Kernel Fresh Liberia

In Liberia, a wild variety of palm trees grow naturally. For centuries, these trees have grown according to a natural pattern in which nuts fall to the ground and new trees grow.

Unlike multinational companies that clear large swathes land to plant palm, in rural Liberia, no one plants and no one cuts these trees. They are managed by the local communities, and serve as an important source of income and vegetable fats. 

However, more than 90% of these smallholders live in poverty. Due to lack of access to finance, smallholders have to use their bare hands to make oil. This results in 35% of palm fruit going unharvested, and 50% lower oil yield. 

We help triple smallholders' incomes by providing access to more efficient mini oil palm mills and access to markets, leveraging blockchain technology to ensure end-to-end transparency, traceability, and efficiency across the supply chain. 

Globally, palm oil production is associated with multinational corporations clearing large of rainforest land, and destroying animal habitats to create plantations.

Ours is a different experience. In Liberia and across most of West Africa, oil palm grows naturally in the wilds, without anyone having to plant, due to the region's agro-ecological profile. In rural areas, palm trees are communally owned and operated. As such, palm oil cultivation in most rural communities do not cause social and environmental devastation associated with large-scale multinational oil palm production.

Sadly, most of Liberia's 29,000 smallholder oil palm farmers and their families live in crushing poverty. While there is no shortage of palm fruit supply, smallholders lack access to modern processing technologies, and have to manually squeezing the palm oil out of the fruit.

This inefficiency results in 35% of Liberia's palm fruit going un-harvested every year. During processing, smallholders suffer an additional 50% oil loss due to inefficient manual processing techniques.

After processing palm oil from the outer layer of the palm fruit, smallholders waste almost 100% of the palm kernels (the oilseeds), further losing additional income.

Smallholders communities risk missing out significantly on economic development opportunities due to this technology gap. 

We manage and operate mini oil palm mills in partnership with rural communities. In lieu of the inefficient manual extraction technique, farmers use our machines to process palm oil at no up-front cost. In return, they pay us 10% of the oils produced. Our machines reduce processing time by 90% and increase extraction rates by 50%. As a result, over 500 smallholders with whom we currently work have seen their incomes increase by 264%.

Additionally, we purchase the hitherto-wasted palm kernels from smallholders, and process them into palm kernel oil to create a range of beauty products, creating an additional income source for farmers.

Our next initiative aims to bring these smallholder farmers into the supply chains of global beauty brands interested in ethically sourced palm kernel oil.  We are currently working with Pacha Soap, a US-based natural soaps company (Whole Foods' 2018 Supplier of the Year) to turn the entire supply chain organic,  and to integrate blockchain technology to ensue transparency and traceability across the supply chain. Once this is done, farmers will receive a premium of at least 30% for their produce. 

This initiative has the potential to improve the livelihoods of thousands of farmers and their families.

1. Farmers: Previously, farmers wasted the palm kernels after processing palm oil because they lacked access to markets for their palm kernels. Now, J-Palm Liberia purchases hitherto wasted palm kernels from smallholders, creating opportunities for them to grow their incomes. Here is one farmer's story: https://youtu.be/_BKiTNHjIoI 

2. Women and youth: J-Palm Liberia strives to create decent work and economic opportunities for Liberian youth and women. The average Sales Rep at J-Palm has 5 years of education and otherwise would be unlikely to get stable employment in Liberia. By working as a Sales Agent at J-Palm Liberia, Sales Reps like Elizabeth Kamara are able to take care of her families and send their children to school:  https://www.youtube.com/watch?v=wYl0osG37Eg 

3. Our customers: Our goal is to place the Liberian/ African consumer at the center of our R&D/ product design process. We create products that are efficacious, affordable, and relevant to the lives of the local consumer. A customer, Savina Sackie, shares how J-Palm Liberia's Natural Moisturizing Oil (Kernel Fresh)  helped clear her acne:  https://www.youtube.com/watch?v=TXLxxMrY92s

Natural ingredient supply chains such as palm oil have to the potential to improve smallholder livelihoods and reduce environmental impact if properly structured, managed, and promoted. However, smallholders in Liberia are currently bypassed by global palm demand, whilst instead promoting palm from industrial plantations that cause huge environmental degradation.

