What on earth is Novozymes, a $1.8-billion industrial biotechnology company headquartered in Denmark, doing in Mozambique, a poor African country (per capita income: $440) where corruption is rampant and more than half of the government's budget comes from foreign aid?
The company says it's trying to protect forests, increase agricultural productivity, lift farmer incomes, reduce indoor air pollution and, not incidentally, make money.
In an unusual move for a big multinational company, Novozymes and a partner, a New York-based firm called CleanStar Ventures, have created a vertically integrated, energy-and-fuel company called CleanStar Mozambique. The centerpiece of the new venture is a factory that makes clean-burning ethanol for use as a cooking fuel from cassava, a starchy food crop widely grown in Africa. The factory opened in mid-May, with a visit from Steen Riisgaard, Novozymes' CEO, who said, according to published reports: "I've seen many ethanol plants in the world and this is the smallest. But it is also the one that makes me the most proud."
CleanStar Mozambique aims to do business at the bottom of the pyramid, where the world's poor people collectively make up a big market. [See my blogpost, "How SAPMiller is making green beer at the bottom of the pyramid," which is also about Mozambique.] BOP, as it's known, is an appealing theory, but not one that has generated a lot of success stories since it was put forward by two academics, the late C.K. Prahalad (who wrote "The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits" in 2004) and Stuart Hart, a Cornell professor who co-authored the first article on the BOP with Prahalad and has since become a leading thinker on sustainability.
The idea for CleanStar Mozambique took root after Thomas Nagy, an executive vice president of Novozymes, met the CleanStar Ventures people at a Cornell seminar organized by Hart. "We'd been looking for ways for our technology to get into the BOP market," Nagy told me, when we spoke by phone. Novozymes is the world's largest maker of enzymes, which are molecules that catalyze (or speed up) chemical reactions; they're used in many industries, from detergents and toothpaste to stone-washed jeans, pulp and paper, oil and gas and biofuels. CleanStar Ventures, meanwhile, was formed by Greg Murray and Sagun Saxena, both former strategy consultants, to pursue business opportunities in emerging markets, with a focus on food and fuel.
"We founded CleanStar Ventures because a lot of groups that operate in this space have a short timeline," Greg told me by phone. "They're in a rush to put money in and take it out. To transform things like the dependence on charcoal for cooking in Africa, we need to take the time to really understand the issues and bring in partners."
Cooking with charcoal is widespread in Africa, and a big problem for several reasons. First, it leads to deforestation because trees are chopped down to make wood into charcoal. Second, indoor air pollution makes people sick. Third, charcoal is expensive; Prices have doubled in the last year in Mobuto, the capital of Mozambique, and some charcoal is transported from more than 200 miles away, according to this story by TriplePundit's Jen Boynton, who traveled to Mozambique with Novozymes.