Croton Innovations in East Africa

Eco Fuels Kenya (EFK) has created an innovative sustainable value chain around croton nuts, an indigenous nut to East Africa.

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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

Eco Fuels Kenya

Year founded

2012

Initiative stage

  • Growth (the pilot has already launched and is starting to expand)

Annual budget in 2017 (USD)

  • $500k - $1m

Number of beneficiaries impacted so far

  • 5,000 - 10,000

Organization type

  • Social enterprise

Secondary Focus Area

  • Rural development

Headquarters location: Country

  • Kenya

Headquarters location: City

Nanyuki

Location(s) of impact

Kenya: Mwea, Muranga, Baringo, Bomet, Kirinyaga, Makueni, Meru, Nanyuki, Nyeri, Rumuruti, Thika.

Website

http://www.efkgroup.co.ke/

Facebook URL

https://www.facebook.com/EcoFuelsKenya

Problem: What problem is this initiative trying to address?

Eighty percent (80%) of Kenyans and East African's are engaged in agricultural activities. Yet while Kenya has one of the fastest growing economies in sub-Saharan Africa, for the past decade it also has an increasing number of people who live in absolute poverty (less than $2/day) - many of these rural farmers. So while agriculture remains the backbone of Kenya's growing economy, smallholder farmers are increasingly disenfranchised from high value cash crop markets and are excluded from this growing economy.

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

Eco Fuels Kenya, the world's first and only croton nut processing company, has created an entirely new value chain around a previously untapped but plentiful natural resource. The croton tree is an indigenous tree to East and Southern Africa. Millions of adult trees already exist in forests and are frequently found on smallholder farms, traditionally planted for shade. EFK buys croton nuts from smallholder farmers and through a 100% no-waste processing system turns the croton nuts into biofuel, organic fertilizers and animal feeds. These croton products are sold to other SME businesses in Kenya as well as back to the smallholder farmers thus improving farms yields and soil degradation while preserving the environment. EFK is providing a new cash crop for farmers that is in addition to their current cash crops while creating shared value through a supply chain that is inclusive of the smallholder farmer and guarantees access to markets.

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

Eco Fuels Kenya has been improving the livelihoods of croton collectors while creating organic environmentally-friendly croton products. EFK currently has a network of 6000 croton collectors - 85% are women and youth - who earn on average an additional $50/year from croton. For some of the collectors, this can be up to 50% of cash income they earn for the entire year. Based on surveys, 25% of collectors use the additional income from croton to reinvest in their farms, while 50% use the money for school fees, medicine and other household items. An added benefit of croton is that it doesn't replace other cash crops or other income-generating activities. Collectors are paid for the nuts upon delivery which is faster than any other cash crop supply chain in Kenya. Collectors use EFK's organic agricultural inputs which repair degraded soils and produce increased crop yields. EFK has also established a tree planting program with collectors with over 100,000 trees planted to date.

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

As EFK scales, it will become a profitable sustainable business as it reaches economies of scale and targets high-vale markets for its croton products. The company currently has been supported by sales, grants and equity investment. To-date, sales is 25% of operating costs; grants/awards 45% and equity investment 30%. Grants and awards have been used to build a stronger supply chain and create programs to support the farmers who collect croton as well as helping to scale factory operations. As EFK continues through its growth phase, it will continue to seek grants and additional equity investment on its path to scale throughout East Africa.

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

EFK is the only social enterprise who processes croton nuts into sustainable energy and organic agricultural inputs. Our business is 100% no-waste and we work with our croton collectors around what we call "income-motivated conservation". Farmers are able to engage in a value chain where they receive much-needed income quickly, they are preserving trees which has a positive impact on the environment and they are using products that improve their farms and their livelihoods.

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

Alan Paul engaged by academics from Kenya and the US to evaluate the value chain of the croton megalorcapus that produced croton nuts saw the limitless possibilities from this plant. In 2012 after being inspired by the concept of the social enterprises, he came up with a business model that would engage the community to collect the abundant nut that initially had no economic value. This would empower people at the base of the pyramid to earn an additional income without abandoning their way of living. In addition, the tree is not good for furniture, the fruit cannot be used as a food by humans, so it lends itself perfectly to be converted into biofuel, animal feeds and fertilizer without having the usual debate over food versus fuel.

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

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Photo of Mouhamadou Moustapha

Congratulations and good luck for the future.

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