This status quo creates a vicious cycle of poverty: smallholder farmers remain poor because they are too poor to purchase equipment, and lack access to markets, despite massive global demand for palm oil and a huge stock of wild palm trees.

Our initiative creates opportunities for thousands of farmers to prosper.

USAID's Smallholders Oil Palm Support Project (SHOPS) addresses the problem of smallholders' lack of access to processing technologies at the macro level through a technology transfer program that trains Liberian blacksmiths to locally fabricate mini oil palm mills. While the mills significantly increase yields and efficiency for producers, uptake has been slow (less than 1000 units sold nationally), as smallholders cannot afford the cost up front. In essence, we are solving a last-mile problem, using a sustainable business model to increase smallholders' access to this transformational technology.

While the fabricators produce the mills largely in urban centers, our mills are stationed in rural areas where the majority of smallholders reside and operate. Our solution is complementary to SHOPS in that we take the technology that has already been developed, and make it widely accessible to smallholders in the most remote villages across Liberia through a viable for-profit model.

We are different from the USAID SHOPS Program because while they focus on technology development and transfer, we focus on democratizing access to the mills across rural Liberia. While the oil palm mills have the potential to significantly increase incomes for smallholder producers, most smallholders simply cannot afford the US$3500 cost up front in communities where a majority of smallholder farmers live on less than $2 a day.

As a business, J-Palm Liberia has the capacity to absorb the up-front cost of the machines, allowing smallholders the opportunity to increase their oil palm yields and incomes.

Oil Palm Mini Mill

The innovative continuous-feed palm oil expeller, called the Freedom Mill in Liberia, pulps the fruit and extracts the oil in the same operation. The per-hour processing capacity of this expeller is eight times greater for the manual version and 20 times greater for the motorized expeller, compared to oil palm processed with the traditional manual method. The significantly higher extraction rate of 18 percent — when processing fruit from the hybrid tenera oil palm variety — increases oil production by more than 60 percent compared to the predominant traditional method, and 24 percent over other intermediate-scale mechanical methods.

Blockchain Technology

A critical component of this project is the direct link from smallholder to customer, which will be achieved using Blockchain to track every Kg of palm kernels produced. Customers will be able to trace the supply chain back to individual smallholders in Liberia who produced the palm kernels that went in to their product, and also obtain details on the impact this supply chain has had on their income. This type of traceability matches demand trends where customers want to know exactly how their ingredients are sourced, which is particularly critical for an industry such as palm oil which has a significant amount of negative press because of the environmental damage plantations have caused, especially in S.E. Asia.

Machine demo Video: https://www.youtube.com/watch?v=vLt0FTXg2KM

Project evaluation and impact report for Smallholder Oil Palm Support Project, a USAID-funded project, which introduced the technology in Liberia: https://pdf.usaid.gov/pdf_docs/PA00K1K9.pdf

Our overarching goal is to grow the monthly incomes of 6500 smallholder oil palm farmers in Liberia by at least 250%, within the next 5 years. Baseline average monthly income (based on survey) is $33.

The basic formula that underpins our theory of change is:

Income = Price x Quantity of Palm Fruit Processed + Income earned from by-products - Production Cost

Here are our theories:

1. By creating access to more efficient oil extraction machines, smallholders will harvest more wild palm fruit (at least double, based on our experience). At a basic level, smallholders' output is a function of quantity of palm fruit harvested, and the oil extraction rate. The harvest quantity is, in turn, a function of the amount of time it takes to process each batch of palm fruit. Palm fruit goes rancid within 3-4 days, and so harvest quantity is inversely related to processing time. By creating access to a faster processing machine (30 minutes vs. 8 hours if processed manually), smallholders can process more fruit within any given time, and hence will harvest more palm fruit because they're spending significantly less time on processing.

2. Farmers will yield more oil: The machine increases extraction rates by 50-80% in our experience. Hence, for any given quantity of palm fruit harvested, they will make more oil. 

