This is a story from the Nyamuka Zambia business plan competition. Nyamuka Zambia is part of the Private Enterprise Programme Zambia (PEPZ), funded by UK aid. When I wrote the original version of this case study I was a VSO volunteer and Alan was one of the first prize winners I was privileged to get to know.
From Engineer to honey man
Alan Chanda stumbled into honey production completely by chance when his work as an engineer advising on solar power installations in rural areas took him to communities where bee keeping and honey collecting from virgin forests were part of the normal pattern of life. In his own words, Alan was “clueless” when it came to bees but asked lots of questions. It all started, with him buying a mere 50kg of honey and selling it in reused 500g and 1kg jars to friends and family.Subsequently, Alan put together a proposal to train farmers from an area close to the eastern edge of Kafue National Park (the largest national park in Zambia and the 2nd biggest in Africa) in bee keeping and honey production, not a traditional bee-keeping area at all. However it is a region where it is possible to have two harvest per year which clearly has a massive impact on potential yields. 50% of the out-growers recruited were women, a departure from Zambian traditional practice where bee-keeping is generally thought of as a male preserve.
Alan introduced a single chamber modern hive but subsequently, using his engineering skills, he designed a new hive that lifted yields from 20kg per season to 50kg, an increase of 150%. Needless to say, all the farmers were clamouring for the new hives but that was a problem. The production cost was too high. How was he going to overcome this problem and where was the cash going to come from?
Alan delivers standard buckets to the villages and makes an arrangement to come back on a certain day. All the bee keepers bring their filled buckets and he pays each farmer immediately in cash…great for farmers but a big strain on Alan’s cash flow which as production expanded became a real problem. There is a big demand for high quality organic honey and Alan also wanted to add value by making honey-based products. But that too would take money for investment in plant and machinery.
Clearly Alan had big plans for expanding and developing but the issue that kept coming up was that he needed cash to grow. That was when Alan heard about the Nyamuka Zambia business plan competition and decided to make an application.
The rest, as they say, is history. A few brief weeks later Alan was through to the semi-finals where he was paired with a personal business adviser and developed a robust business plan to turn his honey into sweets, lozenges and a granulated alternative to sugar. He learned that a sound business plan was not only valuable, it was marketable. And before he knew it he was a finalist with a guaranteed cash prize to invest in his business. This prize turned out to be K200,000 ($20,000) for achieving 2nd place in the Game Plan show which was aired on national TV in October 2015.
How did Alan invest his Nyamuka Zambia winnings?
Alan knew that he had to find a way to source new hives made at an economically viable price. He eventually came up with a great solution: to use construction timber off-cuts and have his hives built by training workshops in trade schools and institutes. By the end of 2016, 10,000 hives had already been produced. Another 20,000 will be delivered in 2017.
Alan also used some of the winnings to invest in funding honey stocks and packaging in order to expand the amount of honey he could supply. He has invested in equipment for making granulated honey, sweets and lozenges but has taken the wise decision to delay production in order to wait for the arrival of an expert in these fields who is due early in 2017. As a result of his winnings Alan has been able to double the number of out-growers and has bought the equipment necessary for product diversification.
“I never thought I could handle the business management side of things. I could manage the maths and the figures but all the rest was not what I thought an engineer could do. Now people are asking me for business advice”. Alan Chanda, December 2016
After Nyamuka Zambia
Nyamuka Zambia introduced Alan to the PEPZ Business Linkages programme who, in turn, introduced him to a major retailer who is now stocking Alan’s Sweet Harvest brand. This subsequently led to a bulk supply export contract in South Africa and the promise of more to come. The PEPZ team is now helping him with HACCP risk control certification, necessary for any food producer wishing to export to Europe, as well as supporting him with his quest to achieve registered organic status.
In 2014 Alan produced 2 tonnes of honey; in 2015 that was 26 tonnes; and in 2016 that shot up to 160 tonnes. That truly is exponential growth! In 3 short years, through hard work, application and with help from Nyamuka and PEPZ, Alan has transformed his business from a fledgling enterprise to a substantial supplier entering into the world market.
The real winners?
“One of the things I learned going through the Business Linkages diagnostics process – and it came as a big shock – was what an impact this business was having on communities.” Alan Chanda, December 2016
Let me introduce you to Grace.
Grace is from a tiny village near Mumbwa in Central Province, about 3 hours west of Lusaka. She is the family’s breadwinner. Until recently, the only cash income she had was from selling her surplus maize, earning K1-2,000 a year ($100-200). Last year, with just 15 of Alan’s hives, she earned an additional K10,000 ($1,000), a life-changing uplift in the family income. This year she will be able to send her daughter to the University of Zambia to fulfil her dream to be a doctor. A year ago that dream would have been an impossible one. This year it could be a reality. Perhaps the big winners in this Nyamuka story are people like Grace.
And with Alan about to train another 800 farmers, and with a further 20,000 hives being constructed, this story could be repeated again and again.