J-Palm Liberia Working to Manufacture Products for and by Liberians
Mahmud Johnson is Founder and Chief Executive of J-Palm Liberia, an oil palm processing business he founded in 2013.
He is one of a new group of young Liberians who attended university in the United States but returned to their country rather than settling abroad.
Their contributions are essential elements in Liberia’s attempt to regain momentum towards peace and prosperity after a quarter century of conflict and unrest, followed by the devastation of Ebola.
He talked to AllAfrica about his work and his goal that it will be a tool to address Liberia’s social problems and to create jobs. (AllAfrica interviews are edited for length and context.)
We process palm oil, palm kernel oil, and a range of other products based on oil palm. We are growing very fast. Even though we are making some profit, we are reinvesting everything back into the business. So on paper it’s profitable, but all the money is going back into the business.
This business is very capital intensive. We use a lot of machines. And all the machines we use are locally manufactured.
The manufacturers are still in the early stages of making these machines. They started making them three or four years ago, so they haven’t really mastered how the machines are made. We are having a lot of problems with them. It’s very difficult to go even one week without the machines breaking down.
So that’s a huge technical problem. You are spending most of your profits in maintenance. We are trying to figure out how we can do partnerships so we can minimize that maintenance expense.
Another issue we face is human resources. When we started we really could not afford to hire the kind of people to make sure that the company gets to the level that it needs to be at. So as CEO, I had to be doing marketing, social media and going everywhere.
We don’t have a lot of skilled people here. Most of the skilled people are already employed by the big companies, the non-governmental organizations, etc. We, as a small business, cannot afford to hire the few skilled people that are here.
The vision was to create product and services for Liberians, by Liberians. We are an agriculture enterprise, and we are doing a lot of work with small-holder producers. We are trying to do business with them in a way that can earn them additional income, and we can be able to sustain ourselves as a business.
Most of the other people who do similar work create these products and services and try to market them internationally. And have a very nice story around it about how they are helping the African people and all that – which I don’t have a problem with. But my idea was to say: Even though there are a lot of Liberians who live on less than two dollars a day, that still is a market.
There are best practices around the world that the big companies are adapting to about how to create products and services to serve high-income individuals in high-income countries. How can we learn from what they are doing to apply the same level of discipline, the same level of rigor, and the same level of attention to the customer?
How can we apply those same principles but create products and services that are for Liberians?
If other people use it, that’s fine. But our main focus is to try and figure out what they want and serve them within our scope. So that’s what we’ve been doing. We have been exclusively focused on serving Liberians locally.
Ebola Threatened Everything
When Ebola started, we were just learning how this business works from a technical standpoint, from a marketing standpoint. So when Ebola happened, we had to shut down our operations, because at the time, we were working out of town. We were operating in Todee [a town outside Monrovia]. And due to restrictions on movement back and forth, we had to shut down our business.
It was actually very frustrating, because we could not operate. At the time we were making palm kernel oil to sell to soap manufacturers. Most of the competition came from Guinea – people used to go to Guinea and Sierra Leone to buy palm kernel oil. The border where closed at the time, so there was a shortage of oil on the market. The price actually increased by like 40%.
It would have been a very good opportunity for us to expand our business and capitalize on that. But we could not, because we could not do our own production. So it was a missed opportunity.
But also on a personal level, during the Ebola crisis I went to the U.S. and was participating in a business training program. And of course I had to pay registration fees. I had to pay for my housing and all that. By the time the program was over, I was completely out of my savings. That was a major threat to the business. I had to find money from friends in order to recapitalize. I was fortunate enough right around that time to win a grant that allowed us to infuse additional cash in the business to restart. Had it not been for that grant, probably J-palm would not be where it is today.
Fortunately, none of my employees contracted Ebola. But just from an economic standpoint, most people were not working during the Ebola crisis, so it was very difficult for most of the people. We could not afford to pay them during that period. They had to go and find other things to do. It was very tough on most people. We don’t have a lot of safety nets in Liberia. Most people make very little money and so they cannot save. When things like that happen, it really threatens livelihoods. It was a huge burden for most people. Most are still trying to recover, up to now.
One thing we define ourselves by is that we have a learning mentality. We try to figure out what our customers want. We try to figure out how to best serve them. We also try to figure out how to make our own process more efficient. So now we are focused more on the consumer market. Initially we had a business to business relationship. We were making our products and selling them in bulk. It’s a very challenging business to do because the margins are so little, and you have to produce so much. It’s just a logistical nightmare to run that kind of business.
Now we are producing consumer products, so the focus is more on marketing, advertising and sales. We still do production, but we don’t produce in the same volume that we used to produce before. Which is fine, because we can still meet our revenue target? From a financial standpoint, the business is more stable: we have less cash going out.
It’s also more interesting personally, because I have been involved in the media. I consider myself a storyteller. I like to be involved in crafting stories to communicate my point. And so this new evolution of the business where we are focused on marketing, advertising and telling our stories, I think it’s suited to my own skills.
So it’s actually very exciting to see the way it’s evolved now. We have the products in most supermarkets in Monrovia. And we have gotten some really encouraging feedback from Liberians.
It makes me very happy because the idea that I had in my head was – you go to most countries and you’ll see some companies that are considered the iconic companies for those countries, ones that people just love. And I ask, ‘Can we do something similar in Liberia?
Can we have a Liberian company that everybody is proud of, that everybody has invested in? People will say, “This is made in Liberia, and I am proud that it’s mine.” We are starting to get those kinds of feedback, and so it’s very exciting.
One thing I learned doing business is that it’s very dangerous to market yourself as the cheapest. So our marketing is focused more on the benefits of our product. Like when you are buying this product, you are not just buying oil. It’s a whole lifestyle. You are improving yourself; you are taking care of your skin.
It’s healthy. I think to some extent we’ve been able to communicate that, so people understand that they are buying a product that helps enhance their own lives. So even though we have tighter budget now, after Ebola and people’s income are in some ways shrinking, we still have been able to sell our products.
Liberia has tremendous agriculture potential. I am not an agriculture scientist, but when you travel throughout Liberia, you see miles and miles of fertile green land. From a supply standpoint, we have most of what it takes to be able to significantly increase agriculture production.
Also on the demand side, we are importing most of our food – we are importing pepper; we are importing rice. Even though we are producing a lot of palm oil, we are still importing palm oil and all these things.
So, there’s already an existing market, because most of these things that we consume are being imported. And I will suspect that if they were being produced locally, it’s very plausible that people will be able to price similarly to what’s being imported. So you already have that ready market.
But beyond just the local market, there’s also the regional market; there’s the international market. Most of the products we produce here are organic products, and there’s a huge market internationally for organic products. So the potential for agriculture is just tremendous.
The government has been talking recently about expanding its focus to increase agriculture productivity. I hope that they continue that path. It would be difficult initially. But once we have a robust agriculture sector in place, it’s something that can address most of our pressing challenges.
We talk about unemployment all the time; we talk about poverty. Agriculture is one of the lowest hanging fruits in terms of getting people to work and putting money in people’s pockets.