Where does hair comes from? The global supply chain of human wigs and weaves

Housing in Africa is a huge problem. Every year millions more people arrive in cities and are forced to stay in informal settlements. Developers struggles to keep up, and walking around Nairobi at least, you’ll rarely be far from a construction site building another high rise. What I didn’t realise though, was how the current approach of building with bricks and mortar is actually quite inefficient. There’s a limit on how much you can build each day (four stones high) and a whole series of other considerations which means that the supply of housing is actually constrained by the bricks and mortar approach. In this episode I speak with Mburu who runs Cemex Holdings, a company that produces a new form of building material, essentially panels of reinforced steel mesh. Before conducting the interview in Mburu’s office upstairs I had a tour of the factory and a the show home they made next door. Maybe I was missing something, but the argument to switch seemed pretty compelling. On most fronts it seemed to be a superior offering to stone building, the main barrier being people’s willingness to go with something outside of the status quo. I won’t spoil things too much, but I found this a fascinating business for showing how to introduce a new technology into a market, as well as learning more about the dynamics of the construction industry which I know next to nothing about. Mburu is a biochemist by training from University of Texas, passionate about building Kenya. The vision is how to offer dignified housing to all Kenyans. The technology they are using for the panels (EPS: expanded polystyrene) is over 40 years old. There are 60 plants around the world, and 17 in Africa. It allows for rapid installation of housing materials, cutting construction time by 50%. The core business as a materials supplier. But also need to vertically integrate, with this being a new market. The big thing is to train contractors in using the Cemex system. There are various trade offs involved. The major consideration is the time taken to build a structure. With stone you can only do 1 metre per day. By using a whole panel you do 3 metres per day. Being a new technology in Kenya they are going through the diffusion of innovation. There is a unique housing problem in Africa. There are not enough houses in Africa. A big thing is to try and move people away from the idea that stone is the only route they can do. Kenyans are price sensitive, so the numbers have to work. Which they do. There are cost savings in: less materials (reinforcing foundations), time, finances Interest rates are high in Kenya (13.5% base) and so being able to realise revenue quicker cuts the overall costs. In going to the market, they’ve never had a rejection once engaging with a developer. The vision of the company fits the government’s Big Four agenda (ensuring food security, affordable housing, manufacturing and affordable healthcare). Several other companies have begun using this technology in Kenya. Though they are the only one with a partnership from the Italian originators Emmedue. It’s a certified green building technology. Reduced environmental impact compared to quarrying stone. Transportation is much lighter too: 1 lorry of EPS is the same size of finished product as 7 lorries of stone. READ MORE AT:https://theeastafricabusinesspodcast.com/2018/08/30/walls-how-a-new-technology-building-material-will-transform-kenyan-housing-with-mburu-karanja/

30 Elo 201843min

A lot of the interviews on The East Africa Business Podcast have been related to individual companies telling their stories, and the lessons they’ve learned. In this episode, you’ll no doubt come away with a lot of insight, though the dynamic is slightly different. I’m speaking with Chaning, who is the co-founder of the Busara Center, a behavioural economics lab based in East Africa. Their roots are in academia, though they have now branched out to applying the insights they generate to other organisations. We also have an interesting conversation around grants, and how Busara will typically work with clients to write grant applications to unlock funding. In this episode Chaning and I discuss the multitude of problems which the lab have solved, similarities and differences in how people around the world act in certain situations, and how they have scaled to become an organisation of 150 employees operating in multiple countries. Towards the end Chaning also references a pharmacies business that “sits downstairs”. Nairobi is a small city and he was referencing a company called Maisha Meds. You can listen to that interview that I had with Jess, the CEO by searching for the Medicine podcast in the archives. As always would be very interested to hear any feedback you have on the podcast, but for now, here is Chaning. READ MORE AT:https://theeastafricabusinesspodcast.com/2018/08/23/behavioural-economics-applying-decision-making-insights-to-development-with-chaning-jang-from-busara-center/

23 Elo 201837min

In this episode I speak with Brian Axelrad and Nicholas Java: investors at Beyond Capital. They are a special type of investor, which is the topic of our discussion. Beyond Capital operates as an impact investor, an interesting player in the East Africa business space. Like traditional investment, impact investment is fundamentally a vehicle for injecting money into ventures, the difference lies in that the success of the investment is measured not just in financial terms, but also for social good. As we discuss, this can be a tricky concept to define – but the broad sense is that these investments will accept a trade off on pure financial return on investment, in exchange for promoting pre-defined societal objectives. For Beyond Capital they invest in businesses that address the lack of access to basic goods. We go through how they whittle down opportunities in their pipeline, the challenges of reporting on impact and, where they see the greatest opportunity for impact in the social entrepreneur space. With this episode there are also lots of links and reports that we mention, and so be sure to check out the show notes for more information about both Beyond Capital and impact investment in general. READ MORE AT:https://theeastafricabusinesspodcast.com/2018/08/16/impact-investing-beyond-capitals-perspective-with-brian-axelrad-and-nicholas-java/

