The three-wheeled vehicle was repurposed to enable deliveries of fish to areas outside the central market.
As sales dropped in a central market due to COVID fears, an asset grant enabled Viphya Chambo to buy and repurpose a three-wheeled vehicle to expand delivery, meet consumer demand and live up to its purchasing commitment.
North of Malawi, in Rumphi district, lies a base of smallholder farmers who produce and sell fish solely to their community at farm-gate prices – less than £2.00 per kg. About 100 km away, Viphya Chambo, the biggest tilapia fish farm in northern Malawi, struggles to supply enough fish for consumption to the 212,272 residents of Mzuzu, one of the three major cities in the country.
Bringing these two parties together to partner for mutual expansion, the UK’s flagship Commercial Agriculture for Smallholders and Agribusiness (CASA) programme is delivering one of its key targets: inclusive growth through improved smallholder incomes in agribusiness.
With CASA’s support, Viphya Chambo provides the smallholder farmers with quality fingerlings and equips them with improved production techniques to boost their productivity. At harvest time, the farmers will aggregate their fish, and Viphya Chambo will off-take at an agreed – higher than the farm-gate – price. This will increase incomes for the contracted smallholders whilst enhancing fish supply volumes for the fish farm, enabling them to meet Mzuzu market demand and boost their revenues.
Operating globally with technical work in the field in Malawi, Nepal and Uganda, CASA aims to change how investors, donors and governments view and invest in agribusinesses that work with smallholder supply chains. In showcasing win-win models like the Viphya Chambo partnership, where more equitable commercial relationships allow for better incomes for both smallholders and the agribusinesses that work with them, the programme boosts economic growth and increases demand for smallholder produce.
Like many businesses this year, Viphya Chambo’s expansion plans faced a major challenge due to the COVID-19 pandemic. The fish farm started to see plummeting sales volumes from the Mzuzu central market as urban residents reduced travel and replaced central market visits with local ones for fear of contracting the virus.
“On a normal day we used to sell about 70 kilos of chambo in three hours, but with the pandemic we were taking seven to eight hours to sell the same volume,” explains Odoi Mwangonde, Viphya Chambo’s co-founder. “Revenue declined by an average of about 38% of what it was at its peak. At this trajectory, we contemplated dropping the planned fish aggregation and off-taking model.”
In response, Viphya Chambo and CASA came up with an innovative plan they dubbed the “fish disaggregated distribution model”, which essentially aimed to bring the product closer to the consumer, selling in local markets around Mzuzu city in addition to the central one. To make this happen, CASA provided a grant to Viphya Chambo to procure, repurpose and brand a three-wheeled vehicle for deliveries as the fish farm’s single refrigerated van was unable to cover all the neighbourhoods.
“With CASA’s help, we are now able to reach other markets like Ekwendeni, which is 20 km from Mzuzu. The tricycle is advantageous compared to the van in other ways too. It has a low maintenance cost and uses less fuel.” explains Mwangonde.
In the first quarter of its introduction, the motorised tricycle delivered to 154 consumers. Viphya plans to procure more tricycles to reach a greater number of customers using this model, particularly as the off-taking business rolls out in May 2021. This presents another opportunity for the company to further tighten its long-term thrust of the business and increase chances of success for the proposed fish off-taking model.
“Not only have we managed to solve our cash-flow problems using the tricycle, but we have also managed to add more upper-class customers who opt for home deliveries. We have boosted our revenue base.” Mwangonde concludes with a smile.
