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Free Q & A Service

I am offering a free question and answer service based on my knowledge, information and contacts in the Food Processing and Biofuels sectors. Whatever your question, I will help you as far as I can with information and contacts that should allow you to solve you problem.

I would like to publish the questions and answers here in a anonymous form so that all can benefit. However, if you specifically ask that your information is not published it won’t be. 

Just email me here with your question. I will publish some of the advice I give where I think it has general value.

 

Why is it That Nobody Has Seen Bottling and Canning as a Development Tool in Africa and Particularly Ghana

The question is a really good one with lots of answers. I would see possible problems as being
  • the short time that cheap excess is available meaning that either you are limited in what you can process or you need large equipment and can’t set it up as a sustainable business
  • if its a business selling becomes the major constraint requiring REAL entrepreneurs
  • if its a home operation things like caps, energy cost, sugar, vinegar which seem insignificant to us become constraining
  • eventually bottles have to be bought and this is even worse in terms of afforability – in Ghana the standards authority previously stopped bottling in used general food bottles – imported bottles even when imported by an NGO were not affordable
You will have understood I have had some experience with projects in Ghana – this was admittedly several years ago but I understand the breakthrough has not been made. I believe its worth your while to collect information from people such as those below who have already tried food processing, although maybe not specifically with canning.
  • FitGhana – were involved is setting up women from households to make jams, but could not get it established because of the costs of bottles and other inputs
  • ADRA – installed a large (maybe 1000 kg a day) community plant in Techiman to process excess tomatoes into bottles tomato paste which the idea was to sell to schools, restaurants and other institutions and hopefuly retail. The plant was funded by USAID, installed by NRI and costed and assisted by CSIR. The product was very good with a multiyear shelf life but I believe never got going because the product wasn’t sold – even so the farmers wanted a bigger plant.
  • NRI – have done a lot of work in Ghana on both food safety and cassava/gari markets / processing and probably know as much as just about anyone about the possibility of what you want to do. NRI were also one of the drivers of Fruits of the Nile where households solar dry excess tropical fruit which FON quality control and export.
  • USAID – have funded a lot of attempts
  • CSIR Ghana – have developed technologies and believe they have many SME opportunities in the food area and have surely though on canning
  • Gratis Foundation – design, develop and implement agri processing equipment
  • Can & Kaa – Kofi Asiedu ran a small food processing business with hi-tech grant funded equipment in Accra
There are others I could maybe scratch out but many more that I didn’t have contact with.
I would like to tell you a story that opened by eyes. I was traveling to a lime juice factory in Cape Cost with George Baiden, then Director of ADRA Ghana when we say people working with oranges on the side of the road surrounded by acres of black plastic. When we went to look George, who had food/nutrition as one of ADRA’s focuses was alarmed to see that women who were peeling the oranges were putting the peels in basins and throwing the flesh on the ground. There were tons and tons of orange pulp lying rotting on the ground. The peels were being dried on the black plastic and shipped to the USA for incorporation as an organic ingredient in tea. This was a completely entrepreneur driven undertaking with no development support and although the entrepreneur was involved in fruit he wasn’t worried by the waste
To me there are points to be taken out of this
  • Entrepreneurs, not organisations, are best situated to identify and serve opportunities
  • Sun drying is a simple low capital cost process
  • Niche markets are easier to penetrate that the commodity markets
  • Focus is really important
You will notice that I tend to think of opportunities as businesses this because from my experience community things are hard to get working especially when capital and running costs are required. Thats a simple statement and easy to take with a pinch of salt and brush but its my very firm belief – based on how I suffered under it in projects we ran.
My other statement is that if you have a business you have to sell for more than it costs you to produce if you are going to create sustainable opportunities. Just as the above its easy to overlook but critical to any development through enterprise project.
I feel I am waffling too much! but am not going back to edit – but I know how often the things we conceptualise don’t work easily in the Development environment.
What I would do if I was starting now:
  • follow up on the experiences I’ve outlined above and others in a very frank way – not the “i do nice development story”
  • if any can be used as a starting place for further development try and develop sustainable plans
  • investigate the market potential for sun or if necessary solar drying taking ideas from the Fruit of the Nile experience
  • teach people any missing skills in cottage processing – eg drying, bottling, pickling, fermentation, nutrition, safety . While these may not give nice quantifiable outputs for the funders it of value to the people.
  • get a small scale canner, run it for a season and determine the real opportunities, “markets”, costs and especially safety issues. I by the way, even though I know its kind of development lore that small communities shouldn’t be shown dangerous things like meat canning, would not limit it to acidic products. After all fish drying is simply handled by many household although that is potentially dangerous!
  • investigate the large industries you speak about as potential off take for processed or partially processed products from the farmers.
If you would like to follow up with the organisations, feel free to contact me and I will give you whatever contact details and people I have – some could be outdated but it would be a start.