3. Farmers face lower production costs because of more efficient machines: When farmers use the traditional manual extraction process, they often have to hire the services of other community members (up to 8 persons) to manually pound and squeeze out the oils. As payment, they sometimes give these helpers a share of the oils produced, plus a full meal. Access to a mill eliminates this extra cost,  as the machine requires only 1-2 operators.

4. By creating a market for previously wasted palm kernels, farmers earn additional $16.5 per ton of palm fruit processed. This is income that previously went to waste.

5. By certifying smallholder communities and palm trees organic, smallholders will earn a 30% premium on their oil prices, and a guaranteed market for ALL their produce.

Direct beneficiaries are the farmers. However, average household size is 5.1, and so these indirect beneficiaries are included in parentheses.

Current number of farmers served: 508 (2591)

In one year: 1500 (7650)

In five years: 10,000 (51,000)

Our immediate goal for 2021 is to turn our entire supply chain organic. We already have received a Letter of Intent from a Rotterdam-based buyer, committing to purchase all of the oils we can produce (minimum value of $1 million per year). Organic certification will immediately expand our addressable market, and hence create opportunities for us to bring more smallholder farmers within our supply chain. Our plan is to almost triple the number of smallholder farmers within our network, to 1500.

Within 5 years, we will have expanded to all of Liberia's 15 counties, working with at least 10,000 smallholder oil palm farmers.

Our main goal is to bring the wild oil palm variety into the mainstream. We have received signal from many mid-sized and large companies in Europe and the US,  that they are interested in sourcing palm kernel oil from us, conditional on us achieving organic certification, and integrating traceability technology such as blockchain within our supply chain.

We envision a future within the next 5 years where "Wild Forest" Organic Palm becomes a standard/movement (versus plantation palm with questionable sustainability and ethical footprint), and consumers can, for example, scan a QR code on a product's packaging to trace exactly where the palm oil/ palm kernel oil in their products was sourced from. This will tremendously increase value for Liberian/West African smallholder farmers, and impact a significantly larger number of farmers and families than we have projected.

We currently face two key challenges:

1. Human Resources: Liberia's protracted civil wars caused a mass exodus of trained professionals. While the war ended more than a decade ago, most of Liberia's professionals have not returned home. The few professionals in the country either work for large companies or for the government, as small businesses like ours cannot afford to pay them what they demand. While we have been able to grow rapidly with limited bandwidth, we can accelerate our impact at a much faster rate with more talented individuals on the team.

2. Limited Access to Financing: In Liberia, young entrepreneurs have almost zero access to capital. Banks often require collateral in the form of immovable assets such as houses and farms worth 2.5 times the value of the loan. These are forms of collateral that we do not have access to at J-Palm. In addition to this stringent collateral requirement, the banks also charge upwards of 25% interest on loans, making it unviable for a startup venture. 

1. Human Resources: Over the last 2 years, we have developed a High-Level Strategy Committee, comprising of senior managers, leaders, and mentors at companies such as Coca-Cola and Johnson & Johnson. These business mentors provide guidance on strategy, R&D, marketing, sales, and strategy execution. They're also providing mentorship and guidance to our team members, to enable us strengthen our skills and technical expertise.

2. Our plan is to tap into grants and business plan competitions, and using those funds strategically to improve our business operations to ultimately attract equity investors. In fact, we have already received our first round of equity financing. However, we intend to continue to leverage grant funds to improve our unit economics and grow the company's valuation before going into a second funding round.

Full Time: 41

Part Time : 12

Casual labor: 15

• We have more than 50 years of combined experience in agriculture, engineering, finance, marketing, and sales from leading universities in Liberia, the US, and Indonesia.
• We were all born and grew up in Liberia. We have deep knowledge of the local landscape, culture, and markets.
• We've pioneered this model in Liberia, have 7 years of experience building relationships with local communities, leaders, farmers, and stakeholders. We understand this market INSIDE AND OUT.
• We are the first company in Liberia to transform a previously wasted agricultural product into a leading national brand. We have grown our business by 900% over the last 4 years.
• We are committed, passionate, steadfast and focused. It took us 5 years to reach profitability. Yet, we persevered - in a country with VCs, and almost no access to capital. This is because we 100% believe in the vision.
• We have achieved widespread recognition (locally and internationally) for our work.

