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Posts Tagged ‘Africa’
Q&A with Oluwemimo Oluwasola, author of Olam Nigeria case study

Oluwemimo Oluwasola is a graduate of the Obafemi Awolowo University, Ile-Ife, Nigeria where he obtained B.Sc. (Social Science) with a Second Class Upper Division in Geography. He also holds M.Sc. and PhD Degrees in Agricultural Economics from the same University. He is a lecturer in the Department of Agricultural Economics of the Obafemi Awolowo University, Ile-Ife, Nigeria. His areas of specialization include: agricultural development and policy analysis, environmental resource economics and poverty reduction. He also teaches economic theory at the undergraduate and graduate levels. Until he joined the Faculty, he was a Research Fellow at the Development Policy Centre, Ibadan. Dr. Oluwasola is an international scholar, development expert and consultant in agricultural development and policy analysis, sustainable environmental resource management, and rural development and urban poverty reduction. He has worked with several development partners including the Urban Management Programme (UMP), UN-Habitat, UN Volunteers, African Network of Urban Management Institutions and UNDP. He has also collaborated with the Brookings Institute in Washington, D.C. He is a fellow of the Leadership for Environment and Development (LEAD) International, New York; Foundation for Environmental Development and Education in Nigeria (FEDEN); and Foundation for Development and Environmental Initiatives (FDI), Nigeria. He is an American International Visitor on Poverty in an Expanding World Economy: A Multi-Regional Project.

Olam Nigeria, a supplier of raw and processed agricultural commodities, engages smallholder farmers by supplying farm inputs and providing ready markets for their products.

To download the Olam Nigeria case study from the GIM database, please click here.

What is Olam Nigeria’s basic value proposition and what makes its financial model sustainable?

Olam International Limited is an international and integrated supplier of both raw and processed agricultural commodities. The company is involved in varying degrees across the total product supply chain, which include procurement of farm products as close to the farm-gate as possible, primary processing, inland transport, warehousing, marine transport, and distribution – using a network of local buying agents, primary processing facilities and logistics. Olam’s flexible business model enables it to achieve rapid and cost-effective organic growth as it pursues growth strategies that enable it to exploit adjacent and peripheral opportunities. The business model enables the company to compete favourably with other interests by ensuring growth through product diversification and increased turnover; cost sharing which reduces cost of doing business and integrating expertise across products, geographic markets, and supply chain activities to create a diversified portfolio of products and services. As an international market player, it seeks to service the market that yields highest returns for its products hence, financial sustainability is ensured.

How has Olam Nigeria improved the livelihood for farmers in Nigeria?

Olam Nigeria has succeeded in improving the lot of the Nigerian farmers in several ways. It makes available critical inputs like improved seedlings, chemicals, fertilizer and credit free and/or at market cost to farmers and on time. This has been a major problem in the nation where bureaucratic problems hinders the timely delivery of such inputs to farmers on time or get them delivered to rent seekers who pretend to be farmers. It also provides the necessary market for the products of the farmers and pays farm gate prices which are competitive. It is also in close link with the farmers to offer advisory and extension services at no cost. Finally, it has organized the farmers into cooperative groups for the farmers to have an administrative voice in the way they are managed.

Why did Olam Nigeria encourage the formation of farmer groups?

The main reason is to make it easy to deal with the farmers. Farming in Nigeria is dominated by small scale farmers and run into millions as 60% of the nations labour force are involved in agriculture. Organizing the farmers into cooperatives enable Olam to reach them in their groups. When they are given loan, the cooperative societies serve as collateral and ensures members repay their loans as well as sell their products to Olam. It is always easy to reach out to the farmers in terms of input supply or extension services through their groups.

What are the main benefits of Olam Nigeria being part of a global multi-national company?

