1 / 36

EPKOEP PRESENTATION

EPK - Outgrowers Empowerment Project Company Limited. 7 th ANNUAL MEETING CLUB-ER Rural Electrification Strategies in Africa: lessons and perspectives in partnership with the PACEAA / GTIEA project Mombasa, Kenya, 23 - 26 March 2010. EPKOEP PRESENTATION. Empowerment. For Sustainability.

robert-pickett
Download Presentation

EPKOEP PRESENTATION

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. EPK - Outgrowers Empowerment Project Company Limited 7th ANNUAL MEETING CLUB-ERRural Electrification Strategies in Africa: lessons and perspectivesin partnership with the PACEAA / GTIEA projectMombasa, Kenya, 23 - 26 March 2010 EPKOEP PRESENTATION Empowerment For Sustainability

  2. INTRODUCTION • Who are EPK Outgrowers Empowerment Project Co. Ltd.?

  3. Who are EPK Outgrowers Empowerment Project Co. Ltd.? • A community Based Organization. • Started initially as a tea farmers mouthpiece. • Registered as a Limited Liability Company in March 2006. • Located in Western Kenya – Nandi District, 70kms south of Eldoret International Airport.

  4. Location of EPKOEP

  5. Who are EPK Outgrowers Empowerment Project Co. Ltd.? • Its members are small scale tea farmers who deliver their tea to the 7 (seven) Eastern Produce Kenya Ltd owned and managed tea factories hence the initials ‘EPK’ in its name. • Current membership of EPK OEP stands at 5500 farmers.

  6. Reasons for Formation of EPKOEP • Address the falling/fluctuating prices of tea. • Agitate for better terms of trade with our tea processors e.g. leaf collection, road conditions. • Give farmers an opportunity to participate in the in the whole tea production and supply chain (Growing/manufacture/export). • Kshs 8 Million raised by June 2006. Eastern Produce Kenya Ltd offered to sell to us one of its tea estates with a factory at Kshs 400 Million (5.5M USD)

  7. Reasons for Formation of EPKOEP • The amount looked impossible to raise at first but we agreed to try. • Farmers now own 41% of the property. We are actually ahead of schedule by 16% • Assist members mobilize the resources they have for profit not subsistence only. • Identify investment opportunities that members can participate in jointly and increase their incomes.

  8. Reasons for Formation of EPKOEP • This is through diversification of activities-not relying on tea alone. • Assist farmers by availing/sourcing credit to buy farm inputs, marketing of produce etc. • Educate farmers on sustainable use of resources e.g. conservation of water resources and environment. We also educate our members to stop subdividing their land as this makes agriculture uneconomical.

  9. Management Structure • EPK OEP has a board of directors of 5 members. • Directors are elected from the various zones that farmers come from. • There is a Zonal Committee of 50 members (delegate system) that is answerable to the Board of Directors.

  10. Management Structure • The directors make the day to day decisions of the company. • The company has 3 permanent staff. • A team of 29 (twenty nine) trainers (TOTs) has been formed to train farmers in any subject(s) of relevance.

  11. Annual General Meeting (All shareholders) Board Of Directors 5 Premium Committee 15 Negotiations Committee 7 Staff Environment, Food Security, Health and Safety Committee 7 Internal Control Committee 5 Zonal Committee 50 Sheds Committee 167 EPK Outgrowers Empowerment Project Co. Ltd.Organization Chart

  12. FAIRTRADE LABELLING ORGANISATION (FLO) • The story of EPK OEP would not be complete without mentioning FLO. We knew about them in early 2006. • FLO is a certification body with its headquarters in Bonn Germany. • It has Regional Offices in all the areas it has a presence. • Its mandate is to ensure that farmers (producers) from the third world countries are able to sell their products at prices above the cost of production. • Ensures that a social premium is paid to the producer in addition to the purchase price.

  13. FAIRTRADE LABELLING ORGANISATION (FLO) • About Kshs 73.Million (USD 1,000,000) received todate. • Premium intended for use in community projects and investments that benefit all farmers. • 70% of the premiums invested in the factory that we are buying. • 25% is used on community projects, 5% in administration. We have currently put up 8 projects as follows:- • 3 dispensaries, 1 staff house in a school, one class room, one school kitchen and two water tanks. • We have started an artificial insemination project using the premium funds.

  14. Annual General Meeting of EPKOEP

  15. A Rural Dispensary Coming Up

  16. Tea Factory that our farmers have bought

  17. POTENTIAL ROLE OF EPKOEP IN THE KIPCHORIA RURAL ELECTRICITY PROJECT • The project is located in our area of operation. • The target rural community identified to benefit from the project are our members. • We will provide the financing/credit to members to pay for electricity connection. • EPKOEP views the electricity project as one way in which it can have a greater impact on the community through provision of electricity with a social element.

