APPROACH AND METHODOLOGY
CleanStar Mozambique (CSM) decided to establish operations in Sofala province, near 10 communities that the venture already has a relationship with via one of the company's directors - Allan Schwarz - who has been working in the region for the past 15 years. Smallholder farmers in the 10 communities will be invited to join the venture as suppliers. CSM aims to be working with 500 smallholders by the end of 2011 and 3,000 by end 2014. The farmers will be given all the necessary training and inputs to implement the agro-forestry model designed for the venture (at no cost to the farmer) on land that they own but have abandoned (having exhausted the soil nutrients already).
The agro-forestry model includes native tree species, Pongamia trees, pigeon pea, nhemba beans, groundnuts, sorghum, soya and cassava. The model is designed to rehabilitate the soil while producing crops of interest for local food and energy markets (the majority going to food products). Also, it does not require ongoing inputs (aside from labor). The farmer owns the land, but the venture owns the trees - and pays the farmer to take care of them (enough to overcome the temptation to cut them down to make e.g. charcoal). The smallholder family is free to consume whatever they desire from the system, but may not cut down the trees. Any surplus production they can then sell to the venture. Prices will be set with reference to local markets when possible and always sufficiently high to incentivize increased supplier loyalty and production.
In practice, farmers will take their surplus production to (and receive payment from) the nearest 'community processing center' (CPC), which will be within a few kilometers. The CPC will also serve as the point where farmers will get planting material for each new season (also at no cost). At the CPC, some processing is done of the various agricultural products - incl. chipping and drying the cassava. The semi-processed goods are then trucked to the central bioprocessing facility in Dondo, near the city of Beira, where the final processing is done to make the various food products and the ethanol-based cooking fuel (from some of the cassava chips). These products will then be marketed to local customers, through directly controlled channels and through distribution partnerships. For example, the ethanol and associated stoves will initially be marketed through the venture's own retail stores to local consumers in specific neighborhoods in Maputo. The ethanol stoves will be assembled and partly manufactured locally (a core component - the fuel canister - being bought in from Dometic of Sweden). The cookstoves will be retailed at approx. USD 30, competing with higher end charcoal stoves. The ethanol will be retailed at a price competitive with charcoal. Later, when the trees in the agroforestry model reach maturity, the oilseeds from the Pogamia trees will also be processed to produce a diesel substitute that will be marketed to businesses operating in the rural areas near the bioprocessing center.
IMPLEMENTATION, TIMELINE, AND DELIVERABLES
2009-2010: Venture scoping, pre-feasibility analysis, baseline assessment, detailed feasibility study, business setup and formation of strategic partnerships.
2011: Implementation commenced. Recruitment of management team, construction of early infrastructure (nurseries, seed multiplication sites, warehousing, offices, accommodation, workshop, cooking fuel plant), commission cooking fuel plant, agroforestry rollout with initial 500 smallholders, setup of initial Maputo retail network, commence sales of sustainable cook stove solution in Maputo, commence carbon offset monetization process.
2012-2013: Increase agroforestry rollout to 3,000 farmers across seven communities, build seven community-based pre-processing centers, build other production units within Integrated Agroprocessing Facility, commence major food buying/trading program, commence production and sale of packaged food products, expand Maputo retail network.
2014: Achieve profitability and develop business plans for major expansion of Sofala province operations, replication of agroforestry and processing operations in Inhambane and Nampula provinces, and replication of cooking solution retail distribution network in Dar es Salaam and Nairobi.
2015 and onwards: Expansion and replication commences.
The systems utilized by the majority of African people for producing food and household energy are inherently unsustainable given population pressures and environmental constraints, and are resulting in an interconnected downward spiral of biodiversity loss, poverty growth and degraded family health. The Novozymes commitment enables CleanStar Mozambique (CSM) to implement an innovative and multifaceted solution to these problems, and so create a genuinely restorative relationship between people, forests, food and energy. The solution is an integrated business model that is highly scalable and replicable across most of sub-Saharan Africa. The problems and associated commitments are set out below:
Subsistence Farming Crisis: Rural families practice transient 'slash-burn-degrade-move' agricultural systems, lacking the improved seeds, technical skills and market access required to break out of the precarious subsistence-poverty cycle. To address this, CSM will build profitable and environmentally restorative new value chains between rural farmers and urban consumers, in a manner than drastically improves smallholder family health, incomes and resilience.
Accelerating Forest Destruction: The majority of African deforestation is caused by charcoal production and 'slash-burn-degrade-move' agriculture, driving increasing levels of biodiversity loss and GHG emissions. To address this, CSM will implement agro-forestry systems that drive smallholder permanence through sustainably increased yields, whilst simultaneously reforesting large areas with indigenous trees. CSM will also deliver a clean, safe and affordable cooking fuel solution that enables a material proportion of urban consumers to shift away from deforestation-based charcoal.
Nutrition Insecurity and Food Price Inflation: Rural families do not experience year-round nutrition security, often caused by an over-reliance on a small mix of staple crops. This has major adverse effects on early childhood development.
In addition, urban families are being increasingly impoverished by imported food price inflation as a result of low levels of indigenous food production. To address these problems, CSM will ensure that smallholder farming partners, and the rural communities they live in, have access to a greater diversity of nutritional food crops year-round. In addition, CSM will produce a variety of nutritious packaged foods for urban markets, in a manner that reduces pressure on family budgets.
Energy Prices and Health Impacts: Charcoal is unhealthy, environmentally destructive and expensive for urban families. The Global Alliance has recently highlighted the scale of this problem for Clean Cookstoves (launched at CGI in 2010), of which the venture is a member. Imported diesel inflation is further impoverishing African small businesses, who rely heavily on diesel-based power generation and transport. To address these problems CSM will produce and market a clean, safe and affordable cooking solution to a material proportion of Maputo households. CSM will also produce and market a clean and affordable diesel substitute to African businesses.
