The Clay Cleanser

Rayana Algosaibi, Domenik “DJ” Fabrizio, David Norton, John Tran

Dr. Sushil BhatiaCI 102-A: The End of Global Poverty

Idea Recorder

Date idea was conceived: February 25, 2015

The Problem: ● inability to find safe, clean, and drinkable water● people spend hours of their days looking for a source of water● contaminated water with bacteria and viruses

The Solution:● plastic filtration system that will filter contaminated water with bacteria

and viruses● the natural process of evaporation and condensation● “kills three birds in one”: solves water, health, and labor problems

Idea Recorder (continued)

Target Customer:

● people in third world countries that have a lack of resources and wealth, who are

currently live under $2/day

● target region is Africa because that is where our product would be the most efficient

● then we will expand to other third world countries

● target country is Kenya (42% of population live under poverty line according to

UNICEF)

Size of the Market:

● currently over 2.2 billion people who are living in poverty

● Africa alone accounts for 415 million people. (Statistic from World Bank-

http://www.worldbank.org/en/topic/poverty/overview last updated on 4/6/15)

Why Kenya First?

● Kenya is the most developed and industrialized country in East Africa

● young, well educated English-speaking people however unskilled● 70% of population is under 35 years of age● about 50% are living in poverty● high unemployment rate (10.5% official, 40% unofficial)● Kenya has a fast growing economy● our product works best in dry and hot climate● depreciation of Kenya’s currency, the Kenyan Shilling (80 KSH= US $1)● we are going to produce our product in the capital, Nairobi

Initial Design

Final Design/Model

Competitors

● LifeStraw Personal Water Filter

● Sawyer MINI Water Filter

● Katadyn MyBottle Water Filter

● All Clear™ Bottle

LifeStraw Personal Water Filter

● Price: $19.95

● Proso lightweight (2.7 oz) and portable (wear around your neck)o BPA free plastic and a non chemical filter o simple and easy to use (dip straw in water and suck the straw)o Filter kills 99.9999% of bacteria and protozoao 3 year shelf life if used properlyo 264 gallons (1000 liters) of water can be filtered

● Conso cannot transport water into a large container

(only drink from straw)o unsanitary if used by more than one persono does not filter chemicals, viruses, and heavy metalso filter can be damaged if dropped

Sawyer MINI Water Filter

● Price: $24.95

● Proso lightweight (2 oz) includes a 16 oz reusable pouch to store water, 7

inch straw, and cleaning plunger (syringe)o simple and easy to useo 0.1 micron filter kills 99.9999% of bacteria and protozoao 100,000 gallons (378541.18 liters) of water can be filtered

● Conso does not filter chemicals, viruses, and heavy metalso does not treat large quantities wello awkward to drink fromo unsanitary if used by more than one person

Katadyn MyBottle Water Filter

● Price: $44.95● Pros

o lightweight (7.7 oz), portableo simple and easy to use (just drink and it filters itself)o 0.2 micron filter kills bacteria and protozoao 26 gallons (100 liters) of water can be filtered, have to

replace filter● Cons

o have to replace filter after use, sold separatelyo unsanitary if used by more than one persono does not filter chemicals, viruses, and heavy metals

All Clear™ Bottle

● Price: $99.99● Pros

o lightweight (1 lb 1 oz), durableo portable purification built inside the water bottle o easy to clean after useo high UV technology to effectively neutralize microbiological

componentso lasts 10,000 cycles (3 bottles/day for 9 years)

● Conso needs batteries and electricity to run

(16 gallons or 80 cycles per charge)o does not treat large quantities wello unsanitary if used by more than one persono not tested for E coli or cholera

Idea to Execution

Execution Plan:1. Obtain a patent on our product idea

2. Receive permission to start manufacturing in Kenya

3. Attain loans from private lenders

4. Construct manufacturing plants to create the plastic tubes and clay

filters

5. Hire the native people who are in poverty to work in our factories

6. Check each product that enters our factory

7. Test the final product

8. Transport and distribute our product out to local vendors and the

marketplace

Supply Chain

● Partner with South African supplier, Dynamic Plastics to provide

us with bucket and plastic pipes (there will be a massive order

and we are driving it by truck)

● Partner with natives to create and provide us with clay filters

● Materials will be driven by truck back to our manufacture factory

in Nairobi

● Produce and assemble the Clay Cleansers

Supply Chain (continued)

