J-Palm Liberia

J-Palm Liberia: Mills for Progress (M4P)

Paynesville, LiberiaTodee District, Liberia
Year Founded:
2013
Organization type: 
for profit
Project Stage:
Established
Budget: 
$100,000 - $250,000
Project Summary
Elevator Pitch

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

M4P creates access to simple oil palm processing mills that help 29,000 smallholder oil palm producing households in Liberia reduce post-harvest losses by 50% and increase income by almost 90%. Increased output translates to higher income, reducing smallholders’ vulnerability to poverty and hunger.

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

What if 29,000 smallholder oil palm producing households could permanently lift themselves and their families out of poverty by having access to more efficient and safer oil palm extraction mills?
About Project

Problem: What problem is this project trying to address?

In Liberia, almost 95% of smallholder oil palm producers use the traditional method of manually extracting palm oil from palm fruit. As a result, 35-40% of oil palm fruit goes un-harvested due to lack of time, labor, liquidity and appropriate harvesting and value adding technologies. When processed by hand, another 50% is lost during oil extraction. Smallholders risk losing out in development if unable to upgrade processing technologies.

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

M4P manages and operates mini palm oil processing factories in central locations in rural villages that have the highest concentration of palm oil production, but lack access to processing machines. Each mini-factory serves oil palm farmers within a one-mile radius (50 smallholders, on average). The farmers harvest and transport their palm fruit to the mini-factories where they use M4P’s pre-treatment equipment and mills at zero up-front costs. In return, M4P receives 25% of the oils produced to cover overhead and operations expenses, as well as to finance future expansion. M4P also purchases the (hitherto wasted) palm kernels that accumulate after palm oil extraction, creating an extra income source for smallholders.

Awards

1. 40 Chances Fellowship (2014), 2. Monrovia Business Start-up Center's "Entrepreneur of the Year" Award (2014), 3. Keynote Speaker at National Small Business Conference (2015), 4. Award for "Best Marketing" at Annual Small Business Trade Fair (2015)
Impact: How does it Work

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

J-Palm Liberia's M4P initiative launched in Todee, rural Montserrado County in November 2013. Todee's landscape is almost 50% covered in oil palm trees and groves. Prior to our launch, smallholder producers manually extracted palm oil from the palm fruit, and then stockpiled and burned the palm kernels after processing palm oil. We launched the initiative to some skepticism. However, after only one week of demonstration, 40 smallholders signed up. This is because our operations reduces processing time from 8 hours to 30 minutes per 100 kg of palm fruit, doubles yields and creates incentives for smallholders to increase harvests (given shorter processing time). As a direct result, smallholders' average incomes have grown by 87%.

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

Between November 2013 and present, the 400 smallholder producers with whom we work have seen incomes increase by an average of US $66.82 per 100 liters of palm oil produced (and $267 per month) . We have achieved this by providing portable mechanized oil palm processing machines for rural smallholders, thereby eliminating the 50% oil loss they had endured before the start of our intervention. Furthermore, we directly purchase the palm kernels smallholders produce after processing palm oil, which results in additional income of almost US$10 per 100 kg of palm oil produced. As a result, we have directly helped smallholder producers increase monthly incomes by 87.2%. Over the next 12 months, we intend to scale up this intervention to serve 1200 oil palm smallholder households across rural Liberia, and to reach 29,000 smallholder households within 34 months.

Spread Strategies: Moving forward, what are the main strategies for scaling impact?

There are 29,000 smallholder households involved in oil palm production in Liberia. We intend to reach 100% of smallholder households within 3 years. Here's how: Each mill costs US$3950 to set up, and generates US$150 in weekly profits. Assuming initial investment of 50,000 GBP and 15 households per mill, we will serve 1200 households within 12 months, and all 29K smallholder households within 36 months. Our network of County and District Coordinators will supervise our machine operators at the village level, to ensure efficiency, proper data collection, and transparency. See model attached.
Sustainability

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

Each mini-mill costs US$3950 to set up. On average, each mill processes 200 gallons of palm oil/week. With M4P retaining 25% of the oils, and at market price of $4/gal, weekly revenues are $200. Overhead costs are $50/week. Thus, weekly profits per mini-factory are $150. Each factory pays for itself within 6.5 months and pays for one more mill in year one, and two additional mills per annum in subsequent years.

