The opportunities and challenges of making affordable socks in Kenya


This week we’re talking with two friends who have set up a business making socks in Kenya.

Both Vidyesh and Bishell grew up in Nairobi to entrepreneurial families, and after education in the UK returned home to begin a business.

They are also friends with Sumit, who featured in the board game cafe episode.

Vidyesh and Bishell decided on socks, as they felt there was a gap in the market and that by starting with a relatively discrete market (school socks) they could grow the business.

It’s a very interesting conversation that goes through the practicalities of building a manufacturing company in Kenya.

One of the challenges they state is, for example, the high cost of electricity, and its unreliability, but also the opportunities that come from getting a loyal customer base in an emerging economy.


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Sam:                                      00:07                     Intro.

Sam:                                      01:51                     So we’re here today with Vidyesh, Vidyesh welcome to the show.

Vidyesh:                              01:54                     Alright, thanks.

Sam:                                      01:56                     So to get started, can you tell us a bit about your business?

Vidyesh:                              02:01                     Yeah, so it’s a manufacturing business. We manufacture socks and hosiery products. We started the business about two and a half years ago. We sort of looked into the market and identified a sort of gap in the quality of products that were manufactured locally. And we thought we could do it a lot better than what was actually being offered in the market. And then we sort of went ahead and did a bit of market research and found that this is something that’s, something we can get into, something where there’d be a decent return for us and where we could do something better than the, our competitors are currently doing.

Sam:                                      02:39                     Very cool. Okay. So mainly socks, is the thing you’re doing, like why did you choose socks of all the things?

Vidyesh:                              02:46                     I think it’s one of those products that everyone will always need so they’ll, I don’t think demand for it will ever die down. So yeah, but although that being said, we manufacture mainly for schools. So 90% of our production is catered for all of the schools in Kenya.

Sam:                                      03:05                     90% of your production is for all of the schools in Kenya?

Vidyesh:                              03:08                     Basically the schools.

Sam:                                      03:10                     Okay.

Vidyesh:                              03:11                     Based in Kenya, yea.

Sam:                                      03:11                     Cool. How difficult is it to make school socks?

Vidyesh:                              03:15                     It’s not, I wouldn’t say it’s like the hardest thing. It’s just finding the right recipe or raw materials testing them and then offering that to the market obviously taking into account the price sensitivities. So of course you can go for like the most expensive raw material, but the market locally, domestically is very price conscious. So then you’ve got to turn around and find something that works and is affordable by the local people, by the local parents. So we went around and, you know, got a bunch of different raw materials, tested them, you know, checked out the qualities, found the one that we were happy with but also was affordable by the local market. And still we are, we do manufacture the highest quality product currently in Kenya.

Sam:                                      04:03                     Perfect. Cool. Okay. So if we take a sort of step back. So have you always had an interest or have you had experience in the textiles industry? How did this come about?

Vidyesh:                              04:13                     Personally, you know, I mean, as a family, we’ve had businesses in textiles, we’ve had a, we had a textile mill early seventies, and then we then sort of as competition grew, became harder against you know, China and imports coming into Kenya we found that we weren’t competitive, so then we switched from, you know, manufacturing the fabrics into, and then we went into garments. And when I say we, this is, I guess my family. My dad and his brothers and then we’ve been in retail for garments and we did a lot of export back in the day as well.

Sam:                                      04:56                     When you say garments, what does that mean?

Vidyesh:                              04:56                     You know, shirts, trousers. Yeah, yeah. And then Bashil’s family was also involved heavily in distribution of garments. So there is that background of being in sort of the textiles, garments industry. But in terms of personally, between the two of us, not really. We, I think both of us have always had an interest in manufacturing, in setting up business in East Africa. So we actually were, we both studied in the UK and then you know, I worked out there for a couple of years. Bashil, he studied there further on and then we moved back and we set the business up basically. But yeah, for us, I mean I think there’s a strong interest in manufacturing and not just specifically within textiles and garments but there is a wider interest within manufacturing.

Sam:                                      05:48                     I should note we’ve got Bashil in the room as well and whose sat next to us.

Bashil:                                   05:53                     Hi.

Sam:                                      05:53                     Cool. So, that’s interesting, so you’re sort of, both of your families have had this heritage in producing garments in Kenya. Just out of interest, what were you, what were you doing when you’re in the UK? Were you in…

Vidyesh:                              06:05                     Yeah, so you want to go first?

Bashil:                                   06:07                     I studied economics, university of Manchester after finishing, I lived in London one year. Did a bit of work experience Vidyesh came up with the idea. So we did both the research on it yeah, I decided to move. He moved a few months earlier. I moved after, three months after him. Yeah.

Sam:                                      06:32                     Alright, so the idea for it came…

Vidyesh:                              06:34                     Once we were there.

Sam:                                      06:35                     When you put, you weren’t living in Kenya at the time?

Vidyesh:                              06:38                     No.

Sam:                                      06:38                     Interesting. Okay.

Vidyesh:                              06:39                     So yeah, for me, I was I went to school in the UK. I had been in the UK for almost 12 years. And then of course after school, went to university of Nottingham graduated. So I studied finance and then I was in banking for about four years. So I used to work for one of the big banks in the UK. It was fun. It was good experience. It wasn’t something that I was going to be doing indefinitely. It was, for us we’ve just always had an interest in going into like entrepreneurship or, and specifically manufacturing so…

Sam:                                      07:13                     You’re like, let’s go ahead and make socks.

Vidyesh:                              07:15                     Yeah. Pretty much. You know, everyone’s going to need socks. No one’s going to stop buying socks. I mean actually socks are the most common Christmas gift in the UK. So you know, like it’s just one of those things that people won’t ever stop buying unless, you know, we start wearing alternatives. But yeah.

Sam:                                      07:34                     Okay, cool. So let’s perhaps sort of talk a bit about the Kenyan sock market and so what’s the, what’s the current state of play in terms of producers here and yeah, let me just talk on the supply side first, what’s the current situation in terms of producers?

Vidyesh:                              07:50                     So I guess we can break that down into two segments. There’s the importers and then there is the manufacturers. Importers is a huge diverse sort of there’s many players and the businesses that import socks and hosiery products into East Africa with that, I think the biggest is something called ‘Mitumba’ which is basically second, yeah, second hand clothing. So the Kenyan government many, many years ago formed an agreement with the United States government where we would export garments, finished fabrics to the US but you know, as a bilateral part of that agreement, we were to import secondhand clothing from, from the US and then that slowly grew into Europe, China, India, Dubai. Actually Dubai, funny enough, is one of the biggest exporters of secondhand garments into Kenya and it’s not necessarily that there’s an agreement with Dubai, but it’s more, it’s a, as you say a hub of consolidation from all over the world and then it’s a good tap and it’s comes into West Africa and East Africa and Kenya. So we’ve got a huge secondhand clothing market and there’s a lot of socks there and then of course there’s the importers of socks that are then targeted at the middle class market. The middle, I think I should just…

Bashil:                                   09:15                     Also, since many Chinese have moved here, so now instead of secondhand, there are many replicas coming from China as well.

Sam:                                      09:24                     So for example, like if there’s a Ralph Lauren brand…

Bashil:                                   09:28                     So they’ll be much cheaper than the second hand ‘mitumba.’.

Sam:                                      09:34                     Really? The Chinese socks will be cheaper than secondhand?

Bashil:                                   09:36                     Yeah.

Sam:                                      09:36                     Really? Why is that?

Bashil:                                   09:36                     They’re not paying duties or anything on it. It’s brought in illegally basically.

Vidyesh:                              09:49                     They’ll just fill up their suitcases when they come here and then offload everything.

Sam:                                      09:54                     I see. And that can undercut?

Vidyesh:                              09:57                     Yeah. So for people who then bring it in legally playing, all paying all the duties, VATs you know, all the freight charges of course they can’t compete against something coming in as a second hand product or also illegally. So there is a, the market is restricted in that way, but yeah, there’s again, like I said, so there’s importers of all sorts of socks. So happy socks are in Kenya, there’s importers of people bringing in happy socks.

Sam:                                      10:24                     What’s happy socks?

Vidyesh:                              10:24                     Happy socks is actually one of the, I’d say in the last four years it’s become a very big brand. They do very funky, colorful designer, not designer as in like labels, but you know, cool designs, lots of animation and very bright and bold and loud. So it’s actually a Swedish company which gets it socks manufactured in Turkey, but it’s a huge, huge, huge…

Sam:                                      10:54                     So currently they are exporting them to Kenya?

Vidyesh:                              10:57                     Yeah, so not in a big way because there’s a very limited market. You know, like I said in Kenya you’ve got the low income, the middle market, and then the high end. So there’s a lot of price sensitivity. Those socks would typically be targeted at the high end and then the upper end of the middle, middle class market.

Sam:                                      11:14                     So that’s the imported, what about in terms of local manufacturing?

Vidyesh:                              11:20                     So there are at least, I’d say a handful of manufacturers five to six of us. We, very few of us will be doing socks for the mass market and that’s because it’s very difficult to compete against the ‘mitumbas’ they are, you know, there’s stuff coming in illegally and also the very cheap, very poor quality products and that’s because of course there’s challenges with logistics. We’re bringing in our raw materials from a country that’s far, far away and then you’ve got a lot of bureaucracy in Kenya, which sort of makes it harder for us. And I guess the other biggest, the very huge important factor for us is the cost of our electricity. So if you compare Kenya to Ethiopia and Uganda and Tanzania our costs are almost double relative to Ethiopia. Yeah. It’s higher than Ethiopia it’s higher than Uganda so for us to then manufacture and compete against some of the varying low cost socks which are coming in is almost impossible.

Sam:                                      12:38                     What percentage of the cost of the sock is electricity? Is it, I mean, is it like 5% or is it, is it relatively significant?

Vidyesh:                              12:46                     Again, it varies based on the capacities of the factories that are the scale of the factories. But you know, typically I would say actually it’s way high. It’s about 15%.

Sam:                                      12:59                     15%?

Vidyesh:                              12:59                     Yeah.

Sam:                                      13:01                     The cost of electrricity?

Vidyesh:                              13:01                     Yeah.

Sam:                                      13:02                     And so if you were in Ethiopia, that would be 7.5%.

Vidyesh:                              13:08                     Yeah. Or less even. But yeah, a lot lower than us. And you know, that for us is a huge thing. Again the other challenge, and like I said, you know, the logistics side of it historically you could import a container of your raw materials from, you know, anywhere in the world and it would dock at, the ship would dock at Mombasa port, and then you can put your container onto a truck and bring it directly to your factory, which was, it was done within five days. So five days from landing at the port, it would be in your factory, whereas now, yeah, three to four weeks.

Sam:                                      13:49                     Three to four weeks? Why is that?

Vidyesh:                              13:49                     Yeah. So it’s a double edged sword, this one. But basically, there was an SGR that was built.

Sam:                                      13:58                     This is the train?

Vidyesh:                              13:59                     The railway. Yeah. And of course for it to become feasible, there needs to be volumes moving on it. And so there was a blanket rule that was placed by the government that said any importers what not. Yeah. Any importers outside of Mombasa. So Nairobi, any other place outside of Mombasa, have to put it on the SGR. Now the SGR is, you would think that it would be cheaper than, you know transporting the containers on a truck but it’s actually a lot more expensive. So because of these certain factors we are slightly uncompetitive relative to manufacturers, you know, based in Asia other parts of Africa.

Sam:                                      14:47                     I mean, I imagine that would have been, they would like the government or whatever would have known. Okay. If we’re going from a truck system to a train system, there’s going to be a bit of a shift in prices, is it always going to be the case or is it that there just needs to be other infrastructure?

Bashil:                                   15:07                     They’re trying to recover the cost of building the SGR.

Sam:                                      15:09                     Okay. So they’re just saying regulation, you must do this and the price is as is so they can recoup the cost. The people who are feeling the pinch are…

Vidyesh:                              15:20                     Everyone who’s importing anything and yeah, because for us, again a lot of the raw materials that we use are not manufactured locally in Kenya so we don’t really have an option so we have to import it, and then we obviously manufacture here, but I think for us, the two biggest, those are like our…

Sam:                                      15:42                     The two big challenges.

Vidyesh:                              15:43                     Yeah. Of course with the delays, drops in production in the factory and…

Sam:                                      15:54                     Yeah. Is this a bit more unpredictable?

Vidyesh:                              15:57                     Yeah, I think, like I said, the bureaucracy and red tape that is, it’s kind of the…

Sam:                                      16:04                     Yeah. Right. Well, those are some fairly significant challenges. Talk about talking about the upside, like what’s the, what’s the positive thing?

Vidyesh:                              16:12                     So of course like doing business anywhere in the world I think is fun. It’s exciting, there’s a lot to learn you know, it’s always it’s nice to kind of make changes in other people’s lives. So, you know, we’ve got a staff of 35 people and they, they have families that depend on them. So it’s always nice to know that, you know, you’re kind of indirectly improving other people’s lives and of course for us, you know, started from where we are and we’ve grown and grown and grown. So it’s actually a very exciting journey for us. And along that journey we’ve learned a lot and understood the market and you know, understood how to get better at what we’re doing you know, of course without compromising the quality of the product. So for us it’s always we want to manufacture something that’s going to be very, very good, if not the best but always sell it at a very affordable price to the, to the mass market, to the local market, our target market basically.

Sam:                                      17:08                     And how, how big do you think this market is?

Vidyesh:                              17:11                     I wouldn’t say it’s very big because like I said to you, our we have, we don’t have a very big factory, but 90% of our production is purely for schools.

Sam:                                      17:20                     I’m not quite sure what the best way to like gauge capacity, but like how many socks are you producing in a year. What’s the, what are some of the ways in which you…

Vidyesh:                              17:30                     In a in a day we do again, it depends on the type of socks that we manufacture, but typically we could potentially do about 2,400 pairs of socks a day.

Sam:                                      17:44                     Okay.

Vidyesh:                              17:44                     Yeah.

Sam:                                      17:45                     Right. And those are, then maybe we’ll get more into that, but okay. You’re current 2,400. Is that after the, my impression of manufacturing is that sort of capacity goes in steps rather than in a straight line. Is that, is that kind of your capacity or is it something where you could quite easily?

Vidyesh:                              18:06                     So for us, we’re almost running at 95% of our capacity on those numbers. We would, we are looking at bringing in new machinery and then of course we’ll be able to do a lot more, but also that helps us because then we get economies of scale. So the more machinery we have, the more output we get and therefore our unit costs also drops. So again, I wouldn’t say it’s like, it’s a simple equation where the bigger you grow, the lower your cost becomes. It does kind of stagnate at some point before us were acquired, you know we’re in the infant stage so to speak. And so we’re finding that sweet spot where the more output we get, you know, the more we can split our costs across that and become a little bit more competitive, but not enough to still fight the illegal imports and the imports and all sorts of stuff.

Sam:                                      19:00                     Okay. What sorts of startup capital was necessary to, to get this going? You don’t, you don’t need to sort of say specifics, but just rough figures.

Vidyesh:                              19:12                     We put in about, I think $750,000 into the entire project. Yeah. And then of course now it will be, as we grow, we’ll be putting in more and more. Yeah.

Sam:                                      19:23                     And so you’ve sort of said you’ve got the double whammy of high quality and affordable price. Does that mean your margins are quite thin?

Vidyesh:                              19:35                     Yeah, right now our margins are thin because we’re still you know, our brand is still quite new in the market, so we’ve got to stay lean. We’ve got to keep our prices low so that people, you know, sort of accept the product. And then with time, I think once it’s been accepted, they will turn around and say, okay, we’re confident in the plan will buy it. So the price sensitivities will remain, but our penetration will be higher basically. And, and then there’s a knock on effect into the neighboring countries of Uganda and Tanzania.

Sam:                                      20:11                     Okay. How do you brand yourself?

Vidyesh:                              20:14                     H and F.

Sam:                                      20:14                     H and F?

Vidyesh:                              20:15                     H and? F, yeah. So we’ve got a couple of other brands in the pipeline as we’re growing, we’re bringing in new machinery. We are going to be launching a couple of new designs, different types of socks. Like I said, predominantly right now we’re just doing schools. So our school brand is H and F, but you know, when we do launch our new products in the pipeline, they are going to be new brands coming in for those. Yeah.

Sam:                                      20:37                     How did you land on H and F as your?

Bashil:                                   20:40                     It’s our grandparents initials.

Sam:                                      20:42                     Your grandparents are friends as well?

Vidyesh:                              20:44                     They might’ve been, we’re not too sure, I don’t think so. I don’t think they are. Yeah, we are. We are at some, there is some connection between the two families but yeah,

Sam:                                      20:54                     But why did you choose your grandparents initials and not your initials?

Vidyesh:                              20:59                     So again, okay, now I guess it’s an important point that we, like we discussed earlier, our families have been in business in Kenya for, you know, mine since the 1940s and yours around about the same time before that. Yeah. So because of that there is people, I wouldn’t say people, but a lot of businesses are aware of who our families are. And so we wanted to capitalize on that from the marketing point of view, from sort of market penetration point of view because it’s easy to leverage on that and you know, and get cross sells and new introductions. So that was kind of the thinking rationale behind…

Sam:                                      21:47                     Anytime your grandkids will be using your initials. Okay. So what, so you’re currently making 2,400, you have the ability to make 2400 pairs of socks a day. What happens when they leave the factory? Where do you…

Vidyesh:                              22:09                     Yeah, mainly it’s retailers and distributors and wholesalers and then they turn around and sell it on to, so the retailers of course and customers, but the wholesalers will then, it might go to another wholesaler or another distributor by the time it gets to retail, but ultimately we’ll end up at a retailer.

Sam:                                      22:31                     Retail is just like a shop?

Vidyesh:                              22:31                     Yeah.

Sam:                                      22:35                     Has it been straightforward to get into these retailers?

Vidyesh:                              22:39                     It was difficult in the beginning. The market in Kenya is not one where, you know, if you offer something that’s cheaper at a lower quality, sorry, at a better quality it’s not necessarily that they will go for it. So like I was saying to you earlier, our product is the cheapest in the market right now and it’s the best quality. So we’re offering a Mercedes Benz at the price of a Toyota but you know, the market here is a bit different in the sense that they’re skeptical. So it takes time to sort of assure them. And it’s not necessarily that it’s the owners of the businesses that we’re selling to. It’s more the end market user.

Bashil:                                   23:24                     The reason why is because it’s very seasonal. When school starts, parents by socks for their kids for school, so when they go to shop, the process of them going to that shop and it’s really hard for the shopkeeper to explain to them that this is a better quality. It the one that’s at the shop I get at that it’s really difficult for them to explain which one to go for.

Vidyesh:                              23:51                     They’re used to seeing a particular brand, which they’ve seen there for years, and then they’ll just pick up that brand and go with it. The other thing is also, you know we use materials that are a lot nicer, a lot nicer to feel, they’re more comfortable to wear, but like Bashil said, you know, they don’t always have time to showcase or explain that, but equally, you know, when, when they might pick up our socks, again and compare it to someone else’s but it’s not, it’s, it’s the decision. The thought process is in, you know I’d say a very normal one where you know, you see something that’s, it feels nice if cheaper and you’d go for it. So because of that, it was very difficult for us in the beginning. We also did contract manufacturing, which meant we couldn’t launch our brand immediately after we started the business. So we did a contract manufacturing for about a year.

Sam:                                      24:54                     Why did you decide to do that?

Vidyesh:                              24:55                     So for us it was good it was one of those things where anything and everything that we made, we’d sell it to one buyer and they would pick up everything that we made in our factory. So it was a good sort of start, a good boost for us. Of course then we faced our own internal challenges and we said we need to get our brand recognized as well you know, customer concentration, there’s all sorts of risks that come along with them having one big customer. So we wanted to just diversify our risks and we said that it’s now, we’re now ready to sort of go in with our own brand and sort of hit the market hard.

Sam:                                      25:36                     How did your buyer take that?

Vidyesh:                              25:38                     They still buy from us, but they, it’s now just on a purchase order basis as opposed to, yeah.

Bashil:                                   25:45                     Theres a lot of product awareness.

Sam:                                      25:49                     Yeah, I’d say it must be a difficult one because as well, I mean even though the socks are going to be worn by the kids, that’s right. It’s still the parents who are going to making those decisions. I mean, stressful, buying uniforms and stuff for your kids, I imagine is very stressful experience and your side, Oh my God. Just like make this as easy as possible. I’ll have what I had last year, get in, get out. I’m interested in how you try and break that, how you try and break that mold. Like can you go in and do like demos at schools or like what, what’s what are some ways to try and break that?

Vidyesh:                              26:27                     I think, I think that is one of the ways that we could do it or anything is then we are, we’re kind of limited with time and we’d be too stretched out if we went to individual schools trying to sell the product, we will be sharing the products to the students who may not necessarily have a say but with time what’s happened is that the, like I was telling you we’ve leveraged on our network to give that assurance of a very good quality product. They will then turn around and push our product. So the historic way of kind of selling the product without, you know, really taking time to teach or educate the parents on what, what, what’s available. They starting to do that slowly. And then, you know, the first time a parent buys a sock you know, they’ll see that it lasts a lot longer. It’s a lot more comfortable. So then they’ll buy it again. And what we found then is that the more shelf space we were getting, the more people would, they’re getting, they’re warming up to our brand.

Sam:                                      27:41                     Signals?

Vidyesh:                              27:42                     Yeah. It’s still difficult, you know, having said that, you know, even though we’ve got now bigger market share than we had last year, it’s still difficult for us to then fight the big guys because their brands are very strong in the market. They’ve been in the market for 20 years or so. So you know, it’s, there’s always that challenge when a newbie comes in to sort of persuade the consumers to shift but with time and with a bit of education that will change. The thing is, as a, as a new business, we don’t undertake any marketing, you know, adverts or commercials it’s quite expensive. We try and stay as lean as possible. So we’re just letting the brand and the quality speak for itself but yeah, it’s like Bashil said people are accepting it. It’s getting better and we’re seeing that and it’s, it’s, it’s getting better.

