“That’s way too expensive, they will never buy it,” Judith Walker was told frequently when she told people about African Clean Energy. The family business that she runs with her brother and parents is a ‘multifunctional energy source’ – rather: a quality oven for the Bottom of the Pyramid. This device costs 99 euros and runs on twigs, leaves or preferably dried cow dung ‘because that burns best’.
Walker, who was listed in the Europe 30 under 30 by the US Forbes earlier this year, left the sceptics behind. This year, the sales tripled and ACE delivers more than six hundred stoves per month in the home country of Lesotho.
Pa Walker noticed, when working at Philips, that locals loose a lot of money on polluting fuels that cause serious health problems. After some good research and by investigating the customer needs, he developed the ACE1: a little stove to cook safe and cheap, which even provides LED light power and charges your mobile phone via USB.
“One of the reasons for success is that people can earn back their investment in six months,” Walker said. ACE helps to regulate microfinance, so the target group can instantly save money. That is the most important purchase consideration. The fact that this product saves energy for the long term is secondary.
“We have not had any customers yet who were not able to pay their monthly repayment. Many people purchase the stove together with a group, that brings a lot of social control. However, people regularly pay late. Then we call them. The money transfer goes via the telephone.”
“The biggest challenge proved to be reaching the right audience and convincing them.”
As the Bottom of the Pyramid advised, Walker started working with local sales teams that went to every village to tell the story. “Now we run into a supply problem: we can not prefund thousands of devices.” In order to reduce production and distribution costs, the Walker family has set up a local factory in the South-African country with 53 employees, including 31 women.
One of the main values of African Clean Energy is the excellence of the product. “You have to respect your customer and deliver a product that you would like to have at home. I’m really frustrated about the rubbish that is brought in this market. These people are poor, but they are not stupid!”
During the next few years, the family firm is working on their international rollout. The factory in Lesotho has to scale up production to one thousand pieces per month. The family is already investigating the possibilities of a second plant in Uganda. They also started a project in Cambodia and they are making plans for other countries.
Walker is often asked why ACE is a for profit organization.
“Build an app, earn millions and you’re a hero. Build a sustainable business with social purpose and you get strange looks. ‘You do well OR you do good’, seems to be the prevailing thought. We show that a combination of those two also work.”
Judith Walker (26)
Company: African Clean Energy
Revenue: $1.2 million (expected)
Sold units: 12,000