I last wrote about the women’s association with which I work in late November and since then they have done quite a lot. I’m really proud of the progress they are making and am excited to tell you about it here.
Shea Packaging Day – As mentioned in the last “Si Teriw Update,” the women made several different qualities of butter during the 2011 production season. The third quality (mediocre) was set aside for making soap. The women decided the second quality (good) would be packaged in non-descript black plastic bags and sold and that the first quality (superior) would be sold once packaged in small plastic tubs and stamped with the association logo.
On December 16, the women gathered together to weigh out the second quality of shea butter, kilo by kilo and package it in black plastic bags. The work went really successfully and, at the day’s end, representatives of the six villages in the association split 33 kilos of shea butter amongst themselves to be sold in their villages’ local markets. By selling this shea butter at 1,250 CFA (about $2.50) the women were able to make 41,250 (about $82.50).
Monthly meeting (January 27) – In late January, two representatives from each Si Teriw village came together for the monthly association meeting. This meeting was particularly important, because January was the end of the loan period. The village representatives were asked to pay back their 20,000 CFA loan, along with 20% interest – a total of 24,000 CFA (about $48). I was really proud to see that each village had given out their credit money amongst their members and were returning it, plus interest, in-full and on-time!
After two successful loan periods, I think that this credit system is working really well to help reward the women for their work in the association (no dividends are being paid yet, as the business is making very little profit right now). In addition, the interest provides the association with another form of income generation and enables them to be internally banked – instead of losing money by incurring the fees associated with a traditional bank account, each six months they set aside the money they will need for operational expenses and give the remaining money as small loans.
In addition to paying back their loans, each village turned in the money earned from shea butter sales – a total of 41,250 CFA.
These two “pots” of money, combined with the small amount of money that was sitting in the association bank, totaled nearly 190,000 CFA (about $375). I could tell that all of the women were excited to hear that figure and to realize that their hard work had paid off. They were able to see that, although slowly, they were making money and contributing to the pool that will be reinvested in the business or offered to association members via credit.
The next item on the meeting agenda was to determine how much of the money should be set aside for operational expenses and how much could be pushed back out to the villages in the form of loans. This part of the meeting ended up being the most important from my point of view, as it contained an invaluable lesson in budgeting.
When asked, the women, without much thought, said that they thought about 50,000 CFA should be set aside for the expenses of the coming six months. I was weary of the figure, knowing that they were grossly underestimating the operational costs for the months ahead, so I suggested that we go through each known expense and create a budget for the coming months. This, I told them, was the only way they could really know how much they needed to set aside. With a few nods of the head, clicks of the tongue and an “a ye tine fo” (that’s the truth), we started a line-item budget for Si Teriw, February – July 2012.
After taking into account all of the known expenses (soapmaking materials, food for soapmaking days, money for packaging and labeling, etc.) the figure totaled just over 100,000 CFA. As a business volunteer, this aha budgeting moment was a victory to be celebrated. They were able to clearly see that if they had only set aside 50,000 CFA, they would have been operating in the red around March or April.
After this discussion, the women decided to put this money aside for their operating expenses. The remaining money – a total of 60,000 CFA – was given in credit to each village representative to be distributed amongst one or more of their members and returned, with interest, at the July Si Teriw meeting.
Making shea butter soap – The last item of discussion during the January meeting was soapmaking logistics. After chatting for a while, it was decided that the women would gather together on February 9, March 1, and March 22 to make soap. You might remember that they learned these skills during last year’s technical exchange. A woman in my town offered her house as a place where they could make the soap and store the materials.
The February 9 production got off to a late start and, although not surprising, it caused a lot of frustration among the group (and me, of course). Some people didn’t arrive until nearly 11 am and wanted to leave around 3 pm.
Again, we had to emphasize that if you start really late, the work time doesn’t change, but you just finish really late. As not everyone arrived on time, and some wanted to leave early, this put an unfair burden on the host, as she started working the afternoon before, to prepare the lye/water mixture, and ended up having to work until dark on the production day to ensure all the soap was dry and properly stored.
Despite this one hiccup, the production generally went really well. They made five batches of soap – cutting three batches into bars and molding two batches into large balls (a type often used in Mali for washing dishes and clothes). The 167 bars and 54 balls of soap was stored until the next production day to ensure that the lye was very dry before selling it.
On March 1, we got started early. We didn’t wait for those who were going to come late, as to ensure that the work could be finished well before the sunset prayer. The women made six batches of soap, all bars, and added palm oil to the mixture to help the soap make better suds. Because the palm oil is softer than the shea oil, it took longer for the molds to set, but once they were ready the soap looked really nice.
In all, they produced 318 bars of soap and 16 balls (from the mold scraps).
While the soap was drying, we reviewed all of the expenses for both production days and determined the break-even point. The women then discussed different pricing options for the two types of soap. During this discussion, it became clear that the profit margin for a batch of soap formed into balls was far less than the profit margin of a batch of soap made into bars. This helped them decide that they would only make balls of soap with the bar scraps that would otherwise not be sold.
Based on their knowledge of the market’s average soap price and the potential profit that could be made at different price points, the women settled on selling the bars of soap for 200 CFA and the balls of soap for 275 CFA.
At the end of the day, representatives from each village left with 27 bars and 9 balls of soap to sell in their village markets. At the production day on March 22, the women will collect the first batch sales and will distribute another round of soaps to sell.
It seems like the established price structure is going to enable the women to make a fair amount of money of the production and sales of soap. I’m really excited that they are putting their soapmaking skills to use and that they are expanding their product line. Perhaps next will be lotion or lip balm!
You can see pictures from the soap making production days here.