The Business Opportunity in Bush Biomass
SME Success Proves the Business Opportunity in Responsible Bush Control
Philipus Alugodhi, based in Otavi, is proving his entrepreneurial prowess through his charcoal business, which he has grown in a short space of time to be a choice employer for charcoal workers. Philipus has worked as a police officer, a diamond inspector, a geological technical and more. It was however when working at Energy for Future, producing wood chips for Ohorongo Cement, that he was first introduced to the biomass industry. “A friend of mine suggested I start producing charcoal, I already knew most of the farmers in this area because of my involvement in bush thinning operations. So I decided to go all in. I started up quite small, with six guys and twelve kilns. The first farm I started on is my mother’s farm near Tsumeb. Then I started renting at other farms. I now have twenty workers, and sixty kilns, and I did that in two years.”
Philipus’ hard work has paid off fast, “It’s a good business model, it works so long as you keep growing. For me, the best part is that I am my own boss.”
Growing a Labour-based Business
To get to where he is today, Philipus is constantly reinvested in his business. “I just kept reinvesting. In the beginning I used to do a bit of road construction here and there too, just to get extra funds and anything I got I would inject back into the business. I kept going, reinvesting and then it got to a point where I could get two trucks out per month, then it started moving a little faster because with two trucks you can make more profits.”
The biggest challenge for Philipus have been in acquiring startup capital, “I have also applied to get extra funds from the Development Bank of Namibia (DBN) but it’s very difficult to get loans, we have had our application in for almost a year. It’s a big challenge.”
With his big group of labour-based workers, Philipus has chosen an inclusive and empowering approach to his management style. “My workers will tell you that I care for them. If one of my workers gets sick, I will drive to get them medicine. It’s not easy being in the field with an axe the whole day. The work that they do is very intensive, so it’s important to look after them. I know they appreciate me too, and they produce for me.” Taking on board the knowledge acquired from various training courses sponsored by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), Philipus recommends the labour-based harvesting guidelines for bush control. He applies the SHE (safety, health and environmental) principles and ensures quality control in the production process. Phillipus echoed that he also learnt a lot from his workers. “Most of my guys have been in the industry for a very long time. Some of them have been cutting or making charcoal for as long as fifteen or twenty years.”
Philipus is an FSC (Forest Stewardship Council) certified producer, meaning his products are sourced responsibly and in line with environmental and social standards. Explaining how he became FSC certified, Philipus says, “it was not difficult for me because I had everything in place already. I had housing facilities and toilet facilities etc. When they came to inspect, they were pleased with the standard of my operation. It was a matter of two weeks and I was certified.
The Opportunities of the Industry
When asked why he thinks this is a good business model, Philipus explains “It’s profitable. It’s a challenge to get the startup capital, but you can make it back very quickly. If you start correctly, with the right amount of people, within six months, you would have recouped your money already.”
Philipus adds, “I think the biomass sector is going to be huge, especially with the projects in progress such as the NamPower biomass power plant in Tsumeb. These are very promising developments for the sector. Maybe one day I will diversify into wood chipping, but for now, my focus on growing the charcoal business.”
Philipus believes his product has great value, “the best thing about biomass is that it is renewable if you harvest sustainably. It helps with the recovery of grass, especially in the encroached areas. So many farms here are bush encroached that wildlife or livestock struggle to roam freely. It’s a waste of land. You have this huge piece of land that is not productive. That is why we focus on bush thinning. We don’t cut down everything completely. We leave the big trees and thin the bushes so that within the next rainy season you can have a lot more grass. It’s in your favour.”
Honsbein, D & Njembo, S. 2020. Labour-based Encroacher Bush Harvesting Guidelines. Commissioned by Bush Control and Biomass Utilisation Project implemented by GIZ.
De-bushing Advisory Service.2020. Labour-based Harvesting for Rangeland Restoration video.
De-bushing Advisory Service.2020. Manual Bush Control – An SME Perspective video.
Namibia Charcoal Association. 2018. Charcoal Best Practice Guide.