Partner/supplier Paul Munsen is president of Sun Ovens International Inc., based in Elburn, Illinois.
Expert Jeff Klein is director of the Wharton Leadership Program at The Wharton School, University of Pennsylvania, and instructs the school’s Social Enterprise Fellows.
Expert Patrick Doyle is manager of energy and climate change division for Development Alternatives Inc.
America.gov asked finalists from among the more than 700 African immigrants who submitted business plans to the “African Diaspora Marketplace” to blog about their ideas. Sponsored by USAID and Western Union Company, the African Diaspora Marketplace is a contest that will award seed money to approximately 15 winners to help them bring their ideas to life in their home countries.
RONALD MUTEBI, entrepreneur:Uganda sits on the equator in eastern Africa, more than 1100 meters above sea level. My country was once covered by lush forests and rich vegetation. However, wars and lack of good governance have resulted in deforestation. This problem has also been driven by poverty, especially in the rural areas, where trees have been cut down and sold for cooking fuel and charcoal production.
Deforestation, in turn, has caused radical change in weather patterns, especially rainfall. We see regular food shortages and famines, extended drought and flooding.
In many treeless villages, people have started to cook with grass for fuel. In other places, there is no fuel at all, so people must eat their foods raw. In still other places, people must choose either food or fuel; they live in a situation in which they can afford only one cooked meal a day. The biggest casualty in all this has been the children, who have become malnourished or undernourished.
In 2002, my business partner, Denis Wandera, and I came across an oven that uses the sun’s heat to cook. It is made by Sun Ovens International, based in Elburn, Illinois. We plan to manufacture and sell these ovens in Uganda.
Since the start, we have encountered and overcome many obstacles, ranging from high Ugandan taxes to a lack of knowledge by customers of how to use the ovens. After extensive training and demonstrations, the Ugandan government now sees the value of this oven and supports our project. (The ovens can not only bake but can also be used to boil water, which will result in better health because many water-borne diseases will be eliminated.)
My partner and I have acquired the license to manufacture the sun ovens in Uganda. We will make them readily available to everyone at an affordable price. The manufacturing process is labor intensive, so many jobs will be created.
PAUL MUNSEN, supplier/partner:
Solar ovens are desperately needed in deforested countries like Uganda. The business concept that Ronald has developed – making and marketing the ovens locally – will make the price affordable and create jobs. His purchase plan allows people to pay for the ovens in small weekly installments, using money they will save by not having to buy charcoal. It is a win-win solution for everyone concerned.
The ovens are sold at a profit. Initially, we here at Sun Ovens International are going to ship oven parts to Uganda for assembly there. Later, Ronald will develop the manufacturing capacity to make most of the oven parts in Uganda. At that point, Sun Ovens will be financially rewarded stilll, because the company will receive royalties on a special gasket that allows our ovens to get considerably hotter than other sun-fueled ovens. Each Sun Oven can cook for a family of eight people. We believe that 75 to 80 percent of Ugandan households could significantly benefit from these ovens, so the market is potentially huge. Because the country has a great deal of sunshine, our ovens will be very useful there.
Ronald has shown entrepreneurial ingenuity in making this project possible. Originally, the high government taxes on the ovens doomed the project. In most places in the world, that is still our biggest issue.
Ronald was able to convince the Ugandan government to grant a total exemption of both the import taxes and the value added taxes for the ovens. That has changed the economic viability of the project dramatically. Ronald went to the home of the then Ugandan minister of finance and worked with the minister’s maid to cook with a Sun Oven. The minister’s wife got involved with the cooking and was so impressed that she sent her driver out three times that day to put additional food in the oven. She lobbied her husband, and he arranged for the tax exemption. Ronald showed exceptional creativity in working with the minister’s maid and wife to get that accomplished.
JEFF KLEIN, business expert:
This business plan demonstrates social innovation and wealth creation at a number of key junctures. In developing economies, the consumer’s purchasing power is severely constrained – especially for larger, one-time payments. By developing a payment structure that allows buyers to channel their savings on charcoal into the purchase of a Sun Oven, Ronald enables a large segment of the population to become buyers. This marketing and pricing structure is a true “bottom-of-the-pyramid” strategy.
Local manufacturing is another impressive feature of the plan. Not only will the region benefit from the additional wealth generated through the venture (and retained in Uganda), but it will also benefit from the capacity built within the workforce to adapt the Sun Oven to local conditions and uses.
Nutrition and safe drinking water are two of the major social challenges facing the world today. By adapting an existing product for use in a new market, Ronald applies new, market-driven solutions to address these challenges. The for-profit model that he has developed creates incentives for multiple stakeholders and supports long-term sustainability.
Ultimately, the success of this project – indeed, most projects – will depend upon the network of collaborators and supporters who stand behind the launch. By generating government support at an early stage, Ronald has both eliminated an obstacle (high taxes) and enlisted an ally. The alliance with Sun Oven imports technical knowledge and business process support. It is my hope that Ronald can continue to grow this network of collaborators to include additional parties from the private, public and NGO sectors.
PATRICK DOYLE, business expert:This appears to be an excellent technology-transfer project and hopefully the exemption of taxes and tariffs for this particular oven will be applied to other ovens and renewable/efficiency products in the future.
It would be good to have some more information on the Sun Oven technology. It appears Sun Ovens are easier to manufacture locally than parabolic solar cooker technologies, for example. Local manufacturing will help avoid or reduce tariffs if the policy changes in the future. I do have some questions about the project. Has the technology been proven in other similar environments? How many units will be operating? Are there any independent reviews comparing the technology to others? Some factors to consider, in addition to cost, would be its hardiness and durability in rough conditions and ease of cleaning. How long does the stove take to boil water? The stoves can’t be used on cloudy, rainy, windy days, so being able to set it up quickly during brief periods of sunshine would be useful.
The cost and lifespan of this gasket that must be supplied by the manufacturer over the long term is critical, as I’m sure you realized.
Unless the manufacturer –- Sun Ovens International Inc. — is financing the ovens for you, it appears you will need a loan. The cost of this finance is key, as it makes the systems more costly for you and your customers. Have you worked out this issue in your business plan?
You may want to consider leveraging the carbon markets to help finance the stoves by registering your project with the United Nations Framework Convention on Climate Change as a “Clean Development Mechanism” (CDM) project or with the Voluntary Carbon Standard group. A CDM project in Indonesia using parabolic solar ovens has resulted in the reduction of more than 1000 tons of CO2e emissions. Each stove in the early stage produced about .5 tons of reduction per year. The reductions depend on how often the stoves are used and the fuel type that the solar oven is replacing.
Donor funding may be able to help get the project off the ground as well. Good luck!