PeaceKERNEL Liberia

PeaceKERNEL Liberia

LiberiaMonrovia, Liberia
Organization type: 
for profit
Project Stage:
Start-Up
Budget: 
$50,000 - $100,000
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

At PeaceKERNEL, we are reinvigorating post-war Liberia’s dormant palm kernel oil industry. In the process, we are creating jobs for youth, increasing the incomes of smallholder oil palm farmers, and helping to mitigate air pollution in rural areas.

WHAT IF - Inspiration: Write one sentence that describes a way that your project dares to ask, "WHAT IF?"

What if rural farmers in Liberia could be equipped with the right technology to increase their productivity by a 100-fold?
About Project

Problem: What problem is this project trying to address?

Small-scale factories, many of which use palm kernel oil (PKO) as the major ingredient, produce 30% of Liberia’s detergent needs (the rest is imported). Due to a dearth of PKO processing technology locally, soap producers have to import PKO from Guinea, spending ~ 35% of gross margin on procurement, which slows business expansion. Relatedly, every year smallholder oil palm farmers waste an est. 13K tons of palm kernels after producing palm oil.

Solution: What is the proposed solution? Please be specific!

PeaceKERNEL will source 5 modern, low-cost PKO screw press technology (each costs $4.5K) and station them in regions with the largest quantities of wasted kernels. Through our robust purchase agent network, and partnerships with oil palm cooperatives, we will purchase palm kernels from rural oil palm farmers, process them into oil, and sell the oils to local soap factories. In our market study, we identified over a dozen soap producers who are very excited for us to begin supplying them PKO, as it will reduce the stressful and costly process of importing from Guinea. Additionally, by selling the unused kernels to us, smallholder oil palm farmers will see an estimated 50% increase in income; they currently receive no income for the kernels.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

PeaceKERNEL can increase the average income of existing palm oil farmers/producers by over 50% by purchasing their now unused palm kernels, while also creating jobs, reducing air pollution and developing the local market for kernel oil. Currently, at Panta Palm Co-op (PPC), members turn palm flesh into palm oil, but are unable to process palm kernels. As a result, PPC members gather unused kernels and burn them in a pit. Not only does this procedure contribute to local air pollution, it also represents a substantial economic waste since processed kernels fetch an attractive price on the soap oils market. PeaceKERNEL can buy these kernels, raising PPC's profits, while also creating jobs for rural youth as palm kernel purchase agents.

Impact: What is the impact of the work to date? Also describe the projected future impact for the coming years.

MEDIUM-TERM IMPACT (2-4 yrs): Youth job creation: We plan to employ 100 young people (20 per county) as palm kernel purchase agents. They will serve as the primary liaisons between PeaceKERNEL and smallholder farmers. INCREASED INCOME FOR SMALLHOLDER FARMERS: Help smallholder palm farmers in at least 1000 households increase their income by at ~50% through the sale of palm kernels. MITIGATE RURAL AIR POLLUTION: By purchasing palm kernels, we will effectively be putting a halt to the practice of burning up palm kernels, which is a major source of air pollution in rural areas. RENEWABLE ENERGY: Currently, several companies and institutions - including USAID and EcoPower Liberia - are providing rural electricity using palm kernel shells as biomass/ source of renewable energy. PeaceKERNEL will directly supply them with kernel shells at affordable prices to support their work.
Sustainability

Financial Sustainability Plan: What is this solution’s plan to ensure financial sustainability?

Our business model is straightforward: Purchase palm kernels from smallholder farmers, use palm kernel screw press to produce palm kernel oil, and market the oil to customers (primarily soap manufacturers). Our estimated profit margin is 44%, which is highly above average, and will allow us ample fiscal space to expand the business to all of Liberia's 15 counties, creating more jobs for youth and increasing incomes for more rural farmers.

Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?

Currently, there is only one other PKO production company in Liberia (African Palm Kernel International Company). However, our business model differ in one major respect. APKI only supplies a few large-scale clients who can afford to make large purchase orders. Thus, small-scale soap manufacturers - who can barely afford to import PKO and most needs a domestic supplier - often have to use their meager resources to travel to Guinea and purchase PKO. As a result, small-scale soap manufacturers cannot effectively compete with large companies, because of the high costs they face in procuring PKO.
Team

Founding Story

After I graduated from Dartmouth College (USA) earlier this year with a BA in Economics, I returned to Liberia and founded J-Palm Liberia Ltd, which provides modern equipment to rural palm oil producers to increase productivity, in return for an equity stake. I quickly saw the large quantity of palm kernels that go to waste after palm oil processing, due to a dearth of palm kernel oil expelling equipment. Through research, I found that palm kernel oil is in high demand among soap producers, many of who spend upward of 35% of gross margin on procurement and transportation, as they have to travel to Guinea to purchase palm kernel oil. I immediately saw the economic and social potential of starting a palm kernel oil processing company.
About You
Organization:
PeaceKERNEL Liberia
About You
First Name

Mahmud

Last Name

Johnson

About Your Project
Organization Name

PeaceKERNEL Liberia

Organization Country

, Monrovia

Country where this project is creating social impact
How long has your organization been operating?

