Our solution

Burkina Faso could be a very big market for TerraCottem, but different barriers have to be overcome, a lot of sceptics have to be convinced and a lot of different sub-markets have to be opened.

Due to the biggest barrier, the cost of TerraCottem, we have to try to organise a distribution channel with a low overhead and not too many pit-stops, which all want to eat some of the cake.

The normal (see diagram, left side) distribution organisation is very sequely organised:

•  An importer, who has a direct exclusivity contract with TerraCottem NV .

•  A distributor, who has a distribution network like local shops, or a network of professionals

•  Professionals who will advise their clients to use TerraCottem.

In order to reach our goal in Burkina Faso , we might have to adapt this serial distribution model:

• Our aim is to reach the poor families and (professional) vegetable growers, farmers. Most of these potential customers do not have the cash to invest.
• There is no nationwide network of shops or distribution of this kind.
• NGO's have taken over the function of information spreading and training. Local information and training should be organised
• TerraCottem has been here before, and left some sceptisism behind, as the market never took off.
• Transport and import taxes are an important cost factor.

Earlier, we already recognised the barriers we will have to cross to introduce TerraCottem nationwide:

• Price
• Availability
• Credibility
• Affordability
• Investment mentality
• Cultural reasons
• Competition
• Information and Marketing

In order to reach our aim in Burkina Faso , we will try to use some of the principles we learned from the book “The fortune at the Bottom of the Pyramid”:

• Adapt the offerings to the market – availability - affordability
• Work together with NGO's and governement
• Use what is cheap: local material and manpower
• The technology gap is no problem
• The market has still to be developed

We propose a business model in different layers with different time horizons:

1. The installation of an importer/distributor
2. Creation of the market for commercial use/high end market
3. Co-operation with NGO and governement to open the market up for vegetable and fruit growers and poor families in the arid area's.
4. Distribution thru NGO's, with a microfinance plan to finance.

1. The installation of an importer/distributor

The installation of a distributor was our first priority. Without a distributor the minimum quantity is 500 kg, and even with this quantity we have to count on 0,75 EUR/kg transport cost.

A distributor would make a lot of things easier:

•  People and organisations could buy TerraCottem in Burkina itself.

•  No paperwork and difficult procedures at long distances

•  TerraCottem can be bought in smaller quantities.

•  Would make a bridge between a technology-wise credible import country and local way of trading

•  Buying small quantities to test is now possible.

•  Lower transportcost.

•  A centralised point of information and suppor.t

•  Different organisations will be connected quicker to the product TerraCottem with a local importer/distributor.

There were 2 candidates:

•  Martial Sawadogo

•  Sylvain Margollé

Martial Sawadogo Martial is a Burkinabé and veterinarian, a diploma he received in France . He is married to a French woman, also a veterinarian, who works together with a Belgian entrepreneur. Martial imports eggs from Belgium to incubate through his own firm CNPA (Centrale des Nouvelles Productions Animals), which also distributes cattle pasture and small material. His capacity at this moment is 15.000 eggs, which he wants to expand to 65.000. Through his firm he has a widely spread network including NGO and governement organisatons. Martial has the advantage of being a Burkinabé, with a good knowledge of doing business with Europe . That there is already a link with Belgium will only help. (See Pictures)

We have choosen to work with Martial over Sylvain for various reasons:

• Martial directly saw a market for himself – the market of the villa owners with a garden and high water invoices every month.
• Sylvain seemed to have the right connections to find a market, but seeked help through somebody else. We prefered the first approach, as this gave us the most confidence that something would happen when we were back in Belgium .
• Martial directly started to organise a structure to install this activity on the right level, with a barrier to get out again due to the investments he would have to make to start.
• Sylvain gave us the impression that he wanted to be the importer but not the distributor, as he was first looking to find a client before wanting to invest in stock.
• Sylvain and his contact Jean Pierre gave us the feeling that we had first to find a market, which would give us an opening to find a finance solution for our customers. We thought this was one step too far for our project.
• Martial made, in 1 day, an impressive business plan, showing his belief in the plan, and the energy he was willing to put into this project.

From in the beginning we mentioned to Sylvain that we would work with someone who would start to invest in TerraCottem, because we were too afraid that once in Belgium , we would never get this process started again.

In the beginning of May, Martial Sawadogo is in the process of creating a new firm which will distribute different products to farmers and breeders. TerraCottem will be one of them.

TerraCottem will be sold in buckets of 5kg and bottles of 750g to be in the range of payable units, easy to transport on a bike or motorcycle. Also 5kg can still be carried when spreading it over the fields or gardens. With each bucket or bottle there is a measure included for the correct dose.

He is planning to hire 6 sales-people, and be ready to sell for bigger projects after 6 months.