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

USAID's Smallholders Oil Palm Support Project addresses this problem at the macro level by providing extension services to smallholder oil palm farmers and a technology transfer program of training Liberian blacksmiths to locally fabricate mini oil palm mills. While the mills significantly increase yields and efficiency for producers, uptake has been slow (less than 500 units sold nationally), as smallholders cannot afford the cost up front. In essence, we are solving a last-mile problem, using a sustainable business model to increase smallholders' access to this transformational technology.
Team

Founding Story

It all clicked for me in December 2012 when I came across a USAID report estimating that 35% of Liberia’s palm fruit went un-harvested. For the 65% that got harvested, smallholders suffered 50% oil loss because they did not have machinery and had to manually extract the oils. Conversely, urban palm oil retailers reported that they ran out of stock at least bi-weekly. Soap producers had to travel to Guinea and Sierra Leone to purchase palm kernel oil. Smallholder oil palm producers were leaving a lot of money on the table, due to a lack of access to simple palm oil and palm kernel oil processing machines, while significant demand existed. To me, this problem was unacceptable.

Team

Mahmud Johnson - CEO and Founder (Full-time) Mahmud Johnson is a young Liberian social entrepreneur who has been recognized by Liberian President Ellen Johnson Sirleaf for exemplary youth entrepreneurial leadership. Mahmud holds a Bachelors degree in Economics from Dartmouth College and a Certificate in Business Management from the Tuck School of Business at Dartmouth. Mahmud has 2 years of experience as an agriculture value chain consultant with USAID, and 2 years of experience as Senior Economic Analyst at Aurora Solutions, a corporate strategy and economic development consultancy that works at the intersection of economic development and corporate strategy in Liberia. Mahmud also has 1 year of experience as Public Affairs Intern in the Office of the President, Republic of Liberia. In 2014, Mahmud was one of four entrepreneurs under 35 in Africa who received the inaugural "40 Chances Fellowship" for J-Palm Liberia's Kernels for Peace (K4P) initiative that transforms Liberia's wasted palm kernels into palm kernel oil. The 40 Chances Award is given to young entrepreneurs who pioneer a "market-based approach to address poverty and hunger" and is a $150,000 fellowship awarded by the World Food Prize Foundation, Howard G. Buffett Foundation, and Tony Blair's African Governance Initiative. Also in 2014, Mahmud received the "Entrepreneur of the Year" Award from Liberia's Business Start-up Center. On November 17, 2015 Mahmud served as keynote speaker at the national Micro, Small and Medium Enterprise (MSME) Conference organized by Liberia's Ministry of Commerce and Industry. The audience included Liberian President Ellen Johnson Sirleaf, government officials, members of the diplomatic corps, international development professionals, and entrepreneurs. Here is an excerpt from the official press release from the President's office: "President Sirleaf paid tribute to young and enterprising Mahmud Johnson who returned home from the United States - where he could have remained in search of better opportunities but selected to come back and give to his country. Addressing scores of entrepreneurs who had jam-packed the Monrovia City Hall, the Liberian leader enjoined them to become the next 'Mahmud Johnson' of Liberia." ----------------------------------------------------------------------------------------------- Ayouba Konneh - Partner and Chief Technician (Full-time) Ayouba serves as Partner and Chief Technician at J-Palm Liberia. Ayouba is a metal works expert, and a pioneer in creating portable oil palm processing mills in Liberia. Ayouba worked with USAID and Winrock International to fabricate the very first oil palm and palm kernel oil mills in Liberia, upon which all subsequent mills are modeled. While working as Senior Technical Trainer at USAID/Winrock International's Smallholder Oil Palm Support Project (SHOPS), Ayouba promoted the private sector commercialization of innovative, highly productive oil palm processing equipment though a sustainable supply chain. Ayouba developed technical support documents and training aids such as user guides, training manuals, diagrams, schematics and other learning tools to facilitate technology and knowledge transfer to Liberian blacksmiths to enable them independently create oil palm mills. Ayouba also worked with manufacturing partners to ensure quality control and to keep records to track equipment sales, in addition to collaborating with private sector equipment vendors to ensure technology quality and promote the adoption of a sustainable distribution and equipment supply chain. As Chief Trainer, he selected and trained metal workers and workshop staff in the manufacture and promotion of oil palm expellers. He monitored and controlled the quality of workmanship, promotion and post sales service activities of the manufacturing enterprises including visiting installation sites to check for proper