● Place them into our trucks will be distributed to our vendorso Not all product will go to the vendors, some will be sent to

our personal vendors in order for them to travel into the

smaller villages to sell

● Vendors will sell to the customers, which will generate revenue

● Vendors will keep track of their accumulated revenue

● Vendors will report their logistics to us

Environmental Impact

● All of our plastics will be the recycled buckets coming from the Dynamic Plastics company, in either the 5, 20, or 25 Liter sizeo We chose to go with recycled buckets to try to cut down our

ecological footprint and the negative environmental impact that products have

● The shipping from South Africa to Kenya by truck would emit less fuel than shipping by plane from US or China to Kenya

● Resulting in a less negative environmental impact due ● This product itself is an environmentally friendly product

o Needs no power besides the sun/heat to keep it working

Income StatementSell Price per Unit $8

Number of Units Sold

7,500,000

Total Sales $60,000,000

Cost of Unit Sold $11,250,000

Gross Profit $46,875,000

Operating expenses

$13,482,271.28

Income before taxes

$33,392,728.72

Taxes $15,405,578.29

Net Income $20,666,759.80

Number of Units Sold

● Population of Kenya is roughly about 45 million● The median household size is about 5 people

We divided the population and the median household size to determine how many units we should produce.

45,000,000/5=9,000,000

We decided to sell about 7,500,000 units because not every family will need one.

Production Cost per Clay Cleanser

● Tin and Plastic Bucket: $1.10 ● Plastic Pipe/Clay filter: $0.65

Each unit will cost $1.75 to make. We are deciding to sell it for $8 each.

This will result in a profit of $6.25 per unit. (62.5% gross profit margin)

Cost of Sales: 7,500,000 * $8 = $60,000,000Cost of Units Sold: 7,500,000*$1.50= $13,125,000Gross Profit: $60,000,000- $11,250,000= $46,875,000

Why Production in Kenya?

● to reduce production cost● $7-9/hr in the United States, 8 hrs a day= $56-$72/day each

person● $2.50/day a person to do the same job a in Kenya● we will produce many job opportunities for the unemployed

Distribution of Product● too expensive to send products overseas by plane or boat, then

renting a truck to distribute VS.● buying our own trucks to distribute our products to vendors which

will be less expensive

Transportation Expenses

Isuzu NHR N-SERIES truck is about $26539.42 each (2,500,000 KSH)5 trucks for our distribution=$132,697.13 (12500000 KSH)

16.07 km/ L * 75 L (fuel capacity)= 1205.25 km/pump1 L of gasoline= $1.10 (103.79 KSH)75 L * $1.10/L = $82.50

5 trucks * $82.50= $412.50 every time we distribute12 times that we are going to distribute to vendors throughout the year each year= $4950

We will spend $30,000 on gas just in case our estimations are off.

Transportation Expenses= $132,697.13 +$10,000= $162,697.13

Wage Expenses

Employees= 1000 employees (50 managers)Salary for regular employee = $0.3125/hr; $2.50/day Salary for manager= $0.45/hr; $3.60/dayPer year (6 days/week)= $799,715

Vendor sellers will receive 20% commission for sales0.20 * $6.25= $1.25/ unit7,500,000 * $1.25/unit= $9,375,000

Advertising Expenses

We will advertise through many mediums:● social media (Facebook, Twitter)● local newspapers/magazines● word of mouth● posters and billboards● local radio stations

We estimate that we will spend about $50,000 on advertising.

The Clay Cleanser

“Magi Safi”

941.99 KSH

Office Space/Supplies

Pension TowersLoita Street, Off Kenyatta Avenue - Nairobi Central Business DistrictProperty Size: 4,699 ft2

Price: $0.80 (75 KSH)/ft2 per monthPrice for full year: $44,859.15 (42,209,100 KSH)

Estimation of Office Supplies (chairs, tables, printers…)$50,000

Total Office Expenses= $44,859.15+ $50,000= $94,859.15

Manufacture Property/Equipment

We estimate that the necessary equipment and the factory needed to produce our product is about $3,000,000. It includes:● machinery● packaging● environmental costs● fans● electricity

Total Operating Expenses

Types of Operating Expenses Amount Spent

transportation $162,697.13

wages $799,715

vendors $9,375,000

advertising $50,000

office $94,859.15

manufacture property/equipment $3,000,000

TOTAL $13,482,271.28

Taxes

Taxes in Kenya in order to do business= 38.11%

$40,443,978.72 * .3811 = $12,725,968.92

Income before taxes= $33,392,728.72

Net income= $33,392,728.72- $12,725,968.92 = $20,666,759.80

Entrepreneurs

How will you get a person at the bottom of the pyramid to participate in your activities as an entrepreneur?