Bashil:                                   28:42                     The main season in December, January, so about, I think two, three seasons.

Sam:                                      28:46                     School socks were you’re sort of first thing, do you think you’ll soon start going into other types of socks?

Vidyesh:                              28:58                     Yeah, I mean we’re definitely gonna try it wouldn’t be a big market for us.

Sam:                                      29:03                     What would it be?

Vidyesh:                              29:05                     So socks for the mass market. So for if you go to like you know, high end retail stores, we might have a couple of very high quality socks in there, but we won’t be able to manufacture something that will be bought by the mass market, you know, anyone that needs socks, we’ll be like, Oh, we’re going to buy H and F socks. No. That’s going to be very difficult, purely just from a price point of view you know, even a difference of 10 shillings for a buyer here is, it’s a game changer.

Sam:                                      29:38                     Is the plan to sort of do do socks until we’ve nailed it and then go into other product lines or we begin to look at other product lines before you’ve…

Vidyesh:                              29:49                     Yeah, we’ve actually already started looking at other lines. It’s just the thing is we don’t want to jump too quickly. We want to make sure that this business is doing as well as it can and then it’s kind of becomes a cash cow for other businesses that we invest in.

Sam:                                      30:08                     What’s you don’t have to disclose, but you, how do you think about what you do next? Do you think about growing trends in fashion or do you think about the types of products that people buy as incomes rise or similarities in the production process to socks?

Vidyesh:                              30:26                     Not really, actually. It’s just for what the market requires.

Sam:                                      30:30                     How do you gauge that?

Vidyesh:                              30:32                     Just understanding the market. So market research, basically speaking to people, how they’re spending the monies. I mean simple things. Just like us last week I was speaking to a couple of guys who were painting a property ours and yeah. It’s like asking them, you know, where do you spend most of your money and how much do you end up saving? And from what you save, what are you spending your money on? So just understanding the, what striving consumerism or and if there’s a better word to use, yeah.

Sam:                                      31:00                     Aspirational?

Vidyesh:                              31:00                     Yeah.

Sam:                                      31:03                     Okay. So you basically based on that, we think that…

Vidyesh:                              31:06                     If there’s a gap in the market somewhere where we can do something a little bit better than what is being offered, then that’s something that we would, yeah.

Sam:                                      31:14                     Okay. In terms of what makes a better sock, like what are the, what are the characteristics you mentioned, you mentioned raw materials.

Vidyesh:                              31:24                     Yeah. So I mean when you wear socks, you, for anyone that wear socks, you know, you don’t want to wear socks that get sweaty. Yeah. You want something like, yeah. And it’s gonna last, no marks on your legs.

Sam:                                      31:39                     I hate marks on my legs, yeah. How many sort of distinct processes are there to go from raw material in to socks out, is it like first you do this then this then this then you’ve got sock, like how many of those things are there?

Bashil:                                   32:00                     So first the machine spins the yarn to produce the product.

Vidyesh:                              32:05                     Knitting.

Vidyesh:                              32:07                     And, and it goes, so, Oh yeah, it’s all open. Then it gets linked with another machine, after that it gets checked, if there’s any coils or like if it’s perfect, the yarn is perfect. And after that, it gets boarded and steamed and after that it gets packed.

Sam:                                      32:32                     It gets steamed?

Bashil:                                   32:32                     Yeah, for the shape.

Sam:                                      32:36                     Oh, okay. So the same idea.

Vidyesh:                              32:37                     So the fibers in the socks then basically you get sort of glued together and this improves their elasticity and also the life of a sock. So it doesn’t loose shape very quickly. So yeah, there’s a…

Bashil:                                   32:54                     Many companies have this process.

Sam:                                      32:56                     Many companies do you have that process? And that means that they are…

Vidyesh:                              33:06                     Say cheaper.

Sam:                                      33:07                     Elastic. And what is the raw material? Is it wool?

Vidyesh:                              33:11                     No. So you’ve gotten many different types of raw materials. You can have, wool is one that you couldn’t use. You can use cotton, you can use nylons, you can use polyesters, you know, you can use acrylic yarns. So there’s a lot of synthetic yarns, which are the polyesters, nylons, acrylics, and then you’ve got the natural ones, which are cottons and you know, you’ve got bamboo and you’ve got…

Sam:                                      33:37                     Bamboo?

Vidyesh:                              33:38                     Yeah.

Bashil:                                   33:42                     It’s like really, it’s one of the best right now.

Vidyesh:                              33:42                     Yeah. So we are, we’ve actually just trialed bamboo socks and we’ve got some really nice socks that we made for the two of us with bamboo yarn.

Bashil:                                   33:50                     It’s expensive.

Vidyesh:                              33:52                     But it’s also more…

Bashil:                                   33:53                     Really good quality.

Sam:                                      33:54                     So they just sort of take, cause bamboo’s quite hard, do they sort of soften down?

Vidyesh:                              34:01                     Yeah, yeah. Yeah. So they break down they pulp it up and then they from fibers, then they spin it into yarns. The thing is with bamboo, you get very short fibers. Whereas like with cotton you can have really long fibers. So harder to make bamboo socks. It’s not necessarily the shortest, but it’s just it’s a harder yarn to make.

Sam:                                      34:25                     Okay.

Vidyesh:                              34:25                     Yeah.

Sam:                                      34:26                     And what are the advantages of bamboo socks?

Vidyesh:                              34:27                     So, you know, like the world is becoming more and more environmentally conscious. So for example, cotton requires more water to cultivate. So the same amount of cotton if you take a kilo of cotton yarn and kilo of bamboo yarn, bamboo yarn requires less land and less water.

Sam:                                      34:48                     Okay.

Vidyesh:                              34:50                     Yeah.

Sam:                                      34:50                     In terms of the, the wearer,

Vidyesh:                              34:54                     It’s just like cotton, if not better. Yeah. You can’t really tell like, if you give it to someone.

Bashil:                                   35:00                     It absorbs sweat much better.

Vidyesh:                              35:00                     Yeah.

Bashil:                                   35:00                     It’s breathable.

Vidyesh:                              35:04                     Yeah. If I gave you a pair of socks between cotton and bamboo and I didn’t tell you what was what, I don’t think you’d be able to tell the difference. But they both nice. They both feel good on the feet breathable, comfortable. One’s obviously more environmentally friendly than the other.

Sam:                                      35:22                     And so, just a few more questions, if that’s alright. That’s interesting, since you, so you said you’ve been going for about two and a half years, what have been some of the biggest insights you’ve, you’ve had since starting?

Vidyesh:                              35:37                     Wow.

Bashil:                                   35:38                     When we got feedback compared to our competitors, they tell us that the customers like, now just want to buy our product. It’s like a good feeling.

Sam:                                      35:50                     Yeah.

Vidyesh:                              35:51                     Yeah, I think, I think like again, with the insights, you can break it down into two parts. Yeah, you can for us as a learning experience and you can, I can segregate that into a silo of doing business better. And then also on the other side where we get customer feedback. And so like Bashil said, we’ve got very good product and everyone buys it, Will buy it again and keep buying it. And there’s not a single person that’s ever given us negative feedback on our socks not one that we can recall, like that’s said that to us directly and that’s why we’ve been able to grow year on year. And then on the other side it’s learning about the business and learning about the economy. Cause like, you know, the two of us, we had no experience of running a business in Kenya and so that was a lot of fun. It can get very frustrating at times as well. So I would say that, you know, we discussed well like being in Rwanda, being in Tanzania and being in Uganda, being in Kenya. And if you look at the sort of data which is available on the internet, you know, Rwanda is easier to do business in than Kenya and it’s not necessarily that Kenya is a bad place to do business. It’s just, it has its own challenges. So for us, like there was a lot of learning, you know, how to deal with the bureaucracy, how to get the best out of our people of all of our staff, you know, how to motivate them better.

Sam:                                      37:22                     I mean, have you found any interesting ways to motivate people?

Vidyesh:                              37:25                     I think for us the main thing is just treat them that the way you want to be treated. I think we just keep them happy. We keep them you know, when there’s something good we can talk about it.

Bashil:                                   37:40                     Of course add some incentives like once they hit theior targets, they get their bonuses.

Sam:                                      37:43                     Okay. And so would you say when something’s good it’s in like we nailed production today, there were no difects.

Vidyesh:                              37:48                     Yeah. I mean, you know, the more you talk about something that goes well, then everyone just naturally feels better about it. They feel motivated.

Sam:                                      37:58                     And in terms of the incentives, that’s what are some of the targets or metrics that you…

Vidyesh:                              38:04                     So we’ve got targets that they have to hit every day for each department, you know, packing, plating trimming, linkingknitting itself. So, you know, it can be as simple as giving them a kilo of flour. So either as simple as that.

Sam:                                      38:26                     And is that explicitly made known as in if you beat your target today, you’re getting a kilo of ‘unga.’

Vidyesh:                              38:33                     It’s not on a daily basis, but yeah, we, they are aware of it. The thing is…

Bashil:                                   38:39                     You can’t just do it for one day, you know, if they hit their targets at least 80% of the month, then they’ll be rewarded with the ‘unga’ or bonuses.

Vidyesh:                              38:53                     Yeah. They get bonuses, end of month bonuses, all of that sort of stuff.

Sam:                                      38:58                     So that sort of gets them.

Vidyesh:                              39:00                     Yeah. Yeah.

Sam:                                      39:01                     Has there been anything that surprised you in running the business?

Vidyesh:                              39:05                     I think for us it was just more how we managed to get into the market and like we’ve hit it really hard and then, you know, we were bullied when we started, you know, there were people who discouraged us from starting, like, why you’re putting up a socks factory. You know, you won’t know. You don’t know what you’re doing you, you won’t be able to last. You know, this is not a job for you guys, but all of those things. And it happens, you know, even with our customers, you know, at one point they said, you know, don’t buy these guys’ socks but we overcame that and, you know, we hit that, we passed that hurdle. And I think for us that was quite nice. The others, I think the other positives, I mean, there’s a lot of course, like the growing the business, you know, seeing our turnover grow year on year that was naturally enough forecasts anyway, but you know, to see that as a tangible result and that’s also quite satisfying.

Sam:                                      39:59                     And if we were to come back, let’s say that again a couple of years time, well, what do you think H and F would be looking like then?

Vidyesh:                              40:05                     So, yeah. Socks. We want to be the market leaders in East Africa we’re kind of making big strides in…

Sam:                                      40:11                     Just how many songs do you think is, is possible to sell in a year in East Africa?

Vidyesh:                              40:17                     In East Africa? I mean, I wouldn’t be able to give you a…

Sam:                                      40:19                     Maybe 13 million pairs.

Vidyesh:                              40:22                     I guess to put this into perspective, right Primal across the whole of Europe sells, there’s a number that I read about 200 million pairs of socks.

Sam:                                      40:37                     200 million across Europe, okay. So imagine, I’m trying to think.

Vidyesh:                              40:42                     So that’s one company.

Sam:                                      40:43                     Yeah. How many pairs of socks do you buy a year?

Vidyesh:                              40:46                     So on average people will have like 10 to 15, well, I used to buy 10 to 15 pairs of socks when I used to live in the UK and that generally lasts you. But yeah.

Sam:                                      40:56                     And then there’s, what the general population?

Vidyesh:                              40:58                     So in Kenya there’s 44 million people. 48 million.

Sam:                                      41:01                     So across the region, you’ve got 150 million?

Vidyesh:                              41:05                     Across the region. Yeah, probably about a hundred million. Ethiopia, I mean, you take that Ethiopia, so you just look at Uganda, Tanzania.

Sam:                                      41:12                     Kenya and Rwanda.

Vidyesh:                              41:14                     Yeah. Yeah. Easily Over a hundred million I’d say. But again, you have to remember that not everyone wears socks. Yeah. So you’ve got to, it’s different market segments that you need to then kind of break down into.

Sam:                                      41:33                     Is this the sort of thing where people buy, they buy it fairly regularly so everyone buys more than that on buys. So it’s potentially hundreds of millions of pairs of socks. Obviously you kind of reduce that down, but it’s not like you’re selling some niche products which people are going to buy once and they never buy it. I can see how if you have that brand, it’s something which gets…

Vidyesh:                              41:55                     It’s something that will keep growing. I think for us more it’s like we want to really get into the export market getting into like shops in the UK, Europe, US, Australia. For us that would be great. I think that’s where now we can really hit volumes. I mean, we can do it in East Africa but it’ll, it’ll be a lot more difficult than…

Sam:                                      42:18                     Yeah. If you’ve got your export markets so cool. And people who are listening, how can they learn more about H and F and sort of the journey that you’re on?

Vidyesh:                              42:28                     Okay. We was just in the process of developing a website but coming by social Kenya. Yeah, we’ll have a website up in a couple of months. I mean, I’ll share that with you at we don’t really, like I said we don’t really focus heavily on marketing but we relying on just brand awareness and the customer loyalty. Now the customers that we have they’re going to keep growing, but yet in with time we’re going to invest in, you know, social media marketing, have our website up. Just right now our market is quite small in terms of the specific market that we’re focusing on and they don’t necessarily use the avenues that we’re discussing. Where in the future we will have these things. Yeah.

Sam:                                      43:18                     Cool. Well, Vidyesh, Bashil, thanks so much.

Vidyesh:                              43:21                     Yeah, thanks.


Why Zamgoat believes goats are the next big meat in Zambia (and the world), with Paul Nyambe


In this second episode from Zambia, I speak with an entrepreneur who has found his niche and is fully focused on it.

Paul Nyambe grew up farming goats in rural Zambia. He and his family were unable to earn money from the animals which always struck Paul as frustrating.

Years later he built a career in food sales, specifically ice cream, which meant had relationships with large supermarkets and restaurants.

One noticeable thing missing from the menus and shelves was goat meat.

In 2012, Paul quit his job and started Zamgoat.

The vision is simple: to sell high-quality goat meat to the public.

In our conversation, we talk through various parts of the business such as the profit margin on a goat, the barriers to entry for getting a goat in supermarket aisles, and the reasons why Paul is so positive that goat products are the next big thing for consumers around the world.

We also chat about the potential for more value creation in goat products, such as making rugs from goat skins and various other products.

If, on the off chance, you happen to know someone who’d be interested in advising Paul in this regard, please let me know via the contact form.


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Social Media Links



Twitter: @zamgoat



Sam:                                      00:07                     Intro.

Sam:                                      02:35                     Cool. So we’re here today with Paul from Zamgoat. Paul, welcome to the show.

Paul:                                      02:40                     Thank you so much. Sam

Sam:                                      02:42                     So to get started, can you tell us a little bit about you and a bit about Zamgoat?

Paul:                                      02:46                     Okay, so like Sam you’ve put it, I’m Paul Nyambe and I’m the founder and CEO of Zamgoat. I was born in the Southern part of Zambian, I currently live in Lusaka and I started Zamgoat in 2012 and I’ve been actively running it since since then.

Sam:                                      03:02                     Very cool. And we should note that you’ve got a bit, you’re recovering from a flu at the moment, so your voice is not…

Paul:                                      03:08                     So my voice is a bit, a little bit Husky.

Sam:                                      03:11                     And from the name. So I mean Zamgoat, you’re in the business of goats in Zambia.

Paul:                                      03:18                     Exactly, exactly. Yeah. So we’re in the business of goat processing and distribution. Essentially what we do is we aggregate goats, we do not keep our own goats. So we buy goats largely from small holder farmers. We then process and distribute goats to get the emerging urban consumer base in Zambia, initially starting out with the Lusaka urban market.

Paul:                                      03:41                     Very cool.

Paul:                                      03:42                     Yeah.

Sam:                                      03:42                     Great stuff. Okay. So you so I’m sure there are lots of things that we can talk about both on the sort of supply and the demand side. I’m interested though, how did you spot this opportunity? How did the business sort of, what’s the founding story of the business?

Paul:                                      03:56                     I guess so, it started from a combination of two realities of my life, one of which is my rural upbringing. Growing up in a village set up as a child and keeping goats, my family keeping goats, with no economic impact whatsoever on our lives, you know, but just for village prestige, like any other villager would do at the time. Reason being or why there was no economic baring, more or less through our good keeping activities was because of lack of access to a readily available market. So later on, growing up in the city and working the city as a country sales person for, you know, a food company in Lusaka. You know, my experience with that, working experience, exposed me to a gap in the market. I used to do mostly with supermarkets, restaurants and hotels in supplying out food orders at the time for the company that I used to work with. But then I observed there was no goat meat sold in those supermarkets. And goat was also a rare feature in most restaurants. I mean most restaurants and hotels in Lusaka, whereas on the other hand, again, I’m an ardent consumer of goat. I love goat meat. So that, you know, opened up my eyes to the opportunity and that’s how Zamgoat started in July, 2012.

Sam:                                      05:18                     Very cool. What was the other food you were selling?

Paul:                                      05:21                     So my last job before I started Zamgoat, we used to, I used to work for a company that used to deal in ice cream.

Sam:                                      05:28                     Okay.

Paul:                                      05:28                     So yeah, I’m a former ice cream sales person. I used to sell ice cream.

Sam:                                      05:35                     At times, did you get paid to try out new ice cream? I mentioned that when there was, when you were selling ice cream, you had, you were given free samples and things?

Paul:                                      05:45                     Yeah, sure. So yeah, we would give out free samples to try to our customers during our field sales.

Sam:                                      05:53                     Okay. So basically you went from ice cream to goat?

Paul:                                      05:56                     I went from ice cream to goat cause that was my last job.

Sam:                                      05:58                     Yeah. Very cool. Okay. Right. So what should, so let’s start on the let’s start on the demand side.

Paul:                                      06:04                     Yup.

Sam:                                      06:04                     Okay. So the, you were saying that the supermarkets, restaurants, hotels weren’t selling goats. Is that because the consumer, the end consumer wasn’t demanding it or was, was it because they just didn’t have a reliable way to get on, to get it on the menu?

Paul:                                      06:22                     At that time there was a gap in the supply side. There was no company that was processing and you know, making goat available in those…

Sam:                                      06:30                     So people were still wanting it.

Paul:                                      06:33                     People would still want goat but at that time, I think the only source where people could, consumers could get goat meat from was from the informal market setups and these mostly are open markets, you know, setups that have a lot of litter and hygiene issues with them.

Sam:                                      06:51                     Yeah.

Paul:                                      06:51                     So that to a large extent tended to, you know, limit the uptake of goat among consumers.

Sam:                                      06:57                     Got it. Is goat quite, is it something which is eaten across Zambia or is it just particular regions that sort of eat it?

Paul:                                      07:06                     Goat meat is eaten right across Zambia and now, more consumers ought to actually love to eat goat more than any other meat products. And this, I think can be attributed to the health and nutritional benefits and values that you know, are associated with goat meat as compared to other red meat.

Sam:                                      07:26                     Such as what?

Paul:                                      07:29                     One of which, I think the key health benefit for goat is it’s lean, you know, it’s leanness, It’s a lean meat and that means it poses less challenges that associated with that cholesterol, you know, cholesterol levels in in mid, in mid consumption.

Sam:                                      07:50                     Okay. What are some traditional ways that goat is eaten?

Paul:                                      07:53                     Traditionally the goat is mostly eaten in a stew form, but that stew, normally people don’t add, you don’t add any other ingredients apart from salt. So just boil the goat and then add your salt and then they take it as a goat soup, which sometimes they also eat with the local staple, which sima.

Sam:                                      08:13                     Sima?

Paul:                                      08:13                     Yeah. The other common way that goat has eaten traditionally in Zambia is through Bryce.

Sam:                                      08:19                     Like a barbecue?

Paul:                                      08:21                     A barbecue, yeah. Most people eat it in barbecue foam, but that is mostly, again, common in social joints, drinking places, stuff like that. Yeah.

Sam:                                      08:33                     Okay. And so when, we’ll sort of get to a bit about how you’ve done it, but you’ve basically been able to say, go to supermarkets, hotels, restaurants and say I’ve now got a high quality supply of goat. What’s been the, what’s been your sales pitch when you’ve been going to, have you found it an easy pitch or have you found that they’ve said, Oh, well I’m not sure if people are actually going to eat it?

Paul:                                      08:58                     Sure. Our pitch in trying to upscale the goat, you know, the distribution of goat meat in Zambia is our emphasis on one wanting to transform the entire quotive value chain through value addition and improved of distribution of goat meat, which in turn would then also create a sustainable market opportunity for smallholder farmers. So our pitch out there is unlocking the availability of goat in convenient places where consumers would easily find goat meat, at the same time also creating a sustainable market for small holder farmers. So most of our customers engage with us on those two fronts. Wanting to make goat available conveniently to the growing consumer base of goat meat, but also wanting to contribute to the greater good out here, by creating a sustainable market opportunity for the small holder farmers who are the main producers of goats in Zambia.

Sam:                                      10:10                     Got it. Okay. So when you’re going to, I don’t know, the Radisson hotel for example or you know, like one of your big suppliers or one of the, one of your big customers you’re partly saying by putting goat on the menu, you can tell your customers that they are supporting small holder farmers.

Paul:                                      10:28                     Exactly.

Sam:                                      10:28                     Yeah.

Paul:                                      10:29                     Yeah, sure.

Sam:                                      10:29                     Does that resonate?

Paul:                                      10:30                     Yeah, sure. That’s what we do and most of our customers actually buy into that. Okay. So they buy into making goat available for their consumers but also stocking it as a way of supporting small holder farmers out here.

Sam:                                      10:46                     Yeah. When you go to your sales pitch, you bring along some goat for people to try?

Paul:                                      10:52                     We do so, especially like when we introduce a new product range, cause we have quite a number of goat products that we supply. So besides the fresh, ordinary goat meat as in it’s fresh or frozen state, we also do smoked goat meat. We do goat buton. We do goat burgers as well.

Sam:                                      11:17                     Oh, burgers.

Paul:                                      11:17                     Yeah, sure. So like in terms of, when I introduce a new, we just introduced a new product line we normally go with the samples, you know, for our customers to try out.

