Processing for development

Country: Malawi, Mkondezi, Nkhata-bay District
Tel/Fax: (265) 1 332 423
Email: demat@malawi.net
Contact: Boniface Mbundungu (Regional Manager -South)

Consumers: Mostly the local community including the Catholic Community (Priests), who use it during mass celebrations

Principal strengths and weaknesses

Contribution to rural development

How was the business started ?

Mkondezi wine group started by the Development of Malawian Enterprises Trust (DEMAT) in 2002. The trust came up with the wine marketing idea after conducting a survey on the uses of bananas in Nkhata-bay area where the group is based.

The results of this survey revealed that there was a lot of banana wastage in the area. Farmers simply used the bananas as a dessert and also sell them flesh for income generation. DEMAT then came up with a value adding idea to the excess banana by making wine.

Steps in product preparation

The process is currently very basic where traditional plastic containers are used to let the bananas ferment before the wine is produced.

The group is using a small house, which houses the few plastic containers. It’s dimensions are 10m long and 5m wide though enough for the processing activities. The proposed layout for the new building area is big enough to separate the fermentation room from the filtration, packaging and then selling room.

The banana wine making follows a number of steps from obtaining the raw material up the production of the final product.
The product can be stored for up to 1 year.

Input access and marketing

The business gets its raw materials from within its locality and suppliers usually bring the bananas. There are only a few cases when they have gone to look for the raw materials in the surrounding villages. In this case, the manufacturing group finds means of transporting the bananas to the processing site. Suppliers are paid at the time of delivering the bananas. The business has not done any research on specific bananas to use but at the moment they just use the available ones in the area, which are mainly the Cavendish types.
When the product is produced, it is either sold directly to customers who come to buy from them or taken to Mzuzu City, which is 50km away. This is done with the assistance of DEMAT personnel who assist in the marketing of the wine. The production levels are low and the demand is always increasing. This scenario has made it impossible for the business to be storing wine at their premises as it is sold outright. Direct purchasers are usually the local communities who keep on asking for the product. These clients are very stable because they have been around since the business started. They are pleased with the product and usually pay cash when buying. The price is quite reasonable as it is determined by a method called “Cost Plus”.
Production levels follow a certain trend. More is produced during month ends when a lot of people have some money to spend. However, the price remains the same. Studies have shown that the product can stay as long as you wish to keep it. In fact people have discovered that the longer it takes, the better it tastes. This indicates that the business is able to get a feedback on their product. The flow of information is quite promising at the moment, as it has been revealed that this is the only way the business has been able to get new clients in addition to the little efforts being made by the owners in publicising the product.
The group faces stiff competition from well-bottled and labelled products from a formal manufacturing company called Malawi Distilleries. The use of bananas as raw materials makes this wine unique. The group, through visits and interviews has gathered this information from their customers in various market places.

Support services

This wine is gaining popularity during traditional celebrations in most places. The sponsoring organisation DEMAT has played a major role in promoting this product as it takes it to the commercial city of Blantyre where it has gained a lot of popularity.
The group sources all its inputs from farmers, vendors and shops. It got a credit from DEMAT during the initial establishment stages though it was in the form of equipments. This organisation also assisted in training the group in business management and marketing strategies.
The business has indicated a great desire for additional credit to achieve some meaningful expansion. They are also in great need of better equipment for bottling and filtering.

Business management

The business desires to reach a higher level in both production and bottling. This would enable it make more sales hence get more profits. They have used old bottles, which are found on the local market some of which are not meant for wine. Arrangements are in the pipeline to make links with a South African Company to provide them with proper bottles.
The environment is quite conducive for this business to expand as its’ staff has been receiving business management services. The fee for this activity used to be met by the government through the Ministry of Trade and Private development. In addition to this, the group is a member of a functional group, which intends to develop into a cooperative.
The business is made up of 10 members who are working together and have shared positions amongst themselves; thus Chairperson, Secretary, Treasurer and the Committee members. Since the sales are low, due to low production the members have put in place a mechanism to be sharing profits once in a while.
These members are able to carry out their activities, as they have all been able to undergo some form of training in one field or the other. Membership has not changed since the group started operating. This has made it possible for them to improve in skill and knowledge.
They keep account books and once in a while records are processed further for everybody to follow. Currently the business has no plans and budgets because of the very low production levels. The only positive point is that the business has never encountered problems in paying its raw material providers.