To Take a Risk

Daniel, Caroline, and Richard

When the pressure is on what do you do? When the unexpected happens, how do you react? One thing is definitely true of operating a business in Africa: It keeps you on your toes and never a dull day.

During my service in the Peace Corps I wrote monthly posts to capture my experiences and learning lessons. Now five years later (can you believe that??) – it’s time I capture some of my experiences running a business in Mozambique. First, I need to introduce my business partner, Richard Wakefield who has more decades of experience running businesses than I have decades of life.

It’s December of 2021 and we’ve broken a new record for monthly sales; fulfilling orders for x3 semi-truck loads (53 foot semis too!) to a single client representing nearly 40% of our business. We’re applying for bank loans to cover the operating cash flow associated with the growth. It gets approved and we’re signing contracts and undergoing due diligence before disbursement.

New Years Eve. Due to a security incident the site representing 40% of our revenue temporarily closes. Two weeks go by, and a small fraction of people return to site and we resume a small supply in February with projections ramping up to 2 semi trucks per week by June. Loan gets disbursed. March volume is a slow increase with April increasing to 2 semi trucks loads in the month.

March 24^th, a secondary and significantly more egregious security incident happens – the site fully closes. Fortunately, we lost no assets and minimal loss of produce. We’ve lost about half of our revenue stream. Our client is going to be delayed in paying their December, February, and March accounts. We’ve taken on this new balloon loan with a one-year term (ie they gave us a lump sum, we pay monthly interest, and at the end of the term must repay the loan in full).  

So what do we do?

Rich and I are out on the veranda discussing options. We phone the two largest dairy manufacturers in southern Africa. We set a meeting with the regional chicken and egg farm. Running numbers on investing in new supplier chains. And by the way, there’s a mine about 600km away that our same client also caters, but we’d need our own 15 ton truck if we even want to quote for the business – renting out to fulfill the supply makes our pricing non-feasible. We start phoning secondhand dealers around the world.

 By the end of April, we have solidified three risks –

1/ Approved distributor for one of the dairy manufacturers and are now stocking yogurt and milk

2/ Contract in place with the egg and chicken farmer and won our first bulk supply of frozen chickens

3/ Selected and purchased a second hand Mercedes Axor truck out of the UK with a load capacity of 15 tons

 The dairy / egg / chicken expansions were easier risks to take. We were able to secure sales before we had to take on stock. Then we were able to slightly over-stock so we could have stock on hand to win additional sales. We do our quotes for the mine that’s 600km away knowing that when the truck arrives we have to win the sale. There is no other option. We cannot afford to take on this asset without generating sales with it.

 The truck arrives in July and we process import duties and clearance and it arrives in Montepuez. First hiccup. Cold unit is not functioning. We had it inspected in the UK before it shipped out so we phone the refrigeration company – fortunately it was simply low gas (the seals dried out in the 3-4 months it was sitting). By the beginning of August, we win an order for the mine! Big breath of fresh air and a massive relief. We’ll be okay after all. Sales will return to 2020 averages and we might have a slight increase on 2021s end of year totals.

Our first 15 ton mid sized refrigerated truck!

 Truck is backloading and on its return after the first delivery. Cold unit goes down – it’s a new error from the display unit. It gets back to our packhouse and a capacitor has exploded leaving visible damage and melted plastic across the main computer board. When it comes to our refrigerated trucks and cold rooms, Richard takes lead on gas related issues, technical welding, and engine related issues. I take lead on electrics so this one is with me. We speak to the UK refrigeration company and a parts distributor to get the full manuals along with wiring diagrams.

The computer board in question

 I have a background in software and had to take 2 computer engineering courses. That was my only experience working with circuit diagrams and let me tell you – it’s a completely different game when you’re looking at a circuit diagram for a technology you barely understand. On this specific Carrier Vector cold unit, the fans are 220v powered by a generator that is mounted to the engine. Unit cranks, compressor belt works, and we have gas flowing but no fans and hence no cooling.

 Fortunately, our client had a delay in their stock requirements that bought us an extra 10-days before we needed to make the next delivery. I should also add we are put as a probationary supplier pending our service the first 3-months of supply. Pressure is on. There is only 7 volts AC going to the fans. Something is wrong with our generator circuit. There’s this weird circuit on the diagram being called an “excitor circuit” that is feeding power back into the generator, and the capacitor is wired into this circuit. Ok, we seem to be getting somewhere.

 There is a guy in Pemba (200km inland from us) that can bench test motors so let’s dismount the 220v generator and let him test it. He wires a 20uf capacity in the excitor circuit and hooks up a motor with a belt to run the generator. It’s producing 230 volts! Ok, there’s hope, finally. We have 4-days left to get our unit working.