Sam:                                      11:29                     Very good. Okay. So company’s been going for about, like seven years, seven years now?

Paul:                                      11:35                     Yeah, about seven years.

Sam:                                      11:37                     What sort of scale are you at now?

Paul:                                      11:39                     We are quite at a good scale right now, starting out with just one goat in 2012, with under $200 in startup capital. We have at least to date, you know, done over 5,000 goats. Okay. And generating revenues, you know, slightly above $400,000 now. So for us, I think that’s a good traction, but we would have loved to do more than that. Would have loved to do more than that.

Sam:                                      12:08                     Yeah.

Paul:                                      12:08                     But we understand, you know, the Strata of our industry as a whole, they goat industry. Historically it has been underdeveloped. But, you know, we are still satisfied, I think with the strides that we’ve made so far, though we feel, I think we should have gone more, more than that.

Sam:                                      12:28                     Okay. So let’s sort of talk about the, the process that you have. So you’ve, sort of stage one is going and collecting live goats?

Paul:                                      12:38                     Live goes from small holder farmers. Yes.

Sam:                                      12:40                     Yeah. And then maybe just sort of, can you sort of walk me through the whole process from receiving a goat, all the way through to it being sold as a goat burger.

Paul:                                      12:51                     Okay. So it all starts from first engaging with small holder farmers whom we mostly organize in supplier groups and cooperatives. And then from there on we agree on the terms of business with them, we offer them a good buying price. Good in the sense that our price is actually better than the prices that most of the informal traders do, you know, of our farmers out here, and then from there on after we buy those goats from the smaller farmers. We take them to our processing facility in Lusaka, currently operating out of market. From there we do process goat, which we sell in two, or rather through two main ways, through the butchery set up where we, sell, you know, goat meat in its fresh frozen state as well as other value added products, that includes smoked goat, buton and goat burgers. And then we also have another sales channel which is a take away. This is a recently added sales channel where we are doing ready to eat goat products. Okay.

Sam:                                      14:05                     So within your processing plant you will be cooking?

Paul:                                      14:10                     Yeah, so currently we are trying to optimize the space that we have at our store, which also serves as, you know, a processing facility at the back end of it.

Sam:                                      14:20                     Yeah.

Paul:                                      14:21                     So we have, on the other side of the store, adjacent to the butchery section, we’ve recently opened up a take away offering, and the brand, we are calling Zamgoat express, so that offers good goat amd chips. We do smoked goat and chips, we do goat burgers. We do goat sausage and chips. Yeah. And those, we do an upscaled vision of goat soup, which is different from the traditional goat soup that, you know, has been common on the Zambian market.

Sam:                                      14:59                     Very cool, Okay what, in terms of the, sort of the economics of it, how much do you buy it? How much roughly do you buy goat for, roughly what ptice?

Paul:                                      15:10                     So roughly we buy our goats at about $30 from a small order farmer, $30 per goat.

Sam:                                      15:17                     Okay.

Paul:                                      15:17                     Yeah.

Sam:                                      15:17                     And how much, what’s the process to value of that goat?

Paul:                                      15:22                     On average, the minimum processing value of the goat that we sell is around $45.

Sam:                                      15:30                     $45, okay. So you;re making about $15.

Sam:                                      15:32                     Okay. And so what’s been the cost? What’s been the total cost to sort of set up the processing plant? I’m just trying to work out how…

Paul:                                      15:42                     So to date I would say we haven’t really had a formidable processing plant, so we’ve kind of you know, been bootstrapping our processes whereby we are doing everything that we do using very limited that means so far we’ve invested over $40,000 into our current, into our current processing facility, but we are actually current working on setting up an ideal processing facility,which is estimated to cost around $400,000. So we’re currently actually active in the market trying to raise the capital to set up an ideal processing facility so that we could then supply more good products out there. So satisfy our market as well as also increase our impact in working with smolder farmers.

Sam:                                      16:41                     Yeah. Okay. So $400,000. And you’re making about $15 per goats, so you’re gonna have to do like 250,000 goats, is that right? No, no, 25,000 goats.

Paul:                                      16:52                     About 1200.

Sam:                                      16:53                     25,000 goats?

Paul:                                      16:55                     Yeah.

Sam:                                      16:56                     Is there demand for that? 25, like at the moment you, you’re sort of production’s about, you’ve done about 5,000 goats. I mean that’s increasing the capacity of your operation by five times.?

Paul:                                      17:12                     Yeah. So actually our target increase in capacity is about 10 times more than what we’re currently doing.

Sam:                                      17:20                     Okay.

Paul:                                      17:21                     Sure. So we’ve done about yeah, you’re right. So it’s close to about 10 times more in terms of production output.

Sam:                                      17:32                     And I mean, I don’t, I know nothing about the goat industry, but I’m just thinking if you’re making $15 per goat and there’s, it seems like there’s a lot of, you’d like, you’re adding a lot of value. You’d be processing it, you’re packaging it, you’re distributing. I was wondering if like, do you need to get a certain scale before it’s become, before you make money off this, like, or is it already profitable? Like?

Paul:                                      18:00                     It is already profitable, except that the current state of profitability is limited by scale by our current scale. So we can only do so much for now, given our limited capacities. We Believe that once we grow capacities, then even our profitability should also be able to.

Sam:                                      18:24                     So that means that out of that $15 per goat that you’re making your, costs would you reduce?

Paul:                                      18:30                     Exactly, the cost will reduce because of optimize…

Sam:                                      18:32                     Yeah.

Paul:                                      18:34                     You know, our processes.

Sam:                                      18:35                     Okay,

Paul:                                      18:35                     Sure.

Sam:                                      18:37                     Do you think that you’d ever pay less for a goat? Ket’s say at the moment, if you’re going to a small holder farmer and you’re buying 10 goats off them for $30 each, would you ever get to a place where you’ll say, right, I’ll buy 50 goats off you for $25?

Paul:                                      18:54                     Exactly. So with increased the capacity operating capacity on our side, there is the possibility of us incresing our costs

Sam:                                      19:01                     But do the, do these kind of small holder farmers sell 50 goats for $25?

Paul:                                      19:10                     They would sell.

Sam:                                      19:11                     They would.

Paul:                                      19:12                     Yeah, they would sell, they would sell. Again, it all gets back or it all borders on our capacity at any given time. So with capacity at any give timeit is a fault to negotiate with our suppliers to look, we are buying so many at a go, so we’ll then negotiate for a bulk discount.

Sam:                                      19:34                     Yeah.

Paul:                                      19:34                     Okay. And then also that would make sense for the farmer because instead of just selling 10 goats, you know, they’ll sell at least more and make more money at a go than to make the same amount of, say in my photo.

Sam:                                      19:48                     Exactly. Like, yeah. And they get, Just sent a lot of cash, which they can then use to invest in…

Paul:                                      19:53                     To invest in that, in other activities that also, in enhancing their livelihood. Yeah.

Sam:                                      19:59                     How do you transport the goats? You said, I’m forgetting…

Paul:                                      20:02                     Yeah, so for now we outsource transport. We hire delivery trucks, we hire open trucks that move our life goods from the farmers to…

Sam:                                      20:14                     Do you have to take a Zamgoat representative to like tick off this number of goats have gone on.

Paul:                                      20:19                     Yeah. So we normally have people on the ground.

Sam:                                      20:21                     Okay,

Paul:                                      20:21                     Sure.

Sam:                                      20:22                     How many people are employed?

Paul:                                      20:24                     Currently, our establishment is still small. We have a total of four staff when I was that, I’m sure.

Sam:                                      20:31                     So there’s you and three other people.

Paul:                                      20:33                     Yeah. There’s me and three other people.

Sam:                                      20:35                     Each time that you go and buy goats, one of the four of you has gone.

Paul:                                      20:40                     Yeah, it has to be. Yeah.

Sam:                                      20:42                     Yeah.

Paul:                                      20:42                     But then we also have times when farmers bring themselves, so they come through to Lusaka. So we’ve made ourselves so popular among the small holder farmers, such that every farmer out there who’s living in the outskirts, whoever wants to sell goat, they know that there is Zamgoat. So they give us a call and then we make arrangements for the delivery. And sometimes, you know, there are those that you’ll be dealing with for some time, we know that they’ll bring us the right quality of goats. So we give them a go ahead. Okay. How many are you ready to supply this time around? They give us their number and then we give them a go ahead. Okay.

Sam:                                      21:26                     Yep.

Paul:                                      21:27                     Move them over to Lusaka, show.

Sam:                                      21:29                     Nice. What’s your quality assurance process when you see a goat? Do you, do you like how do you…

Paul:                                      21:38                     Yeah, so we look, we look at quite a number of things. One of which include the general wellness wellbeing, the physical stature of the goat. Okay. It has to appear to be in its, you know, perfect state. Okay. To go out to guarantee us quality meat, then two, it’s the age. We look at the age.

Sam:                                      21:58                     How do you tell the age?

Paul:                                      21:59                     There are a number of ways to tell the age. It’s the general appearance of the goat. You can tell this goat, I think. You know.

Sam:                                      22:05                     Okay.

Paul:                                      22:05                     Yeah, ths goat is too old. Then the other technique we use is looking at the teeth for measure, yeah.

Sam:                                      22:15                     The teeth, is that a good gauge for the size, the age of the Goat?

Paul:                                      22:21                     Yeah. To some extent it, it is to some extent, yes.

Sam:                                      22:26                     Yeah.

Paul:                                      22:26                     Sure. I think the best technique is just the general physical state of the goat in its appearance has to appeal to you as a buyer.

Sam:                                      22:37                     It’s gotta be…

Paul:                                      22:38                     It has to be safe. Okay. And not, you know, you’re looking at a goat, you’re able to see the ribs exposing, you know, protruding from out. So that it will give you an indicator. No this might not be, I think, in order to give us good quality meat. So it has to be well rounded.

Sam:                                      22:59                     Yeah. What’s the best age for a goat?

Paul:                                      23:03                     So we’re prefer goats that are not more than three years in age for meat production. Yeah.

Sam:                                      23:09                     Yeah.

Paul:                                      23:10                     I’d say between one and a half years and three years there about.

Sam:                                      23:15                     Okay.

Paul:                                      23:15                     Sure.

Sam:                                      23:16                     And then goats enter your processing plant. And at the other end, we’ve got goat meat like in between, what happens to, so obviously like the goat is killed. What happens to like the other parts of the goat that aren’t used for meat?

Paul:                                      23:34                     Yeah. So you’ll be shocked to learn that to date nothing much happens to, except for the offers. We sell the offers in our butcher section, then we use some also for the takeaway section, but then for the other parts of the goat like the skin to date, nothing that much has been done, you know, in terms of adding value to the goat skins.

Sam:                                      24:00                     Yeah.

Paul:                                      24:01                     So mostly goatskins in Zambia are just thrown about. But, you know, being pioneers in this industry as Zamgoat, we’ve taken it upon ourselves or seen an opportunity in that area as well to start adding value to goat skills.

Sam:                                      24:16                     What could be done?

Paul:                                      24:20                     So one of the things we’re looking at is adding value to, you know, to, to goatskins to save the local market coming up with finished products like belts you know, device poaches you know wristbands and stuff like that.

Sam:                                      24:36                     Can you make rugs?

Paul:                                      24:37                     Yeah. You can also make rugs, you can make bags.

Sam:                                      24:40                     Okay.

Paul:                                      24:41                     You can make shoes like the final leathershoes, most of them are actually made out of goat skins. The other opportunities doing maybe just basic processing and then exporting the semi processed goat skins.

Sam:                                      24:55                     Okay.

Paul:                                      24:55                     To the other parts of the world.

Sam:                                      24:59                     So if there are any goat skin artisans listening to the podcast, they should get in touch with you?

Paul:                                      25:05                     You’re right.

Sam:                                      25:05                     They would be able to come sort of help with the, making nice things.

Paul:                                      25:10                     Excellent.

Sam:                                      25:10                     Okay, cool. How long does it take between goat enters and like processed meat at the end?

Paul:                                      25:20                     Okay. On average takes about 15 minutes. Let me say 15 minutes.

Sam:                                      25:28                     Yeah. Okay.

Sam:                                      25:29                     You do one at a time?

Paul:                                      25:31                     Yeah. So we do, slaughtering, given our current limited capacities, we do slaughter them one at a time.

Sam:                                      25:37                     Is it by hand?

Paul:                                      25:38                     By hand. Yeah. Currently slaughtering is done by hand and then flailing also by hand.

Sam:                                      25:43                     Flailing?

Paul:                                      25:43                     Yeah. Removing of the skin is manually done for now because of our limited capacities.

Sam:                                      25:49                     But this $400,000 investment.

Paul:                                      25:51                     So this $400,000 investment, we are looking at investing in some, at least close to state of the art, you know, kind of facility that would enable us to, you know, to process our goat in a much commercial like manner unlike, you know, how we are currently doing it.

Sam:                                      26:13                     And would that be like a machine?

Paul:                                      26:15                     Yeah. So we are looking at, you know the slaughtering line where you have some conveyor belts that, you know, that electronically move the goat from the slaughtering stage, the flaring stage. Yeah. Up to the, you know.

Sam:                                      26:34                     Where do you, where do you buy that machine from?

Paul:                                      26:36                     So for now it has to be imported from outside the country.

Sam:                                      26:43                     Made in China, India?

Paul:                                      26:44                     Made in China. China will always be the cheapest, you know, the cheapest source, I’ve had some discussion with a number of our suppliers of slaughter house equipment in China. Yeah, sure.

Sam:                                      27:01                     Purely out of interest, do they eat goat in China?

Paul:                                      27:05                     They do, yeah.

Sam:                                      27:07                     Okay. So they probably got it. They’ve got these machines that would be that would be perfect, got it.

Paul:                                      27:14                     And they do slaughter goats there as well.

Sam:                                      27:16                     Yeah. Okay. Because you’re going to get one of these machines and then you’re going to be able to, once you’ve got that, your capacity and then you can just go out and buy more goats. What’s like, if you’re saying that you buy at $30 and you sell at $45, roughly how many days does it take for you to keep the money?

Paul:                                      27:37                     Ideally, it doesn’t take, sort of like through our, our butchery section. So we have a two revenue model, which is retail and wholesale. So wholesale, I mean retail is cash sales.

Sam:                                      27:52                     The cash.

Paul:                                      27:52                     So you slaughter the goat then within a day or two you have, you know, you recoup your money.

Sam:                                      27:59                     Yeah.

Paul:                                      27:59                     And then we also have another revenue model, which is wholesale supplies to these other intermediaries that include supermarkets, restaurants, and hotels. So that in most cases comes with credit, you know hotels. And at most for now, we, we, we accept at least two weeks.

Sam:                                      28:18                     Okay.

Paul:                                      28:18                     Yeah.

Sam:                                      28:19                     So 14 days is your max?

Paul:                                      28:22                     Sure.

Sam:                                      28:22                     So it’s not 30 days?

Paul:                                      28:24                     For now, it’s not 30 days, given our current, you know capacities we can’t do 30 days because then that would wipe out the much needed cash that we need to manage the operation.

Sam:                                      28:35                     Okay. So let’s say you’ve got an, and how does it work? Does it, have you kind of got like a constant flow of buying goats, processing them, selling them? Or is it kind of like up and down?

Paul:                                      28:51                     So it’s up and down. And it mostly depends on two factors, one of which is the demand on our markets marketing side. Okay. And the demand of products from our customers who we’ve signed up with, then two, it is our capacity in terms of you know, working capital, to procure at any given time.

Sam:                                      29:15                     Yeah.

Paul:                                      29:15                     Yeah. So it depends, again, it fluctuates Nothing.

Sam:                                      29:19                     Yeah. But there’s, okay, so there’s demand. So what might cause a fluctuation in demand?

Paul:                                      29:26                     A fluctuation in demand is caused by a number of factors. One of which is the marketing of goat in the manner that we’ve been trained to do it is still relatively a new thing on the market. So a lot of you know, customers and partners through which we sell our products are still getting, you know, acclimatized to our concept and distribution.

Sam:                                      29:59                     Are they still sort of saying, okay, we’ll buy a hundred goat burgers and see how it goes as opposed to we’ll have 200, so they’re still in that sort of testing.

Paul:                                      30:09                     So there’s still a bit of market development activities, you know, going on.

Sam:                                      30:13                     Yeah.

Paul:                                      30:13                     On our end here.

Sam:                                      30:14                     How do you, do you go around with leaflets, how do you sort of…

Paul:                                      30:18                     Yeah, so we, yeah, we do leaflets and then we also do online marketing through you knowplatforms like social media, useing Facebook, Twitter our website as well as just, you know,physical visits to targeted clients.

Sam:                                      30:42                     Okay. So let’s say, are you in shoprite?

Paul:                                      30:46                     Not yet. So for some reason we are yet to start dealing with most of these big retail chains. And the major limiting factor for now is our luck luck over the right, I do, operating scope in terms of processing as well as distribution capacity in terms of…

Sam:                                      31:13                     As in, they’ll only deal with you if you can do a thousand goats.

Paul:                                      31:16                     Yeah. So you need to have a certain level of capacity, you know, we don’t want to engage with you and then tomorrow you’re unable to supply. They need to, again most of these large retail chains are very particular in terms of hygiene and sanitary requirements. So your products, your processes must meet certain, you knowcriteria?

Sam:                                      31:43                     Yeah.

Paul:                                      31:44                     Like how you go about slaughtering, processing and also delivering your goods to market, you need to meet a criteria, which to date I think,e’re still working on and that’s the more reason why we’re also trying to raise money, so that we can scale up our operation and move, you know, our business from this state of,you know, proof of concept like. I think we’ve overstayed at this stage and now we need to grow our capacity and just,ou know, flood the market with…

Sam:                                      32:19                     Flood the market with goat meat. Yeah. I mean you’re right. I mean it seems like you’ve been going for seven years now. You’ve kind of worked out visa the basic functions, you’re going to go off, buy goats, process them, sell them. Okay. Well you go…

Paul:                                      32:37                     So now I think the only missing link is just, you know, aligning our capacities with the, the process that we’ll develop so far. So I do get to fully take advantage of, you know, the market opportunities.

Sam:                                      32:51                     Do you think that there’ll be any resistance or any hesitation from let’s say Shoprite, so one of the biggest supermarkets here, will they perhaps say, okay, well, we’re going to buy this goat from you, but we don’t think people will buy it. Like, do you think you’ll have to do some?

Paul:                                      33:10                     No.

Sam:                                      33:11                     No?

Paul:                                      33:11                     There’s no that hesitation, right now we have actually we have an active conversation with another large retail chain, Choppies. Okay. So they are ready to engage with us.

Sam:                                      33:24                     Okay.

Paul:                                      33:24                     By the end, they’re just waiting on us to be ready in terms of capacity setting up a formidable slaughtering facility, processing facility and also having the right distribution you know.

Sam:                                      33:38                     Set up in cold, you’d have to have some cold chain.

Paul:                                      33:41                     You need a cold truck cause you can’t deliver meat, you know, at the back of a cab. So you need, you need the right distribution tools, you need a cold truck, you need cold storage, sufficient cold storage so that you keep your meat, you know, in the perfect state at all times.

Sam:                                      33:59                     How similar is, how similar is that process to beef and pork?

Paul:                                      34:05                     It is very much similar.

Sam:                                      34:07                     Okay.

Paul:                                      34:07                     What process are similar.

Sam:                                      34:09                     What’s stopping an existing beef producer or pork producer just saying, okay, we’re going to go out and buy some goats and put on and just,

Paul:                                      34:20                     Yeah. I think until recently what was stopping them is really lack of the edge to try out new things or getting used to what they’ve been used to over time. And then two, I think most of these other general meat processors, you know, because of their size, scope. Again, at least most of them reached, a level where they, you know, they’ve gotten used to their routine, the products and the processes and, cause the goat, the goat industry really, you know, is one area that has been overlooked. So there’s never been a, you know,

Sam:                                      35:08                     Did he run, considered it? They haven’t really been thinking about that. Right. If I’m just saying like, are you worried at all that one day, one of these pork producers or cow producers, or beef producers just says, just thinks, Hm, maybe we should try goat and they’ll suddenly be able to do at a really big scale. And does that worry you at all or are there are other reasons why…

Paul:                                      35:33                     It doesn’t, it doesn’t worry me at all. Ourselves, we have an upper edge in the goat industry given our dedication to the, to the industry. So we’ve given ourselves our full focus to the goat value chain, that gives us an edge in terms of supply engagement. Then two also in terms of you know, the room to innovate within the industry. Okay. So we are not preoccupied with you know, many, you know product lines. So we are preoccupied with perfecting, our core product is the goat offering itself. So that gives us an edge as it enables us to, to be more innovative in our product offering. You know, than the general meat processors except to say perhaps the only worry like right now is or as regard to, you know, economic meat processor wanting to add goat, you know, to their offering. The only aspect in which that worries me is yeah, mainly, given their scale, they may get to market much more faster than us. So the only worry is maybe our lack of timely access to scale our lack of timely access to resources to scale up the business. I think that’s the magic. Once we have the right operating scope, I do not see anyone outdoing. Then two, the other thing, again that gives us an edge is our brand. Okay. Zamgoat is a…

Sam:                                      37:14                     I mean there’s no escaping what you do is there?

Paul:                                      37:16                     Exactly, so Zamgoat, I think is already growing into a very popular brand out there it’s growing into a household brand. Everyone who want to eat goat, they would think of Zamgoat.

Sam:                                      37:29                     Yeah.

Paul:                                      37:29                     Okay. So that’s another yeah.

Sam:                                      37:33                     This might sound like a strange question, but is there any issue with you using Zam in your name? So like, isn’t it that there’s a telco company called Zam? Yeah, I did, It is the, does the government have any sort of rights to organizations that have Zam in the name? Do you know what I mean?

Paul:                                      37:57                     No.

