Dubai-based social enterprise shines bright for Africa
It started with a plea to help 60,000 orphans in the company’s care.
The children, who were being looked after in Zimbabwean orphanages set up by the telecoms operator Econet Wireless, could not study at night because there was no power and lighting, and many were getting sick from breathing in the chemicals emitted from candles.
“The chairman’s wife came to me and said ‘look some of the kids are getting sick, some of the kids are struggling’,” says Marco Signorini, director at Econet Wireless UK and Econet Mobile.
“She said to me ‘surely there’s something you could do’.”
The company has offices around the world including in Hong Kong, so on one of Mr Signorini’s business trips he brought back five solar lights and showed them to some of Econet’s engineers, who then built their own version of them.
They made 10,000 solar lanterns and were inundated with inquiries.
“By default we even got a Zimbabwe Post Office order for 10,000 lights. We looked at it and we said ‘OK let’s make 10,000 for the post office but while we’re there, let’s order another 20,000 and see if they move among some of our own retail stores’,” says Mr Signorini, who is also managing director of Solarway, the company Econet set up to make and sell the solar lights.
Four years on, Solarway, which is headquartered in Dubai, has sold half a million lanterns. And last year it sold more than 1 million products. But it has not become fat on the proceeds, like many other firms might have.
Solarway is a social enterprise – one which puts people ahead of profit, operating to improve the well-being of its customers and society as a whole. The company will not reveal what its profit margin is, except to say it is less than 10 per cent before tax.
“Social enterprises need to have a different business model than other corporations because, while they need to make money, their primary goal is not to make money,” says Ramesh Jagannathan, New York University Abu Dhabi’s inaugural vice provost for entrepreneurship, research professor of engineering and associate dean of engineering. “It’s to help the society.
“It’s not just totally profit- based. Also they are aiming at a social population who cannot afford to pay such high prices.”
The number of social enterprises is on the rise, fuelled by the increase in a wage group whose needs are not being met by products and services provided by government or private corporations, says Mr Jagannath.
“There is a whole class of people in the wage group of about $5 a day to about $30 a day, who are above the poverty line but whose needs are not really met.”
While there is no shortage of low-income earners living in Solarway’s target African market, it was still tough to persuade some to buy the products, a legacy of Africa’s status as a dumping ground for technology.
“If I walk into 10 shops with a solar light or a solar product, or a solar phone charger, the response from all 10 is exactly the same, we don’t want those products. They don’t work. Is it made in China? We are not interested,” says Mr Signorini.
Suppliers from China usually make people pay for the stock upfront, so to get around the issue Solarway has given stock on consignment – allowing shop owners to pay for the items once they have been sold. The company’s price point was also an issue initially – the lanterns, which are sold across Africa, range from $20 to $29. Wholesalers are used to making larger margins, so are unwilling to work with Solarway, forcing the company to find its own model.
“We get 10 field angels, we stock them in the morning. They go out in the day. They come back at night and hopefully they bring back the sales.”
But Solarway has also donated 10,000 solar lanterns to help doctors fight the Ebola crisis in West Africa as more than 90 per cent of the affected areas are surviving without light on a daily basis.
“Watching the epidemic unfold on the news and seeing how these people could really benefit from our help using solar lights, not only did we want to help, we needed to,” says Mr Signorini.
“The lanterns also make it possible for those without the use of a typical plug socket to charge their mobile phone, which is another crucial part of supporting these people – communication. It is unbelievable how this one lantern has the potential to save so many lives.”
Follow The National’s Business section on Twitter
Updated: November 25, 2014 04:00 AM