Five Finnish companies doing business in developing countries: partnerships with UN organisations and NGOs
5 December 2019
More and more companies and organisations are collaborating to achieve Sustainable Development Goals together, within profitable business models. What does it take to build a successful partnership?
The UN member countries have agreed on sustainable development goals to mobilise efforts to eradicate extreme poverty and support sustainable development until 2030. Partnerships for the Goals is goal number 17. Achieving ambitious goals requires commitment not only from governments but also from the private sector and civil society.
Such partnerships are also of interest to a growing number of Finnish companies and NGOs. Companies and organisations that have received Finnpartnership’s Business Partnership Support for their projects describe what it takes to build a successful partnership and the kind of development impacts the projects can have.
Baby Aid Kits to refugee camps
Logonet Oy, a textile company, has long been a supplier of products for Finnish Baby Aid Kits. Together with World Vision Finland, the company has started to develop similar kits suitable for the harsh conditions in refugee camps in the Turkana region in northern Kenya. “Logonet’s approach is to introduce Baby Aid Kits as part of health projects for children and mothers in developing countries,” says Mika Roini, Logonet’s VP, Business Development.
“World Vision has local expertise and great contacts with other organisations and authorities. There was no way that we could have started discussions with the health authorities in the Turkana region by ourselves,” explains Roini. Baby Aid Kits are given to mothers in refugee camps who visit child health clinics. During their visits, they also receive information on the importance of breastfeeding, family planning and their own well-being. The aim includes encouraging more mothers to give birth at the clinics, which reduces the risk to the health of both mothers and children.
“Baby Aid Kits have contributed to a significantly increased number of women visiting the clinics. That is why they are great support to our project, which focuses on reducing maternal and infant mortality and improving the status of women and girls,” says Mireille Bathgate, Corporate Partnerships Manager at World Vision Finland.
Collaboration requires long-term commitment
Logonet has generated revenue from Baby Aid Kits exported to Kenya. The kits also serve as a good reference for the new potential business the company is seeking in Africa. “We also work with organisations in other regions and try to shape attitudes so that decision-makers also focus on women’s and children’s issues,” says Mika Roini.
According to Roini, the collaboration with World Vision has been fruitful for both partners, and they have learned a great deal about each other’s different perspectives during the project. “At first, both partners probably had some doubts about how the collaboration would work, but as the project has progressed, these doubts have been dispelled.”
Roini thinks one of the biggest challenges is that cooperation requires long-term commitment.
The company must be prepared to invest and sacrifice working time, even though it may take several years for the business to become profitable. “We had worked for three years in Kenya before we started to receive any actual orders for Baby Aid Kits.”
Like many other NGOs, World Vision is actively seeking new cooperation opportunities with companies. “We are looking for scalable innovations that can solve problems in poor communities. Promoting development is the starting point for collaboration, not the promotion of export efforts,” emphasises Bathgate.
Bathgate agrees with Roini that the prerequisite for successful collaboration is a willingness of both partners to invest sufficient time and money in the operations. Patience is also needed, as a project may be slowed down by unexpected setbacks.
Modular schools for disaster areas
A collaborative project that promotes development goals may also involve several companies and organisations, each of which brings its expertise to the project. An example of such a partnership is a container school designed for disaster-affected regions. The project was initiated by Combi Works, a manufacturer of construction products, and Finn Church Aid, while the design company Elomatic and Disability Partnership Finland joined in later.
Mikko Vesikukka, Vice President at Combi Works, says that the project aim was to develop a building that could be used as a school and that would be easy and quick to transport, erect and dismantle. “We started by setting our goals together. Based on these, we set out to develop a product that can be transported and assembled even under difficult conditions. We also wanted the school to be accessible,” explains Vesikukka.
Nepal was chosen as the project country, as it had suffered a powerful earthquake a few years earlier that had destroyed many school buildings. Pasi Aaltonen, Coordinator of Construction, Collaboration and Innovations at Finn Church Aid, says that the organisation brought its long experience of working in disaster areas and knowledge of the local conditions to the project. Finn Church Aid has a long history of operations in Nepal, and it also has an office in the country.
“Working with companies makes sense. As a humanitarian organisation, we focus on education and arranging related operations. We need companies to help us in product development and construction of school buildings,” adds Aaltonen.
Collaboration was a landmark experience
Disability Partnership Finland offered its expertise to the project to develop accessible learning environments so that children with disabilities can also go to school. According to Anja Malm, Executive Director of the Disability Partnership Finland, a successful outcome requires a number of things to be taken into consideration. “For example, the ramp to the school must not be too steep and there should be a handrail, and there must be an accessible toilet. Interior lighting has to take into account visually impaired children and the acoustics those with impaired hearing,” says Malm.
