly, our government gives fertilisers and crops to plant but does not educate the farmers to sustain their projects. We have the best quality waters where people can even bottle evian water which costs almost M50 per 500 millilitre bottle. However, you may find villagers washing their blankets in the source. That already shows you that they don’t know what they’re holding.

With our crop farmers, you’ll find that if it’s corn season, the whole country will grow corn, the whole country will go and grow beans. I want to believe that every part of the country has got its own strong point where they can grow a certain crop. If we establish that and start working towards that, then we will definitely be in a position to get the crop that we need every season instead of depending on corn and beans that we’re just going to store and wait to consume.

LT: You seem passionate about the subject, have you registered these concerns with the government?

Mr Soares: Yes, I have… We are in the process of setting up a piggery and processing plant and partnering with renowned people in the business. We these people, we have come up with a strategy of involving all the districts in Lesotho so that all our pork produce can sustain our market and we export excess. This is because we have the capacity to do so. Our farmers are just scared that since they don’t have an offtake agreement, they can’t expand too much. So, we came up with the idea of bringing the expertise and start off with piglets from renowned farmers in South Africa and bring them to Lesotho on 28 days then we engage one of the mills in Lesotho to produce the feed locally, then we give out the piglets. The different cooperatives will raise the piglets as prescribed by our mandate, then six months down the line, they bring the piglets in for slaughter and whatever differences they have on piglet and product price is the amount that we give them to enable them to start the value chain on their own in a new cycle.

We work with veterinarians from day one until slaughter to reduce the risk that may occur due to the type of feed because some may want to cut corners and feed with leftovers from takeaways and compromise the quality from the onset. We want to avoid losing money.

If the animal does not qualify, then we will not consume. We’re not going to buy anything live weight, we’re going to buy after slaughter. So, everybody in that value chain must understand how and why so that when they get their pay check, they feel happy that it was done properly. Only then can the mindset change.

We’re also looking at the cattle farmers. Our farmers use cattle to plough and when you take the animal to the abattoir, it will have so many bruises and to us, as the consumers, that is a loss because such parts must be cut off. The farmers must start mini feed lots in the villages, start feeding instead of taking to the field daily for grazing where they walk and consume energy which is supposed to be stored and fatten the animal.

We must instil a new thinking in our farmers because they farmers believe that wealth is in the animals that you see. They do not realise that a pandemic may kill all their livestock in one day and they do not have any security.

LT: We have seen attempts by the government, at some point, to impose bans on the importation of certain products like eggs. Given all the challenges and shortcomings that you have detailed, do you think all those bans are the best way of addressing the inherent problems considering that because of poor quality, you must import 99 percent of your products? Are we not jumping the gun or putting the cart before the horse?

Mr Soares: I think the bans are a little premature. I don’t know the reasons behind the bans at the time like when we had to source all our red meat from the local abattoir because of cattle import ban and we did not even have a feedlot. Even the abattoir itself had to buy cattle from South Africa to slaughter this side. So, if you impose a ban on anything, it must be something that would be 100 percent obtainable in Lesotho. The first product that I would say they would have been right to ban is water because we have it to sustain the entire country… The government must put in place the right security processes to help the people producing water to succeed. I don’t think we’re in a position now to say we can we can safely ban poultry products and say Lesotho can produce on its own. We cannot produce enough for Maseru with everybody that’s doing chickens at the moment. The biggest reason is that there are a lot of by-products that we must consider. If you look at a kilogramme of chicken hearts has 100 hearts… I buy an average of 10 pallets weekly. And 10 pallets would be 70 000 chickens. That means we must slaughter 10 000 chickens to cater for one company. So, any farm that has less than 70 000 chickens at any given time won’t meet the commercial standard in terms of the by-products and all the cuts that I need.

We need at least five or six of that capacity to at least be in a position to say now we can consider comparing local production versus import.

LT: How is Econo Foods performing profitability wise? What are the indications right now?

Mr Soares: We have been steadily growing from inception, where we found that there was a real need for our products. Our company has been growing between 15 and 30 percent annually, which was also a good sign that we were in the right market. Once Covid-19 hit, everything changed because most of the wholesale market (hotels, guest houses, takeaways and restaurants) was closed down. Hospitals started buying little. So, it hit us hard although the retail side is still performing well.

LT: How did the 40 percent reduction affect your employees?

Mr Soares: All management in Lesotho took a 33 percent salary cut decrease that went directly to our bottom staff. On the fourth month after Covid-19 struck, we introduced Pay As You Earn which means a worker was paid what only when they had worked. Initially, we just gave a flat rate of a monthly salary of which you just needed to complete a certain number of hours with overtime. Now, because we had to start working shifts, four hour shifts with the trading hours that were given, they had to start working four hours. So, they’re actually getting paid for four hours per day. So, haven’t retrenched any of our staff. We are just trying to juggle them around to get a balance in the entire business.

LT: A year after Covid-19 struck, how has it been? Do you think you have learnt some lessons that will help you?

Mr Soares: It’s a lot better. I think people generally have learnt to save more and in the business environment as well we’ve learnt to protect our product more. We’ve got the shrinkage committee running, where we get all our staff involved in quality control. They don’t leave things lying around because they know now that every cent counts. Not that it didn’t matter in the past but we had the flexibility to say we’ve got a 0, 35% allowance for damages.

LT: What do you do when you are not working?

Mr Soares: I ride quad bikes. I do extreme four by fours with jeeps. I love I love the outdoors. I don’t do much hiking because I’ve got a hip problem but I love camping I love cooking every time we go out either bikes or jeeps; there’s always something to cook where we are going. I also love listening to music; the old school house, I like my RnB and a little bit of smooth jazz.

LT: Most men love football. Do you follow football or any other sports?

Mr Soares: I don’t follow football for one particular reason; it wastes a lot of time when I need to work. I saw it in the World Cup in 2010 in South Africa when we needed to go to Bloemfontein to buy stock with an uncle of mine. He would keep saying let’s wait the game is about to start and we ended up being late for supplies. That is when I said no soccer for me.

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