In this insightful podcast episode, I had the pleasure of speaking with Thomas Reis, the partner and founder of JegeReis, a community training firm specialized in Angola. Thomas shared his experiences and expertise in navigating the complexities of trading in Angola, a country known for its fragile banking system and dubious rule of law.
Thomas recounted one of the worst trades his company experienced, involving importing soy meal and being hit by a currency slide in Angola’s volatile FX market. He highlighted the challenges of dealing with currency fluctuations and delays in transferring funds, shedding light on the intricacies of trading in such a challenging environment.
The conversation delved into the origins of Yeager Rice and Grupo Rice, Thomas’s family company, and their strategic decision to focus on African trade, particularly leveraging road freight to trade smaller volumes efficiently within the region. Thomas emphasized the importance of finding new ways to mitigate FX risks and capitalize on the surplus by-products of industries in Angola.
As the discussion unfolded, Thomas shared his vision for the future growth of his trading company, emphasizing the potential in the oil seed business and biofuels industry in Angola. He highlighted the importance of trust, honesty, and strategic partnerships in navigating the complexities of trading in Angola and other African countries.
The episode provided valuable insights into the challenges and opportunities of trading in Angola, showcasing Thomas’s entrepreneurial spirit and determination to succeed in a challenging market. Listeners were encouraged to connect with Yeager Rice and Grupo Rice through their website and LinkedIn for potential collaborations and investment opportunities in Angola.
Overall, the podcast episode offered a compelling narrative of resilience, innovation, and strategic thinking in the face of adversity, painting a vivid picture of the dynamic landscape of trading in Angola.
Adapt to survive in Angola.
Adapt to survive in Angola
Angola, a country in the southern west part of Africa, is known for its fragile banking system and dubious rule of law, making it a challenging environment for businesses to operate in. In a recent podcast interview with Thomas Rice, partner and founder of Yeager Rice, a community training firm specialized in Angola, the discussion centered around the difficulties and obstacles faced in trading in Angola. Thomas shared one of his worst trades, which involved importing soy meal and getting hit by a sudden currency slide that resulted in a significant loss for his company.
The story highlighted the unpredictable nature of the Angolan currency, the Kwanza, which can lose value rapidly without notice. Thomas explained how they had to sell on a spot basis and were unable to mitigate the effects of the currency devaluation because most companies in Angola do not have foreign exchange to pay in foreign currency. This led to a situation where they had to receive payment in Kwanza and then transfer the money to a bank, which took more than six months to process, resulting in an 80% loss in value during that period.
This experience underscores the challenges of doing business in Angola, where weak FX markets and limited foreign currency reserves can lead to significant delays and losses for companies operating in the country. Thomas and his company had to adapt their trading strategies to survive in this challenging environment. Instead of relying solely on traditional banking channels, they found new ways to convert their local currency into exports by buying strategic commodities to export, a strategy that has proven successful for them.
The key to surviving and thriving in Angola, as demonstrated by Thomas and Yeager Rice, is the ability to adapt and innovate in response to the unique challenges and constraints of the market. By thinking outside the box and identifying new opportunities for trade and export, they have been able to overcome the obstacles posed by the country’s fragile banking system and volatile currency fluctuations. Their success serves as a testament to the importance of flexibility and resilience in navigating the complexities of doing business in Angola.
In conclusion, the story of Thomas Rice and Yeager Rice highlights the importance of adaptability and innovation in overcoming the challenges of trading in Angola. By finding new ways to convert local currency into exports and identifying opportunities for competitive trade, they have been able to thrive in a difficult and unpredictable business environment. Their experience serves as a valuable lesson for businesses looking to succeed in Angola, emphasizing the need to be flexible, creative, and resilient in the face of adversity.
Restructure trading for African markets.
The podcast transcript reveals the journey of Thomas Reis and JegeReis in restructuring their trading company to focus on African markets, particularly Angola. The challenges they faced, such as FX risks and high freight costs, forced them to rethink their approach and find innovative solutions to succeed in the market.
Initially, the Rices traded various products, including mining tools and chemicals, but they encountered significant FX risk issues due to Angola’s status as a net importer. This led them to explore new opportunities and niches, eventually settling on trading commodities such as fruit. To mitigate FX risks and access financing from abroad, they decided to establish a new company in London to create a credit profile and raise funds for trading in Angola.
By focusing on African trade and leveraging Angola’s position as a net importer, the Rices were able to identify a unique opportunity to trade smaller volumes on trucks from neighboring countries like South Africa, Zambia, and Namibia. This strategic decision allowed them to offer competitive rates to truck drivers and reduce freight costs, ultimately improving their trading operations in Angola.
