Weaving Dreams into prosperity: A Story of Value Addition in Rwanda

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Weaving Dreams into prosperity A Story of Value
Addition in Rwanda
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Silk From Soil to Neck Tie..

• UTEXRWA in Rwanda, is the only company in the
  whole world having a fully vertically
  integrated Silk production facility, from Soil to
  neck- Tie (final product) under one roof.
• This all have been made possible with in the last
  three years.

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Introduction

• Our efforts are helping to improve the capacity
  of people to overcome poverty and participate
  fully in their societies.

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We were n we are!

• 1985-starts operation
• 1989-92 Backward and Forward Integration.
• 1993- US 20 Mil. Sales Revenue.
• 1994-War and Destruction
• 1995-Sales plummeted to 3.5 Mil..
• 1999-Sales 5.5 Mil. with Cash losses 2.5 Mil.
• Today Sales of 7 mil, with profits 1mil.
• Increase in Sales, 1.5 Mil, Improved
  profitability 3.5 mil.

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The HISTORY.. 1985-95

• UTEXRWA in Rwanda, as a Textile Industry, was
  established in 1985 and it became a vertically
  Integrated Textile manufacturing Industry by 1992
  with a Sales of USD 20 Mil. in 1993.
• 1994 Civil War and Genocide resulted in loss of
  lives of 300 of its trained labor. Destruction of
  Property, loss of export market due to the
  absence in the time of closure for 8 months, hike
  in cost of inputs increase in the price of Energy
  have brought down the Sales revenues from 20
  Mil. in 1993 to 3.5 Mil in 1995.

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Getting STARTED

• A Technocrat in India learns about Rwanda for the
  first time and gets attracted to support the
  deserving fellow human beings.
• Gets the task of closure of an ailing Industry
  and turns it into an Innovative Business
  Organization, which gets Best Creator of
  Employments 2008 Award in the Country.

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In 1999..

• Came to Rwanda, as a Textile Technologist with
  Masters in Business Administration.
• Offered to manage this company with 5.5 Mil in
  Sales revenue and 2.5 Mil cash losses.
• Tasked by the Share-Holders to close down the
  factory.
• No Raw-Material for textiles produced in Rwanda.
• I pleaded to allow me to attempt the revival of
  the business with no further financial
  assistance/investment from the shareholders.

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Innovating IDEA..

• Rwanda was similar to the place I come from
  southern India where Sericulture activities were
  creating employment.
• Rwanda is good for Sericulture as it has Fertile
  Volcanic soil and climatic conditions rain fall
  over 8 months in a year, good to grow Mulberry
  and rear Silk-Worms to produce quality Cocoons.
• Rwandas 90 Population are subsistence farmers,
  earning less than a dollar a day so a better
  paying Agro Activity would help.
• .

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Encouragement of the PRESIDENT

• I had an occasion to meet the President Paul
  Kagame in June 2000 and briefed him the
  possibility of Silk production in Rwanda through
  Sericulture which can generate employment and
  export revenues. Requested to help to revive the
  ailing textile company.
• Accepted to consider the prospects of introducing
  Sericulture in the country.
• Brought about 100 Mulberry cuttings from India
  and planted in different parts of Rwanda.

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Success STORY..

• Since I hade submitted an approach paper in 2001
  on Sericulture in Rwanda, by the year 2003 an
  expert from FAO-Geneva, , Dr. Lee was assigned to
  study the prospects of Sericulture in Rwanda.
• He started experimenting, hatching the silk worm
  eggs which were brought from South Korea and fed
  the worms with the Rwandan mulberry leaves. We
  jointly found that the silk worms were growing
  nicely to become quality cocoons.

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Support from MINADEF..

• In the year 2003, the Government of Rwanda was
  looking out for alternate employments for the
  demobilized Soldiers from DRC.
• As a major Local supplier of Uniforms to the
  Ministry of Defense I had a chance to attract the
  attention of the Secretary General to suggest the
  possibility of Sericulture as an alternate
  employment to the demobilized soldiers and their
  families.

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Report of MINADEF Officers

• As the report of the FAO expert become handy, the
  MINADEF sent four of its officers to South Korea,
  to get trained in Sericulture. They came and
  reported that its possible to do the project.
• It was informed to the President Kagame during
  the annual review meeting in December 2004 that
  Sericulture could be an alternate source of
  employment to the demobilized soldiers.

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Proven SUGGESTION..

• That reminded HE Paul Kagame, that my suggestions
  in the year 2000 is proven correct and therefore
  he immediately tasked the Ministry of Agriculture
  to expand the Sericulture in the country and
  include this as a prioritized cluster of growth
  under Vision 2020 of Rwanda by targeting 10,000
  hectares of Mulberry Cultivation in Rwanda.

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Effort of MINADEF

• The Ministry of Agriculture and Ministry of
  Defense jointly promoted 4 centers of model
  Sericulture farms in 4 different regions of the
  country and were trying to produce cocoons with
  the help of our shared knowledge and were trying
  to export them. Then we suggested that they
  should go for reeling the cocoons as Silk Yarn.
  But they were delayed due to the procedural
  wrangles.

