Turning Wasted Vegetable Oil in Fuel for Africa
(Article originally posted on TriplePundit, January 17, 2011)
Michael Mwakilasa is not your typical Tanzanian entrepreneur. With a beaming smile, warm handshake, and a half-New-York, half-Tanzanian accented “Hey man!” he welcomed me into his factory- a rickety array of oil barrels, heavy machinery, holding tanks, hoses, big levers, colored valves and a small generator, buried in an industrial neighborhood on the outskirts of Dar es Salaam.
At age 42, Michael’s resume is by far one of the most eclectic I’ve seen. Yet at the same time, it’s just strangely fitting enough for a man attempting to build a biodiesel industry out of used cooking oil on the eastern coast of Africa.
He’s traveled to every state in the continental United States distributing merchandise on tour with Janet Jackson, Nsync, and countless other American pop stars; authored a children’s book on Julius Nyerere, Tanzania’s founding father; worked for several years at a New York City law firm; and is currently running a nonprofit teaching Tanzanian children financial literacy. He also has a deep interest in and passion for ships…….
As he began speaking about his current endeavor Mafuta Sasa Biodiesel Ltd, which launched in 2008 as the first Wasted Vegetable Oil (WVO) to biodiesel refinery in East Africa, I couldn’t help but be entirely captivated by his energy. A born entrepreneur bent on pursuing his philosophy of “doing good and doing well,” he returned to his native Tanzania two years ago after living almost 18 years on and off in the U.S. and Canada. He wanted to return home and do something, anything really, to help improve his country.
As his feet began to itch in New York, Michael and his friend, future partner & CEO of Mafuta Sasa Anthony S. Park, began researching industries and opportunities to build a sustainable business in Tanzania. After pouring over reports, exchanging ideas, and a couple of brainstorming sessions, the grim energy scenario in East Africa sparked a light bulb. “How about biodiesel?” they asked. Biodiesel burns 75% cleaner than petroleum diesel, smells good, can be produced from a multitude of sources, and the industry was wide open.
Starting with used oil from McDonalds and a small Jamaican restaurant in NYC, Michael and Anthony began tinkering with transforming WVO into cheap, clean burning biodiesel. A year later, they perfected the precise formulas for adding methanol and sodium hydroxide, knowing the right inputs, the proper amounts and the exact timing for heating and settling. With an initial $160,000 of investment and equipment from the U.S, they set up shop in a broken down warehouse in Dar es Salaam, literally building the walls and roof, Michael told me, to keep the place safe.
If you have ever had the chance to visit east Africa, you can understand the need for cleaner burning fuel. If you haven’t, picture this: thousands of mini-busses and trucks zipping across cities 24 hours a day, spewing out seemingly endless black plumes of smoke from their tailpipes into the lungs of pedestrians, motorcyclists, and other cars. With constant power shortages, diesel powered generators are always cranking to bring light, air conditioning, and power to hotels, apartments, offices, and shops. With the price and demand of petroleum diesel continually on the rise, why not try something new? If there was a way to develop a cheaper, cleaner, renewable substitute for petroleum diesel that comes not from sacrificing food crops (like corn), but instead uses wasted oil generated from the thousands of eateries across the city, why not give it a shot?
Mafuta Sasa Biodiesel Ltd. (literally: Oil Now) started with exactly that thought. And so far, while progress seems to be slow, the concept appears to be working. The company collects their WVO from hotels, restaurants, and street cart vendors from across Dar es Salaam for a small fee and brings it to their refinery, where it undergoes a carefully calculated process of mixing, heating, cooling, settling and sifting, through series of pipes, hoses, drums, and barrels before it is turned into biodiesel that meets the same exact specifications as local petroleum diesel. Currently they are producing up to 2,000 liters per week, and selling to hotels, apartments and even a bakery, and are actively expanding to increase both production capacity and sales.
With the price of petroleum diesel hovering at around 1,600-1,700 TSH ($1.15 USD) per liter, Mafuta Sasa’s biodiesel is clearly the cheaper alternative at 1,250 TSH per liter. But price isn’t their only concern. There are many barriers to expansion not the least of which is government policy. There is currently no legal framework or policies around biodiesel yet in Tanzania, which limits them to small-scale distribution, and bars access to more broader fuel markets like gas stations. This is not to say Mafuta Sasa is operating illegally – they have all their legal paperwork as a registered business and their biodiesel is certified as a diesel- but creating a separate class, category, and set of certifications for biodiesel may take some time.
Another challenge Mafuta Sasa faces is the market itself. Many people Michael comes across in Tanzania still think he’s crazy when he says “We’re making diesel from your used cooking oil.” The market has yet to understand the fuel, the difference between diesel and biodiesel (or the lack thereof), and will require quite a bit of education on the product.
Despite the challenges ahead, Michael remains optimistic and continues to see opportunities for Mafuta Sasa in Tanzania. He is beginning to explore alternative models for supply, such as contracting small-scale farmers to produce Jatropha seeds (a small crop from which oil can be extracted and used to create biodiesel), which would give rural farmers an income generating activity and increase Mafuta Sasa’s production capacity. They have also incidentally stumbled upon a separate business as a result of the refinery’s only byproduct: crude liquid soap. Glycerin, one of the inputs used to convert the WVO to usable biodiesel, can be easily used after the mixing process as a strong, black liquid soap. They call it “Sash.”