Eco-Fuel Africa - optimizing impact at every point of the value chain
Eco-Fuel Africa, founded by Sanga Moses in 2010, is producing and selling bio-charcoal mainly made out of sugar cane waste. The company has two production sites, in the towns of Lugazi and Masindi in Uganda, as well as four smaller sites at franchisers, framers that produce the briquettes and selling them back to Eco-Fuel.
Linda Leifsdotter and I visited the Lugazi site since the company was recently granted financial support from Innovations Against Poverty (funded by the Swedish government). We met a seasoned entrepreneur in Sanga Moses, who explained that this venture is his 6th start-up. Some have failed and some have successfully gone to scale.
“To tell you the truth, the ones that went to scale were not the ones I really believed would grow. For example, I started a small print shop at the Makerere University, since the students had difficulties in getting their dissertations printed. It turned out that a lot of businesses in that area had the same problem, so within a year we hired over 20 people.”
He was the first among his siblings to finish school and to continue higher educations, thanks to a public scholarship for gifted students from poor families. Sanga had to resist early marriage, that his parents insisted on, and successfully finished his studies at university. Starting a job in banking he could support his younger siblings with the school fees. He also did several of his companies on the side. But when he returned home, he was shocked to find his younger sister crying when they met.
“There is no point that you send money for me”, she said, “I cannot attend school every day anyways since I have to help mother collect fire wood.”
Sanga decided to leave Kampala and return to the country side to come up with something that would solve the fuel problem.
“My mother thought I had gone crazy, leaving a job in banking and returning to this poor area. She called a witch doctor,” Sanga explains with laughter.
He had no idea what he would do though to produce fuel that would save the women the hard collecting work and not contribute to the deforestation, since 70% of Ugandas forests have already disappeared. Sanga turned to a professor at Makerere to help him. In return he got a pile of books and after a week of reading he had discovered the process of making charcoal out of waste. Today his team has developed a simple production technique to convert organic waste into briquettes, involving 2100 farmers in the process.
Before supplying the waste the farmers turn it into powder format by burning the waste in kilns that they buy from Eco-Fuel. One kiln costs 180,000 shilling (just over €50) and is paid off with small installments. Often two- three farmers share one kiln. During one week a farmer can produce around 50 kg powder waste and gets 50 shilling (10 cents) per kg from Eco-Fuel.
The Eco-Fuel briquettes are sold at small kiosk around the small town and villages. 80% of them have been set-up by Eco-Fuel themselves, inviting women to run their point of sales including an opportunity to sell anything else in these kiosks as well. Some of them have turned into small grocery shops. We recognize the kiosk by their bright light-blue colour as we walk through the small town.
“We have selected women who have at least one daughter, and agree with them that part of the income from the sales of our products should go towards financing of the daughter(s) education.”
One woman complains that the supply is not enough; she can sell a lot more of the briquettes.
“The next step for us is to change our machines so that we can produce larger quantities. We have received help in changing the design from a Chinese supplier and I am now on my way to China to evaluate this.”
Via IAP, Eco-Fuel also received advisory support through Challenges, that helped them develop a marketing plan. One of the suggestions was to think about branding and now the businesses that use the Eco-Fuel briquettes also label their brand outside, for example at the entrance of restaurants.
At the production site in Lugazi 11 people are working and the management team has its office located at the site. In the future, the scale-up plan is focusing on creating many more franchisees that help increase the volume and geographic coverage of Eco-Fuel Africa.