Selling metal silos and bags for grain storage: a promising business in Latin America
Market stall owner: Marylaure Crettaz
At the end of 2012 SDC has started the project “Wide spread Replication of Successful Post Harvest Technology in Latin America” (Proyecto Postcosecha América Latina, PPAL) to be implemented by Swisscontact. With this project, SDC in partnership with private sector actors aims at increasing income and food security of 130’000 rural families in 5 Latin American countries: Nicaragua, Honduras, Ecuador, Peru and Bolivia. Selling post-production solutions for maize and beans to subsistence and low-income farmers will allow agribusiness companies to enter into new markets, while reducing postharvest losses and improving life conditions for small farmers. Replication of the business model will be supported by conducive policies and knowledge management.
The initial business model was thought to work with traditional tinsmiths as assemblers of silos kits –precut by an industrial provider- and distributed by an agribusiness company. The hypothesis was that the company would adjust its sales strategy to reach low-income clients in a profitable way. The model did not work mainly due to high sales distribution costs, low margins, and resistance of tinsmiths to be subcontractors.
Another business model (working with semi industrial tinsmiths and a wide network of individual local dealers) is currently developed. Some challenges identified are: the need for more accurate market studies at local level (different timing of harvesting seasons of grains but also of cash crops like coffee (availability of cash to purchase postharvest solutions); innovation in marketing devices; the informality of artisanal and semi-industrial tinsmiths.