Sam:                                      37:58                     It’s not like, cause I don’t, when I, you know, when I see Zamgoat, I might think, Oh that’s like the national Institute for goats. Awesome. So it’s like, it’s a great, it’s a great industry you’ve got, I was just wondering if there are any any issues you have with naming

Paul:                                      38:11                     Yeah, no issues at all. We don’t have any issues. Even that’s, there are number of businesses out there that have got the Zam prefix to their names. Yeah. So for us we chose Zam prefix to own it, to make it Zamgoat, because we wanted to be really the leader of the goat industry in Zambia. Okay. And not only in Zambia, we wanted to be the company here in Zambia to be identified within the region, around the world, you know, as the company that is the pioneer of you know, activity in the goat industry.

Sam:                                      38:53                     Yeah.

Paul:                                      38:54                     Yeah.

Sam:                                      38:54                     I guess if you wanted to go across the border, you’re going to have to know Zamgoat.

Paul:                                      38:58                     Yeah. So if we want to go across the boarder, yeah. So again, depends on, on the, on the particular markets. There are markets that will be comfortable to go trade as Zamgoat, but for some markets we’re also looking at you know, coming up with other brands that are targeting particular international markets to make us more relevant and appealing to those local markets. Yeah, sure.

Sam:                                      39:20                     What are some names you’ve thought of?

Paul:                                      39:22                     So currently there is another food service outfit that we’re working on, which we know we are calling Pizzagoat Africa and this is pizzagoat.

Sam:                                      39:32                     Pizza?

Paul:                                      39:32                     Goat, pizzagot.

Sam:                                      39:34                     P pizza. Have do you spell.

Paul:                                      39:37                     Pizza as in pizza? P I Z Z A.

Sam:                                      39:44                     Got it.

Sam:                                      39:44                     As one word.

Sam:                                      39:45                     Okay.

Paul:                                      39:46                     So this is a brand that we want to use for our international market penetration on the food service side. Yeah. So we are calling it pizza goat Africa. Okay. So what, is what we want to use in growing, in penetrating or in having a physical presence in the, you know, African.

Sam:                                      40:07                     Why did you go with Pizza goat?

Paul:                                      40:08                     So pizzagoat, again it gets back to to our desire to value add and disrupt the distribution of goat meat or good products. So pizzagoat is a brand that is focused on providing exclusive goat pizza and pastries. Okay.

Sam:                                      40:28                     Goat pastries?

Paul:                                      40:29                     Yeah. Pastries. We’ll have goat pies, goat samosas, goat spring rolls.

Sam:                                      40:35                     Yeah.

Paul:                                      40:35                     Yeah. So, but the key product, you know, within that offering is goat pizza itself. Yeah. So we are currently doing a test run on the same, we’re yet to, you know, fully launch it out there. But so far we’re getting a lot of positive responses from our customers who get a lot of, you know, positive inquiries. People looking forward to, you know, to have goat Pizza.

Sam:                                      41:07                     How many goats are in Zambia?

Paul:                                      41:09                     Currently, the population of goats I think is slightly under 5 million.

Sam:                                      41:13                     How do you know that?

Paul:                                      41:16                     Livestock censuses that are normally conducted by the ministry of livestock and fisheries and their last update I think indicated, you know, somewhere around 4.8, 4.9 million goats.

Sam:                                      41:29                     How many people are there in Zambia?

Paul:                                      41:32                     Currently we’re around 17 to 18 million. The last census I think was around 16 million.

Sam:                                      41:38                     Okay. So it’s pretty thin. Basically one goat for every three humans. Just purely out of curiosity, I’m interested if there are, what the goats to human ratio is what, like goats per capita is in other countries. Do you know, do you have any, are there any other countries where there’s a higher goat per capita or is Zambia a particularly goat heavy country?

Paul:                                      42:05                     My recent discoveries, I think I’ve indicated that countries like Ethiopia, Somalia, and you know, Somalis in African countries Tanzania, Kenya do have quite a higher, you know, number of goats as well.

Sam:                                      42:19                     Is that because the…

Paul:                                      42:24                     Because of the religious, you know, factor.

Sam:                                      42:26                     Yeah, I think it’s with like nomadic tribes, looking after goats and so there’s more of a culture of…

Paul:                                      42:31                     Yeah, yeah. That’s another, another attribute. But, the other attribute is on the consumption patterns. You know, most of the mentioned countries, Somalia, Kenya, are Muslim countries. So they tend to prefer, you know, eating more goat than the other regions.

Sam:                                      42:52                     Yeah. Is Zambia more or less purely Christian? Or is there a Muslim population here?

Paul:                                      43:00                     There is a Muslim population. Yeah. But obviously Zambia is predominantly, you know, Christian in terms of population. But we do have quite a big number of Muslims as well here.

Sam:                                      43:15                     Is Zamgoat halal?

Paul:                                      43:17                     We are positioning ourselves to halal, but again, currently given our limited operating capacities, we have not yet reached that level, where we would be officially, you know, certified halal, but we are working on,

Sam:                                      43:30                     Okay.

Paul:                                      43:30                     On certifying, having Zamgoat certified as halal.

Sam:                                      43:34                     At the moment a Muslim customer wouldn’t be able to buy…

Paul:                                      43:38                     At the moment, yeah. That’s another market that we are currently missing out. So part of our plan actually in setting up the planned sloughter house facility is to be able to enable us, you know, qualify to meet that halal standard certification. Sure.

Sam:                                      43:57                     Okay. Do you ever think, would you ever deal with like goat milk, or is that like different?

Paul:                                      44:03                     So again, it gets back to the strata of the industry as a whole, totally under developed, no much activity in any specific area of it, be it milk, skin. So even with new products, nothing much has been done with, you know, goat milk in the country. But again, as a business, that’s something that becomes opportunity for us. So as we keep growing, we are actually seeing ourselves grow into a fully verticallly integrated business across the goat value chain, doing something, you know with everything about goats, including, you know milk products. So we are looking at getting into the nutritional market, you know segment with time, riding on, goat milk as a highly nutritional product as you know, which, you know, some people out there say goat milk is as good as a human milk. So with that…

Sam:                                      45:07                     Do some people give goat milk to babies or is that…

Paul:                                      45:09                     Yeah. I think some do but it’s not yet a popular trend but there’s a lot of positive vibes out there. This is another industry for the future within the, you know, goat value chain. So we are looking at with time we should be able to venture out in coming up with goat based nutrition, you know, products.

Sam:                                      45:36                     Yeah. Like internationally, are there other countries where there is a or other companies that have said we’re going to vertically integrate in just goats?

Paul:                                      45:52                     Yeah, there’s been a few countries where at least it’s recently beginning to be some activity.

Sam:                                      45:59                     There are sort of Zamgoat equivalents. Whereabouts in the world is it?

Paul:                                      46:04                     In Somalia, there are countries that just, yeah, I mean there are companies that just focus on goat processing and distribution.

Sam:                                      46:12                     Are they sort of, are they a similar stage as Zamgoat?

Paul:                                      46:16                     There could be some, I think I must have heard of, I’ve forgotten the name but is one company that is, that is doing pretty well in Somalia. So they’re quite an advanced, at an advanced stage in terms of their development as compared to Zamgoat.

Sam:                                      46:31                     I’m just curious cause it’s always useful, I find, when there’s a company, you know, a country another part of the world where they’re never gonna come and enter the Zambian market, but you can still learn some good lessons from them. I was just wondering if there were, I don’t know. Vietnam for example, you know, pick a country. If there were any companies where you can say, okay, well in five years time we want to be like, yeah, “Indonesia goats.”

Paul:                                      46:58                     I think there’s one common phenomenon across the world. The goat industry. I don’t know for some reason, somehow, it is an industry that has been overlooked. Okay. And for me, I think this is what, becomes the biggest opportunity. It’s a pretty, you know, under developed industry and that to me as an entrepreneur, you know, rings a lot more opportunity than most of these industries that are fully saturated. That the traditional, you know, meat industries, beef, pork and chicken. Then two, goat meat and the other assorted products are becoming the talk of the day, okay. Around the world. Goat meat is seen to be more healthier than these other meat products, goat milk, you know, is also seen to be a very healthy, you know, product, you know, with some data out there equating it to human milk, you know, to be as good as, you know, breast milk, you know, goat skins. Okay, that’s fine leather, it’s one of the most treasured you know, leather out there, but somehow again, to some extent, there’s still some slowness, you know, inactivity not to fully capitalize on these products.

Sam:                                      48:30                     Why do, why do you think that is?

Paul:                                      48:33                     The lack of innovation? Yeah, so this is, this is the time now innovative entrepreneurs, you know, prying their trade in the innovative age, like now to come up with innovations that add value to these products that have got a yearning market out there.

Sam:                                      48:51                     Are there any countries where the goats are not indigenous or the goat, or there’s not many goats? One thing here is like in let’s say one of the biggest meat producers in the world is the U S and they’ve got loads of pigs and loads of cows, so they probably developed all of their machines and factories just around that because there’ve been lots of meats, beef cows and pigs around and so they’ve really sort of like grown the beef and pork industry. I’m just wondering had, if by historical accident, there were goats in America and they, 50 years ago, you know, 80 years ago, started factory producing goats. Whether that would have, is it that the fact that goats aren’t in places where there’s currently been big areas of meat production? Is that why it’s not seen as a popular product

Paul:                                      49:48                     To some extent, yes. In fact you’ve just reminded me, one of the countries in the world that seems to have made headways in processing of goat products is Australia. Okay, there are companies in Australia that have made, you know, serious strides in adding value to goat meat and distributing it around the world. I was surprised during my stint in the US, I found, you know, Australian goat in some supermarkets in the US.

Sam:                                      50:18                     I can imagine.

Paul:                                      50:19                     Yeah.

Sam:                                      50:19                     Any country you go to, you go straight to the goat, to the meat section and you check out where all the goats come from, yeah.

Paul:                                      50:26                     Yeah. So they’ve made strides, and then yeah, their country, I think goats. Goats are there in most parts, but I don’t know. I think it’s just lack of there’s some stereotype perhaps that has been associated, you know, with goats.

Sam:                                      50:46                     I guess as well if, yeah, if you’re saying that most people consume, choose what food to consume by, let’s say going to the supermarkets and if the supermarkets have a barrier where they say you’ve got to hit a certain capacity before we can even enter, then lots of people might not realize that they’re missing out on goat because they go to the meat counter and there’s beef, chicken and pork. Suddenly if goat producers like Zamgoat are able to hit a certain capacity and making them looking at beef, pork, chicken, goats, Oh, actually I’ll try goat. And that introduces it to, and that generates the demand. I can see that. I can sort of see that logically being something.

Paul:                                      51:25                     Yeah, sure. So I think there’s just a general stereotype that is somehow you know underplaying or downplaying the efforts or the opportunities that exist within the goat industry like, you know, experience. Okay. One of the challenges that we have been facing, for instance, even in trying to access, you know, growth, financing opportunities out there is this seemingly unattractive, still unattractive state of the industry as a whole. Not for us as a business, but the Industry as a whole, you know, to attract financing from traditional financing sources that want to find us businesses, operating industries or in proven industries in other words, industries That have got a proven track record. Industries that have got a proven record for commercial viability. Whereas, you know, theygoat industry has never been exploited, fully exploited. So the financial markets out there are still a little bit skeptical, you know, especially the traditional sort of funding or finance.

Sam:                                      52:37                     So where, where do you get your financing from?

Paul:                                      52:39                     So given that reality, we’ve mostly be looking at non traditional financing sources, we’ll be looking at, like here in Zambia, the commercial, the most common source of financing for any start up business would be, you know, to go to the bank and ask for a bank loan. But then the banks look what industry dynamics, the goat industry, they have no experience with it so they don’t have that, or technically, you know, cuts you off their books. So we’ve been looking at nontraditional financing sources like, you know, venture capital, equity financing, we’ll be looking at impact financing and especially like in our case, especially given the impact, the social impact aspect of our business. We’ve been trying to take advantage of, you know, development, financing opportunities that exist out there.

Sam:                                      53:36                     As you say, you, are improving livelihoods of small holder farmers. And that must be…

Paul:                                      53:41                     Sure.

Sam:                                      53:42                     A really big impact push that people want to have.

Paul:                                      53:45                     That’s sort of what I’ve been trying to do. I’ve been trying to ride on, you know, impact aspect as a business in accessing impact financing opportunities, which we hope we should then be able to use as catalytic, you know, financing that help us grow the business to reach a level where at least now the business and the industry as a whole should be able to prove a point and become more attractive to a traditional finances. Yeah.

Sam:                                      54:14                     Got it.

Paul:                                      54:15                     So it needs a lot, a great deal of catalytic financing from non traditional, yeah.

Sam:                                      54:22                     Get it in motion. Yeah.

Paul:                                      54:23                     Sure.

Sam:                                      54:24                     Okay. So we’ll just do a few more questions, that’s right. What have been some of the surprises in running the business? So if you were to say compare, what, how Zamgoat is today with what you thought it would look like today? How is it different? Maybe in a positive way, and in a negative way.

Paul:                                      54:46                     It’s not as easy as I thought it was going. Okay. Yeah, that’s one thing obviously. So running the business hasn’t been as easy as I thought it was going to be. It has been a lot tougher, stressful, and sometimes you know, tempting, you know, you just want to quit. But then again you look at, you know, the time invested and the beaconing opportunity ahead, okay. The fact that there’s no track record for commercial viability of the goat industry does not make it, you know, a bad industry as a whole. Okay. I think there are a lot of positive indicators that this is the next big thing in the meat industry, this is the next big meat industry in the world. The goat meat industry.

Sam:                                      55:42                     Yeah.

Paul:                                      55:42                     Okay. Yeah. So just getting back to your question, my experience has been that, I think still a lot more harder. I didn’t think it was going to take us this long, you know, to grow the business, by now, I was projecting that, we are now doing seven years, by now, my initial projections were that by now we should be able to at least saturate the local market and looking at export markets. But it’s been difficult because it’s been hard to raise, you know, growth financing. Yeah.

Sam:                                      56:18                     Okay. And, if you sort of fast forward, project maybe three years time, what do you think Zamgoat will look like?

Paul:                                      56:27                     So in three years time, especially if we manage to raise the initial $400,000 that we are looking at, one, Zamgoat should be able to fully become a household name on the Zambian market in terms of goat consumption. We’re also looking at changing the consumption patterns of goat among consumers. Okay. For instance, we’ve introduced these revolutionary products, goat burgers. Okay. These are products that have never existed in the Zambian market, but now have, they’re only on the Zambian market. People are getting hooked to our concept, goat pizza, pies and pastries, you know, so in three years from now, yeah, we should be able to really spread our footprint in terms of our distribution outlets across the Zambian market, by the fourth year, there about, who should be looking at exploiting the export market. We have a yearning regional export market, the Congo DR, Angola, is just one of them. Okay. Historically, Zambia has been supplying goats to these markets, but this has been done through informal trade, not through formal trade.

Sam:                                      57:44                     Yeah.

Paul:                                      57:44                     So there’s no really, you know, greater benefit that can be tracked down. And then, yeah. And also in four years we’re looking at increasing our capacity in, you know, engaging with smal holder farmers, in improving their economic wellbeing, giving them an alternative in terms of their livelihoods, especially in the wake of climate change where their traditional agricultural practices are failing. Rainfall has become more predictable. So we want small holder farmers to continue earning a living even at least through raising of goats, which are much more adaptable to the harsh, you know, climate conditions that we are currently experiencing.

Sam:                                      58:35                     That’s good. Okay. Yeah. Cool. And people who are listening, how can they learn more about that and Zamgoat?

Paul:                                      58:41                     So people can visit our website, We’re calling it because we envisage ourselves to grow into a group of companies. You know, it’s time. So zamgoatgroup.Com, people can visit that website and get more information. Alternatively, they can find us on Facebook. We have Zamgoat products limited on Facebook. They can, or simply key in Zamgoat online. There’s a whole lot of information and they’ll get links to sites that they can then, you know more about Zamgoat.

Sam:                                      59:15                     Fantastic. And I’ll put some links to these in the show notes.

Paul:                                      59:18                     Sure. That will be great

Sam:                                      59:19                     Cool. Well Paul, thanks so much.

Paul:                                      59:21                     Thank you so much Sam. Its been a pleasure talking to you.

Sam:                                      59:21                     You too.

Sam                                       59:22                     Much. So here’s a pleasure talking to you.


No credit card to drive! How City Drive Hire have opened up the Zambian car hire market


The landlocked country is just south of Malawi, Tanzania and DRC, and has the great Zambezi river as it’s border with Zimbabwe, Botswana and Namibia.

Economically there’s a lot of copper and mining exports, and my sense is that the development of local services is most in line with Uganda or Tanzania, rather than Kenya (more developed) or Rwanda (less developed).

In this episode, I speak with Greg, who runs a car hire company from the capital Lusaka.

It started 10 years ago and now has operations across the country.

I really enjoy hearing how businesses in the region adapt traditional business models to provide a superior service to existing alternatives.

Yes, there’s a lot of excitement in developing off-grid solar solutions using mobile money,  but there’s also a lot of merit in running a business with professional service that an emerging economy is going to demand.

In this case, good quality and reliable car rentals.

Greg and I discuss the company’s formation, how they modify their cars for Zambian roads (such as switching out the Japanese cold weather tyres), how their fleet is now over 500 cars through an innovative leasing programme, and how the payback on vehicles they purchase, is just 4-6 months.

There’s also lots of good advice from Greg about building a company organically and strategically thinking about where you can be valuable to clients.


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Twitter: @CityDrive4You



Sam:                                      00:02                     Intro.

Sam:                                      02:43                     Cool. So we’re here today with Greg from City drive. Greg, welcome to the show.

Greg:                                     02:47                     Thank you for having me.

Sam:                                      02:48                     That’s all. And so to get started, can you tell us a bit about you and a bit about City drive?

Greg:                                     02:53                     Okay. So my names are Gregory Charmer. I was born in Zambia, Luapula province, but I grew up mostly in Botswana, and I came back in 2004 to Zambia for college. Basically. I’ve been back in Zambia since 2004 and I completed my college in 2007. I did ACCA which is basically…

Sam:                                      03:23                     Accounting.

Greg:                                     03:23                     Accounting, Yes, correct. Yeah. And I did that for three years. When I completed, I went and worked as an accounts assistant for a company called Global Logistics. I worked there for about two and a half years from 2007 to December, 2009. I then left to go and found City drive and run it full time.

Sam:                                      03:51                     Cool. Okay. And City drive is car hires, is that right?

Greg:                                     03:56                     City drive is car hire, but basically what we really are, we are, we consider ourselves to be a transport solutions company. The vision really has always been to provide and develop innovative transport solutions at the best possible prices. But then we had to start from somewhere because transport solution is broad. So we had to start from somewhere and we started with car rentals.

Sam:                                      04:21                     Got it. Okay. So out of interest, where do you see transport solutions? Where could that end up?

Greg:                                     04:28                     So for us really, we consider our transport solutions really covering not just car rentals, but when, and anything that will enable us to help our customers out there, move people or goods from one place to the other, to another from point A to point B, in a much more efficient and cost effective manner. That should include obviously car rental itself. But also we’re looking at a taxi hailing, we’re looking at a courier service, we are looking at several other services that have to do with transportation, but obviously with the aim of making it a different and better in a way that will save our customers money and time.

Sam:                                      05:20                     Okay. Okay. So let’s sort of talk about what the situation was like in Zambia before City drive.

Greg:                                     05:29                     Yeah.

Sam:                                      05:29                     So when you say you’re sort of looking, let’s as we currently looking at car hire, car rental?

Greg:                                     05:37                     Car rental yeah.

Sam:                                      05:37                     So what was, what was the process like before City drive?

Greg:                                     05:42                     Yeah, so the current industry in Zambia at the time that we were coming into the scene was still not very developed. It’s still not that developed, though we’ve made some significant progress. But I think when, when you came into the scene, we had a few car rental companies, and a number of them. We had about two, which were sort of dominant, right. But then one of the main problems that we discovered when we did our market research is that the most of the current companies then we’re mostly catering to expatriates, basically customers coming from outside the country. Because one of the conditions was was that they needed someone to have a credit card in order for them to hire a vehicle.

Sam:                                      06:33                     Interesting.

Greg:                                     06:33                     Yeah. Now, when you look at the majority of the Zambians, majority of the Zambians don’t have credit cards. So what that meant was that a large chunk of the people in Zambia who are not receiving car rental services.

Sam:                                      06:48                     So even if they wanted to.

Greg:                                     06:51                     Even if they wanted to.

Sam:                                      06:52                     The fact that they don’t have a credit card…

Greg:                                     06:53                     They don’t have a credit card, they wouldn’t actually hire vehicles. So that was an opportunity that we saw. And when we founded the company, it was really with the vision of enabling ordinary citizens out there to access affordable and efficient car rental services. So, over the years I think we’ve stayed true to that mission. And we have actually provided services for customers, not only in Lusaka but basically across the country because we operate in four provinces in four towns. And we believe we, we have made significant progress in attaining our mission and vision of enabling ordinary citizens out there access affordable and efficient car rental services.

Sam:                                      07:46                     Very good. Okay. I’m interested why is, I know very little about the car rental market. Why did the, the two incumbent car rental companies, why did they insist on people using credit cards?

Greg:                                     08:04                     It’s much safer, right? Because then the credit card becomes security.

Sam:                                      08:10                     What does that mean? Security?

Greg:                                     08:12                     Yeah. So basically the credit card becomes the security deposit. Yeah. So you say maybe there are damages to the car or the car is a right-off they would actually charge.

Sam:                                      08:26                     So they can get the money back?

Greg:                                     08:27                     Can get the money back. There’s a percentage that they’d actually charge immediately on the credit card to get to, to recover their money. So that was one of the reasons which they, you know, they believe that it would actually be safer for them to actually hire out vehicles to people with the credit cards. The, I think, but I think the other reason was was that perhaps the just possibly, maybe we’re not just not interested. They, I think, they thought that it was more lucrative dealing with people coming from outside expatriates, rather than the local market. I think they didn’t really see much business sense in the local market and also concerned with the fact that local market was much, much, much riskier compared to the international market. Yeah. I think those were the, there could be other reasons, but I think those were the two main reasons that we actually discovered when we were doing our research.

