The nature of the competition in the market has often left companies believing that they require a substantial range of products to compete, but more often than not they are better off with a smaller product range which will allow for increased business, sales focus and ultimately profitability.
Patrick Ngowi has built his business empire solely on a small product range, which became a pioneering product throughout the Northern Circuit of Tanzania.
As a 15 year-old teenager, he began to develop an eye for a profitable business opportunity and showed the signs of entrepreneurship early in life, when he realized that cell phones had just started to gain popularity in his native Tanzania, and the scarcity of scratch recharge cards created an exploitable opportunity for any enterprising individual.
Patrick simply mobilised fuel station pump attendants in his hometown of Arusha to sell calling scratch cards – vouchers, and made a made relatively good profits for his troubles at the time.
Discover the problem and offer the solution
The remarkable journey of Patrick Ngowi to business success; began humbly with a small loan from his mother and a free return ticket to Hong Kong offered to him by a close family friend, for him to venture into the unforgiving trenches of business.
His first serious foray at winning the lottery ticket to business success a decade ago was through trading in Chinese mobile phones imported regularly from Hong Kong, targeting the mass market of poor rural people who could only afford basic and cheap phones. Patrick sold more than 5,000 handsets (at an average price of $20) in one year alone.
For a teenager developing his entrepreneurial skills, his mobile phones business lasted for just 1 year, during which time he spotted the long term opportunity in solar because many of his customers had no electricity to charge their phone batteries, and he decided to venture into it.
Ngowi, a Tanzanian citizen discovered that a tiny fraction of Tanzanians enjoyed any access to stable and reliable electricity, instantly he knew he had to rectify that problem.
“The electrification issue was a major one and I just figured out that Tanzanians might be receptive to an alternative energy source,” he said.
“Everyone wanted to get a phone and they could afford it. However, the challenge was charging it. Thousands of my customers complained,” he said.
Nevertheless, as with any start-up by a novice, he had to study about renewable energy because of the solid technical knowledge required in the trade, focussing exclusively on solar power, and then he set-up his first office in Arusha.
He set up Helvetic Solar Contractors Limited, a company that is a pioneer in the supply, installation and maintenance of solar systems throughout the Northern Circuit of Tanzania. He initially embarked on domestic and small-scale installations, and did all the installations himself during the time he was still bootstrapping.
“The first store we opened was very small but it was in a good location. We marketed ourselves aggressively- marketing our products to schools, governments, hospitals and just about everyone else- convincing them to use our solar panels,” Ngowi explains.
“For the first few months, sales were very slow,” he said, because solar was a relatively new energy source to the vast majority of Tanzanians.
His competitive advantage was that he was the only company offering solar products based in Arusha. “Whoever needed solar in Arusha had to come to us. Our other competitors were in Dar Es Salaam, but it’s a distance away. We had the market,” Ngowi chucklingly said.
The Business and Growth
Helvetic Solar Contractors is the first company in the Northern Circuit to cater for solar needs. Helvetic Solar Contractors is a solar energy company that did about $6.8 million in revenues last year.
The company currently works with and promotes the brands of leading manufacturers of solar panels and equipment in the USA, Europe and China. The product range they offer includes: solar water heaters, solar batteries, solar mini-generators, street lights, and gadgets, power back-up systems, accessories, solar fridges and freezers, charge controllers and other renewable energy alternatives.
Furthermore, the company has also branched into other alternative energy services including handling, supply, installation and maintenance of hydro turbines and thermal systems throughout East Africa.
According to Ngowi, Helvetic Solar Contractors has installed over 2,000 small and medium scale solar power and solar water heating systems in Tanzania government institutions, United Nations works, homes, schools, clinics, dispensaries, hospitals, off grid lodges and hotels in Tanzania. And they have also been awarded contracts in neighbouring countries like Kenya, Uganda, Rwanda and Burundi.
Helvetic Solar Contractors has now installed more than 6,000 small rooftop solar systems in his country and four other East African countries – Kenya, Uganda, Rwanda and Burundi.
Helvetic Group has supplied over 1MW of solar panels for direct use, to retailers, for projects in the region as wholesalers. They have built a strong online platform so that they are able to interact with regional customers with great ease and offer 24 hour support system.
Role of stakeholders on cost reduction
“I am happy to say that the Government of Tanzania is an example for other countries in Africa to follow. Solar and Wind products have NO VAT or import charges. This incentive has enabled us to lower the cost for the end user,” he said.
He further stated that,”We are members of associations and NGO’s that have tailored outreach programmes towards rural electrification. We work with donors and nongovernmental organisations closely in solar power projects throughout the region.”
On how Helvetic as a company reduces the cost burden on the final end-user, “We also offer direct credit facilities for solar power installations for rural communities that have good track record. At Helvetic, we strive to lower our cost for products and installations by offering FREE installation package throughout Tanzania as connection charges for solar in Tanzania had been far too high before Helvetic Solar Contractors came onto the scene” he remarked.
The Future Of Helvetic Group
Helvetic Solar Contractors has rolled out 26 agents in Tanzania that are already selling their small package product range. And the immediate plan is looking at increasing that portfolio; so that they have more agents in the region, the rationale being to continue their direct link with rural communities that need their products the most.
Patrick was happy to say that their agents cover every region of Tanzania and have now also taken on 3 agents in Uganda. Helvetic Group has been able to penetrate and build a strong network with electricians and hardware stores throughout.
Moreover, the Group welcomes investors, strategic partners and project promoters to further the company’s vision and mission towards rural electrification in Tanzania and rest of East Africa.
“We still have to invest massively in getting the grid to the wider parts of Tanzania,” he said.
Regional expansion is a top priority, “It’s great for us because neighboring governments issue tenders, and they look at your portfolio and the clients you’ve catered to, and they see we’ve got a good track record and excellent products. So it’s easy for us to get awarded contracts,” Ngowi explains.
On the threat from the Far East, “Indeed our company’s vision remains geared towards offering quality solar products at an affordable cost. China has already overtaken US and Europe in solar panel production,” he said.
The Future of Alternative Energy
We have barely scratched the surface of what is possible with solar energy in Africa. “Africa is currently experiencing energy deficiencies both for domestic and industrial use. In order to achieve its development aspirations, Africa must increase its energy supply to catch up to, and keep up with, growing energy requirements, while avoiding adverse environmental consequences. Simultaneously, the international community has reached consensus that power generation based on fossil fuels (coal, oil, and gas) is the major contributor to climate change and aims, therefore, to reduce greenhouse gas emissions” Ngowi said.
Erratic supply of electricity on the continent increases demand for alternative energy, “The main source of energy in Tanzania is still biomass (fuel-wood and charcoal), which accounts for about 85.5 percent of total energy consumption. Only about 14 percent of the population has access to electricity, but power consumption is growing at the rate of 11 – 13 percent per annum. Where electricity is available, the quality of supply is poor and blackouts and other service interruptions are common. The relatively high cost for businesses associated with maintaining a reliable supply of electricity via use of private generators during blackouts puts pressure on Tanzanian firms to increase product prices to recoup these costs, thereby becoming less competitive against similar products from firms in other countries.”
Patrick Ngowi’s inspiring story should be part of compulsory reading for young people across the African continent that have been consigned to idleness and social ills because of unemployment, resulting from governments being overwhelmed in the job creation stakes in these hard times.
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