16 Elo 201847min

OverviewSo it’s been a few months since we last released episode and we’re back soon with some more interviews on the bustling business scene in East Africa. We have a number of episodes that you can look forward to. I’ll give you a short preview of the ones to come and also a bit of housekeeping. We’re starting on Thursday 16th August 2018 with Impact InvestingThe view from Beyond Capital, and impact fund, on what they look for when putting in money for social good in the region Behavioural economicsInsights that come from the Busara Center on applying behavioural practices to solve challenges in East Africa. Lots of interesting, and often counter-intuitive insights in that one We’ve then got a few big players in the Kenyan economy. I noticed that there has been a slight bias in previous series around focusing on the “growth start up”. Entrepreneurs who have spotted a gap in the market, and are early on their journey. But with this series we’ve got some more… bricks and mortar businesses going on: Tissue PaperChandaria Industries. So I have a great interview with Darshan Chandaria who is third generation of the family business. They’re one of the biggest manufacturing companies in the region (making tissue paper) and now a host of other activities. He is personally an investor on the TV show Lion’s Den which is the Kenya equivalent of Shark Tank in the US and Dragons Den in the UK. Interestingly in Rwanda it’s called Face the Gorillas, I guess because they are they are a formidable creature in the country. And, I had to Google it, it turns out that in most other countries it’s called Dragons Den. I was hoping there’d be lots of Tiger references in South East Asia, but that’s just Japan where the show is called Money Tigers. Sri Lanka probably has the most interesting version which is called Wall of Tuskers, in reference, one would guess to elephants being the most unnerving creature on the island. SupermarketsTuskys is one of the biggest retail chains in Kenya, and by virtue, East Africa. I think this might be one of my favourite interviews to date. It’s certainly the longest, which I guess is a proxy for how much interesting stuff there was to cover. But again, we’re talking with the CEO of a large bricks and mortar business, employing thousands people across the region. The insights and perspectives that you get is different five people with their laptops coding up a solution to a problem they see WallsAnd then to continue the bricks and mortar analogy we have an interview with Mburu Karanja who runs Cemex. They are, ironically, in the business of disrupting the literal bricks and mortar industry. There’s a technology developed in Italy which is an alternative to making walls with stones, instead making panels from steel mesh, concrete and polystyrene. From what he says it’s superior on almost every measure to building stone structures and seems like it could be a really promising part of the nation building aspect of East Africa. The EconomistAlso whilst I am based most of the year in Kenya, I was back in London over the summer and took the opportunity to meet with Jonathan Rosenthal who is the Africa Editor of The Economist magazine, who sponsored earlier episodes on the show. This was quite fun, as I got to go into The Economist office, in the radio booth that they use for their own podcasts, and also see the magazine in the making, as well as have an interview about a lower case economist’s view of Africa. READ MORE AT:https://theeastafricabusinesspodcast.com/2018/08/12/season-three-preview/

12 Elo 20186min

It’s widely acknowledged that one of the biggest prohibitions to the development of East Africa is lack of capital. The global economy is premised on aggregating savings in, say, pension funds and then deploying it to areas where it will earn a return. This investment is what generates economic activity – stimulating business growth and creating jobs. It also generates a return for those running, say, the pension fund to disperse to their members. Traditionally this large scale movement of money has happened only in developed markets. Developed markets are structured in a way that allows finance professionals to calculate the riskiness of an investment, and therefore feel comfortable parting with their capital with an expectation it will be paid back. Traditionally, the methodology for deciding whether to invest big pools of money in Africa has been done using the same framework as for developed markets. This hasn’t bode well. In short the techniques for deciding how much money to invest have meant that only small amounts could be safely deployed. Lendable have taken a different approach. They are a technology enabled debt platform created to help non banking lenders scale. They use in-house software tools and algorithms to analyze loans and offer facilities that make sense for lenders based on their loan books. It might sound simple, but this approach of a buying a loan book, rather than looking at the assets that a company has, is a paradigm shift towards creditworthiness and has meant the company has beenable to unlock millions of dollars of capital that, using the old frameworks, wouldn’t have been deployed. Now, I appreciate that might all sound a bit technical and advanced but Daniel, Lendable’s CEO and I go into the details of how this works – as well as tales along the way of running their business through two Kenyan elections, and what it takes to attract US Hedge Funds to invest in Africa. This is, for me at least, a great episode around how large scale impact can be achieved through facilitating the transfer of wealth from the developed to developing world.READ MORE AT:https://theeastafricabusinesspodcast.com/2018/04/12/big-data-lending-unlocking-commercial-capital-for-africa-with-daniel-goldfarb-from-lendable/

12 Huhti 201843min

Most people have somewhat underwhelming memories of school lunches. Bland, uninteresting food which likely compelled you to go off at break time to the local shop and eat sugary doughnuts, a chocolate bar and a bag crisps. Or chips, for our American listeners. This dynamic is somewhat similar in the Ruira county of Kenya, just outside the capital Nairobi. The difference though, is that the option of meals at school is non-existant. READ MORE AT: https://theeastafricabusinesspodcast.com/2018/04/05/school-lunches-nutritious-meals-for-hungry-kids-with-wawira-njiru-from-food-4-education/

5 Huhti 201836min

One of the upsides of the internet is the ability to collect and store information that was previously only passed down between generations, or spread by word of mouth. One of its downside though, is that it’s a very big place, and trying to find relevant information can be a thankless task in a world where we’re all short on time. Of all the information that’s out there, Mums Village is looking to organise it for a discrete set of people Mums in Kenya. Isis, the founder of Mums Village, and I discuss the platform she has built. READ MORE AT: https://theeastafricabusinesspodcast.com/2018/03/29/mums-creating-an-online-parenting-platform-with-isis-nyongo-from-mumsvillage/

29 Maalis 201833min