Sam:                                      09:33                     I mean, the first, so the second one, I mean, that’s just, I guess the judgment that they’ve made. With the first one though, I mean, that sounds quite sensible. If you’re giving someone a car that you’ve got a way to get a security deposit.

Greg:                                     09:47                     Yeah.

Sam:                                      09:48                     If you don’t take credit cards, how do you get over that issue?

Greg:                                     09:52                     Yeah, because I think that’s, that’s, that’s a question that we had to think hard about when we’re, when we’re setting up the company because I think for us, the vision was just not to cater to expatriates, but also most importantly to the, to the local market, because, you know, I think we believe transportation is very critical in driving the economy forward. And we really wanted to participate in the growth of the Zambian economy. So, we just really had to come up with a plan. What we call a risk management system, which would actually enable us, to hire out vehicles to people without credit cards. And it essentially involved putting in place a screening process. Yeah. So for example, anyone who has a car, we need to they need to bring forward a copy of their utility bill because we need to ensure that we know where they stay. Okay. So there has to be a copy of a utility bill, which can either be an electricity bill or a water bill or a tenant’s agreement. Right. And then of course also when thEy’re filling in the contract, they need to give us at least two emergency contacts. Okay. And we need to know the names of those emergency contacts, where they stay, their contact numbers, where they work. Yeah. And also when they come through there are just a few questions that we ask them. Yeah. It’s part of the screening process. We developed a screening process to manage that risk which we use to actually assess the credibility of everyone who comes to hire a vehicle. So that is the first stage. If that first stage fails, we’ve put compressive insurance on all our vehicles. So in the event of them being stolen, then now insurance will cover the vehicle and have the vehicle replaced. Yeah. So it’s a two-stage risk management system that you have in place, which has actually enabled us to be able to hire out vehicles to people without credit cards. And from the time that we, we actually started operating, we’ve had very few incidents of you know, vehicle theft clients not wanting to pay. Yeah. Et cetera, et cetera. Yeah.

Sam:                                      12:44                     And I mean, rough, say if, I mean, that sort of makes sense. If you’ve sort of come up with your own risk-mitigating criteria and just in terms of the rough scale, how many customers have you got or have you had?

Greg:                                     13:02                     We operate in four provinces and I think over, over the years our customer base has been growing. So roughly in terms of numbers maybe we are looking at a 200, 300 division, 200 and 300 customers.

Sam:                                      13:22                     Yeah.

Greg:                                     13:23                     Yeah.

Sam:                                      13:23                     Are many of them repeat customers?

Greg:                                     13:27                     Perhaps a quarter of that.

Sam:                                      13:29                     Okay. What’s the, what’s the main demographic or like what’s the main reason that people come to City drive?

Greg:                                     13:37                     The main, our main strategy really has been to provide a unique experience. Right? We ensure that from the time you make an inquiry to the time you confirm a booking, the time you get a vehicle and the time you return the vehicle, we ensure that we actually give you an experience which is unique and you can’t get anywhere else. So we, we are into car rental and you know, transport solution. But what we sell is the experience, a unique experience. And I think over the years, that’s really what has made us to stand out.

Sam:                                      14:20                     So, in terms of the purpose. Yeah, that people use the cars, are they doing it for a holiday, are they doing it to move, to move house. Are they doing it to do a long business trip? Like what are some of the reasons that they’ll hire a car?

Greg:                                     14:35                     Yeah, it really depends because you know, we, we have got about four market segments, right? Basically we’ve got about two primary market segments. So those are the international clients and the local clients. With international clients, mostly they come, they come to Zambia and hire vehicles basically for two main reasons. One, they’re coming here as just, you know, business travelers, so they would want a vehicle to move from point A to B. So other than the business travelers. And then the second one is the tourists, right? So they’re coming here and they want to tour Zambia, they want to go to the Victoria falls, national parks, and other parks. So they would rather, most of them will either hire a plain four by four. Okay. Others would hire what we call a fully equipped four by four safari camper. So this basically, the camper basically comes with all the company equipment you need on there. It comes with a rooftop tent, a car fridge, comes with cooking utensils, everything that you need for you to go out there camping. So yeah, so those are the main two reasons for the international market. They’ll come either as business travelers or as tourists. On the local market, we have really clients hiring vehicles for two main reasons. The first one obviously, is for, is for them to, you know, get around. Right.

Sam:                                      16:16                     Just like, like day to day, getting around or?

Greg:                                     16:19                     Yeah. If they want to travel from one town to the other and they don’t want to use the bus.

Sam:                                      16:27                     Okay. Yeah.

Greg:                                     16:28                     They’d hire a vehicle some, if the, they’re coming from one town to the other, perhaps the, they get they use a bus. If they’re coming from Livingston, they’ve come into Lusaka, they get a bus, and then when they get here, they’d want to move around using a vehicle. So they’d actually hire a vehicle. The second reason is now the B to B business. And here we are looking at companies who don’t want to tab their funds in bank vehicles and maybe they’re doing a project. I saw they’d rather hire a car for two, three months for the duration of the project. And yeah, so they’d hire a vehicle as opposed to buying it. And then also we also provide services to insurance companies, so if you’ve got a if you’re insured with an insurance company, and your vehicle is involved in an accident your insurer would hire a vehicle from us for you to use.

Sam:                                      17:39                     You’ll have the replacement.

Greg:                                     17:39                     The replacement, exactly. So you would actually utilize that vehicle as you wait for your vehicle to come out from the garage. Yeah. Yeah. So basically those are the main reasons why people hire vehicles on the internet, on the local market. Yeah.

Sam:                                      17:54                     Very cool. And the, how regular does the insurance one happen?

Greg:                                     18:01                     Every month.

Sam:                                      18:02                     Really?

Greg:                                     18:02                     Yeah. Cause we have accidents every month. Yeah. Actually, I think it’s two fold. It’s sad that you know, your vehicle is involved in an accident, but again, it’s good because we still, the insurance to give you a vehicle to use.

Sam:                                      18:19                     Yeah.

Greg:                                     18:19                     Yeah. You know, there’s continuity on your part in terms of transportation. Yeah.

Sam:                                      18:27                     Did you go to the insurance company and say, I think you should, like, I think this is a service you should provide, or did you, did you displace an existing car hire?

Greg:                                     18:40                     Actually when, when we started and I think we are, we are proud to, to actually have, having you know, contributed to the growth of the insurance market, with regards to replacement vehicle because when we started, most insurance companies used to payout. Right. So if your vehicle was involved in an accident, they’ll say ok, you know what, sort yourself out, go and hire a vehicle, just brings us the bill. But then what we did is that we, we came up with the proposal. Yeah. And we visited most of the insurance companies and we presented to them that look, would be more beneficial for you if you hire a vehicle on behalf of your policy holders as opposed to letting them, you know, just giving them a blank check and telling them to go and hire a vehicle because one, you won’t have control over the costs. Right. And then you also won’t to have control over the quality of the vehicles they are hiring. So if you hire a vehicle for them from a reputable company like us, you can be assured of, one, ensuring that you have control over your costs because you only pay, you will know what you’re paying for upfront. Right. And then we have a good fleet of vehicles, cyclists, you know, you can be, you can rest assured your clients will have access to quality vehicles, which they can, you know, continue driving around as they wait for their vehicle, which in turn will also, enhance your reputation as an insurance company. So in the beginning, the majority of them liked the idea. And I think a couple of them, we, we started off a world of them, decided, you know, getting vehicles. And over the years the industry has basically moved to that. So insurance companies don’t actually pay out any money today. They would rather hire a vehicle for you because they’ve actually realized that they get to save money, and it’s more beneficial in their part. And also they are, their policy holders get to have access to a vehicle much quicker as opposed to the way it was before. Because the way it was before, they would just tell them, look, go and look for a vehicle. Right. But then if they call us and tell us, look, we’ve got this policy, please arrange for a vehicle, we say ok, fine, there’s a vehicle we can deliver to where they are. So it’s much quicker. So yeah, it’s been an interesting and good journey.

Sam:                                      21:22                     Yeah, that’s really good. Great. Can we talk a bit about the economics of car rental? So I’m interested sort of roughly, how much did it cost to buy a car and then what’s your sort of expected payback in terms of being, and maybe some other additional costs that might have to be considered when you’re buying a car to hire as opposed to just to, to drive for yourself.

Greg:                                     21:50                     Yeah. So, you know, buying vehicles in Zambia is quite expensive, especially if you’re going to be buying new cars, right. Because, you know, like say Toyota, Alex, the new Toyota Alex will cost you between $40,000 and $50,000, which is a lot of money. So when we started we started with basically, because, you know, we had to start from somewhere, right. And we started with basically buying second-hand cars yeah, so we would buy second-hand cars from Japan and those are the cars that we were actually hiring out. And so, buying a second hand, a good second hand vehicle from Japan would almost cost you a quarter of the price of a new vehicle in some way. So because of that, we were able to actually you know, grow our fleet over time. And we actually had the payback period for the second-hand vehicles from Japan, the payback period is between, is between four and six months.

Sam:                                      23:08                     What?

Greg:                                     23:09                     Yeah.

Sam:                                      23:10                     Four and six months?

Greg:                                     23:11                     Yeah, between four and six months. Yeah. So you’d get back all your money.

Sam:                                      23:14                     What’s the, what utilization do you need for that? Like how often does the car need to be in use?

Greg:                                     23:19                     Well, the utilization in a month, if you can have at least a utilization of at least 20 days.

Sam:                                      23:27                     20 days in a month?

Greg:                                     23:28                     20 days in the month, between 15 and 20 days in the month, you should be able to get your money back between four to six months.

Sam:                                      23:36                     Are you calculating the total cash amount? Or are you saying, are you factoring in a depreciated value of the car if you were to sell it?

Greg:                                     23:47                     Yeah, so basically the initial investment on the vehicle.

Sam:                                      23:50                     Okay. So let’s say, let’s say it costs $10,000 to buy the car. Are you saying you’ll recoup $10,000 in six months?

Greg:                                     23:58                     Yeah, six months, guaranteed.

Sam:                                      24:00                     Really?

Greg:                                     24:00                     Yeah.

Sam:                                      24:00                     Okay. So it’s not, cause it’s not even, cause you might, cause even after six months, you want to say, right, I know I want to sell this car. You might be able to sell the car for $5,000. Yeah. Get some cash back or…

Greg:                                     24:11                     After six months, yeah. Possibly you might sell it for three quarters of that. Yeah.

Sam:                                      24:17                     Yeah. Wow. So how much does it cost for a day?

Greg:                                     24:21                     For a day, it depends on the vehicles. So our smallest vehicle, which is basically the hunchback vehicles, that the likes of the runx those their costs are 33 Kwacha per day. 33 Kwacha, which is which is about $38.

Sam:                                      24:41                     $38?

Greg:                                     24:42                     $38, So cause I think that’s the other thing, one of our strengths is that we, we actually have got very competitive rates. We have got one of the lowest rates in the industry. And it’s deliberate because we believe that it’s the only way that we can enable people out there to, ordinary people to access car rental. Yeah. So they range from $38. The sedans range from $38 to $55, and then we have the four by fours which range from $90 to $130.

Sam:                                      25:18                     Okay.

Greg:                                     25:18                     Yeah.

Sam:                                      25:19                     Wow. So with this, with a sedan, you were saying in six months, thats maybe a hundred days driving. So it’s about $5,000 to buy car?

Greg:                                     25:27                     To buy a car from Japan?

Sam:                                      25:29                     Yeah.

Greg:                                     25:30                     Yeah, you can, you can buy, you can have it landed for about that much, basically between 5,000 and 6,000. Yeah.

Sam:                                      25:38                     Are there any things that you need to do to the car? I mean, you said one is to prepare them for Zambian roads and the other is to prepare them for being rented out. So yeah. Are there any, so are there any things, I’m trying to think. There might be more potholes in Zambia, there might be, the roads might be hotter. Are there any sort of changes or modifications you need to make to the car?

Greg:                                     26:07                     For the majority of the cars, no. The only thing you need to do is really just when, once, once it arrives, have it registered and maybe at that time what we found is that the tires that the vehicles come with, they are mostly meant for the cold environments in Japan. So once they get here, you need to change them. Yeah.

Sam:                                      26:29                     What do you do the old times?

Greg:                                     26:31                     What we do with the old tires, usually if there are people who are interested in buying them, we sell them, but we explain to them the look, this tires came from Japan. So you’re gonna have to buy them at your own risk. Yeah.

Sam:                                      26:43                     I would say that, is there any use for cold tires? What would you call it, cold surface tires. Have you?

Greg:                                     26:52                     Yeah, in Zambia, usually the tires just don’t work, because if you continue with them, they usually, they’ll either burst or the top part will just come out.

Sam:                                      27:04                     Okay.

Greg:                                     27:04                     Yeah. Just shut off. Yeah. Which is not good.

Sam:                                      27:08                     So is there any other purpose for cold weather tires?

Greg:                                     27:12                     Cold weather tires, here in Zambia we haven’t found any.

Sam:                                      27:17                     Ok, have you just got a pile of these tires?

Greg:                                     27:21                     Yeah, we do have a, I think what we usually do is that we try, by all means to get rid of them. So if we have, if we can find a buyer, we sell them.

Sam:                                      27:34                     Okay. Yeah. But I mean most of the people who are buying them are kind of doing it slightly risky.

Greg:                                     27:41                     Yeah. You usually, it’s usually those who live in the, the, in the rural areas they’ll use it for what we call, this, in a way, you, you have a trailer and then it’s been pulled by either a cow, donkey.

Sam:                                      27:56                     Like a cart.

Greg:                                     27:57                     The cart, exactly. So they’ll usually use them for that.

Sam:                                      28:00                     They’re not going very quickly. Okay. And then are there any other things that you need to do to the car before you start?

Greg:                                     28:08                     I think the other thing that we’ve discovered also is that usually the engines come with what they call a thermostat.

Sam:                                      28:15                     Okay.

Greg:                                     28:15                     Because of the cold whether there. Now, the thermostat, usually only works best in cold weather in Japan. When it comes here it tends to expand and blocks the radiator.

Sam:                                      28:29                     Okay.

Greg:                                     28:29                     Yeah. And if you’re not careful, it might actually lead to the car over boiling and then it might damage the engine, So one of the things we do is that we actually remove it.

Sam:                                      28:41                     Okay.

Greg:                                     28:41                     Yeah, we remove the thermostat.

Sam:                                      28:43                     Alright.

Greg:                                     28:43                     Yeah.

Sam:                                      28:44                     Okay. And does that have any adverse effects?

Greg:                                     28:47                     None.

Sam:                                      28:47                     No. Okay.

Greg:                                     28:48                     The car continues to operate.

Sam:                                      28:50                     And so that’s kind of, you get the car from Japan and you kind of make it Zambia ready.

Greg:                                     28:55                     Yep. And customize it.

Sam:                                      28:56                     Do you need to then put anything like a tracking device in the car or anything? Any other things like that?

Greg:                                     29:02                     Yeah, so yeah, we do, we do. We do actually install tracking devices in our vehicles. In fact, I think that’s one thing actually left out as part of our risk management system. So we track all our vehicles. Yeah. Because obviously, I mean, if, you know, God forbid someone who’s not credible has the vehicle and they’ve got other plans. I would actually be able to track the vehicle. And just if they’re still not continuing. If they’re not bring back the vehicle, we would actually track the vehicle and switch it off, yeah.

Sam:                                      29:47                     Switch it off? So, so, wow. So how does it, so what, what, what data can you collect? So this is like a little device you put in the car.

Greg:                                     29:54                     Yeah, it’s a tracking device that we install on the vehicle, which enables us to track the vehicle and…

Sam:                                      30:00                     So you’re getting the GPS location. It gives you…

Greg:                                     30:04                     So it will tell us the real time location of the vehicle at any time. It will also, it’s able to tell us the speed at which the car is moving to be able to tell us whether the vehicle is stationary or it’s moving as well. It’s about to also tell us,some devices are able to tell us how much was in the vehicle? Yeah.

Sam:                                      30:30                     So have you, have you got sort of a theatre border or like a bit on you on your computer where you can sort of click a button and you see a map and you can see where your car is? Yeah, yeah. We’ve got an admin panel where we’re able to track all our cars. Yeah. And I think I’ve asked you, how many cars have you got?

Greg:                                     30:49                     Yeah, so that’s a good question because the model we use is one which, which we use our own cars and also third party vehicles. In 2016, we launched an online platform, which enables people from the public to list their vehicles. So you list your car and then we hire it out for you. Right. so our own cars, we’ve got very few cars, which are our own.

Sam:                                      31:18                     Really?

Greg:                                     31:19                     Yeah. So our own cars, they’re just about 25.

Sam:                                      31:23                     So you’ve got, on your City drive balance sheet.

Greg:                                     31:26                     Balance sheet?,

Sam:                                      31:27                     You know, under assets, 25 cars.

Greg:                                     31:29                     Just about 26 cars. Okay. Yeah.

Sam:                                      31:31                     How many is in your fleet?

Greg:                                     31:32                     Yeah. So basically on our platform, we’ve got a close of about 500 listed vehicles.

Sam:                                      31:41                     500?

Greg:                                     31:42                     Yeah. 500 listed vehicles. Yeah. So those, those listed vehicles in our own cars, when we combine them that’s the fleet that we basically used to hire out.

Sam:                                      31:54                     Wow.

Greg:                                     31:54                     Yeah.

Sam:                                      31:55                     That’s interesting. Okay, so 25 so, the initial ones that when you started the business, did you own all the cars?

Greg:                                     32:02                     When I started the business, we started one vehicle.

Sam:                                      32:04                     One vehicle.

Greg:                                     32:04                     Yeah. And yeah, and we did own it. Yeah. That’s in 2009 yeah.

Sam:                                      32:09                     25 and then say, well wow. So you’ve now sort of invented this marketplace for people to, so the people who are listed, who’ve listed their cars, what do they, do they kind of drive and then they get a phone call from you saying, can you, can you rent it for a week or have they got extra cars? What’s the sort of demographic?

Greg:                                     32:33                     So the way it works is that when you have your car listed, you get to keep it, right. So the, the, the, the marketplace is not a peer to peer marketplace, whereby a vehicle owner gets to actually just get to interact with the customer and then the, they handle everything, we’re not there yet. But basically what happens is that you have your car listed and then when there’s a booking on your vehicle, we give you a call, okay, we’ll give you a call and then we make arrangements.

Sam:                                      33:07                     Is it basically, so let’s say that you’re paying $50, let’s say that the customer is paying you $50 a day. Do you then go to the people, the five, people who’ve listed and say, we’ll give you $25 a day.

Greg:                                     33:19                     So, so basically the rate in our commission on the vehicles are actually prearranged, right? Yeah. So we usually typically get between 20% to 35% commission or niche higher.

Sam:                                      33:34                     Okay.

Greg:                                     33:35                     Yeah.

Sam:                                      33:35                     And out of that 25% to 35%, that’s all your servicing costs. So your, the team who come and do the initial checks, all that sort of stuff that gets paid out tt that.

Greg:                                     33:46                     Yeah. That gets paid out to you, so that, well our commission is, does cover all our operational costs. Yeah,

Sam:                                      33:54                     Yeah, yeah. Wow. Okay. That’s interesting. So 500 cars, is it 500 people or like to certain people have multiple cars, have some, some people like made a little sub business out of this.

Greg:                                     34:08                     Its actually quite interesting because when we launched the platform, some people started one vehicle. Right. And over time they actually had to buy extra vehicles from the money that they were making on the platform. So it is not, it’s not like, you know, one-to-one, but you have a number of people who have got maybe two, three, four, five vehicles listed on the platform. Yeah.

Sam:                                      34:35                     Nice. And all in Zambia?

Greg:                                     34:37                     All in Zambia, currently we’re just operating in Zambia.

Sam:                                      34:39                     Okay.

Greg:                                     34:39                     Yeah.

Sam:                                      34:40                     Do you have plans to go elsewhere?

Greg:                                     34:41                     Definitely. Definitely. We’ve had plans to go abroad. So yeah, that’s what we are working on.

Sam:                                      34:46                     Where do you want to go?

Greg:                                     34:47                     Well, you know, we really want to focus on, for the meantime, we want to focus on Africa. So we are looking at Southern Africa the neighbouring countries. Yeah. You know Botswana, Malawi, and then the other countries.

Greg:                                     35:05                     And how are you gonna, what framework are you going to use to decide which country to go to next?

Greg:                                     35:11                     Yeah. You know, obviously we need to start with a country which has got an investor friendly environment. Yeah. And…

Sam:                                      35:28                     Because you’d be coming in as foreign investors?

Greg:                                     35:30                     Yeah. We would become foreign investors. And obviously a place where, you know, it’s the, the people, the people there are more accommodative to technology. Yeah. Because our platform is a technological platform and we’d want to ensure that wherever we go, it has to be a place where you know, people are accommodative to technological things. Yeah. Because in many parts of Africa you know, people, this is when people are just getting to learn about these things. Yeah. So, yeah, I would want to go to a place where, you know, it would be easier for us to, you know, get established and have our platform be welcomed into, you know, people will find it easier to use, technologically.

Sam:                                      36:32                     Yeah. And when he’s talking about technology, is this because City drive is a website where they, people go on and select their cars?

Greg:                                     36:39                     Yeah, well actually we actually working on a mobile app because currently the platform is a web app. So you go, you go on the site, on the web and then you can list yoUR vehIcle there. But what we are currently doing that we’re working on a mobile app and yeah, once it’s ready then, you know, it’d be easier for us to scale the service, it’s, easier to scale, the service using a mobile app as compared to using web app so once the mobile app is up and running, then we’ll be able to then look at how we you know, have it exported outside the country.

Sam:                                      37:27                     Hmm.

Greg:                                     37:27                     Yeah.

Sam:                                      37:29                     So most people, most customers, how do they, do they hear about you through a friend? Do they, are they Googling Zambia? Car hire? Like how do they find out about you?