In the first year, his ambition is to sell 10 tons of TerraCottem. He asked and received the distribution rights for Burkina Faso and its neighbouring countries ( Niger , Mali , Côte d'Ivoire , Bénin et Togo .)

See business plan Martial Sawadogo - See signed agreement

We think with the installation of this importer/distributor we have worked on crossing the following barriers:

•  Availability, as he is willing to invest before having a customer.

•  Affordability, as the minimum quantity he is selling is 750g.

•  Information, mentioned on the bucket and bottle, together with the measure for the right dose.

•  Credibility, as people have somebody to go to in case there is a problem.

•  A necessary opening for the next layer

•  Creation of a high end and commercial market for TerraCottem

The creation of a high end and/or commercial market is necessary to keep the distributor in place and profitable, so that for this aspect, we are covered for the long term.

I estimate that we need about 2 years to convince the early majority (NGO's, Local Farmer organisations and farmers) to get into the market.

Who are the target customers? The early adaptors? ( see market of TC in BF ):

•  The villa owners with their own garden

•  Expatriates, mostly white aid workers from Europe

•  Higher Burkinabé management, who are slowly switching towards a more “European lifestyle” and are growingly appreciating the pleasure of a garden and plants.

•  Commercial projects with big gardens around them, like hotels and big office buildings

•  Municipality which invest in small green area's in the city, to beautify the town.

The villa owners will be approached by 5 sales people, who will literally go from door to door trying to convince the habitants.

Installing this layer helps us to conquer the following barriers:

•  Availability, as it keeps the distributor in place

•  Credibility, as we are creating more and more exemples

•  Investment mentality, investment in TerraCottem, to save on water invoice.

•  Information and marketing, as these customers are very well connected through different projects etc…

This part will bring us also into contact with the right people who are in charge of organisations in the early and late majority.

This is a very crucial layer, as this will be the foundation to succeed in the following layers. Any lack of success or product failure here will ruin the highly essential credibility and word of mouth, needed to spread the use of TerraCottem throughout Burkina Faso and beyond. It is very important that there is good communication between the distributor and the research section of TerraCottem.

•  Co-operation with NGO and governement to open the market for vegetable and fruit growers and poor families in the arid area's

In parallel with the development, the lobbying should be continued through the governement and several NGO's to test TerraCottem in a controlled way, meaning that results are noted and compared with the normal techniques.

This is the hardest part, because there is resistance from both sides:

•  The distributor is putting all his energy into the current target market, the early adaptors. At this moment, the cash-flow of the distributor does not permit investing in this area.

•  The governemental organisations are used to having everything paid for by NGO's. Even if everybody in these organisations proclaim that they want to do everything in their power to fight against poverty and water shortage, their ressources are limited, and other projects, coming with free money from Europe are often more tempting.

•  From the governement's point of view, the fact that the producer is not putting money into the tests is seen as a lack of confidence in the product. For them, a good outcome would wipe away the investment for the tests, on the other hand a negative outcome would block every entrance to the market for the whole area!

•  The European producers like TerraCottem and DCM are very averse to this mentality, as most of them have tried this already, have given material but never received any feedback.

•  Even if the tests are positive, a financing model should be worked out, and supported by a micro-finance organisation.

•  The outcome is very uncertain and the energy which has to be put into it is relatively high because of the different tests which should be done.

•  NGO's, which would be interested to use TerraCottem in their own projects, are our biggest hope as they do not have the “put your hand out” mentallity of governemental organisations. The university of Niger is testing TerraCottem too.

Perhaps an alternative finance model could be found if there is an agreement that the extra crop will be sold to fnance the investment in TerraCottem? See Finance part

Which tests should be done ? See “ protocol de tests ” handed over to the Ministry of Agriculture.

•  For each vegetable

•  Different parcels: Control against TerraCottem

•  If possible, also different parcels with pure polymer with organic fertiliser and pure polymer with local fertilizer, as this is a unique chance to test a cheaper alternative.

•  Different vegetables, with the more expensive first.

•  The tests should be economical tests, so subjective quality should be included. It is all about the market price!

•  The environment (quantity and periodicity of rain, irrigation, soil conditions, etc) should be noted to create a knowledge database.

•  It would be advisable to control also local vegetable prices on the market.

•  Distribution thru NGO's, with a microfinance plan to finance

After the tests, plans to roll-out the TerraCottem use in a structured way could be made. The positive tests, done by commercial neutral organisations, should convince enough NGO's to have a nationwide network.

The tests should result in a protocol of how TerraCottem is best used in the various regions and for which vegetables. I can imagine that in very arid area's it is not purely economical thinking, but TerraCottem can also be seen as an insurrance against drought and hunger. What is the price of vegetables? Does anybody else have them?

At this moment it is the right time to attract a micro-finance organisation, which is used to working with the bottom of the pyramid customers.

The results of the tests should also be used to update the calculation sheet for the profit and loss of TerraCottem investment for vegetables.