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International Development Club members make a difference abroad. Article by Maren Winnick '08, for the Bottom Line, April 18, 2007.
The International Development Club (IDC) is proud to report that, over the past semester, five teams of Columbia Business School students successfully leveraged their professional skills to drive value on behalf of a range of international and emerging market concerns. The projects themselves, pro bono consulting engagements, ranged from assessing viable capital market opportunities to identifying ways to provide better care to HIV/AIDS patients.
Beginning in February, the IDC student consulting teams began working intimately with their clients to map out the scope of their partnership. The clients included a diverse roster this semester, including: Cell-Life, a nonprofit serving the South African Healthcare sector; EMP Africa, one of the largest private equity funds addressing this region, The Earth Institute, and Women’s World Banking. During Spring Break the teams traveled as far as Cameroon, Kenya, Rwanda and South Africa to gain on-the-ground experience and better serve their clients.
In Cameroon, students worked with a company that sells cooking gas and is looking to expand its market. In Kenya, students investigated electricity markets in rural areas. In South Africa, students worked with a local NGO that is trying to improve HIV/AIDS patient management through technology solutions. In Rwanda, students investigated the potential impact of increased maize production on the local economy.
In the end, all IDC members past and present should be proud of the recent activities of the club and feel confident that the skills being built at Columbia Business School are being put to good use beyond the classroom, to the benefit of deserving organizations abroad.
Below are a few highlights of this semester’s IDC Projects.
Improving HIV/AIDS Management in the South African Public Healthcare Sector
Team members: Jessica Chin ’07, David Del ser Bartolome ’08, Mila Kantcheva ’08, Jenna Trabulus ’08, Maren Winnick ’08.
Our client Cell-Life, is a nonprofit initiative that seeks to provide technology-based solutions to improve the management of HIV/AIDS. Cell-Life’s proprietary technology helps address logistical challenges including the distribution and procurement of Anti-Retroviral Treatments (ART) and patient compliance monitoring leveraging wireless technologies. Four IDC members spent Spring Break in Cape Town, South Africa on Cell Life’s behalf. There, we amplified our understanding of the core issues by interviewing key members of the Cell-Life team, visiting specific clinics served by Cell-Life and, and attending a conference focused specifically on leveraging emerging technology to assist with HIV/AIDS management.
The trip provided an extremely valuable opportunity for the team to witness the Cell-Life technology in action and observe, in first-person, the impact it is making on HIV/AIDS management in the public sector. One of Cell-Life’s core initiatives, iDart, has revolutionized how pharmacies are run, drugs are tracked and patient-compliance is monitored. This initiative’s results have more than doubled a pharmacist’s patient–serving capacity.
Following this field research, the team worked on developing directional recommendations for Cell-Life to cover product roll-out, marketing and accelerated expansion. As part of these efforts, we recommended specific strategic partnerships to help this small, innovative company grow and better serve the community.
Selling Cooking Gas in Cameroon
Team members: Gbolade Arinoso ’08, Alonzo Dority ’07, Brad Fusco ’07, Justin Mandel ’08, Mark Pedersen ’07, Jindrich Zitek ’08.
Our client is EMP Africa, one of the largest private equity companies targeting Africa with over a billion dollars under management. Our project goal is to help one of their portfolio companies in Cameroon grow its market share and eventually become a major player in the region.
This company is a new entrant that sells a safer type of cylinder for cooking gas as well as cooking gas itself. EMP Africa wants to ensure that they are well-positioned to take advantage of the growing supply of natural gas in West Africa over the next 10 years and also convince people who use firewood to use cooking gas instead, a fuel source which is both more efficient and environmentally-friendly.
Five of us were fortunate to travel to Cameroon over Spring Break where we interviewed the distributors, retailers, customers and other industry stakeholders in four different cities (Douala, Yaounde, Limbe, and Bamenda) as well as company management.
We discovered that in many ways our project is a classic marketing problem because our client clearly has a superior product but does not know how to market it, especially since gas cylinders are generally considered a commodity product and there are also significant switching costs. The company’s senior managers originally believed that the technical advantages of their product – their cylinders are safer, lighter, and always correctly filled, unlike their competitors’ – meant that the product would essentially sell itself. Our final report will provide recommendations about why and how they should change their marketing strategy, as well as outline what they need to do internally to achieve their sales targets.
Working with EMP Africa has been an invaluable learning experience for all of us. We have had access to top-level business figures in Cameroon and experienced first-hand the unique challenges that companies face operating in emerging markets. Traveling around Cameroon was also an unforgettable experience.
Cameroon is frequently called a “mini-Africa” because it has almost everything that the continent has overall – deserts, rainforests, beaches, gorillas and a cornucopia of different languages (260+) and cultures, among other attractions. Our only regret has been that we didn’t have more time to spend in Cameroon.
IDC Team Investigates Markets for Electricity in Rural Kenya
Team members: Nathaniel Choge ’08, Daniel Madden ’08, Ryan Petersen ’08, Richard Wang ’08.
