CleanStar Mozambique: Food, Fuel and Forests at the Bottom of the Pyramid

Friday, June 8, 2012

What on earth is Novozymes, a $1.8-billion industrial biotechnology company headquartered in Denmark, doing in Mozambique, a poor African country (per capita income: $440) where corruption is rampant and more than half of the government’s budget comes from foreign aid?

The company says it’s trying to protect forests, increase agricultural productivity, lift farmer incomes, reduce indoor air pollution and, not incidentally, make money.

In an unusual move for a big multinational company, Novozymes and a partner, a New York-based firm called CleanStar Ventures, have created a vertically-integrated, energy-and-fuel company called CleanStar Mozambique. The centerpiece of the new venture is a factory that makes clean-burning ethanol for use as a cooking fuel from cassava, a starchy food crop widely grown in Africa. The factory opened in mid-May, with a visit from Steen Riisgaard, Novozyme’s CEO, who said, according to published reports: “I’ve seen many ethanol plants in the world and this is the smallest. But it is also the one that makes me the most proud.”

CleanStar Mozambique aims to do business at the bottom of the pyramid, where the world’s poor people collectively make up a big market. [See my blogpost, Beer at the bottom of the pyramid, which is also about Mozambique.] BOP, as it’s known, is an appealing theory, but not one that has generated a lot of success stories since it was put forward by two academics, the late C.K. Prahalad (who wrote The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits in 2004) and Stuart Hart, a Cornell professor who co-authored the first article on the BOP with Prahalad and has since become a leading thinker on sustainability.

Source: Sustainable Business Forum (link opens in a new window)