Improved energy business prospects in Uganda

A five-year programme continues to support micro businesses in East Africa to scale up in a way that boosts local economies while promoting the sustainable management of natural resources and reducing poverty.

Three years ago Jude Kabanda began his business and Community Based Organisation, Friends of the Environement (FEO). Operating from Makindye, a suburb of Kampala in Uganda, his company produces briquettes for local people and businesses.

Briquettes are a source of fuel, sometimes made of charcoal dust, but in other forms can be an environmentally sustainable, made by solidifying biomass waste products, such as sawdust, bagasse (made from sugarcane stalks), coffee husks, maize cobs and paper.

It used to be that all of his briquettes were handmade, the sales of which made him less than 100 UGX a week. He quickly acquired a small machine, but he found that his products were still poor quality and prone to smoking. “They didn’t perform as well as the charcoal people were using before, – says Jude – so they just stopped buying.”

In less than a year however, Jude had increased production in his briquette-making business more than sevenfold and he now regularly tots up monthly sales of around 210,000 Ugandan shillings (around £58).

For Jude the key to his newfound business success is clear. ‘Since I joined DEEP in June 2009,’ he says, ‘many things have changed’.

DEEP – the Developing Energy Enterprises Project in East Africa – specialises in providing support to energy entrepreneurs, both individuals and groups, in rural and semi-urban areas in East Africa by assisting them to identify and operate viable energy businesses. It offers a wide range of support for small businesses and Jude has taken full advantage of the training and mentoring support available to him.

Jude attended technical training sessions, which enabled him to perfect his briquette recipe. He now uses 50% charcoal dust, 30% sawdust and 20% paper with paper or cassava starch to bind the briquettes together, a combination which produces a much higher quality product than before. ‘Our briquettes are now in high demand because of their quality,’ he says proudly.

And after discussions with a mentor provided through DEEP-EA, Jude has also been able to expand his product range. He now produces long, cylindrical briquettes, although he continues to make his original style of round briquettes too: ‘The round handmade version is my history’, he says, ‘And I want to show others that they do not need heavy investments to start a briquette business. You can still do it even if you only have your hands.’

When he received two further machines as a gift from The Rotary Club taking him up to three in total, Jude decided to expand his workforce and invited six local women to work with him as apprentices.

As well as learning how to make briquettes, the women are also involved in the business. Together they pool their resources and collect or buy locally available material to make the briquettes. The proceeds raised from the sales are deposited in a communal bank account, from which the women can take out loans to start up their own small enterprises.

Jude is proud of their achievements. ‘One of our employees has started rearing chickens, another has started a charcoal business, which now supplies FOE, and another has opened a small bar in Makindye,’ he says.

Jude is now passing on his knowledge and runs training sessions for other briquette entrepreneurs who want to improve their skills and set up businesses, which also supplements his own family’s income.

Jude has also attended various networking sessions organised by DEEP-EA, helping him to expand his contacts with other producers, retailers and suppliers across Uganda. As a result, FOE’s customer base has expanded and FOE is now supplying some big hotels and rotary clubs around Kampala as well as local householders. This kind of exposure has lead to Jude being identified by likely investors, such as FINCA, a micro-finance institution in Uganda that has seen Jude’s potential, taking samples of his products for testing, and making orders for briquettes.

Now Jude’s sights are set on expanding his business: ‘Soon we would like to supply local shops, supermarkets and do home deliveries’, he says. ‘Our biggest problem now is not small sales, but how to keep up with demand!’ And FOE may soon be going national, as attending exhibitions elsewhere in Uganda has also brought in enquiries from other parts of the country.

In the future, Jude would like to be able to purchase new machinery, such as a larger extruder and a grinder at the cost of 300,000 UGX. This would allow him to produce 80 kg of briquettes per hour, and to better provide for his customers which include local hotels, as he often finds himself unable to meet their demands.

GVEP International is in the process of finalising a Loan Guarantee deal with FINCA. Once the deal is signed, Jude and other DEEP supported entrepreneurs will have an opportunity to access the much needed finances to upgrade their production.

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