The Jordanian who’s boosting small farmers’ profits through technology

Late payments are a huge problem for small farmers, so Ghoorcom has reduced the payment period so that its farmers are paid on time. (Supplied photo)
Updated 17 May 2019

The Jordanian who’s boosting small farmers’ profits through technology

  • By eliminating the middleman, Ghoorcom enables smallholders to sell directly to retailers, hotels and restaurants
  • For now the main destination markets are Amman and Irbid, with buyers segmented by size and location

This report is the first of a series being published by Arab News as a partner of the Middle East Exchange, which was launched by the Mohammed bin Rashid Al Maktoum Global Initiatives and the Bill and Melinda Gates Foundation to reflect the vision of the UAE prime minister and ruler of Dubai to explore the possibility of changing the status of the Arab region

DUBAI: Jordan’s agriculture sector could be transformed by a local business-to-business start-up. Ghoorcom, which launched its services in January 2018, promises to swell farmers’ income and improve the quality of produce in shops.

Its premise is ingeniously simple: With the help of technology, it eliminates the middleman and enables Jordan’s smallholders to sell directly to retailers, hotels and restaurants. That means higher prices for growers, lower prices for buyers and a more efficient distribution model; currently, goods transportation is often unreliable and can lead to spoiled produce.

“Small farmers face lots of difficulties,” explained founder and chief executive Mohammad Oqeili. “There are many struggles that need to be solved. We first enabled a few transactions between farmers and retailers offline, also taking care of logistics, payment and quality assurance. Now we’ve built a platform to do the same online.”

The company, which began testing its platform in June 2016, has ambitions to become a regional agricultural platform, said 28-year-old Oqeili, citing China’s Alibaba as his inspiration. Major source and destination markets will likely include Lebanon, Saudi Arabia and the UAE.

“Our vision is to expand across the Middle East. Our mission is to connect with farmers and help solve their problems. Then we go to potential buyers.”

For now, Ghoorcom’s main destination markets are Amman and Irbid, with buyers segmented by their size and geographical location.

“It’s a very challenging process to convince retailers to buy from us. They worry about our commitment — they want reliable, fresh, quality supplies,” said Oqeili.

Already about 200 farmers have signed up to the platform, which began by focusing on oranges and now sells seasonal produce.

“We match farmers with retailers. Each season produces different types of crops — in winter it’s citrus fruits like oranges and lemons, while summer produces watermelon and grapes.”

Ghoorcom is partnering with an IT company to build a blockchain system to ensure product quality. The system will verify the quality of the produce by adding a code to every box of both vegetable and fruits. This code incorporates various details on the produce including seed type, soil type and country of production.

Ghoorcom’s various features should help farmers reduce their reliance on intermediaries.

“The big issue with middlemen relates to micro-financing,” said Oqeili. “Some middlemen lend farmers money to grow their produce at a high interest rate. This sometimes creates unfair trade terms for farmers who are restricted to growing specific types of products for the middleman.

“Late payments are another huge problem for small farmers — we’ve reduced the payment period so that farmers using our platform are paid on time.”

Oqeili’s grandparents were agricultural workers and he knew from a young age that he too wanted a career in the sector. He has a degree in accounting and finance, plus a masters’ degree in agricultural economics from the University of Birmingham in Britain.

On returning home from his studies, he worked full-time as a business development manager, creating Ghoorcom in his spare time. The company, which has a staff of six, participated in a six-month, EU-funded start-up incubator in 2017.

Currently, Ghoorcom is self-funded, having turned down potential investors, although Oqeili is keen to find the correct partner to help the business to grow.

“I’m seeking a visionary investor who believes in helping farmers, who believes in social enterprise as well as in creating a successful, profit-driven business,” Oqeili said.

“Someone who believes in our capability to add value to the market. I’m very willing to collaborate with investors who can support us in achieving our vision.”


Rooftop revolution: Pandemic chill upends solar power industry

Updated 10 July 2020

Rooftop revolution: Pandemic chill upends solar power industry

  • Executives in US and Europe rely on tech, finance plans in battle for survival

LOS ANGELES: The booming rooftop solar panel industry nosedived overnight when the coronavirus forced homeowners to rein in spending and keep their distance from would-be installers.

Now, in their struggle to survive, companies on both sides of the Atlantic are turning to online marketing rather than knocking on doors, using drones to inspect roofs, arranging digital permits and coming up with attractive new financing plans, according to interviews with 12 executives.

At stake is the future of a key driver of the global transition from fossil fuels to renewable energy: solar power was the second-fastest growing renewable source after wind in 2019, according to the International Energy Agency.

And rooftop installations, which generate electricity used by homes or businesses rather than feeding into the grid, made up more than 40 percent of the market before COVID-19 struck.

