Manuel Rodrigues, Merging Commercial Success with Social Impact

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Hi there, everybody, and welcome to another episode of Difference Makers Discuss.
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I'm Sinead Donovan and I have an amazing interview today with Manuel Rodriguez.
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Manuel is a chartered accountant member of South Africa.
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And you have met him before in the Young Difference Makers Discuss, but we're catching up with him again as we see his journey where he's grown his company EDP, Mozambique, to a phenomenal micro uh economy.
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Um, and I'll pass over to Manuel to fill us in on the details.
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Um, yeah, so it's uh it's a Portuguese phrase called the escolha do povo, which means the people's choice.
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And um we started that project um in 2014, and over the years it's grown and developed, and I think some of the some of the listeners have followed the the project's progress.
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Uh, but effectively what the the project does is it's got a network of small-scale farmers that produce maize and soya in a very rural village called Vilo Longwe in the Tet province of Mozambique.
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So we've got about 55,000 uh small-scale maize farmers on the books and about uh 14,000 soya farmers.
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And what these guys do is they grow maize in this, they grow soya and we buy all that product back from them and we process um or make products for the formal market um with those raw materials.
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And um when we did the analysis initially um in terms of of the needs of the market as well as the um uh commercial viability, we decided to then go into poultry.
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So, what we then did was we annexed a uh commercial hatchery where we produce stale chicks.
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Um, and we at the feed factory we produce now a chicken feed using the maison soy that comes from the small-scale farmers.
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And effectively what we've done is we've started this training program where we teach the small-scale chicken farmer how to buy their chicks and their feed and to grow a uh a chicken that they then sell in their various communities um as a protein source.
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Um, so this was backed by the government.
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We've had a lot of government support uh because not only is it uh creating opportunities for small-scale farmers as farmers to start their own businesses, but also um, you know, it it helps with the um uh nutritional intake of your local Mozambican where you know sometimes protein sources were a little bit more difficult to come by.
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Um now, you know, we're starting to get a lot more uh protein availability in in the market.
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Um so through the years, you know, that's really been our focus.
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And we started off with one little retail store, uh, a small community of farmers that we were that we were training.
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And at this point in time, this month, we actually opened up our 11th store.
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So we've got stores now all over the central part of the country, as well as the northwestern side, as well as the northeastern side.
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So I suppose central, central and north, and um similar type type of process where we bring in these farmers, we run uh lectures and training, uh, you know, we upskill these farmers and then we supply them the inputs for them to start to start their business.
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And that's sort of been what we've been doing over the the past couple of years.
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Now, um last year we then ventured out into a completely new side of the business.
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I suppose it's it's a bit of a vertical integration.
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So what we were doing in the past is we would import these fertilized eggs from Zambia and hatch the chicks and then distribute the chicks.
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Uh now we're investing in our own um internal fertilized egg production.
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Um, and we've done that in uh conjunction with two of the communities in in our area.
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So effectively, what we've done is we've built a little uh what we call a breeder house for them.
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And over a period of time, we're going to teach them how to produce these fertilized eggs, which in in turn they will sell to us.
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We will then hatch the chick and sell those out to the small-scale farmer.
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So at the end, end of the day, what's actually happened is we've managed to create a little bit of a microeconomy where these small-scale farmers who produce maize and soya into the project, they obviously earn cash.
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We produce chicks and chicken feed, which we sell back to them and they grow a chicken, and they then sell that chicken and earn cash.
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And so this little microeconomy sort of circulates.
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Um, one of the reasons why government was very much behind the project from an entrepreneurial point of view is because a lot of the farmers in the area were growing maize and soya at the time.
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And um, you can imagine that you harvest maize and soya and you do that once a year.
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So your income potential is annually, um, maybe twice a year if you're lucky and you're one of the savvy farmers.
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Um, but with poultry, um, the farmer then buys their input and they're able to churn that that capital every 35 days.
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So you've now gone from a month or an annual earnings to to making a profit on on this type of business um monthly.
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So it's made a lot of uh social impact in in the area, and naturally, what happens as the volumes for the feed grow, so does the volumes for the maize and the soya grow.
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Um, and so we're able to support more and more people.