Less than a year

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Your Solution
Founding Story: Share a story about the “Aha!” moment that led you to get started and/or to see the potential for this to succeed.

After I graduated from Dartmouth College (USA) earlier this year with a BA in Economics, I returned to Liberia and founded J-Palm Liberia Ltd, which provides modern equipment to rural palm oil producers to increase productivity, in return for an equity stake. I quickly saw the large quantity of palm kernels that go to waste after palm oil processing, due to a dearth of palm kernel oil expelling equipment. Through research, I found that palm kernel oil is in high demand among soap producers, many of who spend upward of 35% of gross margin on procurement and transportation, as they have to travel to Guinea to purchase palm kernel oil. I immediately saw the economic and social potential of starting a palm kernel oil processing company.

Select Sector(s): To which of Unilever's categories of sustainability does your solution apply?

Waste, Smallholder Farmers, Supply Chain Micro-entrepreneurs.

Measurable Impact
Audience: Who have you identified as your customers/recipients and why? How will you get your solution to them or engage them in your initiative?

SMALLHOLDER OIL PALM FARMERS are our most vital clients. They provide the major input (palm kernels) for the production process, and also increase their incomes by supplying us.

RURAL YOUTH: Liberia's youth constitute over 60% of the population, and are largely unemployed, fueling an increased wave of youth-induced public violence. “Putting the youth to work” is thus vital for sustaining long-term peace in Liberia.

SOAP MANUFACTURERS: Use kernel oil as active ingredient in soap products.

Impact: What is the impact of the work to date and expected impact in the future?

MEDIUM-TERM IMPACT (2-4 yrs): Youth job creation: We plan to employ 100 young people (20 per county) as palm kernel purchase agents. They will serve as the primary liaisons between PeaceKERNEL and smallholder farmers.

INCREASED INCOME FOR SMALLHOLDER FARMERS: Help smallholder palm farmers in at least 1000 households increase their income by at ~50% through the sale of palm kernels.

MITIGATE RURAL AIR POLLUTION: By purchasing palm kernels, we will effectively be putting a halt to the practice of burning up palm kernels, which is a major source of air pollution in rural areas.

RENEWABLE ENERGY: Currently, several companies and institutions - including USAID and EcoPower Liberia - are providing rural electricity using palm kernel shells as biomass/ source of renewable energy. PeaceKERNEL will directly supply them with kernel shells at affordable prices to support their work.

Growth, Finance & Leadership
Scaling the Solution: How do you intend to scale your activities over the next two years (e.g., reach new markets, diversify solutions, etc.)? What will make this possible?

On the production side, palm kernels are widely available throughout Liberia, as an estimated 90% of Liberia's palm kernels go to waste. Thus, with the right technology, we will be able to produce at full capacity.

On the demand side, the resurgence of Liberia's cosmetics manufacturing sector (particularly laundry and beauty soaps) will continue to fuel demand for palm kernel oil. Furthermore, demand in the West African sub-region is estimated at approximately 55000 tons per annum, and is currently being met through imports.

With these favorable supply- and demand-side factors, our plan is to develop a robust network of local and regional sales agents who will market and distribute the products directly to the customers.

Financial Sustainability: What is your business model to ensure financial sustainability?

Our business model is straightforward: Purchase palm kernels from smallholder farmers, use palm kernel screw press to produce palm kernel oil, and market the oil to customers (primarily soap manufacturers). Our estimated profit margin is 44%, which is highly above average, and will allow us ample fiscal space to expand the business to all of Liberia's 15 counties, creating more jobs for youth and increasing incomes for more rural farmers.

Experience: Please provide examples of any previous entrepreneurial initiatives you have pioneered.

In 2010, I founded the iMHere! Project, which provided full-tuition academic scholarships and mentorship to 23 young men from low-income communities in Monrovia, Liberia.

In 2012, I founded the iTeach, iLearn Fellowship, which mentors top-performing Liberian high school students to apply to U. S. colleges, and tutors them for the SATs (URL: www.iteachliberia.org).

Currently, I am CEO of J-Palm Liberia Ltd, an oil palm production company.

Comments

Mahmud Johnson's picture

Hi All, just submitted my project. If you have a minute, I'll appreciate it if you could give me some feedback. Thanks!