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Our INITIATION

• We hired a Sericulture expert from India on our
  companys role to train the farmers to produce
  Cocoons. He brought some 10 boxes of silk worm
  eggs and some more Mulberry plants from India. We
  then planted Mulberry in about 3 Hectares of land
  in all the corners inside the factory premises.

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Our own INCUBATOR

• To hatch the Eggs we needed an incubator which
  would cost about 10,000 to import it.
• As I am an Engineer and could understand the
  functions of the Incubator I told my technicians
  to convert an old refrigerator by removing the
  cooling system and fitting with a heating system
  with a heating coil used in a water heater, with
  a thermostat control. For Air circulation and
  exhaust, we made perforations and fitted fans on
  either sides. For humidity requirement we just
  kept a pail of water inside the chamber.
• That worked and we hatched the eggs and got the
  silk worms.

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First Silk Yarn in RWANDA..

• By 2006, I located a working reeling factory in
  Southern India, and bought the entire machinery
  and equipments and got the machines transported
  and commissioned it in Rwanda.
• Started reeling Rwandas first Silk yarn by early
  2007.

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Our Support toRwandas VISION 2020..

• Since the 10,000 hectares of Mulberry cultivation
  in Rwanda is under the Vision 2020, we wanted the
  country to have capacity to absorb the entire
  cocoons to be produced in the country.
• The only way out was to create a local
  consumption and therefore imported Twisting
  equipments and Hand looms to train the local
  population in those activities and to form
  cooperatives.

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Local Loom Manufacturing..

• We further thought, better to avoid dependency on
  foreign machinery manufacturers, service
  engineers and spares.
• Therefore we analyzed and found that Hand-looms
  could be made 90 from locally available wood.
  10 of remaining metallic parts could be
  imported.
• Engaged a professional to make engineering design
  of Handloom Parts and joined with Technical
  Schools in the country to make use of their
  carpentry workshops/Labs.

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Vertically Integrated Silk Industry..

• With these initiatives we can create a whole new
  vertically Integrated Silk Industry in Rwanda
  with all parts of value chain in place in the
  decentralized sector with cooperative units and
  SMEs.
• Larger Private Sector players may take up
  Marketing, to access the Export market.

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Our Further Development..

• Meanwhile, we hired another expert for
  Post-Cocoon Research and Production activities.
• We further experimented, using Natural and
  vegetable dyes and created different samples.
• Local Market, we launched Silk Ties, Silk Scarves
  and Umusenana the Rwandan traditional Attire for
  the ladies.

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Under one ROOF..

• With the production of final products like Ties
  and scarves we have completed the vertical
  Integration process in Silk and have acquired the
  unique status of being the First - fully
  vertically integrated Silk Industry in the world,
  from farming to final product, under one roof.

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Our Brand..
Our motto is Weaving Dreams into Prosperity
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Our Real Life

• Weaving Dreams into Prosperity

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Our Core Business..

• In our core business of Cotton based textiles we
  have developed Technical Textiles to diversify
  and customize the clients needs. This is
  necessary to survive the competition from Asia.
• We have designed products suiting the specific
  needs of the local and regional Hospitality
  Industries, Hospitals and educational
  Institutions. We also have exported container
  loads of Cotton bags to clients in the US like
  Macys and Starbucks. We have also supplied Obama
  campaign materials and had repeated orders for
  the Obama Inauguration too. We export Lavender
  Bags to the UK.

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With Other New Fibers..

• We are also simultaneously working on Banana Stem
  and Pineapple Leaf fibers production which can be
  emulated in the same model as that of Silk. This
  can make use of the Agro waste of Banana Trees
  and Pineapple leaves to generate new Raw
  materials in the country for Textile and
  Handicraft applications.
• We have just ordered for some Fiber Extractors,
  and we expect to be extracting Banana and
  Pineapple fibers by end of May 2009 in Rwanda and
  will have the trial production and develop
  products before the end of this year.

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Employment in RWANDA..

• With these initiatives, employment creation in
  silk industry could be in the range of about
  150,000 with 10000 Hectares of Mulberry
  Cultivation and corresponding creation of value
  chain in the country.
• The Banana and Pineapple Fibers initiative can
  create an employment of over 100,000.
• Working on to set up a Malaria Bed-Nets
  production- 3000 employments..

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Expected REVENUE..

• The ultimate earnings could be in the range of
  250 Mil Per Year by the Textile Exports from
  Rwanda.

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INNOVATE OR DIE!
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What This Means

• Think out of the Box, be innovative, Focus on
  People all the time.
• Success will follow tireless efforts.
• Bring focus to Private Sector on participation
  with Governments to alleviate poverty and
  together we can do!

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Next Steps

• We propose to encourage participation of all
  women and men to join us to bring in new ideas
  and action together to create wealth and
  sustainable employments through innovation.

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Thank you!