Poor rainfall is partly to blame for Africa’s food security woes. Two young entrepreneurs, Charles Nichols and Samir Ibrahim, are however hoping to transform agriculture with their SunCulture solar irrigation kits. The two told How we made it in Africa’s Dinfin Mulupi how they got started, their challenges and expectations.[hidepost=9][/hidepost]
Tell us about yourselves.
Nichols: I’m 24 years old with a background in mechanical engineering and economics. SunCulture is the fourth company I’ve founded and co-founded, though my first in Africa. I was initially drawn to Kenya by the number of technology success stories and the great market opportunity for clean energy solutions like solar power due to the high costs of grid electricity.
Ibrahim: I’m 24 years old and was born in Toronto, raised in Orlando, and bred in New York City. I studied finance and economic development. After graduation, I worked at PwC in their financial services, structured products, and real estate group. I learned a lot, but realised there was more to learn and more to accomplish in Kenya, the country my family is from. So I used all my vacation days to meet Charlie in Nairobi, left PwC, and fully launched SunCulture, and I’m so happy I did. Kenya is full of great opportunities, smart people, and untapped industries. I’m excited to be a part of what will certainly be one of the greatest economic successes of our time.
Give us a brief about SunCulture.
Ibrahim: We design and sell a solar-powered irrigation kit which makes it simpler and cheaper for farmers to grow food. The kit replaces expensive diesel and petrol pumps. We use solar power to pump water into a raised tank and use gravity to release the water through irrigation lines directly to crops. This increases yields by up to 300% and makes water usage more efficient. The kit sells at 380,000 shillings (US$4,500) and the payback is one growing season. The system does not have any recurring costs like a diesel powered system. Most farmers use the kits to grow tomatoes, onions and capsicum, which are high value produce.
How is the business performing?
Nichols: Very positive. There is demand for this type of irrigation system because farmers are always looking for ways to minimise their costs. The largest cost incurred by farmers is the cost of fuel or electricity for their water pumps, with the typical farmer spending more than 20,000 shillings ($238) monthly on energy costs.
We have sold to, or are in negotiations with, farmers who have been farming for many years and know what they need to change to make more money. We are also getting another class of ‘farmers’ who are more of landowners. They are professionals who want to make their land, which has been sitting idle for years, productive.
Ibrahim: A lot of this is because of a change of mindset. A lot of young people who have seen their parents farm unsuccessfully write to us seeking advice on how to start farming as a business. Contrary to perceptions, the youth are interested in agribusiness.
Irrigation is just one component of agribusiness. How do these farmers get access to market, expertise or even financing?
Nichols: At this stage, we are focused on how to get our product into the market. We are working with clients who either have the capital or existing relationship with banks. We are also working on a number of partnerships with financial institutions to enable more farmers to access financing for the AgroSolar Irrigation Kit. In terms of market, our farmers are at an advantage because they get high-quality produce. We are also providing solutions to other problems farmers face like access to the best seeds and fertilisers and knowledge on the right farming methods.
Despite solar energy being ‘free’ and easily accessible in sub-Saharan Africa, very few people are utilising its potential. Why the slow adoption?
Nichols: Solar power is an economical alternative to expensive grid connections and fuel generators, especially in rural areas where less than 5% of the population has access to grid-electricity. The main struggle for many is the upfront cost required, though these costs have fallen dramatically in recent years and continue to drop.
What challenges do you face?
Nichols: The cost of the kit is our biggest challenge. We want to reach as many people in the market as possible, but understandably, a lot of people do not have 380,000 shillings ($4,500) stuffed under their mattresses. Financing is the solution to this challenge. A number of banks have expressed interest in working with us. We are also constantly trying to figure out how to make the kits more affordable.
You were both raised and educated outside Kenya. Why did you choose to bring SunCulture here?
Ibrahim: Kenya has 5.4 million hectares of land but only 17% can be fully sustained for rain-fed agriculture. That leaves a huge part of the land that needs irrigation systems to be able to continuously produce crops, yet currently only 4% of that is under irrigation. That is massive demand.
It is also about the Kenyan culture; people are eager to adopt new technologies. Kenyans are the hustlers of this part of the world. They are going to pioneer growth in this region. Once Kenyans adopt this technology, it is going to spread naturally and we will go where the demand is. The opportunities in Kenya and the rest of Africa are so much greater than anywhere in the world.
What advice do you have for other entrepreneurs?
Nichols: You need to have local partners. A lot of entrepreneurs are coming in from the US and Europe because of the opportunities in Africa but for them to be successful, they need to have local partners. That has been one of our biggest advantages. Partnerships are crucial, even for local entrepreneurs who have local knowledge.
Ibrahim: Adapting to cultural norms is a difficult process that can be overcome quickly by working with local people.