Greg:                                     37:39                     Well, so we, we have we market our products in many different ways. One of them is obviously using Google ads. Yeah, we use Google ads a lot, drives traffic to our site. And then also we have got listings on a number of sites as well. We’ve listed our services. And then also on the, on the local scene you know, we do do a lot of we put billboards we put billboards around and then we just have got a sales team which goes around just doing direct marketing. Yeah.

Sam:                                      38:26                     Cool. How big is your team?

Greg:                                     38:30                     So our team is basically spread across the four provinces. So we are talking about a 10 man team.

Sam:                                      38:43                     10 man team. Okay.

Greg:                                     38:45                     10 people.

Sam:                                      38:46                     10 people.

Greg:                                     38:46                     Yeah.

Sam:                                      38:47                     You say 10 men, are they all men?

Greg:                                     38:48                     No, sorry. Both. Both men and women.

Sam:                                      38:53                     Okay. And we’ll go, we’ll just do a few more questions if that’s all right. So City drive has been going for nearly 10 years.

Greg:                                     39:02                     Nearly 10 years, yeah. This our 10th year.

Sam:                                      39:04                     Yeah. Since you started, what have been, if you sort of think about yourself 10 years ago, if I was to sort of ask you, when you started the company, what will City drive look like in 10 years? How do you think today is different from what you initially set out? Both positively and negatively.

Greg:                                     39:22                     You know, in initially the vision was really to be an international company by the seventh year. Yeah. We’re supposed to have at least opened up branches outside the country. But I think one of the main hurdles we faced is that I think we realized as we went on that some of the assumptions we made were wrong. Yeah. Some of the assumptions we made were wrong and…

Sam:                                      39:48                     Such as?

Greg:                                     39:50                     Well, you know, we discovered that it is going to take a bit longer for us to actually you know, open offices outside the country. Mostly because of two main reasons: One, we found it extremely difficult to access capital to grow at the pace at which we had, we actually wanted. And then the other thing also is that we found it also difficult to, you know, to find skilled personnel who’d from whom we’d actually build a team that will enable us to scale the company quickly. So, because of those two main challenges we faced, we’ve taken rather longer than we thought to, you know, grow, grow quickly and open offices outside the country basically. Yeah. That’s what we faced. So we are currently operating in four provinces. Our hope is that in the next, in the next two years, we should open an office office office outside the country.

Sam:                                      41:09                     Okay.

Greg:                                     41:09                     Yeah.

Sam:                                      41:11                     Well how have you, how have you financed the business? So I guess you’re having to, well, at least with 25 vehicles you’ve had to buy them upfront, how have you financed that?

Greg:                                     41:22                     The acquisition of the vehicles has been done in two main ways. The first one obviously has been, we’ve been reinvesting our profits into the company, so I think the majority of the profits we make we’ve just been reinvesting in the company, in buying more vehicles. And then secondly, we financed the acquisition of vehicles through loan capital. Yes. So we’ve been fortunate enough to have to maintain a good credit rating. And we’ve been able to get loans from the banks and from private individuals.

Sam:                                      42:05                     Okay.

Greg:                                     42:05                     Yeah.

Sam:                                      42:06                     Is this, are you, is this a kwacha financing or dollar finance?

Greg:                                     42:10                     I think when we started in the early days, we were able to get kwacha.

Sam:                                      42:13                     Yeah.

Greg:                                     42:14                     But, over time we also managed to organize and negotiate for dollar loans. Yeah.

Sam:                                      42:23                     Do some of your customers pay you in dollars?

Greg:                                     42:26                     Yes. So we have, I think in terms of ratio dollar to Kwacha revenue, we have, it’s about 40 to 60.

Sam:                                      42:37                     $40. 60.

Greg:                                     42:38                     Yeah. 40% dollar revenue, 60% Kwacha revenue. Yeah. So because of that we’re able to actually get dollar loans, because then we just match the two right, the revenue against the expense.

Sam:                                      42:54                     Yeah.

Greg:                                     42:54                     Yeah.

Sam:                                      42:55                     Very cool. Nice, great, people who are listening at home, how can they learn more about City drive and also, yeah. What’s your presence online like? How do people find out more about the company?

Greg:                                     43:06                     If you just Google ‘City drive rent a car’ or ‘City drive,’ we’ll definitely pop up. So you can find us on Google business. You can find us on some other listings that we have. You can go to our website, You can also find us on Facebook. ‘@city Drive rent a car’ and then you can also find us on Instagram and Twitter.

Sam:                                      43:32                     Oh, you’re on Instagram?

Greg:                                     43:33                     Yeah. We’re on instagram.

Sam:                                      43:34                     What’s your, what’s your, like what has been a popular recent post?

Greg:                                     43:38                     A popular recent posts has been we recently hired out a camper to some tourists who came all the way from Netherlands and yeah, they had no problem in us getting photos of them with the camper. So we managed to share that on our instagram.

Sam:                                      44:02                     Whereabouts was the photo taken?

Greg:                                     44:05                     The photo was taken at our office.

Sam:                                      44:07                     Really?

Greg:                                     44:07                     Yeah, when they were collect the vehicle at our office.

Sam:                                      44:09                     Nice. Yeah. And then they took it all around…

Greg:                                     44:11                     They took it around and actually they still have it. It’s they’ve had it for three weeks. Yeah, they’re touring Zambia.

Sam:                                      44:20                     Oh, nice.

Greg:                                     44:20                     Yeah.

Sam:                                      44:21                     Very cool. Nice one. And that is City drive on Instagram. Just like City drive.

Greg:                                     44:25                     Yeah, City drive Instagram, yeah, so @city_ drive.

Sam:                                      44:31                     Awesome. Very cool. Nice. Well Greg.

Greg:                                     44:34                     Yeah.

Sam:                                      44:34                     Thanks so much.

Greg:                                     44:35                     Thanks a lot.

Sam:                                      44:36                     Cheers.

Greg:                                     44:37                     Thanks a lot for the time.


Move over Tesla, Opibus has a better way to get electric vehicles on African roads


We’ve got a very interesting interview this week, one that brings together using modern technology with a compelling market need.

It’s all about electric vehicles.

Now, you’ve probably heard about Tesla and some other companies building cars that don’t run on petrol.

It turns out that, for now at least, these vehicles don’t work in the East Africa context.

Opibus is a Swedish company founded by a group of engineers looking at how to get more electric cars on the road.

One route is the Tesla approach of building an electric car from scratch.

The approach of Opibus is to take existing vehicles, rip out the petrol engine, and put in an electric engine instead.

What that leaves you with is a much quicker and more flexible way to get electric cars being driven in different conditions.

Interestingly, despite being a Swedish company, other than a few prototypes the company’s operations have been almost entirely in Kenya.

Several factors, such as the presence of lions and elephants, have made it the ideal place for the company to start.

Mikael, the head of the commercial side of the business, and I discuss this, and all manner of things in this episode which I hope will leave you feeling positive on the role and room for innovation in the region.


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Starting with safari

The big challenge with electric vehicles is the charging infrastructure. Battery-powered vehicles have a range they can manage and, especially if you’re making unpredictable trips, it’s unclear where your next charge is coming from. Safari lodges don’t face this issue. It’s typically a relatively short trip that begins and ends at the same point. It’s also a market where customers are willing to pay a premium for an environmentally friendly experience.

International cars not fit for African roads

The quality of roads in Kenya mean that many international car companies don’t want to have their cars being driven here. These cars are made for smooth roads, and things such as the suspension, bearings etc. will break more frequently on East African roads. This is a bad image, as well as affecting things like the length and depth of warranties that are given. Anyway, all this means that many modern electric cars can’t be put on Kenyan roads. The solution that Opibus have decided on is to take cars that are already built for Kenyan roads (e.g. suped up Land Cruisers) and fit them with an electric motor.

Pay back in 1-6 years

Beyond environmental concerns a big selling point is lower operational costs. This comes mostly from not needing to buy petrol, but also ongoing maintenance. Petrol engines have innumerate parts, cogs and pistons that need fixing. Electric engines are just one. All this means that the upfront price of buying the engine can be recouped in saved costs. The savings are greater the more the engine is used (i.e. saved petrol) and this varies from 6 years, all the way down to a year.

The engineering

Electric engines have better torque (power) than petrol engines as well as being lighter in weight. There’s therefore no issue with them being deployed in tough environments (i.e. the savannah)

The road from assembly

Right now parts are imported into Kenya and put together by Kenyan welders and engineers. In time Opibus is looking for more of the manufacturing to be done in Kenya.

Hiring engineers from university

The CTO has been training up smart engineers on the particulars of electric engines. Kenyan universities produce good engineers, it’s now a case of finding those excited by electric vehicle engines, and training them.

Fixed points for charging

As Opibus (and indeed the electric vehicle market in general) looks to expand it’s offering the fixed points of charging are important. As such, public buses are being viewed as the next step, as they typically transport people back and forth from regular spots. There’s not technical reason why trucks can’t be fitted with electric engines too.

Corruption is frustrating

It’s real. There have been instances where Opibus have had cargo shipments stuck at the port for six months. Apparently regulation changes mean that the battery components can’t be allowed into Kenya and the only way out of the predicament is to pay an official $8,000. Opibus have taken the stance to never engage in corruption, though this has definitely slowed business.

Financing expansion from grants and elsewhere

A company like Opibus will need capital to scale. Right now they’ve been largely self-financed adopting the approach of selling the solution before it’s been made, and then making sure the design fits what the customer wants. As such, they have decent cash flow. When it comes to getting grant money for, say, promoting environmentally friendly solutions they’ve not quite got the track record that donors want yet, but that should come soon.

Social Media Links



Twitter: @opibus1



Sam:                                      00:00                     Intro

Sam:                                      02:02                     Cool. So we’re here today with Mikael From Opibus. Mikael, welcome to the show.

Mikael:                                 02:06                     Thank you very much Sam. It’s lovely to meet you.

Sam:                                      02:08                     Yeah. So just to get started, could you tell us a bit about you and a bit about Opibus?

Mikael:                                 02:13                     So I’m one of the co-founders of Opibus and we’re a company working with energy solutions and electric mobility here in east Africa. And our vision all along was to bring electric vehicles down to Africa. So we started this company back in Sweden about three years ago. And then today we deal with everything from electric vehicle conversions without which I would probably talk more in detail with you later. And then making solar panel installations and also working with lithium battery technology.

Sam:                                      02:43                     Got It. Okay. So you’re a Swedish company, you, Mikael, you’re from Sweden? Right. Is the company operating in Sweden as well or is it just operating here in Kenya?

Mikael:                                 02:52                     So we did all the developments and started the company back in Sweden three years ago, but right now we’re only operational in Kenya. We do have plans though because, as I’ll tell you more abit later, this technology is very versatile and scalable. So we’re probably looking at opening up businesses in Sweden. And all around the world as well. Yeah.

Sam:                                      03:13                     Very cool. Very cool. So we’ve actually just come from your workshop. Would you call it a workshop would you call it a factory? An assembly plants an probably, yeah, but it’s kind of like a, a factory unit is, how would you, how big, how big is it? I can’t really gauge its about 6,000 square foot, 6000 square foot. So it’s kind of like, it feels like you could fit a small airplane in there, I guess you can. Yeah, it’s sort of that sort of a…

Mikael:                                 03:36                     we fit about eight to 10 vehicles, where we do these electric conversions instead, and then of course keeping stock of everything and yeah, it’s a, we, we recently moved there from a smaller place and I think we’re going to move in the next upcoming six months again, actually.

Sam:                                      03:51                     Very cool. And the core business that you do at the moment is, and which I think is fascinating. So you take vehicles and you take out the petrol motors and you put in an electric motor and that then makes the car an electric car.

Mikael:                                 04:05                     Correct. So the sort of technology or the process, it’s called conversion technology. So the idea is to utilize vehicles that already are running on diesel or petrol. And then instead of of designing something from scratch where you make a new chassis, a new car, you can simply take those vehicles and you make the drive chain electric instead. So that means removing the petrol engine, diesel engine, fuel tanks, gearbox. And then we utilize that space to put in battery boxes and electric motors. So with this technology, you can actually turn any vehicle into electric. And the idea from the beginning was to, to have a strategy where we can quite, you know, quick implement electric vehicles into Africa. And the problem is that, you know, there’s not many vehicles that we have in the European market or American market that actually works here because the road ratings are different.

Sam:                                      04:58                     So would we say the car doesn’t work here?

Mikael:                                 05:01                     I would say that many of these big companies, they, they feel it’s a risk to deploy these vehicles here because of the, the bad roads, for example. So one of the most popular models is called Nissan Leaf. It’s a, it’s a Japanese company and they will not simply deploy these vehicles here because the roads are too bad. Right? So that in that way we can take vehicles that are designed for this terrain, for this area, and we can make them electric instead.

Sam:                                      05:25                     Okay. So Nissan Leaf is a electric car, which is on the roads in Japan.

Mikael:                                 05:32                     Right. And all around the world even in Europe, America…

Sam:                                      05:35                     But the quality of the road, is there like an indices or an index for roads, how’s that measured.

Sam:                                      05:46                     So yes, a lot of these automobile companies, you know, they look at how would the vehicles perform and how much problems would there be with the you know the bearings and the suspension and everything. And if they, if they find, you know, a country where the roads aren’t good enough, they simply won’t take the risk at the moment.

Sam:                                      06:01                     Cause, like in Japan for example, they might say we’ve got a three year warranty and assuming that the roads are smooth, one in 10,000 cars is gonna need to go in or whatever, whatever…

Mikael:                                 06:11                     If all the cars break down in one year, that’s a bad image for, Nissan leaf as well. Right? Yeah. So I think the important is that, you know, we want to design and build something here for the African market. We work with transfer technology. So we bring the technology of electric vehicles and electric drive chains, but we want to incorporate the, the African design. So we make a vehicle for Africa.

Sam:                                      06:31                     Okay. So why didn’t you design, did you, I’ll rephrase it. Did you ever consider designing an electric car for Africa or for, for bad roads from scratch?

Mikael:                                 06:42                     So, as I told you, the idea was to bring something quite quick to the market and that’s why we start with this conversion technology, but obviously, the idea in the future is to maybe go from an assembly plant to more actually production. So maybe five years down the road and we can actually produce, you know, complete new electric vehicles here in Kenya, perhaps as an OEM solution to Nissan for example. Maybe they don’t want to touch this market because they don’t know how it works. Maybe we can be the guys they work with for electric drive chains for example. But yeah, so if I just roll back a little bit. So right now we deal with electric safari vehicles. Oh, okay. So there’s different markets for everything. But, why we started with this market is because, there’s no electric vehicles in Kenya at all and there’s no charging infrastructure and those two goes hand in hand. You can’t have the other one without having the other one. Right. But there’s a foreign industry, they drive short distances less than a hundred kilometers a day, which sort of reduces the range exciting that we have in Europe and everywhere else. And then they also start from one point in the, there’s a foreign lodge, so to speak, and they drive out with these tourists and then they come back to the same point. So we only need one charger. So it’s an easy investment in a car, in one charger, and then it fills the whole application. Right? Yeah. So that’s where we start to showcase. And then also, yeah, show people that, you know, this works. And then this year we’re also moving towards other types of vehicles, which we might speak about more today.

Sam:                                      08:20                     Yeah. I mean, the safari thing, that sounds like quite a smart idea. Was that like a light bulb moment or was that a, okay, we need to find parts of the industry which have these particular characteristics.

Mikael:                                 08:32                     Yeah. We, when we assessed it, the market back in Sweden, we realized we need to find a market where it makes sense today. And when it comes to city cars, you need to make huge investments in charging infrastructure to make it, you know, possible. So, yeah, we simply identified this market as an entry market where we can, you know, start doing this business, we can showcase the products and get all the experience that we need for the next several months.

Sam:                                      08:57                     So Opibus is operating in Kenya. Like if, if Kenya didn’t have lions or elephants, you probably wouldn’t be here. Yeah. And so you’ve gone to the safari lodges and I take, you’ve got to pitch to them and say we can turn your current vehicles into electric vehicles.

Mikael:                                 09:21                     Definitely. So I’m the sales chief, right? So I mean, the, the main part is that, you know, they want to be able to attract tourists, right? And now we see a trend in the tourist industry in East Africa for ecotourism. So it’s simply customers that have a little bit more understanding of, of the, you know, the conditions of the world and in how we can make it a better place. So think more about, you know, environmental choices where we might not, you know, put more emissions in there. So many of these camps have already started installing solar panels to show customers that they really care about this and they care about the wildlife and the environment. And the next step for all of these, these camps is to bring, bring the vehicle electric, make it make it electric. So one of the main points when I sell these vehicles is, of course, pushing on, on the environmental aspect. You know you can market this as an ECO solution for tourists. But then, the important thing is also that this terrain is quite demanding. You know the Maasai Mara during the rain period, they get the black cotton mud, which is one of the worst one in the whole world. And you need to have a vehicle with a lot of torque and performance. Maybe many people don’t know about it, but electric vehicles are actually more powerful than normal conventional vehicles. And I, we can go into depth later about the technical specifications, but that’s actually the truth. So it’s about the environmental, you know, advantage. And then also about the performance. And then they actually reduce their running costs as well because electricity is cheaper than diesel, especially if you were generated through a solar panel system. So our customers today have a payoff time of about six years, four to six years, depending on how much they drive. So, you know it’s a cocktail of all of these different advantages, but of course the incentive for, for using the running costs is a big one as well. So I think they get hooked by the, by the vision and the idea, but then practicality when they actually look at the model and the they see the, they save money, that’s when they go for it. Yeah.

Sam:                                      11:31                     Okay. So if we can, can we just sort of talk a bit about the economics of, of how it works. So how much does a Petrol safari, cause these are kind of like big land rovers…

Mikael:                                 11:46                     Land Cruiser and Land Rovers can work with right now.

Sam:                                      11:49                     And it’s kind of like eight or nine people who sit in the back.

Mikael:                                 11:53                     Yeah, its nine people. Yeah.

Sam:                                      11:54                     Um, so how, how much does one of those cost if you were to have yourself a petrol motor?

Mikael:                                 11:57                     So is it just to, to buy or to operate?

Sam:                                      12:00                     To buy. Upfront.

Mikael:                                 12:01                     So right now with the, with the local assembly plant, order cars here in Kenya, it’s maybe an end price of about 60, $70,000.

Sam:                                      12:10                     Okay. And then what sort of the, the rough on ongoing costs with that per year?

Mikael:                                 12:16                     So when there’s two things, one of course is the, is the petrol or diesel. And one of the problem is that these camps, they’re quite secured. They’re in the middle of nowhere. So first they need to transport all these few out in the middle of nowhere, which costs, you know, an extra extra costs on the diesel. But then, with the conventional, because you also have a maintenance needs, you need to change the oil filters, you need to work with the, with those maintenance on the gearbox and the engine. And there’s a lot of moving parts that can go wrong, right? But when it comes to electric vehicles, you only have one moving part. And that’s the electric drive shaft. So, the different things that, that make them, you know, save money and it’s a, it’s quite a lot. We usually have a reference saving costs of about 80% of the normal running costs. Yeah.

Sam:                                      13:06                     Okay. Cool. Okay. Um, and so roughly is it like when you do the calculations, when you say, when you add up petrol and calling out a mechanic and all that stuff, do you say it’s like, what, $10,000 a year or something? What’s

Mikael:                                 13:19                     so the service we usually, eh, we calculate, I think it’s about, um, yeah, about $5,000 a year probably. And then petrol, it’s, it’s, it’s probably about eight to $10,000. Yeah.

Sam:                                      13:35                     Cool. And so you can go to them and say, we’ve got this, yeah. This kit, this solution. So if you don’t mind, like how much is it, how much does it cost to?

Mikael:                                 13:42                     Yeah. So for us, we, we would like to offer our customers you know different options, right? Because some of these camps, they might have a, a big, a bigger demand for range. There might go longer distances. So we have options where we can put in more battery packs. We can put in faster charging, but the, the main idea, a normal conversion starts at about $37,000 today. Yeah. And that’s when they bring their vehicle and we converted to electric. So that’s not the whole card service of making it electric. Yeah.

Sam:                                      14:15                     Yup. And cash up front duty financing.

Mikael:                                 14:20                     So we have a verity of different options, but, it’s a mix of deposits to be able to secure all the components and then, you know, loan or we’re actually working on PPA solutions as well.

Sam:                                      14:32                     whose PPA?

Mikael:                                 14:32                     So it’s a, you know, when you, when you pay for and the distances you drive. So imagine if a finance company, they take investment and then, they have, a contract with the customer. So if they drive a hundred kilometers, they pay for those a hundred kilometers. Right. So they pay off as. They go. Yup. Yup. And this model has been, it’s been very popular in Europe, in other regions of the world. But I think in Africa it’s really picking up the PPA to actually be able to, to pay it off as you go.

Sam:                                      15:05                     So what does PPA Stand for?

Mikael:                                 15:07                     So it’s power purchase agreement,.

Sam:                                      15:09                     Power purchase agreement, and it basically means pay as you go.

Mikael:                                 15:12                     Right. Correct.

Sam:                                      15:12                     Very cool. Okay, has it been a tough sell?

Mikael:                                 15:18                     Um, so I’m the sales chief and it’s been going great. I mean the idea of bringing, you know, fully carbon neutral vehicles to this foreign industry, everyone loves it. It’s, it’s been, it’s been very, very good support. And…

Sam:                                      15:35                     How do your meetings, you just call people up?

Sam:                                      15:37                     Yes, it’s a mix of, you know, in every sales organization it’s about, you know, reaching out, doing all the cold calls and then you try to market and network as much as you can. And then right now it’s been, it’s been mostly trying to meet up, bring them to the workshop to show them everything. We do perhaps have a small demo where we show the car, we drive it around a little bit, but yeah, it’s been very successful so far. Yeah.

Sam:                                      16:02                     Nice. How many safari lodges are there in Kenya?

