North West farmer Ben Otukile founded Otukile and Sons Farming, a multifaceted farming and mining engineering business. In part two of his interview in our Farmer Mentor podcast on Farmer’s Inside Track, he dives deeper into financial strategies and the balancing act of credit and repayments.
Otukile’s story is one of resilience, intelligence, and meticulous planning, demonstrating how strategic financial decisions can lead to sustainable business growth.
Reflecting on his early days, he recounts, “Two years ago, I lost about 58 hectares of sunflower due to unseasonal rains.”
When asked what made him continue operations after such a massive loss, Otukile says, “Passion will make you do things you never thought to do. Any challenge you come across, you try and find means and ways to do better next time.”
In the episode, Otukile shares how his engineering background significantly influenced his financial acumen. According to him, a disciplined approach to budgeting has been integral to his success in both farming and mining.
“Understanding the finance part of the business is very important. I had a budget as an engineer, and I had to control my own budget. You plan your own budget, execute it, and stay within it. Simple, no-brainer rules.”
His strategy involves prioritising asset accumulation over liquid cash. “I started by investing most of my money, at least 90%, into accumulating assets to build borrowing power,” he shares.
The role of credit and repayments
This focus on assets allows him to leverage credit effectively, a crucial component of his financial strategy. Currently, he runs his engineering business without money because he has credit everywhere. This, he says, is not possible if you do not have strong relationships with creditors.
“If I have credit, I can go and buy stuff for three million, supply the mine, get paid, and then settle my credit while keeping the profit,” he explains.
He also capitalises on early payment discounts, a testament to his meticulous financial planning. “I negotiate settlement discounts, getting up to 5% off because I pay on time and buy in bulk,” he reveals.
Looking ahead, Otukile says expanding his farming business into African markets is his key goal. “My number one focus is growing the volumes and then expanding into other countries. Within five years, I aim to start exporting,” he shares.
Want to know more? Listen to the full episode of Farmer’s Inside Track.
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Option 3: Click here to listen on Google Podcast.
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