At the start of the semester, the Earth Institute asked an International Development Club team to investigate the value chain for rechargeable lighting appliances to help reduce energy expenditures rural Africa. In areas without direct access to the electricity grid, people light their homes with kerosene, an expensive, poor quality source of light that also generates indoor air pollution. For example, in the village of Sauri, Kenya, ninety percent of the population earn less than $1 per day, with kerosene representing the second largest monthly expense (behind charcoal). The switch to energy efficient LED lighting, powered by rechargeable or disposable batteries, could save these people a lot of money.
Our four-person IDC team spent the semester speaking with the key players in the Kenyan market to learn what types of interventions could accelerate the transition to more efficient lighting technologies. In March we traveled to Kenya for a series of interviews to help us understand the forces driving supply and demand for the products.
The team of first year MBA students was assembled for our diverse and complimentary backgrounds: Nathaniel Choge, a Kenyan whose father is an entrepreneur in the solar industry, has degrees in electrical engineering and business from MIT; Richard Wang is an electrical engineer who owns a company producing power controllers for solar panels in Tianjin, China; Ryan Petersen, an American, spent the last two years working in China as a sourcing agent and supply chain manager for an international trading firm; and Daniel Madden is a former strategy consultant from the UK who lived in Kenya for seven years.
During our time in Nairobi we met with a broad range of stakeholders in the markets for rural electrical appliances. We spoke with executives from dozens of stakeholders, including the leaders of Kenya’s two largest battery producers, its largest grocery chain, and a credit cooperative.
We also met with retailers, importers, logistics companies, solar product outlets, energy entrepreneurs, nonprofit organizations and battery charging stations. In addition, Dan Madden conducted focus groups to learn which lighting products most appeal to people without grid access.
The Earth Institute has been working under the assumption that despite cost savings over their lifetimes, the up-front costs of LED appliances are too expensive for Africa’s rural poor. Yet in Kenya as elsewhere, the prices for LEDs powered have fallen to levels that the poor can finally afford. Indeed, in both Nairobi and in towns nearer to Sauri—the village selected for the institute’s pilot project—we found LEDs to be widely available, with some selling for as little as $1.40.
Given their superior lighting qualities and reduced kerosene expenditures, LEDs represent a sound investment for residents of Sauri. Not surprisingly, the Chief Operating Officer of the credit cooperative Faulu, Kenya, wants his lending officers to begin promoting these cost-saving devices to a network of 75,000 borrowers. We have found evidence of a huge market potential for LEDs and other energy-saving products to consumers in off-grid areas of rural Africa. To help spark interest of market players, the Earth Institute will soon launch a pilot project in Sauri. They will source the lights and batteries from the low-cost suppliers we found in our investigations. We have recommended that they conduct rigorous product quality testing to overcome negative perceptions of LED dependability. We have also suggested that they carry out frequent focus groups and demonstrations of the lights to raise awareness in the village.
To succeed, we believe the Earth Institute must enlist Sauri’s merchants and kiosk operators as partners in reaching this untapped market.
Millennium Villages Project – Rwanda
Team members: Carolien DeBruin ’08, Carla Franklin ’08, Lindsay Pollak ’08, Jeffrey Ware ’08, Lisa Yokoyama ’08.
Columbia’s Millennium Villages Project, run by the Earth Institute, is demonstrating the potential for community led development interventions to achieve the UN Millennium Development Goals within a 5-year time horizon. Millennium Village staff working in Mayange, Rwanda engaged five Columbia Business School students to study the effect of increased maize production on local maize markets and rural farmer income. Millennium Villages introduced fertilizer, improved planting techniques, and a high-yield, drought resistant seed to a community of 50,000 farming families.
Over spring break, Columbia MBA students conducted focus groups with farmers participating in this program, local maize buyers, and the one major maize processing plant in Kigali to better understand the current and potential maize market. The team worked to predict the volume of maize farmers can expect to produce in the next season and the effect of a surplus, rather than a shortage, of maize on local prices. Additionally, students provided recommendations on improving current maize trading practices giving farmers an opportunity to exploit higher prices and greater access to national markets.
Women’s World Banking (WWB) Project – Analyzing Capital Markets in Colombia, Kenya, India and the Philippines
Team members: Juliana Almeida ’08, Aaron Baker ’08, Irene Boni ’08, Fernanda Gonzales ’08.
WWB is a global network supporting a large number of MFI in developing countries in gaining business expertise and sustainable access to capital.
The consulting team supported WWB in analyzing the Capital Market of four countries (Philippines, Colombia, India and Kenya), in order to understand the feasibility of capital markets instrument issuance for the MFIs. In particular, the team focused on main four questions: Does a local Capital Market exist? Is the regulation opened to MFIs issuing bonds/stocks or other instruments? Would local investors be willing to buy these instruments? Would foreign investors gain easier access to investing in MFIs through these instruments?
As you might imagine, answering all of these questions (and gathering the data to do so) is not an easy task. We worked closely with international law firms and other international organizations in order to gain a better understanding of what’s feasible and what’s absolutely unrealistic for MFIs. The final goal for WWB is building a report that can be used both as a support in discussions with international investors and as a guide to encourage MFIs in gaining access to permanent and stable funding.