installation, usage and repairs. He also assisted in the gathering of performance data specific to illustrating the productive capacity, economics and limitations of the expeller or other processing technologies. Ayouba also participated in the organization and execution of testing protocols for newly developed or prototype oil palm processing equipment, and contributed to monthly, quarterly and annual data reports, field work plans and budget to the (SHOPS) management staff. Ayouba has 16 years of multinational experience as an agro processing tools engineer, innovator, trainer, and management expert, with experience working for a wide range of international development organizations including USAID/ Winrock International in Liberia, GIZ in Guinea, UNHCR in Guinea, and BMZ in Liberia. Given Ayouba's vast experience, he is the most ideal person to manage the process of creating oil palm mills and setting up management systems in the most difficult-to-reach rural communities across Liberia. ----------------------------------------------------------------------------------------------- Elliot Sanborn- Chief Strategist/ Chief Operating Officer (Part-time) Sanborn is J-Palm's COO, focusing on high-level strategic planning, as well as developing systems to improve efficiency and productivity at the factory level. Sanborn is a 2014 graduate of Dartmouth College with an interest in social enterprise, private sector development and social justice. A government and anthropology double major, during his undergraduate career Sanborn conducted microfinance research in the Dominican Republic, trained and organized youth volunteers in Costa Rica, and taught English in rural China. A recognized student leader, Sanborn pushes for strategic planning, clear and effective communication, and, most importantly, tangible, measurable results. Sanborn currently works as Policy Consultant at Liberia's Small Business Administration within the Ministry of Commerce and Industry, where he provides technical assistance to the government in creating policies to remove constraints to small business growth. ----------------------------------------------------------------------------------------------- ADVISORY BOARD: John Bush - Business and Finance Advisor John Bush retired in 2012 after serving as a senior executive at JPMorgan Chase and Citigroup and as a Partner in KPMG, the large international accounting firm. At KPMG, Mr. Bush was In charge of providing tax services to financial institutions in the area of corporate restructurings, acquisitions, global trading, tax loss planning, transfer pricing and international taxes. Mr. Bush also served as Chief Tax Officer at JP Morgan Chase, where he supervised its domestic and international tax operations . Since retirement, John has devoted his time to working for several non-profit institutions in the U.S. and on tax and economic issues relating to emerging economies. He remains interested in developments relating to international fiscal issues and to financial accounting and bank regulatory matters. In 2013, Mr. Bush was one of eight consultants hired by USAID to conduct an assessment of the legal and commercial institutions that affect performance in Liberia’s agricultural sector – using the Agribusiness Commercial, Legal and Institutional Reform (AgCLIR) diagnostic tool. Mr. Bush wrote the chapter on taxation and tax policy. Mr. Bush provides business and financial management strategy to J-Palm. He also served as one of J-Palm’s early stage angel investors. ----------------------------------------------------------------------------------------------- Ambassador M. Nathaniel Barnes (Business Strategy Advisor) Ambassador Milton Nathaniel Barnes has over 30 years of combined experience in finance, business development, and international diplomacy. He currently serves as Managing Partner at Aurora Solutions INC, a Monrovia-based strategy and management consultancy that works at the intersection of economic development and corporate strategy. Prior to Aurora, Ambassador Barnes served as Liberia’s Ambassador to the United States, and Ambassador and Permanent Representative to the United Nations prior to that. As Ambassador to the UN, Barnes played a significant role in negotiating to lift economic sanctions against Liberia. As Ambassador to the US, Barnes engaged the US Congress and President to secure foreign assistance to Liberia, and also created the first ever Diaspora Advisory Board to increase Diaspora Liberians’ engagement with the rebuilding and governance efforts back home. Between 1999 and 2003, Barnes served as Liberia’s Minister of Finance where he oversaw the development and implementation of a new Tax Code for Liberia in consultation with the Fiscal Affairs Department and the International Monetary Fund. Ambassador Barnes has an MBA in Finance from the Lubin Graduate School of Finance in New York, as well as a BSc in Finance from the College of Business and Public Administration at Rider University. Ambassador Barnes provides strategic advice to J-Palm in two main areas: 1) business and strategic planning, and 2) handling occasional challenges that might arise in day-to-day operations.
Background
Please confirm how you heard about the Unilever Awards:

