Leveraging Technology to Eradicate Poverty

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                                                                              Martin Fisher & Nick Moon, founders
                                                                              Participated in development failures
                                                                              Identified a revolutionary way to alleviate poverty
                                                                              Founded ApproTEC - Appropriate Technologies for Enterprise Creation
                                                                                  Started in Kenya in 1991
                                                                                  Develops and promotes low cost technologies that are bought
                Kick-Starting Economic Growth                                     by thousands of people in East Africa and used to start
                    in Developing Countries                                       profitable businesses
                                                                                  Market driven solution with no handouts

         Leveraging Technology to Eradicate Poverty
                                                 1                                                                                              2

 Super MoneyMaker                                                           ApproTEC Impact
 Pressure Irrigation Pump                                                   Creating a Middle Class
                                                                                       POVERTY                       MIDDLE CLASS

                                                                                   The average Kenyan             With a MoneyMaker Pump,
                                                                                     farm income =                the average farm income =
                                                                   3                                                                            4
                                                                                     $120 /year                       $1200/year

Impact to Date                                                              Poverty in Sub-Saharan Africa
The ApproTEC difference.…                                                   The poorest region in the world with many failed states

                                                                                 70% less than $1 per day
   35,000 new businesses created to date
                                                                                 40% go to bed hungry
   800 new businesses created every month                                        10% have 90% of wealth
   $37 million annual profits & wages generated
                                                                               Rural poverty
   New revenues generated equivalent to:              These impacts are        80%

      > 0.5% of Kenyan GDP                            measured through
      (equivalent to Microsoft + Cisco as % US GDP)   a rigorous process,
                                                       and are validated                                                              Urban slums
      > 0.2% of Tanzanian GDP                           by third parties

                                                                                                                           No middle class
   ApproTEC only succeeds if our beneficiaries                                                                             Poor governance
           earn a lot of money…                                    5                                                                            6

 Developing World Economies                                          Jobs in Africa

                                                                        Formal sector
   Subsistence/controlled              Market Economies
     Economy                                                             – 13% of the labor force in Kenya
                                                                         – 7% of the labor force in Tanzania
                                       Food, farm inputs
   Basic Human Needs                                                    Informal (survival) sector
                                       Education, healthcare
                                                                         – 70% petty trade
   Subsistence farming
                                                                         – 25% tailoring, carpentry, metalwork

                People need to make money!
                                                               7                                                           8

 Entrepreneurs                                                      ApproTEC’s Unique Approach
                                                                    Act like a business, not like a charity

                                                                     1) Identify profitable new business opportunities
   90% poor
                                                                     2) Design the required new capital equipment
   Save or borrow - $30 to $500
                                                                     3) Establish the supply chain for the new
               But                                                   4) Develop the market for the new equipment
                                                                     5) Cease marketing subsidies
   What business to start?
   Can’t access technology
                                                                                     Throughout process:
                                                                          Measure impacts & collect market intelligence
                                                               9                                                          10

Stage 1: Identify Business Opportunities                            Stage 2: Design Required Equipment

    Market studies to identify business models that:
    1) Break even in 3 months
    2) Large market size (thousands of businesses)
    3) Environmentally sustainable
    4) Low initial investment ($30 to $500)

   EXAMPLE: Typical African
    Land is only asset
    Farming is primary skill
    High demand for off-season fruits & vegetables

     Need for a low cost, manually-operated irrigation pump    11                                                         12

Stage 3: Establish Supply Chain                                                   Stage 4: Develop Market for the Capital Equipment

                                                                                                                       Unique product
                                                                                                                       High price
                                                                                                                       Risk averse buyers

    MANUFACTURER              WHOLESALER                      RETAILER

        7                            7                            250

                                                                         13                                                                             14

                                                                                  A Revolutionary Approach to Development
Stage 5: Cease Marketing Subsidies                                                ApproTEC’s market-driven solution to poverty

            Failure                                       Success                     Relief Agencies        Development Agencies           ApproTEC

$                              #             $    Marketing                   #       “Give people fish”     “Teach people to fish”    “Sells low-cost super
                                                                                              •                        •              fishing poles” that enable
                                                                    Growing           Keep people alive        Social engineering      people to catch 10x fish
     Marketing                                                       Sales                                             •                         •
                                   Tipping                                                                      Very expensive          People sell fish, create
                                    point                                                                                                jobs & make money
                      Sales                                                                                                                      •
                                                                                                                                      Leverage local markets
             Time                                          Time

