Entrepreneurs need to invest in small-scale purpose-built processing equipment for the safe production of quality products when the quantity to be produced is larger than is possible with household or food service equipment, or because the product can’t be produced with catering equipment – for example, cereal milling, jaggery sugar refining or high-capacity bottlefilling and drying.
Major equipment manufacturers cater for economies-of-scale and therefore supply equipment that is too large, costly and difficult for small-scale processors to maintain. As a result, there are fewer companies producing equipment specifically geared towards simpler and smaller enterprises.
Dave Harcourt explains that there are essentially three classes of equipment suppliers who cater for small-scale processors.
1. Development-based local suppliers.
These are companies that were established in development projects that focused on equipment supply as part of the project’s small business development goal. They offer good local knowledge and on-the-ground support, but tend to not invest in technology.
• Rural Industries Innovation Centre, Botswana: Tel +267 544 5000;fax +267 544 0642; email@example.com; www.ripco.co.bw
• Gratis Foundation, Ghana: Tel +233 (0)22 204 243; fax +233 (0)22 204 374; firstname.lastname@example.org or email@example.com; www.gratisghana.com
2. Focused smaller-scale equipment suppliers. Companies that specifically focus on supplying to small-scale manufacturers in Africa seem to be concentrated in South Africa. There are also Indian and Chinese companies producing and supplying small-scale equipment into Africa.
To give a feeling for the type of company likely to be useful to entrepreneurs, the author gives a short description and contact details of three that have successfully supplied small enterprises in Africa.
a. Tinytech is an Indian company dedicated to providing small processors with industrial food processing solutions. The company is best known for supplying vegetable oil plants – it has sold 1,600 of these plants in 85 countries. It also supplies jaggery, milling and fruit processing equipment, and has installed equipment in 95 countries.
Tineytech Plants, VK Desai, Rajkot, India: Tel +91 281 248 0166; fax +91 281 246 7552; firstname.lastname@example.org; www.tinytechindia.com
b. Alvan Blanch is a large British equipment supplier and project management company with offices in Nigeria, Saudi Arabia and Poland, to focus on supplying these areas with medium and small-sized equipment for drying; cereal-handling and storage; milling; packaging; vegetable oil production; and fruit, rice and coffee processing. Formed by Alvan Blanch in the late 1940s, this family-run business also focuses specifically on the safe utilisation of waste materials.
Alvan Blanch, Malmesbury, England: Tel +44 (0)1666 57 7333; fax +44 (0)1666 57 7339; email@example.com; www.alvanblanch.co.uk
c. John F Marshall has taken on the distribution of many smallscale agro-processing technologies to rural African enterprises areas following the failure of Rutec in its various incarnations. It manufactures and supplies vegetable oil and fruit processing equipment and dryers as well as non-food equipment for candlemaking,
chicken-rearing and brick-making.
John F Marshall, technical sales manager, Johannesburg, South Africa: Tel +27 (0)11 842 7100; fax +27 (0)11 622 8074; firstname.lastname@example.org; www.johnfmarshall.co.za
3. Suppliers promoting older designs. There is also an opportunity for companies with manufacturing facilities producing machines based on older designs. The advantages of these machines are that they tend
to be robust, simple and well-suited to operations in areas lacking industrial infrastructure. They also tend to be cheap, as manufacturing has been amortised, but are still able to carry out credible food processing.
Defining the equipment required
The first question any supplier is going to ask is what size do you need? This might be asked with different words like capacity, output or turnover. But it is essentially asking how many units an hour the machine must produce. So, before entrepreneurs start looking to see who they can contact, they need to understand what and how much they are going to produce and sell.
This is not equal to the potential market size for the product, but is rather related to the amount of product the entrepreneur plans to make over a short to medium term. It should take into account the potential of running more than one machine in parallel, providing security and flexibility.
The machine capacity should be realistically set to a level that will most likely be achieved. Oversized equipment is not only a waste of capital but also inefficient and expensive to operate, leading to a higher product cost. It is probably better to err on the side of a machine that is too small, as it’s always possible to run a number of machines together. This in fact increases the flexibility of the factory’s output, as noted above.
The size of equipment can be calculated from the sales volume using the number of machines, days and hours
of operation. It is normally specified in quantity or units per hour.
Locating equipment suppliers
It would be ideal to have a single directory listing all companies that are reliable and efficient suppliers to small-scale food processors located in Africa. The author investigated the possibility of initiating such a directory, but concluded it was a daunting task with little chance of sustainable success. Entrepreneurs can, however, collect the necessary information using a range of sources discussed below.
• Local networks. The first and probably most reliable source of information would be the entrepreneur’s local networks, including business contacts, otherentrepreneurs, business associations, chambers of business, small business promotion agencies, appropriate university departments, research organisations, government departments, industry and related associations. The main advantage of these network organisations is that entrepreneurs can visit and talk with them to get a real feel for the supplier’s performance.
• Written and online sources. There is a range of directory and online information that can be easily sourced, but which excludes information about reliability. There are also many directories that search engines find that are no more than optimistic shells. Directories do, however, help to identify some of the companies
operating in an area that will be able to provide technical information and advice, as well as prices and installation and operation requirements.
• International organisations. USAID (www.usaid.gov), Practical Action (http://practicalaction.org), FAO (www.fao.org), Technoserve (www.technoserve.org), UNIDO (www.unido.org), CTA(www.cta.int), Care (www.care.org), and many others have worked with many entrepreneurial development projects and entrepreneurs. They are, therefore, a source of information on successes and failures. It would be worthwhile to visit their local offices to see what information they can provide, and what links they suggest.
Entrepreneurs should ensure that there is a well-defined agreement, before buying equipment from any supplier. This should at least include:
• Description of equipment function, materials, applicable specifications, and controls
• Product specification
• Product yield, service consumption, and output capacity
• Responsibilities and costs of installation, commissioning, training, maintenance, spares, and service
• Total cost including transport
There is a more detailed discussion about these agreements in a short document of Oklahoma State University,
which can be downloaded at www.fapc.biz/files/factsheets/fapc102.pdf Commissioning and operation
After the equipment has been installed to the satisfaction of both parties, it should be run, fully monitored, and
evaluated with the supplier to ensure that it meets the agreed specifications. This commissioning information can
also provide a benchmark against which future performance can be measured.
All equipment should be periodically evaluated to ensure its effective operation. It is easy to miss deterioration
in efficiency that can imperceptibly increase raw material losses; increase utility consumption; or reduce throughput; all of which will increase production costs. Once the equipment is up and running, entrepreneurs should keep in contact with the supplier to follow what is happening in the sector so that they are better informed about when they next need to consider a purchase.
You can share any feedback in terms of equipment on the webpage http://t.co/PFioK9GV or tweet your country, supplier, equipment and contact details under the hash tag #SAFPPEquipShare. Dave Harcourt is also available to advise you via email:email@example.com