Email announcement in Watson University Alumni Network

Please confirm your role in the initiative (eg Founder/co-Founder) and your organisational title:

Founder and CEO

Which of the 8 UN Global Goals (Sustainable Development Goals) pre-selected for this competition does your solution relate most closely to? [select all that apply]

No Poverty, Zero Hunger, Decent Work and Economic Growth.

Leadership and the Unilever Awards
Please provide examples of any previous entrepreneurial initiatives you have pioneered.

In 2010, during the summer of my freshman year of college, I wrote a grant proposal and won a $10,000 award to set up the iMHere! Project, which ran an educational summer camp for 24 young boys (12-18 years old) from Liberia's largest slum community who had either dropped out of school or had never been to school. We had an educational enrichment component, a speaker series in which we brought in influential Liberian professionals to share their stories, and a sports component. At the end of the 8-week summer camp, we asked the young men if they wanted to go to school, and they all opted to go to school. We provided all-expenses-paid scholarships for them to attend school for 2 years, after which we closed the program. Two years later, we checked in with the boys and realized that 23 out of 24 remained in school! While they were all out of school at the start of the project in 2010, the two years of 'exposure' to school was enough to induce them to want to stay in school. Some of them switched to less expensive schools, while others were able to find other scholarships to continue funding their studies, but they all remained in school, which is a tremendous source of pride to me.

Beyond your existing team, who else are you working with to achieve your objectives, eg partners, advisors, mentors?

Beyond my team, we work with USAID's Smallholders Oil Palm Support Project (SHOPS) which provides technical support in terms of providing maintenance for our oil palm mills, and in connecting us to farmer groups and associations in rural areas to access palm fruit and kernels.

The World Food Prize Foundation and Tony Blair's African Governance Initiative (AGI) provides strategic support in connecting us to government officials, and in navigating Liberia's complex "doing business" environment. For example, with the help of AGI, we were able to influence the Ministry of Commerce to abolish an archaic customs procedure that made it difficult for us to import packaging accessories for our oils.

We also receive tremendous support from two organizations in Liberia: Business Start-up Center (BSC), and Building Markets. BSC has provided incubation, business training and advisory to J-Palm since our inception in 2013, and has provided the opportunity for us to share our story, and network with potential investors at business conferences around the world - Rwanda, South Africa, and the Netherlands. Building Markets provides ongoing training to our staff in marketing, accounting, customer service, and procurement.

Liberia's premier events planner and marketing consultant Barkue Tubman (Miss Boss Lady Entertainment International) has offered to do pro-bono marketing consulting for J-Palm Liberia for the next six months (starting in December 2015). The focus of this marketing consultancy will be to craft promotional materials to market J-Palm's products to consumers and large cosmetics brands in the United States, specifically targeting stores that sell healthy organic skin care and food products. Barkue has also offered to introduce J-Palm Liberia to her vast network of clients within the beauty and cosmetics space. This opportunity would ensure better prices for our palm oil and palm kernel oil products, which means we can pay more to our smallholder suppliers, and scale up to serve even more rural communities.