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So this little world or this little you know flywheel of microeconomy that we have just continuously keeps keeps churning and and keeps growing.
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So the impact just continuously becomes bigger.
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Um so yeah, that's that's in summary what we are and what we've done over the past 12 years.
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I I just think it is amazing.
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And and I know we talked previously, Manuel, about this, and and my mind was was just blown because of the the story and the journey you've you've been on.
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But correct me now if I'm wrong.
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I I think from talking to you before, it did absolutely start for you as a commercial venture.
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Um so so so it wasn't it wasn't just purely as a aid uh to aid facilitate the farmers, it was a commercial venture for you, but it transcended the social uh uh um uh environment.
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And and so it's kind of a win-win for for both.
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Which talk to me a little bit about that and the importance of that and the learnings that we can maybe take from that.
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No, absolutely.
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Um so so initially when we started this venture, it was modeled financially, um, it had a corporate return, and you know, we went into this with a very commercial mindset.
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And over time, a lot of the growth and the development has come because of that social enterprise side um of the business.
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So there's been a lot of a lot of aid and finance that we've gotten from international organizations just because of the social impact um that this is that this project has had, um, not only in one of the poorest countries in Africa, but one of the poorest villages within that poor country.
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Um so it's really been phenomenal uh to see, and it is that classic, well, it it's the one case that I I can categorically say it's where you know your corporate or your commercial and social enterprise meet.
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It's the one area where we are not an NGO by any stretch of the imagination, but our impact would probably paint us with such a brush.
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Um, but we are a company, we have corporate objectives, we have we we run our business for profit, it just so happens um that we just have such a big social impact in in an environment that desperately needs it.
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It's absolutely phenomenal, and and I really would um urge urge listeners or uh you know to to look into it more because it it it it's amazing and and congratulations to you.
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One of the questions that I have for you, as you and you described it as a micro um economy or uh yeah, microeconomy was built up, um, as that has built and as as you know you engage with the farmers and the farmers trade with with you and the farmers trade with maybe each other or create this environment, have you seen any aspect of bad behavior building up?
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Um or or is that something that you're able to manage, monitor, and and and control?
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Um yeah, so so we have.
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Um it's it's unfortunate, but but it's true.
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I'd be lying, you know, if if I had said everyone uh you know played played by the rules.
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Um there have been scenarios where you know, in order to assist the farmers to get their production levels up, we've imported seeds to get them higher yields.
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Um, and then when it comes time to repay those seeds, uh, you know, because obviously we give them to the farmers as a loan, and then at the end of the season, when you harvest, you have to repay your seeds and then you sell the rest.
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Um, many of the farmers, I would say probably in the year that we did that, I'd say maybe about 20% of the farmers disappeared without you know paying paying their seeds.
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And um, so we we naturally I do think in in environments of of desperation the the mindset is very short term.
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Um so you look at the buck that you can make today and forget the consequences that that can have for you next year or the year after.
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So what we did was we we then cut out those farmers.
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Um, you know, any any farmer that misbehaved was sort of taken off off our program.
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And you know, they they do so at at their at their own peril.
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But it is important um, you know, to have taken such a hard stance because, again, we are not a charity.
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Um, you know, we we have charitable objectives, but we are still a business fundamentally.
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And I think to that point, um, having a corporate objective is absolutely important for long-term sustainability.
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Um, and the reason why I say that is, you know, you a lot of the aid that has come to Mozambique has been, you know, through organizations from the US.
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And of late, um, you know, with the regime change, etc., in the United States, there's been a lot a cut of a lot of the grant funding or assistance funding that has come into Africa.
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So Africa's only option now is to be self-sustaining.
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And in our environment, we've seen where there are a lot of organizations that do what we do, um, have sort of fallen over in the past year or so because they just don't have I don't want to say the corporate mindset, that's that's the wrong term to use, but that that view that in order for you to be sustainable in the long term, you have to stand on your own two feet.
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And that means that you have to be able to generate a return, etc., so that you can invest and grow and develop.
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And so the mindset for us, where it's been a bit of a a saving grace, is the fact that we had these commercial objectives and we ran it like a business.
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So if there was any farmer that misbehaved um and and acted unethically, you know, we we dealt with it as such.