Energy research firm Wood Mackenzie has slashed its rooftop solar installation forecasts for Europe and the US by a whopping 30 percent this year, while lifting its forecast by 3 percent in Asia, where China provides strong government support.

Joana Palau, 42, a council worker on the Spanish island of Ibiza, was one of the few in her neighborhood who pressed ahead with a plan to install 12 solar panels on her farmhouse in June: “If I had not been working and did not have the stability of a salary every month, I definitely wouldn’t have done it.”

A housing estate with solar panels in Duesseldorf, Germany. European firms are offering innovative finance plans to entice wary clients amid rising job insecurity. (AFP)

By contrast, large-scale solar installations that power the grid have fared relatively well. Wood Mackenzie trimmed its forecast by less than 10 percent for Europe and barely touched its US outlook as rock-bottom prices, subsidies and government mandates helped insulate larger projects from the pandemic. In the US, the third biggest rooftop solar market after China and Japan, about 80 percent of the 100,000 job losses in the solar sector so far have been at rooftop installers, the Solar Energy Industries Association said.

Many of the staff who were not laid off, however, began to focus on one of the industry’s most persistent challenges: How to cut the cost of identifying homeowners with suitable roofs, and then persuading them to buy panels, executives said.

Quickly, companies made sales appointments virtual.

Leading US installers SunPower Corp., Vivint Solar Inc. and Sunrun Inc. said that reassured potential clients worried about the virus. It also cut the cost of acquiring customers, which Wood Mackenzie puts at nearly $4,000, or 22 percent of the average $18,000 cost of a US system.

Normally reliant on door-to-door visits, an effective but expensive sales tactic, Vivint trained hundreds of salespeople to canvass by phone as its sales slumped 60 percent following state lockdowns, CEO David Bywater said.

By early May, sales were down only 30 percent. “It was a radical shift,” said Bywater, adding that it had hastened Vivint’s plan to diversify sales strategies and cut costs: “I hope we never lose that and we accelerate that.”

In fact, the strategy was so successful that larger rival Sunrun announced on July 7 that it had agreed to buy Vivint in an all-stock deal valued at $3.2 billion, saving $90 million a year and creating a solar player with half a million customers.

Sunrun bought Vivint because of its focus on direct selling, a model Sunrun CEO Lynn Jurich said had become even more durable during the COVID-19 pandemic: “Both companies are delivering above where we expected.”

HIGHLIGHTS

  • Solar panel firms go digital as lockdowns hit sales.
  • New sales strategies cut costs as firms battle to survive.
  • Solar power seen as key driver in climate change fight.

Rival SunPower has also seen a massive shift to digital sales, with about three-quarters of consultations now happening via video chat, up from a 10th previously.

CEO Tom Werner said he expected half of its sales would be digital from now on. He said it was harder to close deals in virtual chats but that was offset by cutting out travel time between appointments.

“Ideally, you have the day when solar is like Amazon, so you can buy and be fulfilled in a very efficient process,” he said.

Sunrun, meanwhile, had to pull its salespeople out of stores such as Costco and Home Depot during lockdowns, outlets that had been bringing in nearly a third of its sales. Within two weeks, Sunrun had moved its field sales team online and launched a promotion offering six months of home solar power for $6. While initial online commitments were lower, the percentage of customers following through was higher.

Sunrun said innovations like virtual sales and automating permits to avoid physical processing by authorities will trim about $2,000 off the cost of an array over the next year or so.

EmPower Solar, a rooftop installer based in Long Island, spent New York’s lockdown on “game-changing initiatives” such as digitising sales and paperwork, and using satellite imagery and drones to inspect roofs, said CEO David Schieren.

However, he said that it was harder to build rapport with customers without face-to-face contact.

In Europe, rooftop solar firms developed more enticing finance plans as the pandemic made clients wary about spending.

SotySolar in Gijon in northern Spain accelerated the roll-out of a “Netflix-style” subscription model. It installs panels and charges a monthly fee though homeowners can buy them or end their contract when they like, said co-founder Daniel Fernandez.

“We have been thinking about doing this for a while, but we brought it forward because of this situation,” he said, adding that he expected to triple installations with the offer.

In Barcelona, renewable energy utility Holaluz has accelerated an initiative to install panels free for people with available roof space — and use them to generate power for all its customers. It aims to extend the plan to apartment blocks and commercial buildings.

Holaluz expects to boost clients to one million and carry out 50,000 rooftop solar installations by 2023. It estimates fewer than 10,000 Spanish homes currently have panels.

“This is the rooftop revolution,” said co-founder Carlota Pi. “We have spent so much time at home, we have become much more conscious of the value you can create by transforming your roof into a source of energy generation.”