Way to grow: how mushroom farmer beat the odds to success
Faced with funding woes, tardy builders and complaining neighbours, this Magaliesburg farmer never gave up on his passion
Farm owner Peter Nyathi, who started out as a worker on a mushroom farm, has been through two decades of blood, sweat and tears to build a thriving business that today supplies to large retailers such as Pick n Pay and Shoprite Checkers.
Announced as Pick n Pay’s small supplier of the year last week, Nyathi, 53, of Tropical Mushrooms described his success story as a “very hard journey”, at one point of which he had no choice but to offer a bank shares in his company so he could secure lending.
His sprawling 18.9-hectare farm in Magaliesburg is his passion, and he has also created a trust for his workers to empower them. “If one is sure of what they love, they will always find a way to make that thing work, no matter what obstacles they come across,” Nyathi said.
During a visit by Times Select, two tractor drivers were preparing manure that would be used to grow mushrooms, while the rooms where the mushrooms are cultivated were abuzz with busy workers.
Nyathi said his dream of owning a farm started when he was a farmworker.
“I worked in all departments at my previous employer. I was a picker and at some point a sales rep, so I know and understand everything when it comes to farming,” he said. His mushrooms are cultivated indoors, with rows of different types growing in carefully controlled conditions.
He said mushroom farming was an obvious choice for him because they are not a seasonal crop.
Challenges are part of any business, but Nyathi said he always promised himself he would rise above any problem he encountered, including the three years it took to secure funding for the farm.
“It was really a hard journey. Big retail stores don’t take any supplier to supply them with vegetables. They want someone who has the capacity to deliver to them, so with the capacity that I started with they could not just approve me as a supplier.”
Funding proved to be his biggest obstacle, Nyathi said, as banks shut him out because he could not meet their strict lending requirements.
“Some banks would offer to only finance a certain percentage of the land and I needed funding that would see the whole operation running. On the other hand, some banks would demand exorbitant deposits, which I didn’t have.”
However, he eventually came up with a deal that made one bank agree to lend him money.
“I negotiated with Absa and offered them shareholding in the company (farm) and they agreed to fund me because the shareholding gave them full access to the financials and books of the company,” Nyathi said.
But many more challenges awaited him once the financial hurdle had been overcome. These included builders who could not stick to deadlines, and delays in Eskom electrifying his farm.
“In the year that we were busy with building I drove more than 70,000km trying to get this and that. It was really hard.”
Then, as things started to fall into place, Nyathi had to deal with neighbours who laid complaints against him.
“They laid so many complaints with the department of health, saying that I was generating flies. Inspectors would come here and would find no such thing, but the complaints and inspections never stopped until such a time that I asked the inspectors when last did they inspect the neighbouring farms,” he said.
“Those were really the tough days because in those days, every order was important. It meant so much to me."
Nyathi said that in the early days of his business he didn’t have the capacity to supply big retail stores, so he supplied only hotels, restaurants and corner shops. Starting with 34 employees, he has 150 permanent staff today.
“We bought Absa out and now I currently hold 65% shareholding of the company,” Nyathi said. His staff own the remainder.
He has expanded his production capacity twice and plans to do so again.
Suzanne Ackerman-Berman, transformation director at Pick n Pay, said the annual award recognises the top-performing supplier in the company’s enterprise and supplier development programme. The winner is selected based on the exceptional growth performance of their business, and job creation.