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Um, you know, and and we had to, and luckily we did, because now it's saved the program for all of the others who who play ball.
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Yeah, and and and look, really eloquently um described there.
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And and the reason I asked the question was not absolutely to to to call out any of the the local farmers.
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The reason I asked the question was to demonstrate that I think human human want is that there will be some element that will try to to to to to to I don't know make make make do something wrong.
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But what was really important was as you said that through the commercial aspect of it, you called that out and you stopped it.
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So you were able to instill, I guess, your values and the values of how you wanted the program to run, which has melted made itself sustainable.
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I think that's a really important message to try to to get across in in this podcast, because as you said, it it it kind of was the saving grace for the program.
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Absolutely, absolutely.
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Um we would have been a casualty if like all of the others if we weren't self-sustaining and we were depending on on donor funds to keep running.
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Okay, and and and one question for you, and and and and this is is kind of maybe out of the blue, but is is anyone in the community coming through the ranks to help manage the company per se, or is that very much still um is it still in in kind of its its its infancy from that perspective?
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Um not not quite.
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Um so I think a lot of the so a lot of our staff that we employ do come from from the community, the local community.
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Um so they have a vested interest in making sure that you know this this operates and and it operates well.
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Um it is unfortunate from a skill set point of view.
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It is um a very underdeveloped part part of the world, so the education system is not quite strong.
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It is also quite quite rural.
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So naturally, what happens is anyone who does get an education in that area tends to leave to go to the city.
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Um so skills skills availability for us is is quite um quite a challenge.
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Um it really is, but we have identified one or two stars um, you know, locally where the guys just have a really good attitude, want to grow, want to develop, um, trainable so you can teach them.
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And and one of those, if if I could give a little shout out, is is to our national sales supervisor, where the guy is just absolutely phenomenal at what he does, and no ask is is too high, and he executes with precision.
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Um, yeah, I just it it's such a beautiful story to see how somebody can grow and develop if they get the opportunity to do so.
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But it it takes years of investment, of time, etc., you know, to get somebody up to that level.
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Isn't that fantastic?
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And and well done for calling that out.
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I just think that's brilliant, and you know, it really it really um demonstrates the value in in what you're doing and the purpose.
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And and quite often, you know, accountants are we're called out for not really having that much purpose in what we do.
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But I mean, this is so has so much impact.
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And and to that point, uh Manuel, you know, to to to manage something like this venture, to grow it in the way you've grown it, how much do you think your charged accountancy training um and skill set helped you in that or or or or helped you along the way?
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Yeah, um a really good question, uh Sinead.
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So I I don't think I would have been able to do it if if I didn't have the the underlying skill set.
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Um so just you know, because for example, from a controls point of view, we've got now retail stores, 11 of them all over the country.
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Um there's there's trucks that move, uh, there's standard costings that go into these things, how you track the consumption of the raw materials, how you cost those raw materials.
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Um it it's it's quite a big financial exercise.
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Uh, I mean, just to give you an indication, I mean, when we bought raw materials this year, we bought six and a half million kgs of maize.
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Um, so it's a sizable project.
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Um, to cost the product is is an exercise, you know, to get that done correctly.
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And uh a lot of the, you know, you can imagine a lot of these small-scale farmers, you're getting two bags, three bags, you know, from each of these guys, and everyone is collating to bring it all together and how you control all of that from point to point.
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So the audit side, the management accounting side, the costing side, the how you feed that into an accounting package that then controls and reconciles your stock.
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Um, without those skill sets, I think a lot of things could have gone wrong.
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And and even with those skill sets, things did go wrong.
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Uh, but I think with a skill set, you're able to identify, okay, we have a problem.
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Let's go figure out and and and investigate a certain area where without those skill sets or without that eye, you know, you probably would have identified the problem when it was too late.
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Yeah, it's it's funny, it was it was only something I was talking to um a colleague the other day about how chart accountants do have this ability to solve problems um quite quite well.
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I think it does come from our training as to how you uh break things down and analyze it and then come up with a solution.
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So I think that's that's a really good call out.
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I I think the other question I'd have is obviously you said that you did a lot of this with with government aid and government interaction.
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I'm guessing your skill set as as an accountant helped in that and with the gravitas of the negotiations there, did it?