Mikael:                                 16:05                     So when there’s a lot of them. I would say it’s a, it’s more than a hundred in Kenya. And so every lodge has everything between five to 50 vehicles. Right. And there’s also some companies doing only the tours. So some companies have their own camp where they offer accommodation for the tourists, but some other companies, they only offer the drive. So they, they start from maybe Nairobi and then they go out to the national parks and they, they come back to Nairobi. Right. Yeah. So in total, there is a, as probably a, you know, several hundred thousands of these land cruisers and Land rovers out there. Yeah, it is. And I mean, this, this sort of model with, with Land Cruiser, it’s been very popular, not only for the safari industry, but for any type of purpose because the roads are bad. Right. Then when you, for example KPLC, the, big power generation company in Kenya, you know, they do a lot of utility rounds where they go out to the, you know, the off-grid systems they have and all these power stations where they need to have vehicles where they can, you know, get through the terrain. So these types of vehicles are very popular in Kenya

Sam:                                      17:19                     Is part of the set, I’ll rephrase. I remember hearing that one of the things about electric cars is they hardly make any noise. Right. Do vehicles that have been converted, do they also not make much noise or is that, do they still sound quite quite loud?

Mikael:                                 17:35                     Yeah. So it’s actually funny that I missed this point because it’s also a, you know, a big advantage for the safari industry because I mean, you know, having a ride where you don’t have to listen to the rumbling engine, but you can, just be close to the nature and experience everything. That’s also a very, very good selling point. Yeah, some, I’m surprised I missed it. But yeah, and obviously electric vehicles, they don’t have any, any pistons that move in the engine. And then there’s a lot less things moving so there’s less noise, but there is a humming noise. So when you exert energy from the motor, you get a humming noise, but yeah, it’s much less than a normal convention vehicle and it’s very good for the safari industry. Yes.

Sam:                                      18:12                     Yeah. Very cool. And so the vehicle that’s being converted, it sounds just like a Tesla, for example, when that’s been built from scratch.

Mikael:                                 18:22                     Yeah. So obviously when you convert, there are some things that you can’t… You can’t design everything because there’s already a, you know, an existing drive axles and differentials and everything that we can’t touch because that’s the part of the original solution. So of course there’s a lot of mechanical sounds that can come from our solution that doesn’t come from Tesla. But in general, it’s silent and it’s much less than a conventional vehicle. But yeah, that’s the picture. Yeah.

Sam:                                      18:50                     Very cool. Now I’m not an engineer, right. But, I’m interested in sort of some of the mechanics of how this works. I mean, how, how technically complex is it? Cause we were in the workshop, like the Bonnet was open and it was just, it had been gutted out completely, putting in a new one and it looked like, I’m going to simplify, you were just connecting up the wires, like what’s actually going on there?

Mikael:                                 19:13                     Yeah. So right now, as I told you in the beginning, we’re more of an assembly plant. So we work with the different suppliers all over the world. We buy batteries from China, like everyone else. We have motor suppliers from Switzerland, really high quality. We’ve got Palestinian units from America, but all these units, we make sure that they fit together and they fit with our design. So we simply, we disassemble vehicles, you know, removing the combustion engine, the fuel tanks and everything. And then we use that space to design and put in our drive chain. So, of course there’s a lot of electrical work. You know we need to make all the cables and the wiring of a battery management systems and high voltage cables for the motors, but then there’s also some productions that we do. We do, for example, the battery boxes here in Kenya and also mounting points for the motor. So there are some elements of production and metal work that we do as well, but yeah, right now we’re more of an assembly company, but I think more years down the line we would like to move some of the production of some of these components to Kenya. So maybe doing partly assemble, assembly of the motor, the electric model and maybe some other, yeah, PCB boards and BMS systems as well. So yeah.

Sam:                                      20:34                     Cool. I’ll be honest, this again, it might be because I’m quite inexperienced, but it didn’t look that, it looked quite complex, still. It’s, you know, the’re people there that were welding, there was like pretty high spec stuff going on.

Mikael:                                 20:48                     Yep.

Sam:                                      20:48                     How easy is it to find people to do that? Like, is this a completely new skill set? As I said, it’s an existing skill set that you’ve had to tweak it. Like…

Mikael:                                 20:59                     Right. Definitely. It’s a new skillset. There’s a lot of good engineers here in Kenya, right? Yeah. Electrical and mechanical engineers. But when it comes to the electric vehicle side, we’ve simply had to, you know, teach everyone from the start, you know, what is a battery, what is electric motors? How do they work together? So when it comes to sort of recruitment of all our employees, it’s been a lot of interviews. It’s the only way to do it. You reach out to the, to a lot of different engineers.

Sam:                                      21:31                     How do you do that? Is it going…

Mikael:                                 21:33                     Right. So one of our strategies from the beginning was to have collaborations with universities here in Kenya because they have a great knowledge pool of engineers and you know, these young guys, young people, young girls that are really excited to do things. So, this is sort of where we started. We started targeting these sort of engineers in the beginning. We had a lot of different interviews and we ended u, with a few people, the people that started with an internship with us. And then these people, they get more, you know, knowledge and more experience in the, in the company and they go towards smarter than employment and then, you know, maybe even a, a management position as well. So yeah, it’s been, it’s been fairly easy to find people that are excited and really good at engineering stuff and, and just us giving them some pointers and teaching them about electric vehicles has been more than enough. So we’re very happy with the people that we looked at. Yeah.

Sam:                                      22:31                     How do you have to like, give them a practical thing as in like, here’s some metal and some wire and like, can you make it into something or is it, you know…

Mikael:                                 22:42                     It’s more of hands on practical things You know, doing all the connections for the battery cells, making sure that they don’t connect two of the terminals at the same time because then it goes, you know, a small spark and stuff like that, but yeah, it’s, it’s a, it’s been… One of our co-founders is called Phillip and he’s our CTO. So he’s sort of the mastermind behind the whole design and all these different components. So He’s been taking a lot of different classes so to speak with our engineers in the workshop and teaching them how to do everything. Yeah.

Sam:                                      23:13                     That’s good. Does Phillip, does he have a background in cars?

Mikael:                                 23:16                     Yeah. So actually all of us in the management team that started this company back in Sweden. We have a background in engineering and it’s engineering with less physics, but a little bit more energy cause it’s an engineer, energy engineer. But Philip has even more experience from the electric vehicle side, he’s been doing hobby projects since he was a little boy, converting an old Porsche and stuff like that. So he’s really, really good with these type of components, yeah.

Sam:                                      23:46                     I hope there’s a picture of Little Philip in your pitch deck.

Mikael:                                 23:49                     Huh?

Sam:                                      23:49                     I hope there’s a picture of Little Philip with his porche in the pitch deck. Are there other people doing this at this sort of thing around the world?

Mikael:                                 23:59                     Yeah. So I think this sort of technology and processes is picking up in you know, Europe, America all over the place, but it’s been mostly on a, on a hobby level. So people wanting to convert their vehicle into electric and they’re doing it as a hobby project at home. But the commercial businesses hasn’t been around for that long. So in Europe it’s starting to pick up and we actually have some collaborations with other European companies doing it on a commercial scale for city cars, but in Africa it’s quite new. It’s very new and we know of two or three other people doing it in Africa, but it’s been also on more of a hobby level. So we’re actually one of the first one in Africa to do this on a commercial scale for converting vehicles to electric. Yeah.

Sam:                                      24:49                     As you sad, one of the limiting factors seems to be this infrastructure of charging points. And so I guess it’s a case of, you know, one can’t put one before the other. And if you’ve got these instances where there’s this fixed location where people basically do round trips, right, that works out quite well. Have you begun thinking about what your next market is going to be?

Mikael:                                 25:13                     Yeah, I don’t know if I mentioned it yet, but there’s a foreign industry at the entry market. And then today and this year we will move towards electric motorcycles and also electric public transport buses, which is called ‘Matatus’ down here in east Africa. And the reason why is because their vision all along was to bring the solution to Kenyans. Right. And actually when you think about it, the safari vehicles, the electric safari vehicles, It might affect more the tourists than actually Kenyans. So it had to be our entry market because of all the reasons I’ve been discussing about before. But we really want to move towards, you know, the cities and give a solution that everyone can benefit from. And as you probably know, it’s, it’s quite struggling for many people in Kenya working with, you know, Taxify and all these taxi services and also a motorcycle taxi service. And if we can give them a solution where they can save, you know, $3 or $4 extra everyday, that just massive for them. So I think, um, we really want to bring this to Kenyans. That’s the goal. Yeah.

Sam:                                      26:18                     Cool. What’s the pitch going to be to motorbike taxis? So say for context, like a very common way to get around Nairobi is to hail a motorbike and then you’ll sit on the back and the driver will give you a helmet and you’re going to drive around, but you’ll be sort of sat on the back of this motorbike.

Mikael:                                 26:38                     Correct. Yeah.

Sam:                                      26:38                     That’s a very common way of moving about. So you’re saying that you’re going off to that market or all the personal people who own motor bikes for their personal…

Mikael:                                 26:45                     No. So it’s the, it’s a commuter, the commuter business. Yeah.

Sam:                                      26:48                     Okay.

Mikael:                                 26:48                     So, um, yeah, as you, as you said there, there is a lot of motorcycles or ‘boda bodas’ as we call them down here, that you know, makes the transport industry work in Kenya because they drive people all over the place. It’s very cheap form of transport. And as I said as well, there’s a very big group of, you know, low wage people that do these services and I think if we target that market, it’s partly, you know, the volumes. There’s a lot of these ‘boda boda’ businesses and then also targeting a group that really can benefit from this. So it’s important for us to make a social impact, right? Yeah. But I can tell you more about the motorcycles if you want. So the idea is to target this market and make an electric motorcycle, they can go about 50 to 80 kilometers on one charge. But the difference is that we want to have a battery swap system. So you can, you can actually, when you charge the vehicle, you remove the entire battery from the motorcycle you’re putting into our charging rack. And you take a new one and putting into that motorcycle and this means that we effectively charged the vehicle in 10 seconds instead of waiting hours. Right. So by having this system, it’s really good for us because we can sort of implement the new charging infrastructure that works for our bikes and it also good for the consumer because they can quickly charge and just continue with their services everyday services instead of waiting.

Sam:                                      28:16                     Consumer here being the motorbike driver?

Mikael:                                 28:18                     Yeah, correct.

Sam:                                      28:19                     Yeah. Okay. And so what’s you pitch to the motorbike drivers?

Mikael:                                 28:23                     So it’s a, it’s simply, we want to offer them a solution where they can lower their operational costs because for these guys, they don’t care that much about the environmental aspect, but they do care a lot about their finances and everything they spend on fuel every day. So we offer them a solution where they lower their running cost from day one because we will work with financing options and leasing and everything and asset finance companies and then offer them a solution where they can go with electric motorcycles and swap them with battery sale.

Sam:                                      28:56                     So will this also be a conversion? Will this be getting a motorbike if it’s built specifically for this?

Mikael:                                 29:04                     Right. So in the beginning it will be a sort of converted bike. So we will take frames that are already assembled here in Kenya and then putting our electric motor and controller and batteries, but a few more months down the line, it’s going to be a completely new design that we manufacture from scratch. Cause this is a, it’s, it’s easy to design and produce a motorcycle than a whole car. It takes in less money in development and it’s more easy to do it here

Sam:                                      29:34                     Cool so if I’m a, an existing motorbike taxi driver, if I come to Opibus, I will be basically, will I be still using the same motorbike I’m driving in?

Mikael:                                 29:46                     So, no, what I’m saying is that the first customers that we have right now will not be the, the battery sub system. It will be targeted more towards maybe commercial businesses to do logistics, specifically for their own company. And that’s where we’re going to get all the pilots out or the first products. And we’ve already have an order of about 50 motorcycles going out now in October. But the next sort of the big phase for the, all the commuter bikes will be a complete new solution with a battery subsystem. Yes.

Sam:                                      30:17                     Okay. So if, if I’m, if I’m a motorbike driver and I’m wanting to be part of the Opibus system, I will have to get a, a bike specifically made for the Opibus?

Mikael:                                 30:28                     Yes, correct. And the idea is that already today there’s asset finance companies that finances these motorcycles on the market. So an asset finance companies takes the risk of investing in the motorcycle and then the, driver pays it off daily. Everyday. He pays a little bit every day. And since these financial solutions already exist and these drivers are used to it, we can just tap into the same system. Right. So we can then offer a motorcycle, within asset finance companies. So they don’t have to pay anything upfront. Yes.

Sam:                                      31:01                     How much does the motorbike cost?

Mikael:                                 31:03                     So if we were to sell it as a one off to maybe these logistic companies that I talked about in the, in the beginning, it’s probably about 2000 to $2,500 for the most.

Sam:                                      31:14                     This is not.

Mikael:                                 31:15                     No. And a new, a new really cheap TVS that is imported from India. It’s about $1,300 today on the market. Okay. But then they would pay quite a lot in petrol and the maintenance cost, right?

Sam:                                      31:30                     Yeah. Do you like, I can’t get the economic argument. Do you foresee any or has it been any resistance in just the notion of an electric vehicle and like what if it rains or like what if we run out of power every, those sorts of like other challenges or things that you’ve come up against?

Mikael:                                 31:51                     Yeah, I mean we always get the same question about, you know, if it rains, what if the, what if there is night, there is no sun can they, can it operate. Yeah. There’s a lot of these questions and obviously it’s about teaching people how it works, show them how it works as well. But the main, the main idea for this market is that they want to save money and if they see a solution that you know, brings down their operational cost, they will jump on it. They love it. Yeah.

Sam:                                      32:16                     Very cool. Okay, so you’ve got actually, the safari cars, we’ve got ‘bodas’ are the motorbikes. Did you say something after that?

Mikael:                                 32:25                     Yeah. The, the last, or the next market would also be public transport buses.

Sam:                                      32:30                     Yep.

Mikael:                                 32:31                     Yep. So it’s very interesting because the more you drive every day, the more you actually save because that’s, you know, more kilometers that you don’t have to put petrol into your car and you put electricity instead and it’s cheaper. And these Matatu so the, the public transport buses, they drive long distances every day. It’s up to 500 to 700 kilometers a day.

Sam:                                      32:55                     Really?

Mikael:                                 32:55                     Yeah. Which is insane. Some of them operate inside the city, but some of them operate, you know, into connection between cities. So maybe Nairobi up to Machakos or Nairobi to Narok or, or stuff like that. So since they drive so long distances, the economic model for them is, it’s crazy. And if we offer a solution today to these, public transport buses companies or a Sacco as they’re called, they would have a pay off time in one year.

Sam:                                      33:25                     Wow. Okay. And the battery engine is able to move up to 500, 600 kilometers a day.

Mikael:                                 33:35                     So there’s a few things we need to do to make this, you know, application work for them. I think the range for one of these public transport buses would probably be maximum 250 to 350 kilometers. But the good thing is that they don’t drive 700 kilometers in one go. The drive may be 150 or 200 in one go, and then they stop, they wait for people to get on the bus and then they go back. So while they do these routes in total, they make about 700 kilometers a day. And this means every time they, they stop at one of these end stations, they have time for charging. And when we’ve been talking to these companies today, they wait about one hour before they fill the vehicle for the next round. And this hour is perfect for full charging.

Sam:                                      34:22                     Okay. And I guess, yeah, so I suppose again, this is another example of you don’t need the full network of charging stations. You’ve got the, in this case, just the two points.

Mikael:                                 34:31                     Correct. And this is so interesting because usually if we want to implement charging infrastructure in Kenya, we need to have huge governmental support. You know, a lot of grants and money and investments and right now the market isn’t that mature. So I think the Kenyan government, which we might talk about later as well, they are not ready to do, you know, these sorts of investments. So this means we have to do it ourselves. And the ‘Matatu’ or the public transport bus industry is quite interesting for this because we don’t have to have chargers everywhere because we have to have one charger at one station and one charger at the other end station. So it’s two charges for one route and that can can make, you know, one route be operational on electricity instead of diesel or petrol. And if we do that for the other lines, right, we can organically build the charging infrastructure of Kenya and maybe opening up these charging stations for other types of vehicles in the future as well. So actually the public transport bus industry is one of the solutions to lock up the, to unlock the, the infrastructure of charging. Yeah.

Sam:                                      35:42                     So you see I’ve never, yeah, I’ve never sort of quite thought about the little steps you can take before actually sort of building up. I’m trying. What’s, what kind of comes after a ‘matatu,’ what’s between a ‘Matatu’ and a private car?

Mikael:                                 35:55                     Yeah. So I think the end result is to do any vehicle like, you know, comes into our workshop and if it’s city cars, if it’s a big year, 50 seat bus or a, you know, even an airplane in the future as we talked about in the workshop. But, these are the natural steps to, approach the market today.

Sam:                                      36:12                     Can you trucks?

Mikael:                                 36:13                     Yeah. Everything. Yeah. But right now we can’t do it because every time there’s a new model we need to develop, you know, battery boxes, the right design for the Moultrie power and, everything.

Sam:                                      36:24                     But is there like an upper limit as to how much power a battery engine can like produce?

Mikael:                                 36:34                     No. I’ve, I would say today with all the different components and, you know, companies that produce these components, there’s no, there’s no limits. I mean you can buy an engine with 3000 horsepowers that is perfect for a truck or you can buy a small electric motor for only a motorcycle. So these components definitely exists.

Sam:                                      36:53                     And the 3000 horsepower one, it’s not so big that it can’t be fitted into a truck.?

Mikael:                                 37:00                     No, it’s actually the opposite. Electric vehicle components are much more power dense. So, for example, when we, when we retrofit or convert the safari vehicles, we remove about 400 kilos and we add about maybe 300 kilos. So actually when we’re done, we actually reduced the weight of the vehicle and this is going to be the same for trucks, because they have huge fuel tanks. Right. And every lead during that fuel tank weighs a lot of, yeah, it weighs a lot.

Sam:                                      37:29                     Yeah. Wow. Okay. So you say trucks is a plausible next step, cause that’s another one where you have a start point and end point.

Mikael:                                 37:35                     Correct. Yeah. Yeah, so trucks and the city cars will definitely be the next step.

Sam:                                      37:39                     Very cool. So far it’s quite expensive. How, how have you sort of financed the business so far?

Mikael:                                 37:44                     So, yeah, it’s incredible. We’ve actually managed to do a lot with a little, and I think that’s one of our companies, you know, models to do as much as possible with as little as possible because not always, you can, you know, you can have support of a big grant funds and all this. And so our sort of main thing has been to work with sales because we want to sell first and then develop. This is very important for entrepreneurs in every business because if you develop something first and then you show it to the customer and try to sell it and they say, no, you need to go back and redevelop and redesign and everything. But if you sell an idea to someone and they buy it right and they need develop what you say, what you’ve sold to them, it’s already done right. The sort of downside is that it might be a, you know, issues with delays and also, there might be some design steps that we need to do, you know, while we’re delivering the vehicle to the customer, but this has been one of our approach because we can very quick, you know, show the proof of concept, start getting, getting revenue into the company and yeah. And show people that it works.

Sam:                                      39:04                     Okay. So have you been self-financed the whole way?

Mikael:                                 39:08                     It’s, it’s almost, we’ve taken loans from different Swedish banks and we haven’t done any equity round at all so far. And right now we sell about six of these vehicles a month, and we sell ’em perhaps about a thousand solar panels every month. And we’ve been awarded a big project of 300 lithium battery storage systems going to be installed all over Kenya with the auto valuable but $1 million. So everything is really picking up. But yeah, it’s been a, it’s been almost only self funded from the start.

Sam:                                      39:43                     Is it, is this a sort of business that needs to have investment to kind of take it to the next level or is it something where you can kind of grow…

Mikael:                                 39:55                     Investments are definitely needed. Yeah. So this is sort of the, you know, the proof of concept showing everyone that we can do this. We know what we do, we also get experienced in the market, but we, yeah, in the near future we will do some big equity rounds to bring in the capital needed to, scale up and also to scale up to other countries. Cause it’s very interesting that the markets in Kenya are very similar to markets in Tanzania, in Uganda. You know, they have the same sort of public bus system with the Matatu, they had the same motorcycles and everyone is in need of, you know, reducing their running costs. And they also have a lot of sun four for charging of, you know, through solar panels. So I think, yeah, definitely in order to scale up, we need to have investments. Yeah. Okay.

Sam:                                      40:41                     Okay. Now, to me, this seems like a good use case for like grant money.

Mikael:                                 40:49                     Definitely.

Sam:                                      40:50                     If you, I don’t know anything about it, but I can imagine there’s, a big fund or report money somewhere, which is saying we need to promote, energy efficient or like environmentally friendly solutions in developing parts of the world. Are they, do those things exist?

Mikael:                                 41:07                     Yeah, definitely. And we thought the same from the beginning that, you know, this is the perfect, the perfect project for grants and funding to, to put their money on. But I think we’ve been applying for probably, you know, five or 10 of these applications and some of them are still in progress and I think we’re probably gonna get a few of them quite soon. But so far we haven’t got that much. And I think the reason is that everyone talks about bankable projects, how you can find projects that actually, you know, make a profit and are a good investment in some way. And these are the projects that they tried to find. And when we have is sort of, you know, destructive and very innovative idea that is quite risky because we bring in a product to Africa that has never been here before, even though even though it sounds really good, you know, some of these institution and the, and funding might not like the risk. Yeah.

Sam:                                      42:05                     Oh, it’s a shame isn’t it?

Mikael:                                 42:06                     It’s such a shame. Yeah. We’re really close to getting a few of these. I think so, yeah.

Sam:                                      42:10                     I’m sure if you can, you’ll get some good use cases. It becomes more bankable

Mikael:                                 42:13                     definitely then. And that’s the way, because we need to, we need to show the proof of concepts so they know that, you know, the grant will actually do some impact socially and environmentally. So we need to show the proof of concept, which you’ve done now and then, you know, have a scalable idea of, how to proceed. Yeah.

Sam:                                      42:30                     How does, like how technical do you need to be in terms of the efficiency gains in terms of, from an environmental perspective? Is it, can you just kind of just say like a petrol engine emits this amount of fuel fumes? We don’t, here’s this, here’s a calculation, we’re better, or do you need to like actually take readings of stuff like this?