  18. POTENTIAL ROLE OF EPKOEP IN THE ELECTRICITY PROJECT • Over 90% of EPKOEP members are not connected to electricity either because they cannot afford it or they are sited too far from a transformer. This provides a very big connectivity potential from the small hydro project. • EPK OEP would therefore like to be an undertaker in the project and sell power to its members under terms that they are comfortable with –e.g. cost of initial supply could be slightly reduced and payable over a period of up to one year.

  19. POTENTIAL ROLE OF EPKOEP IN THE ELECTRICITY PROJECT • EPK OEP will encourage group purchases where farmers in a particular zone will be connected at the same time. • KPLC has attempted to do this but most connections are still done on individual basis and this is what makes accessing electricity very expensive. • EPK OEP will provide the electricity to its members on the basis of their tea production. This will encourage farmers to maximize their production to be able to get electricity. • We are in the process of introducing extension services for the farmers to enable them maximize production

  20. POTENTIAL ROLE OF EPKOEP IN THE ELECTRICITY PROJECT • EPKOEP intends to provide electricity to its members in a manner they are comfortable with. • This venture fits into our plans. Our Memorandum and Articles of Association incorporates electricity generation.

  21. STRONG POINTS TO JUSTIFY ROLE OF EPKOEP IN THE SHP • We would also like to put up a value addition plant for tea. • Our main reason of highlighting the new developments is that we would like to site them at a point where we can utilize the power generated from the small hydro. • We are capturing the projects in a 5year strategic plan.

  22. Current Generation Plant

  23. Building housing current generation plant Constructed in the 1930s

  24. Water overflow from the channel running the turbine

  25. Normal Kipchoria river flow

  26. CONTRIBUTION OF EPKOEP INTO THE PROJECT • EPKOEP as a company does not make any money in its day to day operations. As a Community Based Organization, it is only holding members’ investments in a trust kind of set up. • We could ask members to approve that 10-30% of premium received goes towards the electricity project. • This is because upon purchase of 49.5% stake in Siret, the premium funds will be freed up. This will be done by July 2010

  27. CONTRIBUTION OF EPKOEP INTO THE PROJECT • What we as EPK OEP directors can promise with certainty is that once the project is complete we will be able to fund all distribution to farmers using the Fair trade premiums and members contribution. • From our experience in buying the tea factory, I would say that we don’t feel that it would be intimidating if it were to take on the generation installation and management.

  28. STRONG POINTS TO JUSTIFY ROLE OF EPKOEP IN THE S.H.P There have been some new developments. • There is a likelihood of us buying a second tea factory which happens to be the first factory to be connected to the small hydro supply. • As part of diversification EPKOEP is looking at putting up a maize milling and packaging plant, milk cooling plant, timber treatment.

  29. AREAS THAT EPKOEP WILL NEED ASSISTANCE. • Necessary technical know how in electricity generation and distribution. This will be through recruitment/training of staff. • Assistance to put in place the necessary billing system and recruit staff to manage it.

  30. AREAS THAT EPKOEP WILL NEED ASSISTANCE. • Legal expertise to develop systems to govern the project e.g. with customers, KPLC and EPK Ltd. • Directors will require capacity building through training to be able to make correct business decisions related to the project.

  31. STRENGTHS OF EPK OEP • It is a legally registered company • Its memorandum and Articles of Association has electricity generation as one of its functions. • It has a board of directors and a management structure in place. This will only require to be strengthened through training and capacity building. • Potential for uptake of the generated power is high.

  32. STRENGTHS OF EPK OEP • Eastern Produce (k) Ltd who are the main partners of EPKOEP have very good financial and other management systems that we are already borrowing from. • Most of the raw material for use in the small industries can be sourced easily from our members. • Strong Capital base as evidenced by purchase of tea factory and estate and possibility of buying more. • Our association with Fairtrade has opened up for us opportunities that a few years ago were a pipe dream. We will be able to train the directors and staff in all management aspects using the premium funds. We will also use part of the premium funds to finance the project.

  33. OPPORTUNITIES TO EPKOEP AND ITS MEMBERS IN THE PROJECT • Creation of employment in the small and medium industries that are expected to come up. • We will encourage our members to step up agro-forestry activities to provide poles for use in the distribution of electricity. Excess poles can be sold to KPLC. • Improvement of environment

  34. OPPORTUNITIES TO EPKOEP AND ITS MEMBERS IN THE PROJECT • Opening up of the region to investment due to availability of power. • Workers manning the investments will create a market for local produce – milk, poultry products, vegetables etc. • We will see reduction in cutting down of trees for firewood and charcoal if farmers get electricity. • There will be a general improvement in the socio-economic status of members

  35. CHALLENGES THAT EPKOEP MAY FACE • Poverty levels may see a low uptake of electricity generated by members. We will however empower our members economically to enable them afford electricity. • Government legislation provides for monopoly in power distribution. EPKOEP may sell the power to the monopoly. • Ways will have to be found to ensure that farmers are connected even if it is not EPKOEP carrying out the distribution.

  36. CHALLENGES THAT EPKOEP MAY FACE • The cost of providing electricity is quite high and EPKOEP will have to identify sources of funding to adequately finance distribution of electricity.

More Related