Sogepal Lda

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Company Outline

SOGEPAL is a Mozambican company, founded in 2010, operating in the Province of Maputo, with a factory located in the Municipality of Matola, headquarters in the City of Maputo and a branch office in the Province and City of Maxixe, operating in the renewable energy sector.

It develops essentially the following activities:

  • Production and marketing of improved stoves;
  • Importation and commercialization of solar systems for domestic use.

Head Office Location: Maputo City, Amílcar Cabral nº 903

Regions of Operation: Southern Mozambique

Company Size: 51-100; >100 employees

Turnover and company impact

The company reached up to now with the commercialization of the improved stoves produced and commercialized by Sogepal a little over 68.586 improved stoves.

The annual turnover (2021) is around 14.98 Million Meticals.

The company has so far created about 70 current jobs, of which 37 new employees are men and 33 are women, currently favoring the hiring of women and young people.

The company has an inclusive business model, namely:

  1. It has provided opportunities for families to generate income through businesses that complement the company's value chain;
  2. Has promoted greater gender inclusion in all production chains, through inclusion in all direct and indirect activities;
  3. Has provided families with access to functional, efficient, effective, safe, and low-cost alternative energy technologies.

The company is currently in an expansion phase, essentially seeking to impact more and more the most remote areas of the Southern Zone of Mozambique.

Solutions Offered

Improved aluminum stove that uses charcoal as fuel and saves 45% of coal use compared to a conventional/traditional coal stove.

Features: The stoves are produced from aluminum and clay, are portable and easy to transport with a weight of about 7Kg, able to support pots up to 100Kg of weight, has a useful life of about 3 years and renewable for the same period after maintenance, is easy to clean/wash and has air vents that facilitate the complete combustion of coal.

Unique selling price to the consumer: 600,00MT (Six hundred Meticais)

Sogepal has external financial support from grants through Partnerships with Non-Governmental Organizations (NGOs) operating in Mozambique directly or indirectly.

Consumer Insights

The improved stoves target low- and middle-income families in rural and peri-urban areas in the southern part of Mozambique.

End-user Financing

We offer subsidized improved stove sales prices, credit, mobile money to customers.

Distribution Network to Reach Customers in Remote Areas

The improved stoves reach consumers through:

  1. Sales promoters who do door-to-door sales in the community
  2. Resellers who do sales through points of sale within the community
  3. Community awareness raising with the support of Local Structures

O&M and After-sales service (Warranty, Repair, Replacement and Sustainability)

The company provides pre-sale and post-sale follow-up on the correct use of the stove, the former at the time of sale through explanation of use, and the latter by the call center team through follow-up monitoring.

At the time of sale, the customer is given a 90-day warranty against manufacturing defects. When the stove is sold, the customer is provided with a warranty certificate, which contains:

  • Customer Data - name, address, customer contact;
  • Product data - serial number, price, warranty period, model;
  • Company data - name and contact of the sales manager/promoter, address and contact of the company.

This warranty certificate, is the document that will be used by the customer within the period established by the company as a warranty to claim any anomaly arising from the manufacture of the product.

If the customer reports a defective stove, the company will immediately replace the product, through the regularization of data when necessary, such as serial number, new delivery date of the product, new warranty, etc.;

The manufacturing of the stoves is done by our company, therefore all costs to be incurred is the sole responsibility of the company.

The company makes sure that a defective product brought to the company is really the product that the company sold, because at the time of sale is filled in the warranty certificate in triplicate the serial number of the product that is the only production that is filed one and registered in the database of the company along with all other customer data.

The stoves have a useful life of 3 years, however it can be renewed for another 3 years through the maintenance of the ceramic or metallic part by paying 50% of the current sale price of the stove.

System Monitoring

The improved stoves are monitored through a customer sales management platform with cloud solutions.

Impacts on End-users

So far, the improved stoves produced and commercialized by the company have impacted 342,930 beneficiaries.