 

Some thoughts on establishing rural processing businesses in South Africa

People tend to say rural businesses can be based on adding value to raw materials (sell mango juice rather than fresh), use unique natural resources (eg amarula cream) or use cheap excesses (eg dried bananas).
All these are great ideas that can be easily implemented and people trained to produce in an acceptable and hygienic was. But the two problems that call the difficulty are: 
  • seasonality of the raw materials – eg marula’s are only harvested for four months of the year so one has to step up from simple processing that can be done on a small scale to processes like concentration and cold storage. This can again be installed and mananaged although the management skills are higher
  • but the real problem is the selling of whatever product is made – this requires much deeper skills but especially commitment, which I personally believe can’t just be instilled in anyone who happens to be around. Selling to the retail system in South Africa is particularly hard and requires money as well as skill and persistence. Its my believe that some one from a government department or NGO is not even able to recognise and evaluate the difficulty of selling at the level necessary to ensure sustainability.
So the focus is really on how can I and how am I going to ensure that the business sells its products at a level that makes it sustainable in the normal business sense ie pay proper salaries, register, pay tax etc.
There a number of ways that have been tried: 
  • get a retailer to give advantage / help / assistance / preference to the enterprise as part of their corporate responsibility. Quality, price and consistent supply have to be right the retailer is not going to plan to loose on any transaction. – Its my experience that it is easy for the retailer to commit to assist early in the process but much harder for the enterprise to supply. The retailer often commits without the information the enterprise needs to base his business on which is a firm quantity, a firm price and business conditions.
  • become a supplier to a company already selling to retailers, thereby, not having to establish the skills, expertise and infrastructure required to sell. A good example of this is in Uganda where household dry mango, banana and pineapple which is bought by Fruit of the Nile (FON) who grade, clean, package and sell to UK super markets. The difficulty here is that FON add to the value chain cost, this is often looked on as being unacceptable as the enterprise would make more income if it sold directly. The real costs of such an operation are ignored and the shelf price found to be very attractive.
  • supply local consumers with products they need which are not available through the retail system. This has seldom been achieved although the combination of local distribution and unique product seem very attractive.
  • traditional products eg mopani worm and offal stews in convenience packs also seem attractive but haven’t been successful.
  • there are finally the development kind of markets like FAIRTRADE, ethical trading, organic and low carbon where communities from developing countries are actually given an advantage in “developed countries”.

On the other hand simple technologies eg sun drying, solar drying, jam making, preserving, oil production, baking and milling can all offer households in a community ways to

  • save money – which can be used for other purchases
  • preserve grown or cheap bought produce for use when costs are high
  • use the processes to improve nutrition
with those going its always tempting to the say OK we will sell the extra but raises expectations and moves the focus (funders and government will push this) to income generation and sustainable enterprise where a group who could succeed at a small community level will almost inevitably fail.
    

 

That all sounds rather miserable but lets remember that there are community businesses running in South Africa’s rural areas eg stores, bottle stores, millers, caterers, driving scools, mechanics, restaurants, hotels and taxis so its possible but needs the right person and a real opportunity.
There are quite a few organisations that operate in this sector (eg Practical Action, NRI, CARE, Technoserve etc) which I could give you connections to if you want – they have mainly moved from the cottage sized industry model which was the starting point. It might be said that there are not lots of really good examples of successes in creating jobs in a project mode where real entrepreneurs are not in control. 
This is really from a South African viewpoint – things are very different in other countries especially where the formal industry is small and the income levels lower.

3 comments to Free Q & A Service

  • Judith

    Hello Dave
    I am surfing the net looking for information on starting a small food processing business. I cannot find any information on regulations that pertain to same. Also, your comment on ensuring that a market is available to the product is pertinent. I am beginning to think that I have bitten off more than I can chew by thinking that I can process foods on a small scale profitably. How would you suggest one can test the market with a new product. I have several ideas for foods that I make in my kitchen, that are not available currently in the market. Perhaps you could offer me some advice.
    Much appreciated
    Judith

  • I would like to get more info on you services I am a male Zambian and I am in business and a member of the Chamber of Commerce Here in Zambia.
    Ilook forward tohearing from you soon.
    Regards,
    Henry Muchemwa
    +260 97 777 2251

  • Great delivery. Outstanding arguments. Keep up the good
    effort.

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