The main benefits are in terms of access to large resources of funds to do business, provide facilities, and engage in forward as well as backward linkages to manage a product from the farm gate to the final consumer. In addition, Olam has a wider and bigger market and can be very flexible. For example, when rice is harvested in Nigeria, there will be a glut in the local market. Olam, packages this and then sell to other countries where demand and prices are high. When the product is in short supply and costly in Nigeria, it imports from other countries where prices are low and sell in Nigeria. It is also able to benefit from highly skillful pool of experts that it can move around to ensure organizational goals and targets are met. It is also able to transfer best practices across national boundaries.

What would you say was critical about the actor ecosystem that enabled this business to be successful?

Olam does not go into established and big businesses. It looks for the small, unattended to and probably unpopular products and invests its resources to turn it into a much sort after business. Before others will come in to it, Olam has established itself as a clear leader. The strength of Olam is its ability to see opportunities and act before others will even think.

 
Q&A with Winifred Karugu, author of Ecotact case study in Kenya

Winifred Karugu is currently the Managing Director (MD) of Jomo Kenyatta University of Agriculture and Technology (JKUAT) Enterprises (JKUATES), a company that is 100% owned by the University. She is based in the University’s Main Campus at Juja, in Kenya. The Company is the commercial wing of JKUAT and engages in direct linkages with industry through training, consultancy and related activities. She had also served as a director of the JKUATES for three years before her appointment as MD. Prior to this appointment, which took place in February 2008, Winifred was the Director of the School for Human Resources Development, which houses Business and Humanities at the University, a position that she held for four years. Winifred also lectures in economics and marketing courses units at the university. She also engages in research and consultancy. She has published several articles in refereed journals and written several business cases both teaching and analytical. Her research interests include pro-poor business models, SME growth strategies in emerging markets and gender & technology transfer. Winifred is a member of: Academy of Management (AoM), International Association of Agricultural Economists (IAAE), African Association of Agricultural Economists (AAAE), Africa Technology and Policy Studies Network (ATPS) and Kenya Association of Business and Management Professionals (KABMAP). Find below selected publications of her work.

Ecotact is a company that provides low-income people with the most basic of necessities: affordable sanitation in pleasant surroundings within urban areas, with particular emphasis on the most disadvantaged areas such as urban slums.

To download the Ecotact case study from the GIM database, please click here.

What is Ecotact’s basic value proposition and what makes its financial model sustainable?

Ecotact’s main value proposition is the provision of affordable and pleasant sanitation options to the masses that previously had few and often unpleasant options available when they were out and about. Ecotact facilities now routinely provide comfort and dignity to middle and lower income customers but for the lowest end of the market, Ecotact provides even greater value in that they now have access to facilities that were not available to them before. Slum dwellers often lack privacy in matters of sanitation and hygiene and the options available are often substandard and seriously overcrowded. In addition to this security is often an issue. Slum dwellers therefore greatly appreciate access to warm showers and clean toilets in secure and pleasant surroundings. The franchise model creates value for would be entrepreneurs.

What are the main benefits of using a franchise model for the Ikotoilets?

The franchise model is of benefit to society in that there is rapid expansion of the facilities. Entrepreneurs benefit in that their capital input is lower, the standardization inherent in such models gains the trust of the public, ensuring a reliable market.

What are the main challenges facing Ecotact’s scale up and replication?

The main challenges faced by Ecotact in their efforts to scale-up include the fact that land in urban centres is not readily available and is very expensive as well. Municipal land is more available but subject to politicization. So far the real problem currently facing Ecotact is that the demand for their services far outstrips their ability to provide.

What makes this public-private partnership model successful and what more can government do to ensure access to sanitation to improve the lives of people living in informal settlements?

This private-public partnership has been successful due to the fact that it is a win-win situation all round. The municipals gain by cleaner, more environmentally friendly towns, the facilities will end up in their hands eventually and the public is more dignified. Ecotact gains financially and the public is much more comfortable. Government can help this process by encouraging similar entrepreneurial activity especially where the most vulnerable people reside.

What would you say was critical about the actor ecosystem that enabled this business to be successful?