The company has had a positive impact with the commercialization of the improved stoves for the target clients in the following way:

  1. Generation/creation of family income savings resulting from saving the consumption of coal by 45%, allowing investment or consumption in other areas, such as: food, education and health;
  2. Possibility of reducing diseases resulting from prolonged exposure to household smoke, such as:
    1. Respiratory and eye problems;
    2. Skin irritations.

Challenges and Recommendations

The main challenges faced are:

  1. Need for qualified human resources for various functions in some key areas in the company;
  2. Access to funding for investment in the expansion of the company's activities that may result in the implementation of a more inclusive and sustainable business model, because the company operates in a market with great potential, so we need to strengthen existing activities and increase the range of action to a wider market

The main challenges have been solved in the following ways

  1. By hiring employees with appropriate experience and qualifications in performing the functions of the key areas of the company;
  2. Through the training and qualification of the existing employees in the company;
  3. Through the outsourcing of some functions/activities based on hiring consultants in the short and medium term.       

Challenges related to cooperation and funding eligibility

We seek partnerships with institutions interested in our products and services, such as NGOs, private companies, and financial institutions. However, we face the following challenges related to cooperation and funding eligibility.

  1. Partnerships with NGOs and private companies have occurred, but are short term, which does not allow for the implementation of long term action plans of the company.
  2. On the other hand, although our business plan is attractive to financial institutions, we are not eligible for long-term financing, limiting ourselves to short-term financing due to lack of bank guarantees, which could allow sustainable investments for market improvement and expansion.

The biggest challenges related to reaching consumers who are located over long distances are:

  1. High costs to be incurred in logistics for accessing potential consumers, with more emphasis on transporting technologies and sales teams;
  2. Quality technological means available for communication that can allow constant interaction between the company, resellers and consumers, as well as for making payments, considering that most sales are made on credit.

The above challenges are essentially overcome based on the sales made by the company with the support of local structures and references within the communities that provide the necessary support, for example: (a) Support of local structures and local references in identifying temporary warehouses and facilitating the use of local transportation means at more accessible costs.(b) Support of local structures and local references in the sale and collection of stove values.   

We have not identified any policy and regulatory constraints so far, however, we have also not identified any policies and regulations that could boost our activities related to renewable energy through benefits or others in order to promote more activities directed to the most vulnerable communities in the country.

The recommendations are summarized as to seeking to unite the different stakeholders and identify the challenges as well as the opportunities, thus allowing each actor to identify their role in achieving small-scale objectives as a company. Together, stakeholders must identify themselves as being objectives carried out on a larger scale, so that it can benefit the Mozambican population broadly and equitably.

COVID-related Constraints

The company had several constraints related to COVID, however we consider the most relevant ones:

  1. Inventory/services: restriction in the supply of raw material/services and the price speculation generated by the limitation in access to suppliers/service providers resulting from the Covid-19 pandemic.
  2. HR/Production: Following the measures announced by the government in order to mitigate the risk of contamination by the virus, we have reduced the number of staff working on company premises, administrative staff are working from home, factory staff are working in shifts, consequently production capacity has been reduced;
  3. Commercial/Finance: Reduction in the level of sales due to the slowdown of economic activity in the country.

The contingency plans implemented to guarantee survival during this period were

  1. We reinforced raw material supply levels, increasing the stockpiling period to a longer period than usual, to guarantee production in that period due to difficulties in purchasing raw materials;
  2. We reduced activities that involved expenses not essential to the vital functioning of the company, in order to safeguard minimum financial availability and to safeguard its operational continuity;
  3. We further reinforced the system for collecting values from our customers by encouraging the use of available technological platforms, namely electronic banking and mobile banking, with a view to reducing travel and face-to-face contact costs;
  4. We provisionally relocated some employees from the production area to the sales area in the collections sector, considering the sensitivity of the flexibility required.