Posts Tagged ‘mozambique’

Vidagas raised $1.4M for social business

September 1st, 2009

vidagas truckCongratulations to VillageReach for leading the successful fundraise of $1.4M from Oasis Capital, a European social venture fund to expand their African social business, Vidagas.

I have previously written about Vidagas and how they have innovatively developed a commercial business to become the largest distributor of propane gas in northern (mostly rural) Mozambique.

Seattle Times has more details.

Delivering propane as a social business

January 6th, 2009

Vidagas is currently the leading distributor of propane in northern Mozambique … the least developed and primarily rural portion of the country. It has recently become profitable and is raising additional capital to expand into additional provinces of Mozambique and beyond.

What’s most interesting about Vidagas is that it’s a social business. It was started in 2002 by two NGOs VillageReach and Foundation for Community Development. They raised the initial capital and started this business not because they were looking for a great new investment opportunity, but because VillageReach had a contract to improve delivery of medical supplies to the rural clinics. The rural clinics needed a reliable supply of propane to power their refrigerators (to keep their vaccines effective) and for lights so that they could operate the facilities for operations and at night time. And there was no propane supplier.
Rather than simply funding the delivery of propane with government subsidies (if these could even have been obtained), they saw an opportunity to bootstrap a sustainable commercial business with a strong multi-year client … the Mozambique government clinics. So, they created a separate commercial business and then went about operating it like a commercial business selling propane delivery to other local businesses and residential customers. Today, less than 20% of their revenue comes from the government clinics and their customer base continues to grow as they deliver a valued service.

Triple Bottom Line
Vidagas is delivering a triple bottom line:
  • People. It powers equipment in local clinics greatly expanding their services and effectiveness. Households and restaurants which adopt propane for cooking eliminate exposure to smoke and particulates from burning wood or charcoal … a huge health issue.
  • Planet. Every use of propane for cooking reduces the use of biomass fuels. This means less deforestation and destruction of fragile mangroves which are currently having a significant environmental impact.
  • Profit. It generates surplus which creates sustainability and is reinvested into additional capacity to deliver propane (and, in the future alternative energy solutions like solar) in a socially, environmentally and economically enhancing positive cycle.
They created a business which delivers significant social value to people in an impoverished, unserved market. It’s no wonder the World Bank and UNDP have recognized Vidagas as a distinguished social business.

Going the last mile to save lives

January 5th, 2009

I was introduced recently to VillageReach, an innovative non-profit headquartered in Seattle which is focused on addressing one of the largest issues in healthcare delivery systems in emerging countries … delivery to the local clinic.

Most of us in developed countries just assume that the pharmacy/clinic will have the medicine when you need it. You don’t realize the sophisticated logistics that work behind the scenes to get the right quantities of medicines to the right pharmacies when they are needed. The same process is used to get food and toilet paper to your local shop. And if it’s food that requires refrigeration, you trust that someone has kept it cold (and the at the right temperature) from its source to where you buy it so you don’t get sick when you eat it.
VillageReach was created in partnership with the government of Mozambique to develop a system for distributing medicines to rural clinics which were facing ongoing issues. One of the key metrics that demonstrated the brokenness of the system was the vaccination coverage. Despite ample supply of vaccines at the regional level, there were large groups of the population who were not receiving vaccinations creating an ongoing significant public health issue.
As VillageReach visited the rural clinics in northern Mozambique they were to supply, they learned about some major problems including:
  • no system for recording and reporting vaccine inventories
  • no system for forecasting vaccine demand needs
  • no system for ensuring cold chain to ensure vaccines were still effective
  • oversupply stocking of some vaccines (essentially hoarding)
  • many regular stock outs for many vaccines
  • no confidence in the upstream system for delivering vaccine supplies
“Cold chain” is the technical term used to describe the process by which a product needs to be kept consistently at a certain cool temperature to protect it from spoiling. Like certain foods, many vaccines require consistent cold storage and lose their effectiveness if the temperature is not maintained. The only thing worse than not getting a needed vaccine is getting one that is no longer effective and thinking you’re protected.
Since many of these clinics did not have electricity, the only option for refrigeration was to use propane-powered refrigeration units. The issue … there was no reliable supply of propane to these remote clinics. With no other option, VillageReach raised money to start a commercial business called Vidagas to order to deliver propane tanks to the clinics. I’ll write a separate post later about Vidagas.
VillageReach then built a paper and software system to manage the logistics of vaccine delivery from regional warehouses to the government clinics. A trained staff person visited each clinic on a regular basis to take delivery vaccine inventory, record the status of refrigeration equipment, provide updates/training to clinic staff, gather details on expected demand in order to better plan for the next vaccine delivery and pickup any other details which are essential in order to address special issues.
The result … the vaccination coverage rate for DTP3 went from 69% to 92% (developed world levels) and > 90% coverage for almost all other vaccines. In global health circles, this is as close to a miracle breakthrough as you get! The Mozambique government, the World Health Organization, PATH and many other organizations have all expressed sincere excitement about these results.
Why does this matter?
First there is an immediate opportunity to deliver existing vaccines in order to eliminate dehabilitating and fatal preventable diseases in markets with poor infrastructure. Additionally, there are new vaccines in the works, like the malaria vaccine, which have huge potential to save/improve millions of lives but currently have no delivery system to many of the most vulnerable populations.
Effective logistics isn’t as sexy as a new amazing vaccine, but it’s essential to fulfill the value of delivering these life-saving treatments.
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