My opinion is that the success of this process was largely driven by the success and sheer determination of the CEO of Ecotact. He is driven more by a desire to do something about squalor than by profits.

 
Q&A with Oluwemimo Oluwasola, author of Pot-in-pot Enterprise: Fridge for the Poor in Nigeria

Oluwemimo Oluwasola is a graduate of the Obafemi Awolowo University, Ile-Ife, Nigeria where he obtained B.Sc. (Social Science) with a Second Class Upper Division in Geography. He also holds M.Sc. and PhD Degrees in Agricultural Economics from the same University. He is a lecturer in the Department of Agricultural Economics of the Obafemi Awolowo University, Ile-Ife, Nigeria. His areas of specialization include: agricultural development and policy analysis, environmental resource economics and poverty reduction. He also teaches economic theory at the undergraduate and graduate levels. Until he joined the Faculty, he was a Research Fellow at the Development Policy Centre, Ibadan. Dr. Oluwasola is an international scholar, development expert and consultant in agricultural development and policy analysis, sustainable environmental resource management, and rural development and urban poverty reduction. He has worked with several development partners including the Urban Management Programme (UMP), UN-Habitat, UN Volunteers, African Network of Urban Management Institutions and UNDP. He has also collaborated with the Brookings Institute in Washington, D.C. He is a fellow of the Leadership for Environment and Development (LEAD) International, New York; Foundation for Environmental Development and Education in Nigeria (FEDEN); and Foundation for Development and Environmental Initiatives (FDI), Nigeria. He is an American International Visitor on Poverty in an Expanding World Economy: A Multi-Regional Project.

Mobah Rural Horizons, producer of the pot-in-pot products, which is widely termed as the fridge for the poor, is based in Kano, Nigeria.

To download the Pot-in-pot Enterprise case study from the GIM database, please click here.

What is Mobah Rural Horizons’ basic value proposition and what makes its financial model sustainable?

Mobah Rural Horizons’ vision is to enhance the living standard and hence well-being of the rural poor through simple technology that does not use electricity to preserve their farm products and earn better prices.  The financial model is sustainable because the inventor earns modest profit on pots sold which keep him in business. It is a single proprietor kind of enterprise hence, the inventor enjoys tremendous latitude for flexibility in operation, pricing and marketing.

Why is this invention important for the poor?

The poor, particularly those in Northern Nigeria, are living at the margin of existence. The invention has enabled farm households delay the sales of farm products for some days so they could earn better prices rather than remaining passive price takers. The availability of refrigeration has also enabled young girls to go to school in the day time and hawk their farm produce in the evenings. Also, women who are largely kept in seclusion for religious reasons are able to use the pot-in-pot to sell processed food products thus making them income earners.

What do you see as needed in order to foster more pro-poor inventions like this one?

The major requirement is a desire to help the poor. Seeing the poor as assets rather than liabilities who need a slight push for them to take off. When such men or women are available, there is the need for support from different stakeholder and interest groups like government (provide necessary infrastructural support to create the enabling environment), development partners (to provide seed money since they appreciate the value of such inventions from the conception of the idea much better than governments) and the private sector (in terms of funding and patronage).

What are the main challenges of scaling up this model?

The enterprise is built around one man who is constrained in terms of funds, equipment and contacts. His vision may not even be dynamic. In addition, the products are not as durable and the technology is not clean. The industry is not sedentary and thus planning for upscaling or equipping it is difficult.

What would you say was critical about the actor ecosystem that enabled this business to be successful?

The rural areas where the poor live and farm are very much neglected lacking basic amenities. Yet, there was a latent need and demand which the inventor was able to identify out of “sympathy” for the poor. That need is still there unattended to and will continue to make the pot-in-pot business thrive.

What has been your personal experience going through the GIM training and case research process?

The process has helped strengthen my knowledge in bridging theory and practice. It has further open a new vista of experience in writing case studies. It was a great experience.