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No, absolutely.
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Um and I think also understanding the numbers and understanding where you can flex and where you can concede, because naturally these negotiations is you know, we all have the same objective, but we sit on opposite sides, sides of of the table, really.
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Um, and it's important to have a proper understanding of of the economics that supports the organization so you know where you can concede and where you absolutely can't.
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Um so it it helps tremendously.
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Brilliant.
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Um, a couple of final questions and to end on.
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I can't believe we're we're almost at time, but um, I mean the growth has been phenomenal from from from soya and maize to chicken feed to hatchery to um to to to fertilized eggs.
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Where where next?
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Is it continued to grow in in this region?
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Is it to to bring it to other areas, or or do you know what next what's next?
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Um is is it kind of organic?
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Um uh yeah, so we do have our our medium-term plan.
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So in terms of the next steps for us in in the short to medium term, I do want to double my my retail footprint.
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Um so as I mentioned, we currently have 11 stores.
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I want to take that up to 22 um in the short term because again, you know, uh you can only scale once you've got the route to market.
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And unfortunately, Mozambique is such a big country that you need presence in various areas to be able to have to have access to market.
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Um, the next step for us in the medium to to long term, um, or the next addition on to the business is then going to be to have a um a uh an abattoir.
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And the idea there is that for a lot of these small-scale farmers who are growing their chicken, what you might find is, you know, depending on the time of the year or the demand for the bird, um, they sell their birds, and let's say they take an additional seven days to sell their birds, they still need to feed those birds for the seven days.
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So naturally, once the bird is of weight, any longer day that you keep it, it reduces your margin because you've got the cost to feed it.
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So the idea here is that if we're able to set up a a um uh an uh an abattoir, and all of these small-scale farmers, when their birds get to the required age or weight, they get sold onto the abattoir, then that can be preserved and frozen for the formal sector.
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So we're talking, you know, your retail, uh, retail stores, um, your grocery stores, hotels, restaurants.
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So we can then take that product into the formal sector, but with the objective of securing the margin for the small-scale farmers so that they don't have these additional feeding costs for the next seven days.
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That in in my mind is is the the next step.
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Wow.
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Man Manuel, it's it's it's phenomenal.
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And and to now look forward to kind of migrating or integrating that micro environment you've built or microeconomy you've built into the wider um national economy is is phenomenal.
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Um thank you.
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Uh a quick a question, I don't know if you can answer it quickly, um, but you've done so much.
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What is your proudest moment to date?
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I've stumped you, have I?
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I think uh you know you have, you have.
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I've had so many, but I think the proudest moment uh was when I won um Psych's top 35 under 35.
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I think that was really a highlight of of my life.
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Um because it's such a it's such a competitive environment and there were so many people doing such amazing things, and and to be recognized like that for me was such a humbling moment.
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So I still hold that moment quite quite dear.
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Um so out of out of the many that I've got to choose from, I think that that is definitely one um definitely one of the tops, yeah.
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Brilliant.
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Well, well, all I can say and endorse is how well deserved that was and and and what a deserving winner you were of that title.
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Thank you.
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Manuel, we've come to the end of the um discussion, and and I just want to congratulate you.
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Um I've talked to many difference makers over this series, but but what you're doing um in Mozambique uh is phenomenal, and I wish you continued success and and thank you for educating us on how commercial commerciality can blend so nicely with social enterprise.
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Uh so thank you very much for taking your time.
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Thank you, Sinead.
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Just um one one closing comment from from my side.
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Um if there are any of the listeners who would like to have A view or like to see some footage on what we're actually doing in Mozambique.
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There is a five-minute YouTube video.
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So if you can go to YouTube and just search EDP Mozambique, it's a five-minute summary of where we are, what we do, and if anyone wants to get involved in in any way whatsoever, please feel free to reach out on my email address or on LinkedIn or you know however it is that you're able to reach out.
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Because at the end of the day, the more hands um, you know, just make the difference.
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Brilliant.
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Great call out, and I appreciate I appreciate that, Manuel.
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Um, thank you to all of the listeners for tuning in today.
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What an incredible story, and what another example of a charged accountant that has made a difference.
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I look forward to seeing you all in the next episode, and until then, take care and goodbye.