Diversifying Rural Livelihoods through Off-farm Income: A case of Baobab, Yangu, and Marula and Leleshwa Natural Essential Oils

The solution is to create business opportunities by building an emerging value chain in natural essential oils, previously a wasted resource

Photo of Horizon Business Ventures Ltd
0 2

Written by

I confirm that I am fully aware of the eligibility criteria, and based on its description, I am eligible to apply to the CSV Prize 2017.

  • Yes, I'm eligible

Preferred language

  • English

Organization name

Horizon Business Ventures Limited

Year founded

2008

Initiative stage

  • Established (the solution has passed the previous stages and demonstrated success)

Annual budget in 2017 (USD)

  • $50k - $100k

Number of beneficiaries impacted so far

  • 500 - 1,000

Organization type

  • Social enterprise

Secondary Focus Area

  • Rural development

Headquarters location: Country

  • Kenya

Headquarters location: City

Naromoru

Location(s) of impact

Country - Kenya: Cities - Naromoru, Nanyuki

Website

http://www.hbv.co.ke

Facebook URL

https://www.facebook.com/Muchirib/

Problem: What problem is this initiative trying to address?

Climate change is proving a real threat to rural livelihood systems and is seriously undermining prospects for development. In the face of climate change, the conventional agro-pastoral system that has traditionally supported livelihoods is increasingly becoming untenable. Evidence indicates that without meaningful climate adaptation strategies, incidences of poverty, environmental degradation and social disruptions will continue to increase, with serious consequences on rural life.

Solution Summary: What is the proposed solution? What do you see as its most promising aspects for creating shared value?

The solution is sustainable management of already existing indigenous plant resources, through a combination of indigenous knowledge, technology, inclusive business model and market. The business case targets non-trees forest products (NTFPs) of Croton, Cape Chestnut, Marula, Baobab and Leleshwa as source of commercial essential oils. These resources previously did not have any economic value. Preliminary investigations indicate that these trees are less sensitive to climate changes and can effectively support livelihoods. The project demonstrates an eco-friendly enterprise designed to empower youth and women in the rural context and provides sustainable income and employment opportunities. It follows a market-led conservation approach which not only motivates communities to preserve existing tree habitats but expand the same economic trees on-farm. It increases community climate resilience, brings business to HBV and makes available a natural product to the cosmetic industry.

Impact: What is the impact of the work to date? Specify both the social and the environmental impact of your work

HBV, with the help of a number of partners has established a basic essential oil, feed and bio-pesticide processing facility. We work with 400 women and youth building their capacity in seed collection and tree domestication process. In 2016, we realized a gross income, equivalent of USD 92000, through the sale of the oils of croton, cape chestnut and baobab ($ 58000), animal feed (42000). Half of this or $ 45345 is income to the community linked to the supplies of seeds. At the same time local farmers spend less on agriculture inputs, through this initiative. For example of the 2800, 70kg bags of feed produced in 2016, dairy and poultry farmers saved $ 14,000.
So far the initiative has created 7 local employment opportunities in the emerging value chain. The facility engages on average, 4 semi-skilled workers on a daily basis, mostly women in grading and packaging sections. 13750 trees have been planted on-farm, while illegal logging in forest and landscape has reduced by 40%.

Financial sustainability plan: How is this initiative financially supported? How will you ensure its financial sustainability long-term?

The initial investment in equipment, buildings, and market and seed collection structures came from a number of partners through Help Self Help Centre (HSHC), who provided grants (2013/2015). Subsequently, the business has been generating its own revenue which caters for operational costs. In 2016, HBV generated equivalent of gross income of $92000, and a profit of $28063. We believe an investment of $300000 (grants/equity) will establish a foundation for more profit, growth and sustainability. With this investment a profit of $32000 will be realized by 2018.

Unique value proposition: What makes your initiative innovative? How does your project differ from other organizations working in the same field?

The idea of making money from NTFPs is completely new in our context. People used to make money from cutting trees and making charcoal, often illegally. The idea has strong market-led conservation agenda, protecting existing trees while motivating farmers to plant them on-farm. It offers a strong case for new and unique economic framework in the rural context that balances biodiversity, business and bread (3Bs). Other initiatives in the area focus primarily on wood-based aspect of the tree.

Founding story: Share a story about the "Aha!" moment that sparked the beginning of this initiative.

The idea was first inspired by the ethno botanical and value chain analysis work done by Help Self Help Centre (HSHC), an NGO working in the local landscape in the area of sustainable natural resource management. Both the ethno-botanical survey, market and value chain analysis showed potential business case linked to sustainable management of a number of plant species for the benefit of the local economy. These species included croton, and cape chestnut linked to biofuel and essential oils respectfully. HBV/HSHC was the first to produce biodiesel from croton seeds in Kenya. Consequently, HBV partnered with HSHC to further analyze the business case and establish a pilot project. Later the list of plants was extended to Leleshwa, Marula and Baobab as source of essential oil. The initial investment in this business was the work of HSHC.

Where did you hear about the Nestlé Creating Shared Value Prize?

  • Search engine

0 comments

Join the conversation:

Comment