                                                                                      ROI = up to 1:1          ROI = max. 2:1            ROI = min. 9:1
      “Tipping point” at 20% market penetration
         Growing sales and impacts                                                                                          $0-$2
                                                                                                                                                     $9+ new
                                                                                     $1           <$1 of       $1                       $1           profits &
         Fully sustainable supply chain & retail network                           donated       handouts    donated                  donated        wages to
                                                                                                                           the poor
                                                                         15                                                                          the poor

Impacts of ApproTEC
Throughout history new technologies & new markets have boosted                      MoneyMaker Irrigation Pumps

                                         …families can now afford
                                             Healthcare                              Super-MoneyMaker -$75
                                                                                     MoneyMaker-Plus -$38
                                         which leads to…
                                             A middle class
                                             Thriving local economy
                                             Stronger democracy
                                             Better governance
                                             More investments
                                              Successful States          17                                                                             18

Deep Well Pump                                        Manual Well Drilling

                   Designed with                      Drilling through soft ground

                   60 feet deep

                   40 feet high

                                               19                                    20

Manual Well Drilling                                  Oilseed press

                                   Drilling through
                                   hard ground and

                                   1 meter/hour

                                               21                                    22

Stabilized Soil Block Press                           Manual Hay Baler

                                               23                                    24

Xtracycle                                                            Manufacturing in Africa

                                                                      Limited, poor quality materials
                                                                      Undercapitalization/minimal equipment
                                                                      Lack of skilled labor
                                                                       – High labor cost
                                                                      Inexperienced management
                                                                      Little experience in mass production & QC
                                                                      Low productivity
                                                                      Undercapitalized for raw materials
                                                                      Brown outs
                                                                      Infrastructure/supply chain
                                                                       – Raw materials and finished goods
                                                                25                                                                       26

Manufacturing in Africa: Materials                                   Manufacturing in Africa: Tools

 Mild steel                         Wood                                Basic tools                           Advanced tools
  – Sections, plates & rods          – Not cured, mainly soft            – Power saw                              – Lathe
  – Mostly cold rolled                                                   – Grinders                               – Punching/stamping
                                    Little plastic
  – Chains                                                               – Arc welders                            – Bending
                                     – PVC & HDPE pipes and some
                                       fittings                          – Gas welders/cutters                    – Shears
  – Cables
                                     – Water tanks                                                                – Milling or shaping
 Alloys & stainless are expensive                                        – Hand tools
                                                                                                                  – MIG/TIG welding
 Very little aluminum, copper       Simple molded rubber                 – Black smith
                                                                                                                  – Spot welding
                                     – Compression molding
                                    Little glass                                           MIA
  – Dimensions
                                    Ropes                                                   – Forging
  – Strength
                                                                                            – Casting
  – Consistency
                                                                                            – Large presses
  – Tolerances
                                                                                            – CNC
  – Straightness
                                                                27                          – Injection molding                          28

Designing Tooling and Process                                        Production Start-up

 Materials and dimensions
  – Parts will not be identical
                                                                      Design and build jigs and fixtures
  – Determine critical datum
                                                                      Mass production training – two weeks
  – Complicated jigs and fixtures
                                                                      Six months follow-up on production and QC
 Distortion control – arc welding
                                                                      We do the final QC
  – Order of welding is critical
  – Design jigs for distortion (where to clamp)
  – Removing the part
  – Complicated process to compensate for simple tools          29                                                                       30

                                                        Recognized Leader
ApproTEC’s 3-Year Objective
                                                        An innovator in international development
Sell 100,000 irrigation                                 The Gleitsman Foundation
 pumps, primarily in                                    Award - Oct 03
                                                        International Prize for
    Eastern Africa                                      Pioneering Development
                               Uganda                   Projects - AGFUND -Sept 03
       region…                             Kenya        Time Europe - European
                                                        Hero Award April 03
                                       Tanzania         Schwab Outstanding Social
                                                        Entrepreneurs – Jan 03
                                                        2002 Irrigation Association
                                         Malawi         contest winner – Nov 02
                              Zambia                    2002 San Jose Tech Museum
                                                        Award – Sept 02

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