An innovative construction material transforms Kenya's booming housing market, with Mburu Karanja

An innovative construction material transforms Kenya's booming housing market, with Mburu Karanja

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/

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Game-changing technology that allows those with low-income to purchase goods on credit

Game-changing technology that allows those with low-income to purchase goods on credit

If you don’t have much money there are lots of things that you can’t buy. This might sound simplistic, but in a country where a high proportion of the population have low disposable income it means that, as a manufacturer of products, there is a huge number of people who you can’t access. Unless… you could just give it to them have them pay you back over time. This is the opportunity that Angaza has seen, and they have developed a software platform to allow manufacturers to switch off devices if credit payments aren’t paid. Doing so puts products in the hands of people who otherwise couldn’t afford it. Lindsay is the Head of the Africa office and we discuss the history of the company, considerations for giving products on credit and applying their technology to a range of different products. It’s also similar, but different, to BBOXX who featured on an early episode called “Solar Systems”. You might be interested in listening to that too. READ MORE AT:https://theeastafricabusinesspodcast.com/2017/02/22/hardware-technology-remotely-controlling-solar-products-to-open-up-new-markets-with-lindsay-caldwell-from-angaza/

22 Feb 201732min

Why lack of working capital chokes the Kenyan food industry, and how Umati Capital solves this

Why lack of working capital chokes the Kenyan food industry, and how Umati Capital solves this

Working capital in East Africa is tough to get your hands on. Umati Capital are looking to help, using technology to give credit where banks won’t, typically through giving food producers an advance when a big order comes in. Ivan and I talk about how the legal environment means issuing credit is tough, how they evaluate their clients, and their vision to professionalise the supply chain across the continent. It’s similar to the SME Financing episode with Bakka from Patasente, so give that a listen too if you find this interested. I also should note that the only room available in their co-working space was quite echo-y, and so the audio quality for this interview isn’t great. A couple of answers get lost and so I’m sorry about that. Nevertheless, I hope that doesn’t detract from what is a very interesting interview READ MORE AT:https://theeastafricabusinesspodcast.com/2017/02/15/invoice-financing-smoothing-access-to-capital-in-food-industry-with-ivan-mbowa-from-umati-capital/

15 Feb 201731min

Where does your tea come from? Toby Theobald from Chai Tausi in Tanzania explains

Where does your tea come from? Toby Theobald from Chai Tausi in Tanzania explains

Tea is a product that has a strong industrial base in East Africa. It’s been going for years, meaning that many companies have emerged and there is a pretty competitive landscape. In this episode I speak with Toby, Operations Manager at Chai Tausi in Tanzania We discuss the supply and sales network that they have in place, the best conditions for growing tea across the region and the considerations when it comes to making their blend. I’ve spoken to a lot of high tech companies on my tour in East Africa but this is a proper old school business that we chat about. I hope you enjoy it as much I did. READ MORE AT:https://theeastafricabusinesspodcast.com/2017/02/08/tea-talking-cuppas-from-plant-to-mug-with-toby-theobald-from-chai-tausi/

8 Feb 201737min

"Netflix for Africa": how Tango TV is creating a platform for streaming local East African content

"Netflix for Africa": how Tango TV is creating a platform for streaming local East African content

Most people like to be entertained. Soon after getting a smartphone, people in East Africa start to seek out entertainment in the form of videos on Youtube not even considering the idea of a traditional television which has to stick to a schedule and requires being at home Internationally, the dominant “on-demand” video service is Netflix though the content isn’t very relatable to the African market. Victor and I discuss Tango TV, the Netflix alternative starting in Tanzania We discuss the current media distribution model in Tanzania, considerations of building a video streaming app in East Africa and why the local market won’t watch Game of Thrones even if it was in Swahili It’s a very interesting conversation that we have, and so I hope you enjoy. READ MORE AT:https://theeastafricabusinesspodcast.com/2017/02/01/on-demand-video-building-netflix-for-africa-with-victor-mnyawami-from-tango-tv/

1 Feb 201734min

Digital transformation in Tanzania hospitals - how Geek Technologies make local businesses paperless

Digital transformation in Tanzania hospitals - how Geek Technologies make local businesses paperless

As more of East Africa goes online, they need web services. The trend is towards broader access to the internet and with thata demand towards bringing more and more offline interactions into the digital world. In Tanzania, this is exactly what Geek Technologies are doing Mbelwa and I discuss the trend towards making services digital, how they win customers and why they decided to name their business Geek Technologies It’s an insightful interview about technology in the country, and so I hope you enjoy READ MORE AT:https://theeastafricabusinesspodcast.com/2017/01/25/web-services-creating-paperless-systems-in-tanzania-with-mbelwa-mchayungu-from-geek-technologies/

25 Jan 201730min

How Living Labs teaches entrepreneurship to rural Tanzanians, with Victoria John

How Living Labs teaches entrepreneurship to rural Tanzanians, with Victoria John

Education is something which a lot of people are hungry for. Living Lab is a non-profit organisation in Tanzania that looks to empower people in low income communitiesthrough giving training in entrepreneurship and leadership In this interview, Victoria and I discuss the demographics of their participants, the logistics around organising rural education programmes and why liquid soap production is a popular business idea READ MORE AT:https://theeastafricabusinesspodcast.com/2017/01/18/business-skills-teaching-entrepreneurship-in-rural-tanzania-with-victoria-john-from-living-labs/

18 Jan 201729min

Cycling with elephants: breaking new ground in Tanzanian travel with Mejah Mbuya from Afriroots

Cycling with elephants: breaking new ground in Tanzanian travel with Mejah Mbuya from Afriroots

When most people think of East Africa, they visualise safari. The region is home to many large and exotic animals which parade through the national parks Mejah runs Afriroots, a tour company which focuses on experiences that are off the beaten track We discuss the different customer types they have, how he started his company with $200 and what to do if you ever become confronted by a lion. We were also next to where an aerobics class was taking place, and so if you hear some throbbing beats in the background, it’s just that. Either way, it’s a really interesting discussion about the tourism market in Tanzania and so I hope you enjoy. READ MORE AT:https://theeastafricabusinesspodcast.com/2017/01/11/off-beaten-tours-breaking-new-ground-in-tanzanian-travel-with-mejah-mbuya-from-afriroots/

11 Jan 201733min

Building "Spotify for Africa" with Martin Nielsen from Mdundo

Building "Spotify for Africa" with Martin Nielsen from Mdundo

One of the things I’ve found interesting is how proven international business models are being applied in East Africa. Music streaming is one of these. In years gone by people in Europe and the US would own CDs but now stream through services like Spotify, which pays royalties to its artists and makes music accessible to all. Martin, who started Mdundo, is doing this in East Africa, though… it’s a little different. We discuss the particulars of the African music market, the considerations in scaling their business and what they look for in hiring talent. The room is slightly echo-y, so apologies in advance, however I hope this doesn’t detract from our very interesting conversation READ MORE AT:https://theeastafricabusinesspodcast.com/2017/01/04/music-streaming-building-spotify-for-africa-with-martin-nielsen-from-mdundo/&a

4 Jan 201733min

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