Client Update: Tanwaste - Nov 2022

The Red Hat Impact team is proud to share our second impact update from the Tanwaste team as they consolidate their business operations, attract new customers, and discuss their upcoming funding requirements.

Since the deployment of their first impact loan in May? 2022, Evan Lorendo and the team at Tanwaste have been going from strength to strength. They recently hit a revenue milestone of collecting 1 million shillings per day (?$675 AUD) and are on track for their highest revenue month yet in November.

The first impact loan through LendForGood provided capital for the purchase of 3 waste collection trucks, with the fleet comprising 2 compactors and 1 'tipper' truck, and they have just purchased a smaller three wheeled? 'bahjaji' to help them reach hard to get to areas.

This adaptive approach to fleet purchasing and management, and a desire to provide waste utility services to their local communities, has impressed many people in the city.

Success hasn't been without lessons learned. Evan reported that city waste collection has its drawbacks, despite being an amazing career and impact creator, providing a wonderful and needed service, and giving great exposure for Tanwaste. Municipal waste collection can be hard, exhausting and repetitive work. The Tanwaste team is happy to be doing it though, with the repetitive nature of the work being offset by the opportunity for teaching team members the processes and procedures that need to be put in place prior to scaling to the next stage of Tanwaste’s vision for a safer, cleaner Tanzania.

One of the hardest lessons from the municipal waste collection model has centred around cash flow and financial projections. Current waste collection processes aren't providing regular data and insights on daily collection amounts, and when the team will get paid from the city.

These lessons have forced Tanwaste to reflect on fleet size and efficiency. The team has thought about the most efficient fleet types and size with regards to how they? would build manageable future fleets for the company. For example, not every town needs a brand new large compactor truck, with sometimes simple and more efficient smaller trucks being the best approach for the teams and Tanwaste overall.

In the coming year (2023), Tanwaste aims to secure the waste contracts for all the medium and large towns and cities within the Lake Zone region, and that starts with building out the right trucks for the right situations.

To ensure a more sustainable future, Tanwaste has made changes to their management team to save cash flow, while also investing in contracting an experienced expert in waste revenue collection, and now month on month they are tracking ahead of projections. This new financial and management approach has positioned Tanwaste well to secure a contract with ISOAF Ltd, a major contractor in the building the East African Crude Oil Pipeline (EACOP) pipeline, to collect waste from their site. The contract will provide revenue upwards of US$2,000 a month to Tanwaste's business, and allow them to purchase 2 bahjajis - the 3-wheeled motorized carts - to help in smaller areas and free up the larger trucks.

The pathway to enterprise sustainability also includes moving to private contracts to generate more revenue. The EACOP pipe-coating facility outside of Kahama has given Tanwaste the contract providing that they meet their strict Health, Safety and Environmental (HSE) requirements - which is a significant step up for the team - with the country's largest textile manufacturer also in need of basic waste management services. In addition, the new contract pipeline includes a new gold mine owned by Australian company OreCorp, with a potential revenue stream of a few thousand dollars monthly, and a French water project that needs waste services.

Future revenue streams are looking positive, as there are other mine sites and major projects that Tanwaste feel that they can get on board, including collecting used oil waste from all the Total service stations in the northern region of the country with a potential value between $5-$10,000 monthly.

To achieve their goals, Tanwaste requires a 2nd round of funding to execute the plans for new, private clients and also to maximise the efficiency of their fleet. Capital will be used to purchase a large tipper truck and at least two more bahjajis. Once ordered, the new 8 ton truck will take roughly 75 days to arrive from China and to be put into action. This additional vehicle will free up other trucks in the fleet to provide private services around the Lake Zone region, including at least one compactor to work on the private contracts (for work-site camps) along with one of the smaller tipper trucks to work on the other private contracts.

The new capital will also help ease their cash flow, as the city government can take up to 45 days to process payment for the collection services, making it tough for the team to stay on top of payments and ensure our team is getting paid on time.

The team is well underway in achieving their ultimate goal of Tanwaste creating a sustainable business that is debt free, creating ongoing careers, and providing a much needed utility in the communities that they work in. The strengthened focus on engaging private clients allows Tanwaste to generate more revenue for growth and debt payback, while incurring relatively small costs. There will also be a direct impact on staffing headcount, as Tanwaste will need to hire 3 operators in Kahama and Mwanza, and a salesperson in Mwanza.

By working with private contracts, Tanwaste will be working with some of the country's largest companies, providing instant authority and a reputation that Tanwaste ensures some of the most important waste in the region is handled with care and to an internationally recognized standard.

For more information on the original impact loan completed via LendforGood, see the details here.

All words and images courtesy of Red Hat Impact and Tanwaste, November 2022