Feasibility and Launch of ToughStuff Solar Panels in Rwanda

Situation
Less than 15% of Rwanda has access to electricity. Even in the capital city, blackouts happen as often as 14 times a month. Electricity costs are among the highest in the region, so the cost of connecting to the grid puts this resource even further out of reach. In Rwanda, inability to access affordable electricity represents a daily barrier to education, information and communication.

ToughStuff is one of the leading manufacturers of portable solar panels for the rural poor. One tough stuff panel can drastically change a household…offering a durable, renewable source of energy that can light a room, charge a phone or power a radio. Having successfully established operations in five developing countries, ToughStuff needed to understand if, and how, they might do the same in Rwanda.

Karisimbi Partners’ approach
Karisimbi Partners was asked to provide a comprehensive analysis of the players, dynamics and salient trends related to rural electrification in the region. Part of this understanding was developed in the process of hiring and training village sales representatives as part of an initial pilot study designed to test a new form of village-level distribution. Hard-earned qualitative and quantitative research allowed Karisimbi Partners to provide comprehensive insight related to the feasibility of ToughStuff in Rwanda. After just 90 days, the verdict was in: with significant resources and patience, success was possible and an innovative distribution network viable. Recruitment could begin, the pilot program could expand, and Rwanda could be used to prove a model for rural sales that could be replicated elsewhere.

Results
Based on the comprehensive analysis provided by Karisimbi Partners, ToughStuff decided to enter Rwanda and the race to electrify off-grid households throughout the country. Initial efforts to hire a Country Manager through a local recruitment agency were unsuccessful, but Karisimbi Partners’ network of qualified individuals produced a capable, trustworthy and experienced candidate. This Rwandan individual offered a rare combination of entrepreneurial drive and experience with rural franchise development, and he was quickly hired. Today, ToughStuff has a dedicated team on the ground, including sales people responsible for expansion beyond the few districts
where they previously operated.  ToughStuff Rwanda has already been used as a launching pad for Burundi operations and to evaluate entry into D.R. Congo. In the words of their new Country Manager, Emmanuel Ndoba, “For Karisimbi Partners, business support was not an assignment but a passion…they always go that extra mile.”

Strategic Planning for a Leading Construction Firm

Situation

The heavy construction industry in Rwanda has become highly competitive with the increased presence of international companies, rising labor and raw materials costs and significantly tighter donor development budgets.  One of the leading Rwandan construction firms, experiencing challenges in the midst of this rapidly changing landscape, engaged Karisimbi Partners to identify business opportunities and develop a five year strategic plan.

Karisimbi Partners approach

Karisimbi Partners sized the market opportunity, engaging with local, regional and international customers and competitors to determine appropriate subsector opportunities for the client company to best leverage its inherent strengths.  These strengths, consisting primarily of local knowledge, experience and highly nurtured and interconnected relationships with some of the largest customers in the sector, led KBP to additionally target strategic consolidation and joint venture opportunities to better combat rising regional competition within the industry.

Results

The client company has signed a Memorandum of Understanding with another large national construction company identified by Karisimbi Partners, and is taking initial steps toward a potential future merger.  The company has been actively pursuing joint venture opportunities with large regional and international construction companies and has assigned a full-time senior executive to pursue and execute on at least one of these opportunities within the year.  The CEO affirmed the value of the engagement by indicating that the company would not have considered these options had Karisimbi Partners not presented the justification and supporting plan.

Plant Costing and Profitability Analysis for Building Materials Manufacturer

Situation

A local building materials manufacturer facing stiff competition was having difficulty determining its costs of production by product and the resulting implications for pricing and profitability.  Shareholders had purchased the facility three years prior but had been operating at minimal capacity, in part because they were unaware of the true profitability of the various production lines.  Karisimbi Partners was engaged to analyze the cost structure and inform the shareholders if and where to invest to increase profitability.

Karisimbi Partners approach

Karisimbi Partners performed a detailed Activity Based Costing analysis.  This included a comprehensive study of each step of the production process, from extraction of raw materials to multiple production facilities located throughout the country, to final delivery to the customer, and involved negotiations with customers and suppliers.  A detailed analysis (including the review of hand written ledgers of fuel and electricity use) was carried out to determine efficiencies at different volumes of production.  Most importantly, Karisimbi Partners facilitated internal discussions among team members to ascertain the true bottlenecks inherent in the production process.

Results

Karisimbi Partners concluded that the operations were profitable when performed above a determined utilization level, and only if specific investments were made to maximize throughput.  However, the benefit of this work extended beyond the direct analysis.  Arguably the most valuable outcome was the facilitation of teamwork within the organization.  The client responded by instituting regular meetings between internal customers and the administrative team, which has resulted in greater productivity, a direct 1% improvement to the bottom-line.  The client has made the recommended investments in equipment, increasing productivity by over 50% and is expanding production, projecting a 40% increase for the coming twelve months.

Feasibility Study to Expand Fuel Efficient Cook Stoves in Rwanda

Situation

90% of East Africa’s population cooks with charcoal or firewood using inefficient cook stoves which leads to severe regional deforestation and negative health impacts caused by indoor air pollution.  Providing households’ access to clean burning energy efficient cook stoves is the goal of the Paradigm Project, a social enterprise working to create sustainable social, economic and environmental value within developing world communities.  Karisimbi Partners was engaged by Paradigm to determine the feasibility of launching a new line of fuel-efficient cook stoves into the regional market that would primarily serve the rural poor.

Karisimbi Partners approach

One hundred and sixty households were surveyed in multiple districts, representing urban, peri-urban and rural populations, in order to better understand fuel usage and cooking habits.  The majority of those surveyed were low-income farmers, with almost half of the households earning less than 1.25 USD per day and only one-quarter earning above 67 USD per month.  A competitive market analysis was carried out as well as interviews of senior government decision-makers regarding forestry and carbon credit policies.  Leading potential manufacturers were evaluated to determine capacity to mass produce the client’s cook stoves.  Karisimbi Partners developed price and sales volume sensitivity analyses and finally evaluated different distributors to determine viable models.

Results

Based on market conditions and the competitive environment, Karisimbi Partners recommended that the Paradigm Project take a conservative approach and further test the market with a formal pilot project to evaluate true price sensitivities.  KBP concluded that partnering with the governments in the region would be critical, and that ultimate success of the product would depend on the distribution strategy.  The client has moved forward based on these recommendations and is currently investing in local staffing and further due diligence in the market.