- Country: Kenya
- Industry: Charity, Non-Profit
- Stage: Seed
- Investment size: $11,626 / min. $10,000
- Type of investment: Debt, Equity
The project is based on exhaustive discussions and examining several potential initiatives which could sustain the female population in the country and their family needs and stop the sex-for-food exchange, which risks the life of everyone in the community. Agreed way forward is to start sustainable Soap manufacturing unit in Muhuru bay. Women will need initial seed funding and mentoring in marketing, as well as training support.
THE SOAP PROJECT AS A SUSTAINABLE ALTERNATIVE
With a little start up help the women in the community will be able to continue with their dream of being released from the desperate state of life, exchanging sex for food, and will grow in pride and dignity.
The group’s initial target will be the local Muhuru district with 35,000 residents and the three adjoining districts of Kadem (51,000 residents), Got Kachola (15,500 residents) and Nyatike (63,000 residents) giving a combined total potential local market of 164,500 individuals.
HOW SUSTAINABLE WILL BE THE SOAP PROJECT?
As part of our baseline study we visited three different soap projects, one in Kisumu City, about 350 kilometers away, another one in Siaya District about 500 kilometers away and the final one in Kakamega about 600 kilometers away. In the three projects one was a youth initiative while the remaining two were all women initiated projects. These projects employed 73 people directly and several hundred indirectly and all the directly employed were fully dependent on the project along with their families.
ACCEPTABILITY OF THE PRODUCT
The Kenyan government has done a lot to reduce the stigma of HIV within the community. Our market testing concludes that the community will be very happy to buy SOAP from the WSHG acknowledging the fact that an additional benefit to the end user is not only a competitively priced product, they are also assisting in job creation and indirectly reducing the HIV infection rate by offering an alternative to these women who will no longer work within the sex industry. All the women in the group will sign a memorandum of understanding that they will not return to the Sex trade whilst actively participating in the Soap project.
The Ministry of Health office has vowed support for this initiative, which in turn should lead to wider government support. This support and accreditation will in turn help with the sustainability of the SOAP project. The wider community has also vowed support and the products will be sold on community stalls around the region.
As part of the baseline study and with thanks to the three initiatives we visited for their openness and assistance we found that the average production costs of a 1kg bar of Soap ranged from 41 Kenyan Shillings (Kes) to 48 Kes or $0.49- $0.57. This production cost is inclusive of all Soap Ingredients, packaging, and fixed overhead contribution for power transportation etc. The wholesale price of a 1kg bar of Soap is normally 70 Kes ($0.84), with a direct retail price of around 100 Kes ($1.20).
This region has not even a single Soap production company and with the Government support on this unique initiative which aims at eradicating the risk of HIV new infections, these women stand a great chance to bit the market in the whole country.
Rationale for the deal
PRODUCTION VALUES AND COSTS
The maximum number of soap bar production a day with the proposed equipment is 1200, or 1200Kg. The WSHG will undergo training and capacity building with regard to efficiency. We are targeting production of 300 Kg. per working day in month one, 5 days per week. Rising at a rate of 10% per month until our expected optimum production of 850 kg per day is optimized in month Twelve. The production costs are based on a value of $0.52 per KG. Overhead recovery is set at 10% of the production costs, with a 5% Contribution being retained in the WSHG fund security and a further 5% to cover unforeseen contingencies or to be transferred to profits.
The sale value for cash flow purposes is set at $0.84 (70) Kes being the mean value between our anticipated wholesale and retail activities; it is anticipated that 50 % of the production will be on a 30 day rolling credit line, allowing stall holders to retail product and pay on a memorandum of understanding paying for sold product thirty days after supply.
The cash in bank is not a true reflection of the SOAP WSHG financial status; this figure is prior to payment of any salaries, assuming the key performance indicators are met, the average salary per woman in the group would be around $62 per calendar month.
Use of financing
SEED FUNDING REQUIREMENTS
As startup capitalization to enable this outstanding initiative to proceed, the SOAP WSHG is requesting your support to help change these ladies’, mothers’ and children’s lives. The total Seed funding requirement needed for the project is $5813 as per the chart below.
Item Cost in USD:
Manual Soap Plodder: $938
Caustic soda chemicals oil: $252
Stationary items: $210
Packaging and stamping unit: $302
Cartons and wrappers: $688
Building alterations: $606
Motor Soap machinery: $4400
Kenya registration of trading entity: $1600
Negative cash flow assistance: $2630
Any donations are fully tax deductible as MOSIKO is fully registered as a 501c 3 non-profit organization in Kenya.
Opportunity for the investor
Your support will benefit the community by:
• Directly transforming the lives of thirty women
• Transforming the lives of 99 children whose mothers are in the WSHG
• Focusing on gender equality
• Stopping the shameful sex-for-food these women are forced into
• Reducing HIV infection rates within the community
• Improving health in the community with better sanitation via the use of affordable soap
Flexibility in refund to seed if given as debt to the WSHG is open for discussion with investors with a refund period of 12 Months with interest rate of 20% given the grace period of four months.
If the investor is open for equity to this project, the WSHG is offering 50% of the shareholding and is open to discuss the ROI/IRR and dividends with the investor.
WSHG registered under MOSIKO Kenya, a 501 c Organization and is pleased to receive a seed grant from willing donors to help them pursue the goals of this project and change the living expectation of thousands in Muhuru and in whole Kenya.
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