Professional biography
Winner Kenya-Stockholmer:Evans Kamau
My name is Evans Kamau and I am 32 years of age. I am a Kenyan by birth, from Nairobi, but have been living in Stockholm, Sweden, for the last decade. I am a computer engineer by profession. Next to this, I have attended different business administration courses, such as accounting, sales, risk assessment, pricing and marketing. For the last 5 years, I have been running a taxi business in Stockholm ? Taxitime storstockholm AB. It has 5 cars and 15 employees. In 2011, the company had a turnover of 7,8 million SEK (approx. 950,000 EUR).
I have also been importing fruits, vegetables and flowers from Kenya to Sweden, currently facing challenges in freight logistics, which have made it difficult to guarantee timely delivery to my clients. With a family background of business in coffee growing, animal production, hotel and restaurant industry, I have a diverse experience in the functionality of the Kenyan market.
It has come to the point in my current company, where I can run it remotely with the help of a manager to oversee the operations. This is why I have decided to start a new business that I am going to present today.
Brief presentation of the business plan: Business concept
Nairo-Bio Limited is a company intended to introduce a new concept of renewable energies in the Kenyan market. The basic idea is to convert used cooking oils widely used in the restaurant industry to biodiesel. Other oil sources have also been identified like animal fat from the animal slaughter houses, croton seed oil, jathropha seeds, castor oil seeds, sunflower oil. These different sources have been researched and found in Kenya in large quantities. Kenya as a non-petroleum producing country heavily relies on this product import. Biodiesel would provide a great alternative fuel source that would both be environmentally friendly and economically viable.
Market
There is a high demand for alternative fuels in Kenya, the transport industry is yearning to find cheaper and more efficient fuels to run in their vehicles.
The research, I carried out in December 2011, revealed large need for alternate fuels as the normal diesel prices were becoming uneconomical to run any transport business. The running costs in most companies were quoted as at least 30-50% of total company costs.
The only other similar concept of bio-diesel was in the place called Nanyuki, 2.5 hour drive from Nairobi on a very small scale production, about 100 litres per day, providing bio-diesel to the local personal transport vans better known as ?matatus?.
I have gone to different places to see the possibilities, contacted the Kenyan government to get the policies and rules. All bio-diesel producing equipment would be duty free and the environmental section has put in place different measures to encourage this line of industry.
I am happy to announce that this far, I have very good feedback. Kenya has a lot of fried food eateries, especially around Nairobi. I found that most of the used oils are poured out down the drain, which is not only bad for the environment but a waste of a perfectly good alternative fuel. There was also a lot of animal fats at the slaughter houses. I have also taken into consideration the many other possibilities of raw material in bio-diesel terms known as feedstock, such as jathropha seeds, castor oil seeds, croton seeds, sunflower oil etc. These sources are in plenty in Kenya and have been found to have very high quality oil feedstock for bio-diesel production.
Production
I have been to the Alfa laval Ageratec bio-diesel processor plant in Norrk?ping Sweden and went through their different types of processors. I found that the 1000 or 3000 litres a day machines would be a perfect starting point for my new business. Due to the very high acquisition prices for the equipment, I have been looking at second hand equipment, which has a market value of about 300,000 SEK (approx. 36,000 EUR) for a 1000 litres / 24 hour production unit. This would be the single most expensive part of the whole set up. Transport to Kenya would not pose a problem with the shipping companies. I have also looked into installation. Alpha laval has a local office in Kenya and would assist with the installation and after sale service of the equipment. Visiting an already working unit has also been very enlightening. I intend to go back again and spend a few days at Tolefors g?rd, a bio-diesel producing plant in N?rrk?ping. I had the privilege of hosting the plant owners in Nairobi and got invaluable consultation time with them with regard to my planned set up.
With a proposed unit that would run on 1000 ltr / 24 hours, we have planned to start production at 500 ltrs a day for the first quarter running 20 days a working month, eventually going up to 600, 700, 800 ltrs a day for 2, 3, 4 quarter of the first year. By the start of the second year, the production would be up for 100%, thus producing and average of 1000 litres a day.
Used cooking oil acquisition has been estimated at a low price of 1.5 SEK (approx. 0.18 EUR) a litre since most of it is poured down the drain, even after considering the other sources like animal fats that are also disposed off. Most of the cost of buying them would be at a symbolic level. The restaurants and slaughter houses contacted, actually took it as a better way of disposal.
The company will have all different operational departments, to cater from sales, purchases, production and maintenance. As mentioned earlier, Alfa laval has a local office in Kenya and that will go a great way in the maintenance front.
Marketing and communication
A local advertising agency will be helping in the branding and advertisement strategy of this company, since this is a fairly new concept in the Kenyan market. With great demand it should not be a problem promoting the product.
I have already been in touch with a few transport firms that are ready to run on bio-diesel. The pricing and delivery logistics are underway. A few private fuel stops in the proposed production area are also willing to work with us on the distribution level, where private clients can fuel just like in normal diesel fuelling. Since most of these companies have their parking depots we would deliver the bio-diesel straight to them. We are coming up with a contract that would cover quantities and quality assurance with pricing concepts. Since no modification is required for running on bio-diesel, clients would be able to fuel and continue running any diesel vehicle as usually.
A piece of land has already been acquired in Nairobi where the proposed facility would be built on, but this would only happen after the second year. The first year, the company will rent a warehouse facility. The equipment does not take much space, rent costs would not be in excess. Sales price has been estimated at 6.4 SEK (approx. 0.77 EUR) / litre exclusive 16% Vat in Kenya. Current normal diesel prices in Kenya are 8.0 SEK (approx. 0.97 EUR) / litre exclusive VAT.
Competitive advantage
With the current world oil prices unstable, I see a lot of potential in making bio-diesel in Nairobi and its environs. It is a better alternative fuel economically, and, considering its advantage in better engine lubrication, I have shared these views with a couple of transport companies which welcomed the initiative.
In Kenya, people are becoming more environmentally friendly and see the danger coming from global warming. I see this as a direct opportunity to offer an alternative, more eco-friendly option.
Bio-diesel refers to a vegetable oil- or animal fat-based diesel fuel consisting of long-chain alkyl (methyl, propyl or ethyl) esters. This product is a very successful, world renowned environmentally friendly option that was discovered to help provide an alternative fuel that is both green and economically friendly. Bio-diesel has been used in different countries around the world and has proven a good option.
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Source: http://kenyastockholm.com/2012/09/10/africa-stockholmer-win-european-entrepreneurship-award/
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