 Re-mount everything and replace the capacitor hoping nothing explodes again. Unit cranks AAAAND 7 volts… Well that’s not good. Back to the circuit diagram. There’s a relay showing up on the diagram wired into this Excitor Circuit. It’s controlling whether 1 capacitor, both capacitors, or neither capacitor is feeding back into the excitor circuit.  Trace wires from generator to relay and relay to capacitors and it’s starting to make some sense.

 Funny enough, the relay is controlled by 12v DC signals. Dismount the relay, test it with a battery and it seems to be working fine. Ok, well, off and on is often the fix with computer problems right? Clean all of the wire connections and remount the relay. Crank the engine, compressor belt spinning, generator belt spinning – power production 225v. We did it. We freakin did it.

 Little did I know at the time, but this experience with the excitor circuit was absolutely essential to a repair on our 70kva commercial generator the following year. That’s a story for another time.  

 We made our deadline and supplied on schedule for the next 3-months. Our service was on-point to the degree that this client ended up giving us exclusive supply to their mine and it has been our most valuable client ever since.

 This was a defining moment for me – in both how we react and how we manage stress. It felt like everything was on the line, and to some degree it was. I struggled to sleep in this period. It’s funny though looking back. In the subsequent stressful periods that have come since, I sleep like a baby and that too is a reflection for another time.

 

I’m planning on resuming my blog posts, mainly for myself as a tool of reflection. Give me your thoughts and feedback and as always guidance.

 Thank you for taking the time to read this!

 With all of my heart

Daniel Bladow

07-August-2023

A War

 

A War.

On the left side of the photo you find Faraji who lost his parents in Northern Mozambique. He doesn’t know where they are nor if they are alive. On the right side of the photo is Urença who lost her entire family. She met the young boy while they were fleeing and took him under her protection and care. She’s probably raised tens of young boys and girls between her own children and her grandkids. And she is doing it once again.

They’ve fled an active war zone; the numbers vary widely depending on who is trying to approximate - many people have died and over 100,000 people have fled and are now refugees (Joseph Hanlon probably has the most accurate data out of any report I’ve seen/read).

In the summer of 2017, my parents came to visit me in Mozambique. We went to Ibo island; pristine beaches and wildlife. Between the war and the cyclone last year, the lodges no longer exist. At first many people fled to Ibo. Now people are fleeing even further south and fleeing FROM Ibo.

In February/early March I was personally in the town of Mocimboa da Praia. A bustling town despite the various clashes and attacks that had occurred. The district of Mocimboa da Praia had 127,000 residents as of the 2017 census with about 30,000 to 40,000 living in the district capital (also called Mocimboa da Praia). Mocimboa da Praia is a ghost town. No one lives there from what I’ve been told. Gone. Completely gone.

I live about 250km from the war zone (as the crow flies). Our city leadership is trying to accommodate for the 20,000+ refugees that have arrived. I don’t believe anyone knows the actual number of refugees that have arrived here.  We see truck after truck after truck arriving from the norther road full of people and mattresses. The wealthy people fled to Nampula months ago. The middle-class would have fled to Pemba or Montepuez. Those without means are still fleeing.

This war has broken and torn many families apart. Loved ones who have gone missing and may never be found again. Siblings who have disappeared and you can only hope they’ve made it south but when you hear of their disappearance your gut says, they probably got killed in the woods. Hopefully someone took the time to bury them. It’s not a straight forward war. There are not two sides directly fighting each other. There’s one side expressing a lot of distress and pain and misery and anger at being forgotten. Then there’s the other side profiting from it hoping to only do as much as needed to keep the gas projects going. Or at least that’s how it all started. And then the drug trade got involved. Then sex trafficking got involved. Then people started profiting off the security contracts. Then there was more oppression and violence and heart break. Then Islamic organizations started throwing support around and religion become a cornerstone to it. I don’t know what the solution is. My gut says that security contracts alone will not solve the problem.

There’s some aid programs providing food to refugees. Some of our colleagues have distributed food as well and we’ve provided the crops we have available as well. We’re trying out a couple ideas to do our part:

1)      We’ve taken on 10 new staff persons for about 1-2 months to help in our construction and reserved these positions for refugees (2 of them we’re looking at offering 1-year contracts that could extend into permanent positions). In the grand scheme of 20,000+ it’s barely even a drop.

2)       Knowing that the market in Palma for fruit & veg is growing rapidly, we’re planting thousands of papaya trees. Once ready for transplant, we’ll give 5 trees per refugee family (if they want more, they can order more) all free of charge of course. The hope is they either have a little food when they plant the trees or they can sell us the fruits and earn a little income

3)      We’ve gone to one of our partnerships (TNS) to ask if Total would be interested in funding an agriculture livelihood project

For those reading this post, I have a couple simple requests. One, pray/send your thoughts to those fleeing the war. Two, talk about it. If you’re interested in hearing more about the backdrop of what’s currently happening, let me know. Third, any ideas about how we could help the refugees (we being our farming company)?  

With all my heart,

Daniel Bladow