The story of Thomas and Yeager Rice underscores the importance of adaptability and innovation in restructuring trading for African markets. By recognizing the challenges and opportunities in Angola, they were able to pivot their business model, optimize their operations, and achieve success in a challenging business environment. Their experience serves as a valuable lesson for businesses looking to thrive in African markets, emphasizing the need for flexibility, creativity, and resilience in navigating complex trading landscapes.
Trading by-products for export.
Trading by-products for export is a unique and innovative approach to international trade that Thomas and JegeReis have successfully implemented in Angola. The duo identified a gap in the market where surplus by-products of the food industry could be exported to other markets, creating a win-win situation for both producers and consumers. This not only helped in reducing waste but also opened up new avenues for revenue generation and economic growth.
One of the key insights that Thomas and Yeager Rice had was the observation of the flow of trucks between countries, particularly in the region bordering Namibia. This led them to realize the potential for trading by-products and sourcing raw materials from Angola to be exported to other markets like South Africa or Zambia. By leveraging their on-the-ground experience and understanding of the local market dynamics, they were able to identify a niche opportunity and capitalize on it.
The trade of by-products such as palm sterling, wheat bran, and maize bran not only helped in utilizing surplus materials but also catered to the needs of industries that required these products for further processing. This created a symbiotic relationship between producers and consumers, where surplus materials found a new market and industries had a consistent supply of raw materials for their operations.
The success of their trading business can be attributed to their strategic approach, operational efficiency, and strong team collaboration. With a team of 30 workers spread throughout the country, they were able to handle the logistics, quality control, and contractual agreements effectively. By working closely with producers, ensuring sanitary compliance, and securing future contracts with off-takers, they were able to streamline their operations and meet the demands of their clients.
Despite facing challenges such as road conditions, availability of trucks, and sanitary compliance issues, Thomas and Yeager Rice were able to overcome these obstacles through careful planning, attention to detail, and building strong partnerships with reliable third-party logistics providers. By not owning trucks of their own and relying on external partners, they were able to scale their operations and manage the growing volumes of trade efficiently.
In conclusion, the story of Thomas and Yeager Rice exemplifies the power of innovation, adaptability, and resilience in transforming traditional trading practices in African markets. By identifying a niche opportunity, leveraging their local knowledge, and building a strong operational framework, they were able to establish a successful trading business that not only benefits the local economy but also contributes to sustainable development and resource utilization. Their journey serves as a testament to the potential of trading by-products for export as a viable and profitable business model in emerging markets.
Mitigate risk through strategic structure.
The podcast transcript highlights the importance of mitigating risk through strategic structure in the context of trading businesses operating in African markets. Thomas and Yeager Rice’s approach to managing risk involves creating separate entities within their business to handle different aspects of their operations. By splitting their family company and trading house company into Grupo Reis and Jager Reis, they are able to focus on internal production and trading activities separately, thereby reducing the impact of potential risks on their overall business.
One of the key strategies they employ to mitigate risk is by diversifying their operations across different regions. By having a presence in Nigeria, Namibia, and Angola, they are able to spread their risk across multiple markets, reducing their dependence on any single market. This diversification allows them to navigate challenges such as forex fluctuations and political instability that may impact one market but not necessarily all of them.
Furthermore, Thomas and Yeager Rice emphasize the importance of having strong partnerships with off-takers in the SADEC region, particularly in South Africa. These partners not only help them distribute their products in the region but also provide valuable insights and expertise on hedging risks and managing uncertainties in the market. By working closely with experienced partners, they are able to leverage their knowledge and resources to navigate the complexities of intra-Africa trade.
Another critical aspect of their risk mitigation strategy is the use of a triangular trading structure. By creating entities outside of the countries where they operate, they are able to trade with their sister companies and hedge against currency fluctuations and other risks associated with operating in African markets. This strategic structure allows them to control pricing, manage inventory, and optimize their supply chain, ultimately reducing their exposure to potential risks.
In conclusion, the case of Thomas and Yeager Rice demonstrates the importance of mitigating risk through strategic structure in trading businesses. By diversifying their operations, building strong partnerships, and implementing a triangular trading model, they are able to navigate the challenges of operating in African markets and position themselves for sustainable growth and success. Their story serves as a valuable lesson for other trading businesses looking to thrive in emerging markets by proactively managing risks and leveraging strategic structures to their advantage.
Trust is key for growth.
Trust is key for growth in any business, but it is especially crucial in the trading industry. The transcript of the podcast featuring Thomas and Yeager Rice, two entrepreneurs in the trading business in Africa, highlights the importance of trust in building successful trading relationships.
One of the key points made in the podcast is the significance of reputation in the trading industry. Thomas and Yeager emphasize the importance of being known as a reliable and trustworthy partner in order to build long-term relationships with clients. They stress that a bad reputation can have detrimental effects on a trading business, as trust is the foundation of any successful business relationship.
