Establishing an international supply chain is often a complex and challenging process for energy entrepreneurs and one made more difficult during the Covid-19 crisis as movement restrictions brought severe disruptions. In order to help smooth this process for entrepreneurs seeking to enter markets in sub-Saharan Africa, Energy Catalyst has produced a decision-making guide to help them reach the most appropriate solutions.
Authored by Javier Baranda, Business Analyst for the Energy Catalyst Accelerator Programme, and Martin Jarvis, CEO of Integrated Business Planning, this guide is intended for smaller energy start-ups with limited working capital and lack of on-the-ground presence in their African target markets. Both can hamper their ability to establish long supply chains which tend to favour large volumes of products.
The report highlights some key principles for successfully establishing an international supply chain, including building partnerships with local actors with experience of regional and national trade regulations and constraints, seeking support from local customs and trade companies that can deal more agilely with the often burdensome tariff and custom requirements, and building a good understanding of International Commercial Terms, commonly referred as Incoterms.
The decision of where to establish the manufacturing part of the supply chain is a particularly important step when considering how to scale-up operations in African markets beyond promising prototypes and pilot projects. The choice depends on several factors, including in-house manufacturing capacity, the complexity of the solution and the volume of products and this guide presents a decision framework useful for companies seeking to introduce their products into African markets.