Mikael:                                 42:54                     Yeah, it depends on how you want to do it. But what’s really important if you want to get the whole picture is to look there, look at the design life of the product. So, for example, when we put in batteries and electric models, these batteries and motors needs to be produced somewhere, right? And in the manufacturing process and even in the resource process where we get all these resources out from the, from the ground, because some motors in some batteries requires some really rare earth metals, which are quite difficult to, to get. So if you look at the whole picture, you know, it’s, it’s definitely, it’s not, you know, it’s not the, the miraculous solution to everything, but, it still makes sense. And I think it’s very important to build the infrastructure. And the, how should I say it? The mindset of, you know, we shouldn’t put petrol or diesel anymore in our cars, which use electricity because you know, years down the line it will get more efficient, the batteries will be, will be more efficient as well, and we’ll get everything to be more and more environmentally friendly. So yeah, even though if you look at the whole picture, it still looks really good in comparison to continuing using petrol. But obviously I would say electric vehicles has a little bit more carbon footprint in the manufacturing process. But then in the use, it’s almost nothing except when you, when you change the batteries. So it is definitely much better than conventional vehicles. But when you look at the whole picture, you need to take some things into account. Yeah.

Sam:                                      44:25                     Correct. Okay. So with this all being said, even when you’ve been able to demonstrate that this is a, a bank or like already bankable investment, is that, do you feel there’s an, is there enough grant money out there where you can just kind of keep it up and not give away too much of your business? Or do you think you are going to have to go behind? What type of investor are you going to sort of go around?

Mikael:                                 44:51                     it’s going to be a mix of, you know, impact investment and just, you know, when we look at the investment that we really want to work with the investors in the region, we just, we don’t want to bring in someone that only comes with money. We want to have someone that brings, you know, maybe some knowledge or experience or in our business perspective on everything. So we’re very picky when it comes investments and I can say that, you know, we’ve had a lot of different opportunities but we’re very picky to choose the right ones. And I think you shouldn’t, if you have enough Cash flow and you know, everything works well, you shouldn’t stress it out too much. Obviously everyone wants to bring in the money to make the big expansion of the scalable project. But I think as long as you, as the other viable product that brings some revenue, I think you can, you can take it a little bit slower. And then other VC companies usually say, they always say, you know, if you don’t bring in us now for 50% of your company, you’re screwed. You can’t do anything. But, I think that’s wrong.

Sam:                                      45:52                     Okay. Weird question. As grants involve getting money into the company, is that your responsibility or… Cause you’re head of sales?

Mikael:                                 46:01                     Yeah, so…

Sam:                                      46:02                     Cause it’s because it’s to do with like bringing in money, right? You have to do it or can someone else do that?

Mikael:                                 46:06                     So first of all, to define the company properly, we are sort of in the, the, you know, the, in between being a startup and a really, you know, established company in Kenya. So obviously in a startup, you know, there’s a, there’s a lot of different things to do. So usually, you know, we have our responsibilities and our departments, but you know, if something needs to be done, you know, everyone helps out. So yeah, I’d be working, I’ve been working on these grants as well, but it’s not, it’s not my, my only only thing, my main purpose. Yeah.

Sam:                                      46:33                     Yeah, yeah. Okay. And why is it called Ou Bus?

Mikael:                                 46:36                     So Opibus means resources in Latin.

Sam:                                      46:40                     Okay.

Mikael:                                 46:40                     And I think the idea is that we, you know, we like to work with the resources and how we can, how we can make the most of out of the, you know, the smallest things.

Sam:                                      46:50                     Yeah.

Mikael:                                 46:51                     And, yeah, that said. Yeah. I guess, yeah.

Sam:                                      46:55                     What was the, was it easy to come up with that name? What did you have like a big selection and your like, cool…

Mikael:                                 47:00                     It’s the same in every startup, but you know, it’s, it’s like you almost agree on everything with the business idea and the concept, but like, when it come to the name, it’s always, you know, it’s difficult to, to choose. But yeah, we, we stuck with this one and then, we haven’t had time to, you know, pause and actually think about, and maybe there’s a better name or something. And so, yeah. It stuck with us?

Sam:                                      47:21                     What were some of the other names you considering?

Mikael:                                 47:24                     You know, I can’t really remember, but you know, some of the really classic ones, like, you know, electric safari vehicles practical ones, but yeah. We really like the name now and I think whatever, whatever name you choose and when you, when you become an established company and more people get to know you and the company and the image, it just sticks and everyone likes it. So I think, I think Opibus is quite, quite established now in Kenya.

Sam:                                      47:55                     Um, cool. So we’ll just do a few more questions.

Mikael:                                 47:57                     Yeah, sure, sure.

Sam:                                      47:58                     So company is going for a few years now, you’ve been in Kenya for 12 months per se. What have been some of the surprises, both positive and negative you’ve had? So if you compare, roll back the clock 12 months, if you were to say, yeah, in a year’s time, this is what Opibus will look like. What are some of the surprises you’ve, you’ve had in terms of positive and negative?

Mikael:                                 48:21                     Yeah. So, positively, I mean, the market has responded really well. There might be, we haven’t, you know, we haven’t got that big yet, but there might be a push in the future from, you know, oil companies that have connections. Maybe some, some ministers or someone up in the government that might, you know, want to, you know, quiet us down or maybe want to push us in another direction. So there’s a lot of these forces that we thought could be an issue, but it hasn’t been so far. And I think we’ve had sort of a stealth strategy where we, you know, we develop and then we just go big. So no one has time to, really, you know, put us in place so to speak. But yeah, positively, the market has responded really well and it’s actually, it’s been, it’s been quite, quite good having a company in East Africa and obviously we didn’t know that much about it from the beginning because there’s so many, you know, different things, both the cultural and financially. And then, you know, the rates, interest rates in Kenya is like, you know, eight to 12%. And in Sweden it’s 2%. So there’s a lot of things that they’re really differs from Sweden for example and Europe, but negatively. There’s so many things that don’t work out in the same way as in Sweden for example, logistics, you know, the Kenyan government, when they impose these new customs rules, for example, they can do it overnight and it can, it can just screw up the whole, you know, logistics chain. And we’ve had batteries. There’s been stuck in the port for six months. Like, no one can clear them because they changed the regulations on which papers they need, but the parks has already been sent before they changed it. So there’s just these nightmares that are so difficult to, you know, foresee. And then obviously corruption. Is a, very, it’s a big problem in Kenya and Africa as a whole.

Sam:                                      50:20                     How much have you faced it?

Mikael:                                 50:21                     Yeah, so, you know, you face it every day almost. It’s everything from, you know, traffic police officers to, at the customs or stuff like that. But, we have a policy where we don’t do anything that has to do with corruption. So for example, this example when we had to wait six months, you know, we could probably, you know, pay someone off or stuff like that to make it happen faster. But we just simply said no, like we we’re not going to do it. And finally it worked out, but it takes longer time and it really, it screws up the whole plan. But, corruption has been a really, really negative thing for, yeah, for operations down here. And, I think we’d been managing it so far. But you know, they, they can be a time when just other companies would pay off the government and they get all the products and projects, you know, a Chinese company coming in and doing exactly the same thing, but they give a, you know, $200,000 to the top minister and then maybe we will be out of business. And these things are so difficult to foresee. Also the elections, I don’t know how much you are informed about the elections. Last time it was quite aggressive and it really affected the tourist ministry in all the businesses in Kenya. And this happens every four years, if I’m not mistaken. Yeah. And that’s also a risk, you know, every fourth year maybe you just shake the market completely and you can’t do business anymore. So there’s a lot of risks. But we’ve been managing everything so far and we’re really happy to work here and really, you know, put these new solutions to to Kenya and East Africa.

Sam:                                      52:00                     Fantastic. And people who are listening who might be interested, you know, in Opibus, either for themselves, let’s say they own a Safari lodge, or they’re interested in just learning more about the company. What are the best ways in which people can sort of learn?

Mikael:                                 52:12                     So I think, going into our website, the as in Sweden, we are going to get a, yeah, we’re probably gonna get a Kenyan as soon as, well, I’m actually the guy designing the website and I’m doing all the design work for the brochures and everything. But sometimes it’s difficult doing the big deals and doing the design at the same time. So we’re probably gonna kind of improve that? But going into the website, you know, sending us an email, there’s contact details to all of us in the, in the management team. So if you’re interested in sales, you can contact me if you’re interested in something about the, you know, the technical stuff, you can probably talk to our CTO. But yeah, in general, send us an email or call us. That’s the best way.

Sam:                                      52:49                     Very good. Awesome.

Mikael:                                 52:50                     Cool.

Sam:                                      52:50                     Mikael, thanks so much.

Mikael:                                 52:52                     Perfect Sam, thank you very much.

Booming factory business. Tales of growth, expansion and toilet paper, from Darshan Chandaria


Manufacturing is one of the major value drivers in an economy.

In this episode, I speak with Darshan Chandaria, Group CEO of Chandaria Industries, the company founded by his grandfather in the late 1940s and which has now diversified into other areas.

The core business is hygiene products: recycling waste paper and turning it into tissue and other products.

This episode is slightly longer than usual, mainly because there just seemed to be so much to talk about. This includes the set up of their fully integrated operation, the thought process of building a new factory, hiring strategies across the group and Darshan’s management strategy for leading the team. Essentially: find people on the same wavelength and leave them to it.

There are also other tidbits of information in there around designing detachable roofs in the new factory, the comparatively high cost of transporting goods, as well as Darshan’s strategy for building his Instagram following.

The interview took place at Chandaria HQ which is a working factory and so at times there might be some background noise of trucks moving around. I’m sure you’ll agree though that it adds to the effect.


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Other notes

Family business established since the 1940s. Established in 1964.

Diversified portfolio of companies. Hygiene is the main. Largest tissue and hygiene products company in East and Central Africa: a fully integrated operation.

There are 30,000 Kenyan families employed in the paper collection. Often these jobs stay in the family: there are generations of people in collecting of paper waste. 3,000 people are employed across the group.

Toilet tissue is the biggest seller. It’s the entry level product to hygiene.

Leadership team have to be on the same wavelength, the same vision.

There a few major channels they work with, the crux of the experience the customer should feel is: does the customer feel comfortable enough to call you late at night, because you will sort out the issue they have.

Meeting ISO standards, and the way in which that is measured.

It’s a capital intensive company with high barriers to entry.

Transport cost takes up a higher percentage of the margin.

The expansion of building a new factory will be a $50m investment. Part of this will be a detachable roof in the design. Most of this new factory will be taken on with debt.

Raw materials is a big thing. Less things being printed means availability of raw material is a concern.

Transition from Family Office to Venture Capital firm. Early stage companies to then scale up.

Lessons and Insights

Biggest learning: the leadership team has to be on the same wavelength

Biggest insight: future proof your investment decisions i.e. does your factory need a detachable roof

What keeps you up at night: as paper usage reduces, raw material costs will increase

Social media etc.

Chandaria Industries




Darshan (personal)




Other links


Mobius Motors:

Where does your tea come from? Toby Theobald from Chai Tausi in Tanzania explains


Tea is an product that has a strong industrial base in East Africa.

It’s been going for years, meaning that many companies have emerged and there is a pretty competitive landscape.

In this episode I speak with Toby, Operations Manager at Chai Tausi in Tanzania

We discuss the supply and sales network that they have in place, the best conditions for growing tea across the region and the considerations when it comes to making their blend.

I’ve spoken to a lot of high tech companies on my tour in East Africa but this is a proper old school business that we chat about.

I hope you enjoy it as much I did


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Here are some of the key quotes:

“We’re a tea packing company”

Based out of Arusha in Northern Tanzania. We blend and pack in Arusha and then distribute across the local market.

“Increasing costs led us to move”

We were originally in Dar es Salaam, but found that costs (financial and time) were getting high and so relocated the processing plant upcountry.

“Our tea comes from one area”

All of the tea comes from our sister company which ensures we have a steady supply. If we need more tea we can always find other producers in that region.

“Tea can be picked throughout the year…”

but it’s best to do it at certain times, especially after rainfall. It means there are peaks and troughs of supply over the year.

“Shelf life of 3 years”

This means it’s possible to stockpile to buffer for the variance, however this can be difficult with tight cash flow.

“Kenya and Rwanda have better tea quality”

In Rwanda this is owing to the geographical conditions. In Kenya, there is still good geography but there is also a learning aspect of having grown it for years.

“Tanzania has a less competitive market”

Which means that, as well as having lower costs, we are able to make the most of being close to the market. We’re really competitive on price.

“Tea is drunk differently in Tanzania”

In a big pot the tea, milk and sugar is boiled up and then drunk throughout the day. Often it is eaten with bread for breakfast.

“Quality comes from…”

Colour, aroma and taste. Our factory manager checks the quality every morning by tasting samples that come in.

“Blending is key”

This is all about mixing high grade and low grade tea. Costs can come down by combining the grades meaning we get a good quality tea at an affordable price.

“Tea prices vary”

And so we’ll adapt each blend based on the price and availability of the tea that we have available.

“The factory runs Monday to Saturday”

The set up takes the tea leaves through the production line where it gets jumbled together and then put into packets before being sent off.

“The machinery is all from India”

Which we get second hand and means there is a good market for spare parts which is an important consideration.

“Depots around the country”

We send our tea across Tanzania to sales agents who then go out and sell to wholesalers around a region. The orders are generally consistent each month.

“Our indirect competitor is phones”

Income is a big determinant of sales. There’s a real opportunity cost when money is spent. Other factors are the weather and the price of sugar.

“We’re looking elsewhere in Africa”

The factors we’re considering are whether there are local producers of tea, and what are the current tea prices. DR Congo is looking promising though the key is getting a good distributor.

Social Media Follows etc.

Website: no need…

Facebook: Chai Tausi

Selling cakes (and training cake makers), with Grace Murugi from


If you consider businesses that bring people joy, for me at least, cake is one of them.

It’s also a product which is being bought by the emerging middle class especially in Kenya, with custom made ones being sold for up to $180.

Grace not only makes these cakes, but teaches others how to with her Cake Academy.

We discuss the customers who are buying cakes, how she taught her team to run the business when she went on maternity leave and innovations in the cake industry.

The interview took place outside her shop, and so there is a bit of background noise and not all of the answers are fully audible.


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Here are some of the key quotes:

“It started when I was at university”

We’ve been going for eight years and now have our own shop which also houses our cake academy.

“We train people to make their own cakes”

There seemed to be room for improvement in teaching people how to make cakes, and so after starting making my own, I now teach others.

“How creative can we get?”

We’re looking at introducing fruit and chocolate on the cakes as well as different shapes. We learn from our customers and from bakeries across the world.


Is where we get a lot inspiration.

“We do custom made cakes all the time”

Most people who come into the shop are buying a bespoke cake. These can cost from $30 up to $180.

“Our customers are the upper middle class”

They earn typically earn $20,000 – $30,000 per year. We then have the wedding cake industry too which is even more.

“We’re big on innovation”

Customers come to us to get the latest designs in cakes. We’re at the forefront of cake innovation in Kenya.

“Production is our biggest cost”

Buying things like icing sugar, paying wages and then utilities such as electricity and WiFi.

“We keep several suppliers”

When it comes to critical ingredients like cream, we need to keep accounts open with several in case one of them fails.

“I teach people recipes I’ve perfected”

I took a couple of classes back in 2005 and since then have been changing the recipes to make them better, such as adding an extra egg.

“We’re big on cupcakes”

These come from people who want to buy a present for the office to celebrate, or just as a walk in purchase.

“We reach our customers online”

This is via Facebook marketing, Instagram and we’re considering LinkedIn marketing too. There are also cake festivals and fairs that we attend too.

“People are seeing Cake Academy as a route to employment”

It’s inspirational for people to see success stories of people setting up their own businesses. 100s of people apply to join the course.

“I’ll be focusing on the Cake Academy”

Teaching other people is where my passion lies. We’re wanting to partner with other bakeries internationally.

“… but passion isn’t everything”

It’s important to learn business skills such as financial statements.

“I read business books and took classes”

These gave me some fundamental approaches to how to run the business which I’ve been applying such as allowing me more time strategise about the business. This all came once I was going on maternity leave.

“Franchise is the future”

The way that we’re looking to grow is by documenting everything that we do and then selling the rights to others to set up their own shops.

Social Media Follows etc.

Grace’s favourite book: The E Myth, Michael Gerber

Greatness Business Club: on Facebook




Pictures of cakes Cake 1 Cake 2 Cake 3

The effusive Dr Suudi gives us a taste of his Ugandan radio adverts


Coming from the UK, one of the biggest differences in East Africa has been how products are marketed.

In the co-working space I was at in London we would talk about Google Ad campaigns and reaching users online through content marketing. Here though, the radio is a dominant form of advertising.

In this episode I talk with Suudi who runs Wave Records.

We discuss his extensive experience in the radio industry, why old car radios can only play on restricted frequency and listen to some of his catchy jingles, including a slightly… interesting one about a Ugandan girl getting a Chinese boyfriend (at around 18 minutes)

We were in his recording studio and so there might be a bit of activity/ phone interference going on in the background and it gets a bit echo-y at the end.  Sorry about that.

Hopefully it won’t detract from one of the… most unique interviews I’ve had.


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Here are some of the key quotes:

“I’ve been doing this for 15 years”

I do lots of things in the music industry and I started Wave Records a couple of years ago.

“We have all the customers”

The banks, telcos and other industries in Uganda who have radio adverts, they all come to us.

“TV as well”

Whilst most of what we do is radio, we also offer TV.

“Our adverts are like hit songs”

People are informed of what products through the catchy jingles which we produce.

“93% of people in Uganda listen to the radio”

Most people listen to the radio when they are in the taxi. In old cars you can only listen to frequency of 88-91. Newer cars have more stations.

“In urban centres there are 30 radio stations”

There are some popular stations and unpopular ones. It’s all to do with both music and the chat that the presenters have.

“I’ve been radio since I was 12 years old”

A lot of the population will know me. My business partner Ronnie is also a bit of a radio celebrity.

“Clients don’t follow machines”

They follow the people. When we left our old jobs and started Wave Records these clients came with us.

“We create according to the audience”

Some clients will want a simple voice-over. Others will want one with more catchy jingles. Often the same company will have several types of adverts out at the same time.

“Here are some jingles”

Go to around 16 minutes to listen to some jingles that we recently produced.

“We pay voice over artists a day rate”

Typically we’ll find people through friends and those who we meet. The more experience you have, the more you can charge, because clients can recognise the voice.

“I see opportunities in billboards”

They make a lot of money. If you’re doing a radio advert it’s also useful to follow it up with a billboard campaign too.

“I’ve done a million radio adverts”

I do 150 adverts a week. This is because we do adverts into lots of different languages. In Uganda there are 54 languages spoken.

“Social media has been tough on us”

These days clients are also using Facebook and WhatsApp which means there’s less room for radio adverts.

“Reach 10,000 people in 10 minutes”

Just set up a WhatsApp group have people share it and suddenly you’re getting good coverage.

“There’s coverage all over Uganda”

The government has a station in each region. There are also the private companies, like us, who exist. Unlike the BBC, the state-run radio stations here are probably the worst.

Social Media Follows etc.

Facebook: Dr Suudi

Email: [email protected]

A history of surveying and market research in Kenya with Boniface Ngahu from SBO Research


Understanding the consumer is an important part of a lot of businesses.

Boniface is a director at SBO Research, a Market Research company that has been in business in Kenya since the mid-nineties.

After finding them on Google I went in for a chat and we spoke about his perspective of the market.

We discuss the change in political conditions that brought about the growth in market research industry, how drones are assisting researchers and whether an insurance policy will pay out if an eagle eats a chicken.


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Here are some of the key quotes:

“We started in 1993”

Our first job was doing surveying for Standard Chartered. We now serve over 50 clients per year.

“Understanding market gaps is the main value”

Clients come to us to get insights into the Kenyan market and whether their product/ service will fit.

“FMCG companies are common clients”

Companies with many employees are serving many customers and therefore want to employ services in order to best understand them.

“Government is our biggest customer”

They spend a lot on surveys to understand citizen satisfaction for the public services that are being offered. Often this is for commercial projects (like providing electricity) where there is private sector competition.

“We use mobiles to conduct surveys”

Agents talk to people, typically in their home, and record the responses that come from the survey.

“They chat on Whatsapp before”

When conducting focus groups, the client doing the research has the chance to communicate with everyone in a Whatsapp group to cover the basics beforehand.

“‘If an eagle eats my chicken, will I get paid?’”

Boni was doing a focus group for a new micro-insurance company and this was a pressing question one of the farmers had. Turns out that as eagles are wildlife and belongs to the government, the insurance company won’t pay out as its the government’s remit…

“Historically there would be only one brand”

The government had a regime where there was, say, only one type of cooking oil. As such, there’s no need for market research, because that is the market. Markets were liberalised in 1992, SBO Research was began the following year.

“Our clients are international”

But our insights come from Africa. Typically a multi-national corporation looking to introduce a new product line.

“Insights from inventory”

We track stock levels for different shop owners, in doing so we are able to deduce the market share that different products have.

“Technology will be the game changer”

Competition is coming from non-typical sources, such as Facebook and other telcos. We’re also seeing drones being used to observe how consumers interact with a product.

“We’ll want to hire more researchers”

As the industry grows this is one of the skills that we will want to get into SBO Research as we grow. The skills are scarce though, so good researchers bounce around.

“Bottom of the Pyramid consumers need to be approached differently”

This is a paper that Boni wrote. The typical consumer thinks differently to the ‘elite’ customer.

“My cleaner tells me what to buy”

If you advertise to Boni what cleaning product to buy, I won’t know what it is. If the cleaning product is targeted to my cleaner however, then she will build loyalty and tell me what I need to buy. Cleaning product companies should therefore target the BOP customers rather than “elite” customers.

Social Media Follows etc.

Net Promoter Score

Understanding the African consumer paper


Other articles: from Business Daily