5 minute read
The business opportunity in bush biomass
How an SME’s success is proving the business opportunity in responsible bush control
Philipus Alugodhi of Otavi is proving his entrepreneurial prowess through his charcoal business, which he has grown in a short space of time to become an employer of choice for charcoal workers. Philipus has worked as a police officer, a diamond inspector, a geological technician and more. It was, however, when working at Energy for Future, producing wood chips for Ohorongo Cement, that he was first introduced to the biomass industry. “A friend of mine suggested I start making charcoal. I already knew most of the farmers in this area because of my involvement in bush thinning operations. So I decided to go all in. I started quite small, with six guys and twelve kilns. The first farm I started on is my mother’s farm near Tsumeb. Then I started renting at other farms. I now have twenty workers and sixty kilns, and I did that in two years,” he says.
Philipus’ hard work has paid off fast: “It’s a good business model, it works as long as you keep growing. For me, the best part is that I am my own boss.”
GROWING A LABOUR-BASED BUSINESS
To get to where he is today, Philipus has constantly reinvested in his business. “In the beginning I also used to do a bit of road construction here and there, just to get extra funds, and anything I earned I would inject back into the business. I kept going, reinvesting and then it got to a point where I could get two trucks out per month. Then it started moving a little faster because with two trucks you can make more profits.”
The biggest challenge for Philipus has been acquiring startup capital, “I have applied for extra funds from the Development Bank of Namibia (DBN), but it’s very difficult to get loans. We have had our application in for almost a year. It’s a big challenge.”
With his large group of labourers Philipus has chosen an inclusive and empowering approach to his management style. “My workers will tell you that I care for them. I don’t want them to go hungry. I don’t like it if a person who is working for you is sleeping in a plastic thing. It’s horrible. If one of my workers gets sick, I will get them medicine. It’s not easy working in the field with an axe the whole day. Their work is very intense, so it’s important to look after them. I know they appreciate me, too, and they produce for me.”
Philipus attended a training course on Capacity Building Trainers of Trainers for Bush Control and Biomass Utilisation with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), but says he also learnt a lot from his workers. “Most of my guys have been in the industry for a very long time. Some of them have been cutting or making charcoal for as long as fifteen or twenty years.”
Philipus is also FSC (Forestry Stewardship Council) certified, which means his products are sourced responsibly and in line with environmental and social standards. Explaining how he became FSC certified, Philipus says, “It wasn’t difficult for me because I had everything in place already. I had housing and toilet facilities etc. So when they came to inspect, they said ‘you seem to have everything already, and you’re cutting the right trees’. It was a matter of two weeks and I was certified. These were my models already.”
Philipus Alugodhi is growing his biomass business fast
THE OPPORTUNITIES OF THE INDUSTRY
When asked why he thinks this is a good business model, Philipus explains, “It’s profitable. It’s a challenge to get the startup capital, but you can recover it very quickly. If you start off correctly, with the right number of people, you will have recouped your money within six months already.”
Philipus adds, “I think the biomass sector is going to be huge, especially with the projects that are coming up, like the NamPower biomass plant, which is going to be situated in Tsumeb, and will be producing power with biomass. So maybe I will diversify into wood chipping one day, or just focus on growing the charcoal business.”
Philipus believes his product has great value because “the best thing about biomass is that it is renewable if you chop in a sustainable way. It helps with the grass especially in the encroached areas. So many farms around here are so encroached that no wildlife or cow can enter. It’s wasted land. You have this huge piece of land and you are not maximising it. That is why we do the bush thinning. We don’t cut off everything completely. We leave the big trees and just thin so that within the next rainy season you can have a lot more grass. It works in your favour.”
Kirsty Watermeyer