Johnson & Johnson: As winner of the Johnson and Johnson Africa Innovation Challenge, we have access to JNJ staff who provide support to us across almost all business functions - packaging design, branding, procurement and sourcing, supply chain effectiveness, manufacturing operations, product testing, research and development, marketing and sales. Our engagement with JNJ has strengthened our company, by helping us improve performance standards across the company, create new product lines, and by developing business software tools to improve effectiveness.

Pacha Soap: Our partnership with Pacha leverages the purchasing power of Pacha Soap, and their relationship with Whole Foods, to create and grow the U.S. market for organically certified oil from smallholders in Liberia.

We source palm kernels from smallholder farmers in rural communities, that we cold-press into crude palm kernel oil. We make money by:

1. Manufacturing Skin and Hair Care products from the oils, such as lotions, soaps, moisturizing oils, hair butters, and facial scrubs. Consumers increasingly care about products made with natural ingredients for healthy skin and hair. 

2. Selling the crude oils in bulk to other companies, mostly for soap making purposes. Beyond the domestic market, there is also a large and growing international market for sustainable, organic Palm Kernel Oil, underpinned by large-scale consumer backlash against harmful environmental and human rights allegedly practiced perpetrated by large multinational palm oil firms. This trend puts J-Palm in a solid position to fill demand. 

3. Selling the oil cakes to animal farmers for use as low-cost, highly nutritious animal feed.

 4. Selling the palm kernel shells for use as clean energy/ biomass in industrial plants (in lieu of coal).

We just reached profitability this month, and are also cashflow-positive and can fund our core operations from our profits.

However, we will need to raise financing for our organic certification process. Once we obtain certification and begin to export our oils, we will generate more than enough revenues to cover our expenses. If we need to expand further, we will most likely raise funds by selling shares.

I am applying to Solve because I want to maximize my venture's chance of success, and to maximize my impact. As an entrepreneur operating in a post-war low income country, one of my biggest challenge is simply the lack of access to a network of peers and mentors from which I can learn and grow. The talent pool is also quite thin, placing an increasingly complex number of tasks on the shoulders of a small senior management team. And so, my main motivation for applying is having access to a network where I can gain insights on how to scale my company, how to structure our operations to maximize impact, and how to improve our internal operations to maximize our chance of success. 

International market expansion.

MIT Sloan Students/ Faculty (Marketing and sales, organizational development and leadership, human resource management, international expansion)

Our solution is one of the simplest, yet potentially most impactful ways to lift tens of thousands of African smallholder farmers and their families out of poverty.

We have proven that our solution works, and is scalable. The challenges smallholder farmers face in Liberia (lack of access to modern processing machines, limited market access) are similar to those faced by smallholders in Sierra Leone, Guinea, Ghana, Nigeria, and many other countries across West and Central Africa that fall within the tropical 'palm oil belt.' 

In these countries, palm trees grow naturally in wild groves in the forest, and its processing avoids many of the environmental and socioeconomic challenges associated with large-scale industrial plantations (land grabbing, deforestation, destruction of animal habitats, etc.). However, palm oil remains the most versatile and economical oil for use in a range of health and beauty, pharmaceutical, cosmetic and industrial products.

The massive demand for palm oil continues to create pressures on land and environmental resources. Meanwhile, smallholder farmers, with access to hundreds of thousands of hectares of the highest quality of organic palm fruit (wild forest palm) remain in poverty, and hundreds of thousands of tons of palm fruit go to waste each year.

By simply removing a few last-mile barriers, these smallholder farmers will immediately become some of the most powerful and sought-after actors in the organic palm oil supply chain, and the income they generate could transform whole communities and change the trajectory of their lives and their children's lives.

If we win this award, all of the funds will be plowed into the organic certification process, and in acquiring machinery and the logistic the farmers need to boost their production and access to export markets. 

We have already done all the legwork. We already work with these farmers. We have lined up the buyers. We are currently in talks with the organic certification body. All we need are the funds to make it all come together.

Up until now, the sustainable oil palm movement has been focused on mitigating the harmful practices associated with cultivating industrial-scale plantations.

I think it’s about time to take a model and variety that is fundamentally better, and scale it.