● be part of job fairs where people can learn about the career opportunities at our company

● select the 50 brightest people from our applicant field for our managerial positions

● high school diploma required, college major would be better● intensive interview process● we will talk to vendors and encourage them to sell our product

Entrepreneurs (continued)

How will this entrepreneur be trained to go from unskilled to a skilled entrepreneur to become self-sustaining member of the community by distributing/helping make your product?

● provide managerial/ethical training for our selected

candidates

● they will learn how to manage a large group of people

● learn the ins and outs of running a business

● teach them accounting/finance/marketing/advertising skills to

be successful

Frugal Innovation Award

1. Will the product be low cost enough to be affordable by very-low-income ($2 per

day) people at the bottom of the pyramid?

● will be affordable by very-low income ($2 per day) people

● more of long-term investment due to high market selling price

2. How will the product reach them?

● products will be sent out in one large truckload

● distributed to the smaller, local distributors in the Kenyan markets

3. Will it be easy to use by semi-literate/semi-skilled end users?

● easy to use

● booklet with pictograms (with colors) of the procedures of using our product

Frugal Innovation Award (continued)

4. Describe the special features of the product that makes it suitable for this category.

● provide large quantities of safe clean drinking water

● natural process of evaporation and condensation

● so simple and easy to use

● cost of this product is less expensive than the other filters in the market

5. Are there any shelf life and storage condition requirements? (For instance, some end users

might be living in hot, humid, dusty conditions.)

● durability of product depends on how carefully it is handled

● works best in dry and hot climates, not work well in humid, wet,

and cold areas

6. In which countries would your product be the most useful?

● countries in Africa that have tough times getting to clean water

● will expand our product to other parts of the world like India and China

after our experiment in Kenya

Frugal Innovation

Award

Solution to Poverty through Entrepreneurship● Our product will help hundreds of people get out of poverty through

entrepreneurship● Our factory will be employing locals who are currently unemployed or are

looking to receive a better pay ($2.50/day for employees, $3.60/day for managers)

● Each employee that we hire will be earning at least 25% more than the poverty lineo Putting this into terms of the US that would be a family of five making

$28,410 a year going to roughly $35,513 ● Managers will learn the skills necessary to help them start their own business in the future (accounting, marketing, finance, etc.) through intensive ethical/managerial training

Solution to Poverty through Entrepreneurship (continued)● This does not include the extra commission that our vendors will

be makingo Our vendors will be making a 5% commission on the products

they sello Each unit sold will give the vendor an additional $0.3125,

which is equal to being paid for an additional hour of worko More sales means more money and

less work

Why Our Product is the Best

● over $25 million in net income for just the first year

● the potential that the product can have when it expands all across the

world

● can benefit many people as well as generating lots of profit

● could be the next life changing product that will actually alleviate poverty

● brand new product in its category (sun/heat-based)

● so simple to create and even easier to use

● “kills three birds with one stone”

o improve health conditions

o cleaner water supply

o hire native workers for wages

Bibliography

● http://www.topgear.com.ph/news/isuzu-proves-n-series-trucks-fuel-efficiency-with-ec

onomy-run

● http://www.isuzutrucks.co.ke/nhr-truck

● http://www.isuzutrucks.co.ke/isuzukenya/action/media/downloadFile?media_fileid=4

91

● https://www.cia.gov/library/publications/the-world-factbook/geos/ke.html

● http://kenya.socrata.com/api/assets/BD46451B-3158-4698-8E38-6703631AB578

● http://www.officespacekenya.com/properties/cbd-pension-towers-space-to-let/

● http://www.doingbusiness.org/data/exploreeconomies/kenya/paying-taxes/

● http://www.buylifestraw.com/products/lifestraw-personal

● https://sawyer.com/products/sawyer-mini-filter/

Bibliography (continued)

● http://www.katadyn.com/usen/katadyn-products/products/katadynshopconnect/kata

dyn-water-filters-ultralight-series-products/katadyn-mybottle-microfilter-red-splash/

● http://www.camelbak.com/en/Sports-Recreation/Purification/How/fast.aspx

● http://www.worldbank.org/en/topic/poverty/overview

● http://aspe.hhs.gov/poverty/15poverty.cfm

● http://www.dynamicplastics.co.za/products/recycled-range/

● http://nairobi.usembassy.gov/doing-business-local.html

● http://www.plasticsforafrica.com/index.php/component/virtuemart/?Itemid=6

● http://www.export.gov/kenya/doingbusinessinkenya/index.asp

● all the images were found on Google Images

Thank You!