The container school project was Elomatic’s first collaborative project with NGOs. “It was a landmark experience. The organisations put forward their views, which were not immediately overridden by commercial calculations, and we didn’t start talking about the price straight away,” says Rami Raute, Elomatic’s Product Development Manager.
The development resulted in a container school prototype that was erected in the yard of a vocational school near Nepal’s capital Kathmandu. Vesikukka reports that the project is almost complete. “Through this project, we have identified new partners and customers, such as international humanitarian organisations,” continues Vesikukka.
Ready for similar projects
For Combi Works, the modular container school is a major opening in new markets, but according to Vesikukka, the Nepal project also has broader implications. “This is not only a business opportunity, we could also solve problems that really affect people’s lives,” explains Vesikukka.
Elomatic is also ready to continue working on similar projects. “The world will change radically over the coming decades. Such consortia can achieve Sustainable Development Goals that companies cannot achieve through conventional operations,” Raute points out.
Businesses and organisations agree that successful collaboration requires a clear set of goals, timelines and division of labour. “It is worth giving plenty of time to discussions to find a common voice. The organisation needs to understand that for a company it is a business that must be profitable,” stresses Malm.
“Organisations need to realise that companies must have opportunities for new business, while companies have to understand that it is not an export project or a nice and easy market,” emphasises Aaltonen.
Cold storage units for schools in Somalia
Vakava Technologies, founded four years ago, is a company that develops and manufactures mobile cold storage units. Juha Kunnas, Project Director at the Finnish company, says that the equipment, which is based on new technologies, has been developed specially for the challenging conditions in developing countries.
The company is working on a pilot project in Somalia together with the UN World Food Programme (WFP). The initiative has delivered cold stores for food for schoolchildren to six schools in the Kismayo region in the south of Somalia. “The idea is for schoolchildren to be offered vitamin-rich and nutritious food that is produced on site. The units can be used for storing bananas or fish, for example,” says Kunnas.
Kunnas explains that school meals are important because they can be the reason parents send their children to school.
The deterioration of the security situation in the Kismayo region has held back the project, but the units, which are powered by solar panels, have proved their worth in Somalia’s scorching sun and sandstorms. Smart technology allows remote monitoring of the cold storage units, but weak communications have brought their own challenges. “We’ve resolved the problem by making changes to the unit’s computer system so that the device works even without an Internet connection.”
Kunnas mentions that working with the UN organisation has gone surprisingly smoothly. The red tape has led to delays in the schedule, but working together has been a constructive experience. “The WFP has skilled and motivated employees who are employed locally in Somalia.”
One of the challenges has been logistics. Transporting cold storage units proved too risky, so they were delivered by air. Vakava’s aim is to expand the cooperation with the WFP and to seek new partners from other organisations involved in development cooperation.
“Our goal is to build a healthy business while generating positive development impact.”
Investments in small businesses
NGOs also work with the business sector by supporting small entrepreneurs in developing countries. A new operational model, impact investment companies, was founded by these organisations.
In Finland, the pioneer in this sector is FCA Investments Oy, founded by Finn Church Aid, which finances small businesses in fragile developing countries. “The goal is to create jobs in developing countries and thus reduce poverty,” says Jukka-Pekka Kärkkäinen, Executive Director of the company.
FCA Investments has received a EUR 16 million loan from the Ministry for Foreign Affairs for its operations. The company has granted funding to two funds, one of which invests in small businesses in Uganda and the other in Asia. “We also intend to invest directly in companies in the future. We are assessing companies that would be suitable for the first investments.”
In addition to Uganda, FCA Investments has explored the opportunities of launching operations in Somalia. The company has received Finnpartnership’s Business Partnership Support for assessing partners and preparing a business plan.
Kärkkäinen points out that building a good partner network is essential in a country like Somalia. New companies need to find partners that can provide expert assistance in business development, such as financial management and marketing. Guarantee mechanisms are also needed to protect investments against political risks.
One of FCA Investments’ partners is the GEEL programme, funded by the US Agency for International Development, which promotes local business operations and employment in Somalia in partnership with local authorities. “The programme has improved local businesses so they can be invested in.”
Kärkkäinen believes that financing in the form of venture capital is a good addition to conventional development cooperation. Reducing poverty and creating new jobs requires new businesses, which may find it difficult to find funding even if they have what it takes to succeed and grow.
“Big investors often avoid small businesses. This is especially true in the poorest and conflict-prone countries, where the risks are the greatest.”
First picture: World Vision Kenya