HIPPO Perspectives

Pilot proposal

ConceptLearner — Mon, 26 Oct 2009 18:24:16 +0000

Development and testing of basic business model for the promotion of affordable low-lift pumps in West Africa

In the Sahel zone of West Africa overly expensive and inefficient diesel pumps are widely employed for village irrigation along major rivers such as the Niger and the Senegal Rivers. Current problems involve high overall pumping costs (fuel, maintenance, interest, and depreciation). This means a high proportion of the harvest has to be sold, which is usually not as easy as it seems, not in the least because the farm household may not yet have secured its own livelihood needs.

Pumping costs are high because equipment design and selection are below-optimal and procurement costs are high. The question is how to improve the efficiency of pump marketing in West Africa in such a way that pump irrigation turns into an affordable, sustainable solution for poor farmers along Sahelian Rivers.

Wuxi 6HBC-35

Before these or similar pumps can be brought on the West African market, a number of questions will have to be clarified, either within the area of a pilot marketing project or for West Africa as a whole:

• What are the potential target groups, e.g. NGO’s, pump vendors, farmer groups, unions or federations, government organizations.
• What are the characteristics of the various market segments
• What is the size of these market segments (discharge, motorization, price)?
• What promotion material/campaign should be developed for end-users, retailers, and intermediaries?
• Is it possible to get the pumps exempted from import taxes and custom hassles?
• What kind of financing schemes are possible or necessary?
• What existing distribution and import channels can be tapped into and how can the value chain be quantified (distribution of margins – price build up from import to consumer)?
• What is the customer (farmer) satisfaction with the first pump sets? How does it impact their operations/livelihood? Are there suggestions for improvement/adjustment?
• How can the experiences of the pilot stage be used for scaling up? Which type of after-sales system should be set-up after the pilot phase? What is needed for that?
• What is the consumer (farmer) perception on repair and maintenance peculiarities of the Asian equipment, if any?

Business model

ConceptLearner — Mon, 26 Oct 2009 12:02:15 +0000

The basic business model is that of any small pump manufacterer and supplier:
• the sale of pumps, pump parts, transmissions, and irrigation accessories;
• service and design of pumping equipment;
• manufacture of pump sets or components depending on client request.

The business model is special in the selection of the pumps used (Chinese HB/HW mixed-flow pumps, identical to the ones used by DPS Pumps in Brisbane or Macquarrie in Melbourne) and the advocacy/marketing role the enterprise wants to play and its effort to optimize the equipment in terms of cost-efficiency and sustainability, both to the farmers and development organizations that support them.

The prospects for product diversification should be explored in two directions:
• development-wise: e.g. training for small enterprise development, especially the development of small maintenance (and possibly also rental) networks, where one villager could maintain 5-10 pumpsets. But also: practical research for both business and development purposes, e.g. establishing and reducing pumping costs.
• business-wise: e.g. widening the range of engine makes to suit demand in different areas: Hatz, Kubota, Deutz, Lister-Petter, but also common Chinese and Indian models (much cheaper: competition!). But also diversify into the market for generators, boat propulsion etc.

The role HIPPO 2.0 is to establish itself as franchisor of the HIPPO business model and to establish franchisees in different Sahelian countries. Franchisees could be existing business or new ones. They could be NGO’s, private enterprises, or farmer organizations. Suitable countries to start a pilot are Mali and Senegal.

As franchisor HIPPO 2.0 will ensure international advertizing and networking, training of the franchisees (quality control), and technology development. Procurement will be devolved as much as possible to the franchisee group, but HIPPO 2.0 is likely to be involved during the early years. HIPPO 2.0 will only play a role as credit intermediary if this is beneficial to the initiative as whole. Franchisees will not exceed the catalogue or maximum prices agreed to. Typically, contracts are 10 year renewable.

HIPPOtential

ConceptLearner — Sun, 25 Oct 2009 21:05:18 +0000

1.      The ultimate goal is simply one of practical economics: turning pump irrigation into an affordable, sustainable solution for poor farmers along Sahelian Rivers.
2.      The challenge is complex:
a.      equipment selection (the HIP of HIPPO): a foundation has been laid, but more work will be needed, especially in mapping the weaknesses of selected asian pumping equipment and designing proper maintenance schedules to cope with that.
b.      procurement (the 2nd P of HIPPO): this is a difficult point with aspects of private sector involvement (equipment importers, profit margins), government collaboration (import tax, project design standards), and advocacy to development agencies (increasing unwillingness to look into technical aspects, see 3c below).
c.       organization (the O of HIPPO): in the early phases this will be organization of tests, but in a latter phase this will be looking into problems of financial management and possible organizational solutions to this (e.g. pump rental,
3.      The potential for raising awareness is fascinating:
a.      collaboration of Dutch with West-African universities and colleges (twinning?), the Anglo-French language barrier shouldn’t be much of a problem among technicians. African students should be helped in playing the development role that is expected of them.
b.      environmental sustainability: 1. climate change in the 70s and 80s has caused the current problems: traditional farming systems no longer work, so irrigation has become a necessity; 2. scope for local biodiesel production, possibly involving a mobile (floating) transesterification plant (not a priority, but an interesting challenge)
c.       sustainable development: it is now common to say that “technology is not the solution, people are.” This is true, only to what extent? Why do development agencies select unsustainable technical solutions? What is the opinion of the farmers themselves?
4.      Scalability:
a.      We are talking of potentially tens of thousands of hectares of irrigated land along the Senegal, Niger, Logone, and Chari rivers in Senegal, Mauritania, Mali, Niger, Cameroon, and Chad involving thousands of pumpsets. There is also scope for thousands of hectares along artificial lake shores in Burkina Faso and other countries.
b.      In a wider sense this is also a project about unleashing the power of creative technology, entrepreneurship, and sustainable logistics for international development purposes.

Shifting gear

ConceptLearner — Sat, 24 Oct 2009 15:30:10 +0000

Mixed-flow pumps at Wuxi Pump Manufacturing

Time has come to shift from HIPPO 1.0 to HIPPO 2.0. HIPPO 1.0 was about proving a point. HIPPO 2.0 is about implementation. A new business model is under development, which incorporates all of the important elements of HIPPO 1.0. It builds on positive experiences from the field and the continued need in Sahelian West Africa for addressing the issues of irrigation economics and of pump procurement, maintenance, and replacement.