Chris BishopBy Chris Bishop|September 7, 2022|5 Minutes|In Billionaire Tomorrow

Billionaire Tomorrow

“Our farmers earn  peanuts!“

He is trying to claw back the lucrative chocolate business for Africa from the clutches of the western world – one sweet brown bar at-a-time. Stephen Sembuya is pouring money into his chocolate factory in Kampala, Uganda, in hope and expectation. 

One bleak statistic drives this well-spoken entrepreneur from Uganda:  nearly 70 percent of the world’s cocoa is grown on small farms in Africa from Cote D’Ivoire to Ghana and Nigeria  – yet most of the money turning it into chocolate bars is made elsewhere.

“So a kilo of cocoa is going for two dollars, you get 25 bars from that kilo that sell for two dollars each. It gives you an idea of what Africa is missing out on,” he says.

Chocolate makers in Brussels and London sell the bars back to the shops in Africa at a premium – a hangover from colonial days. A market that is fairly buoyant on the continent as most Africans can usually find a handful of coins for a bar of chocolate.

The belief that entrepreneurs in Africa can earn a larger slice of the rich chocolate cake is one of the factors that drove Stephen Sembuya to set up his chocolate factory in Kampala. He believes that processing cocoa into bars creates 80 percent of the jobs in the chocolate industry.

“When you look at it, it is extremely important; when you look at the farmers, they only make about six cents in the dollar for every chocolate bar that is made. These farmers are the heart of the industry, yet they are earning peanuts from it. I mean, when you go down to these farms in Africa they are not looking good, they are not in the best condition,” he says.

“When you look at the famer, the middle man and the guy who is processing the chocolate they are miles apart. The guy who processes the chocolate is a multi-millionaire, while the farmer still struggles.”

It was a struggle that was the midwife of his chocolate-making business in Uganda. His family used to be known as the wealthy Rockefellers of Kampala. Years of years of poor management and a slew of court cases whittled down that wealth to almost nothing.

“I asked around the family and found out one of the few assets we had left was a disused cocoa field,” says Sembuya.

One fine day, Sembuya drove 60 kilometres east of Kampala to an overgrown 640-acre cocoa field owned by his family in Buikwe District on the edge of Lake Victoria.

He found out that, for three generations, the Sembuyas exported cocoa seeds to Europe; his grandfather planted the trees on the cocoa plantation more than half a century before. On arrival at Buikwe,  he found a score of workers who hadn’t worked since the Sembuya family’s money dried up.

In the shade of a cocoa tree, in the heat of the afternoon, the then 25-year-old Sembuya sat down and struck a deal – wages in return for cocoa – before driving back to his Kampala kitchen to rig up a make-shift chocolate-making operation.

In the first year, Pink Foods, as it became known, turned over $20,000 – now it turns over more than  $150,000;  small, but growing. He has his own bars named the African Chocolate Company and plans to expand past the 20,000 bars a day he is making now.

“Right now we are investing money in sales and marketing because we want to get our chocolate into all of the stores in Uganda in the remotest areas. We are also pushing the drinking chocolate,” he says.

Sembuya wants to increase chocolate production to five tonnes-a-day and build a new plant.

“We want to specialize in the cosmetics business because we are already producing the cocoa butter so we should start making products from it,” he says.

Foreign investment could help, but Sembuya accepts it is going to be difficult. Aside from high taxes and scarce electricity there are a host of other problems.

“ If you don’t take a risk you are not going to make it,” he says.