Additionally, the podcast discusses the challenges of operating in African markets, where communication barriers and banking system issues can create obstacles for trading companies. Thomas and Yeager explain how they have navigated these challenges by building strong partnerships and focusing on providing reliable and efficient services to their clients. By prioritizing trust and reliability in their business operations, they have been able to establish themselves as a reputable trading company in the region.
Furthermore, the podcast highlights the importance of mitigating risk through strategic structure in trading businesses. Thomas and Yeager have diversified their operations, implemented a triangular trading model, and focused on building strong relationships with clients to navigate the challenges of operating in African markets. By proactively managing risks and leveraging strategic structures, they have positioned themselves for sustainable growth and success in the trading industry.
In conclusion, the case of Thomas and Yeager Rice demonstrates the importance of trust in driving growth in trading businesses. By prioritizing trust, reliability, and strategic structure, they have been able to build successful trading relationships, navigate challenges in African markets, and position themselves for sustainable growth and success. Their story serves as a valuable lesson for other trading businesses looking to thrive in emerging markets by proactively managing risks and leveraging strategic structures to their advantage. Trust is indeed key for growth in the trading industry, and businesses that prioritize trust and reliability are more likely to succeed in the long run.
Navigating compliance in international trade.
Navigating compliance in international trade can be a daunting task, especially for businesses operating in emerging markets like Angola. The podcast transcript highlights the challenges faced by Thomas and Yeager Rice, the CEO and CFO of a trading company in Angola, as they navigate compliance issues in their international trade operations.
One of the key challenges highlighted in the podcast is the high compliance costs associated with sending money to Angola. Thomas recounts a story where a friend was warned by his bank that sending money to Angola could result in the closure of his account due to the high compliance costs involved. This demonstrates the complexities and risks involved in conducting international trade operations in certain regions, where stringent compliance requirements can pose significant obstacles for businesses.
In response to these challenges, Thomas and Yeager Rice have taken proactive steps to restructure their trading business and focus on areas of growth that align with the changing landscape of the Angolan market. They have identified protein and vegetable oils as potential growth areas for their business, given the country’s focus on diversification and initiatives in biofuels and oil seed production. By strategically positioning themselves in these growth areas, they aim to capitalize on emerging opportunities in the market.
Additionally, the podcast highlights the importance of trust and honesty in attracting investors and securing funding for international trade operations. Thomas emphasizes the role of promoters in building trust with investors and being transparent about the challenges and opportunities in the market. This approach has enabled them to secure investments from angel investors and build a network of supporters who are keen to continue investing in their business.
Overall, the case of Thomas and Yeager Rice underscores the importance of navigating compliance issues in international trade through strategic planning, trust-building, and proactive risk management. By prioritizing compliance, transparency, and trust in their business operations, they have been able to overcome challenges, attract investments, and position themselves for growth and success in the Angolan market. Their experience serves as a valuable lesson for businesses looking to navigate compliance issues in international trade and thrive in emerging markets.
Angola offers immense business potential.
Angola offers immense business potential, as highlighted in a recent podcast featuring Thomas and Yeager Rice, who shared their experiences and insights on doing business in the country. Despite challenges and risks, they emphasized the opportunities and advantages that Angola presents for entrepreneurs and traders.
One of the key points raised in the podcast was the strategic geographical location of Angola, which positions it as a hub for trade in the region. With its proximity to Congo and Zambia, Angola offers a strategic advantage for traders looking to tap into the growing demand for food security and agricultural products. Additionally, Angola boasts abundant hydric resources and fertile lands, making it a potential breadbasket for minerals such as copper and other valuable resources.
However, the success of doing business in Angola hinges on navigating challenges such as compliance issues, trust-building, and risk management. Thomas and Yeager Rice emphasized the importance of establishing trust with partners and stakeholders in Angola, as well as demonstrating expertise and knowledge in their business operations. By prioritizing compliance and transparency, they have been able to attract investments and position themselves for growth in the Angolan market.
Despite past challenges and negative perceptions of Angola, Thomas and Yeager Rice highlighted the immense potential for business growth and success in the country. They acknowledged that while Angola may present challenges, it also offers significant opportunities for entrepreneurs who are willing to invest in human capital, innovate, and adapt to the evolving business landscape.
In conclusion, Angola offers immense business potential for entrepreneurs and traders who are willing to navigate challenges, build trust, and prioritize compliance in their operations. By leveraging the country’s strategic location, abundant resources, and untapped market opportunities, businesses can position themselves for success and growth in the Angolan market. Thomas and Yeager Rice’s experiences serve as a valuable lesson for businesses looking to tap into the potential of Angola and thrive in emerging markets.