Habona is a Rwandan company that produces affordable and environmentally-friendly biofuels from organic waste. CEO Jean Bosco Nzeyimana answers our questions.
1. How did you come up with the idea for Habona?
Many people in developing countries rely on wood and charcoal as the main cooking fuels. This is not environmentally friendly and there are many health issues associated with burning wood for cooking.
When I was growing up, I came up with the idea of using the waste in our neighbourhoods and communities to make briquettes and pellets as a sustainable replacement for the wood and charcoal used for cooking. That’s how the idea to start Habona came about.
Our target market is small and medium enterprises – such as bakeries and other manufacturing businesses – that use wood or charcoal for heating. As we think about expanding, we will continue to target larger enterprises such as tea processing companies because they are major consumers of wood.
2. Take us through the process of manufacturing the briquettes from waste.
We collect organic materials in the form of kitchen waste and agricultural leftovers like maize husks and rice husks. After the drying process, machines grind the waste and it is compressed. The compressors activate lignin – which is the chemical composite of all organic materials – that acts as a binding agent.
3. Where do you sell your products?
We focus on larger clients because we are still a small company and don’t yet have the logistics capacity to create retail distribution channels. We supply to these major clients and steer away from retail. We did not want to focus on people who buy small quantities as this puts huge overheads on the company. We identified customers such as hospitals, bakeries and schools that cook large volumes of food.
4. How competitive is the industry?
The industry per se is not competitive because there is always a need for energy but we do have a few competitors in briquettes and pellet production. The main challenge is actually being able to produce enough to satisfy everyone who wants it.
5. What are some of the challenges to be successful in your industry?
My challenge was human resources; finding people familiar with the industry and having people I could learn from. All the research had to be outsourced. Investors are afraid of putting money into something that has not yet been proven and I invested so much in the research. It was a constant trial and error because the industry is so new.
The clients were another hurdle as it required a shift in the way they prepared their meals. Some people were reluctant to make the switch and it took a lot of hard work to change that mindset.
6. Tell us about one of the toughest situations you’ve found yourself in as a business owner.
In the beginning, there was a time we were short of cash and our employees had to be paid. It was tough and we didn’t want to disappoint them. Fortunately, we had a good relationship with our banker and were able to get an overdraft to pay the staff.
7. If you had to start your business again, what would you do differently?
Everything because I learnt how to do things better. It is difficult to get it right the first time. I now know the importance of having decent partners; having a plan beforehand; of always fundraising and hiring competent staff.
8. Besides your industry, name an untapped business opportunity in Rwanda.
There is a major issue in terms of food storage. We have so many farms but a lot of harvest is wasted. I also do organic farming and when you do not have immediate customers to buy your crop, it is wasted. There is a massive demand for competent companies that specialise in the storage of agricultural produce.
Another opportunity exists in financial access; financial technology will improve financial access. There are many people who do not have a bank account; who don’t have credit scores because their financial situation is not known. We need companies that can bank the unbanked.
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