In June and July 2024, representatives of Africrooze GmbH and the FABIO organization undertook a major business trip to Jinja and Kampala to finalize the establishment of Africrooze Uganda Ltd. and prepare for market entry. This initiative aims to promote the use of e-bikes in Uganda and strengthen cooperation between German and Ugandan partners. Several important meetings and discussions took place during this trip, laying the foundations for the future development of the company. One of the highlights of the trip was a meeting with the German ambassador Matthias Schauer, who reaffirmed his support for the project and provided valuable contacts to potential investors. In addition, the partnership with the NGO FABIO, which holds 10% of the shares in Africrooze Uganda Ltd. as a co-founder, was intensified. Further discussions and agreements with local lawyers, potential investors and partners in the field of electromobility rounded off the trip. This report summarizes the key results and findings of the business trip and provides an outlook on the next steps for the successful establishment of Africrooze Uganda Ltd. in the Ugandan market.

Caption: Africrooze GmbH & FABIO founding Africrooze Uganda Ltd. Jinja, July 8th 2024

July 08, 2024

Foundation of Africrooze Uganda Ltd / market entry

We are proud and delighted that the mayor of Jinja has officially taken on the patronage of AfricroozE. Jinja, get ready – we’re bringing a breath of fresh air and sustainable mobility to the city! In the photo: the official announcement with Peter Okocha, Schola Abuko from our long-standing partner FABIO and our founder Dr. Jürgen Perschon.

 

July 08, 2024/ 1)

Interview with the German Ambassador Matthias Schauer The Ambassador

Matthias Schauer The ambassador is still very impressed by our project and will recommend us to 2 serious Ugandan investors who are among the few social entrepreneurs in the country:

  • Robert Kabanjero
  • Marry Kibanzu

He advises us to contact EU Development Program Manager Caroline Adriaensen (already requested by email).
He could be at the Kick Off until October 23rd – after that he is on a cycling tour in Uganda until November 2nd. After that, it’s back to…

 

Caption: Left: German Ambassador Matthias Schauer

Lawyer Mark Shyaka / Kampala

After registration in the company register at the URA, the application for the trading license and further administrative steps as well as the opening of an account at Stanbic Bank (recommended several times, among other things because most international companies have their account here).

2 ) Start-up consulting

with Mark Shyaka / Discussion with FABIO

FABIO immediately becomes a co-founder of Africrooze Uganda Ltd. and receives 10% of the shares. This approach is historically justified and, in the light of a German-Ugandan company, also sends an important intercultural signal to a partner that is an NGO, but without which EURIST would not have been able to carry out Ebike activities in recent years.

Furthermore, the new company can find its place in local and national structures in the future. FABIO’s national presence and networking at all municipal and political levels is a major advantage of going down this path together, at least in part, and using the strengths of both players to develop the market efficiently and sustainably. However, FABIO will have no direct influence on the management of the Ltd. as the GmbH will always have a quorum at shareholders’ meetings due to the majority of votes even without the consent of FABIO.

 

 

WORKPERMITS for the consultants seconded by the GmbH

Here we advise – unless they are paid by our Ugandan Ltd (and this is not planned) – not to apply for a work permit, but to apply for a normal visa for the 6-8 weeks on site. Everything else is extremely complicated, nerve-wracking and takes months – and is also quite expensive.

3) Asset Financer ASAAK

Dickson Kinto is the Ebike Marketing Manager of Asset Financer ASAAK, which operates in 8
districts of Uganda (one in Jinja). They will enter the emobility sector for the first time in 2024/2025 and, in addition to motorcycles from Zembo and Spiro, will also
Test Ebee bikes. OIKO boss Caroline Mulwa recommended ASAAK to us because it belongs to the Asset Fin. Count with the lower interest rates (approx. 25%)

Dickson was very enthusiastic about the new Africrooze models and would like to test the 3 types for 1-2 days as soon as possible and then – if the performance is convincing – buy about 10 units to test the marketing potential. The most important aspect is theft protection (reliable GPS system, lock).

He can very well imagine working with us in a later marketing project. If this bears fruit, purchases will increase gradually. The repayment periods are between 18 and 24 months. ASAAK pays between 80 and 100% of the purchase price – depending on negotiations.

 

 

Caption: Left: German Ambassador Matthias Schauer

WATU: An initial meeting could only take place with the regional manager – another is to follow
TUGENDE: Laura Smets has not yet responded to several emails (possibly summer break for Ms. Smets)

 

 

4) Jakob Hornbach – GOGO (BODAWERK)

Once again it has been shown: Jakob Hornbach is probably the most successful and experienced emobility player in Uganda. After founding Bodawerk Emotorcycles 2023, Jakob founded GOGO together with WATU (Asset Financer) and recently received a 1.6 million grant from an EU pot – and now has over 300 employees…great that he is our advisor!

He says of the business model:
If we want/need to bring the price down: As soon as we have the digital drawings: “Go” to China and ask for competitive prices – either NNE goes along or we change supplier.

Break even: To be successful with just 3000 ebikes: Increase the margin to 150-200,- (??)

With the Gisli container, we should deduct all costs from sales before anything is donated to EURIST.

Unlike in the e-motorcycle business, e-bikes can be charged very easily at home or at employers’ premises and anywhere in the grid area. Only in rural areas or if the price of electricity would rise sharply, he advises solar hubs with semi-automated swapping stations (i.e. vending machines that are integrated locally at a store, the store owner receives a rent and is thus motivated to keep the machine running and maintained (most favorable win-win constellation).

Jakob estimates (for the financial modeling) a residual value of the ebike after 2-2.5 years at 100 USD. He recommends (in order to become the market leader) a franchise light model with partners in other countries: We provide training, marketing and business basics and the bikes – according to the motto (on the store website: “Do you want to run an Ebike Business in your country? Call us now”).

Jakob already has a potential partner in Rwanda: Dr. Ephrem would like to open an Ebike store in Kigali (could play a role in the possible VW project). Dr. Ephrem has already had a conversation with me. He receives the new pitch deck and the new spec list and then approaches us. Note: Jakob has a very deep overall knowledge of financial modeling in relation to Uganda and Ebike specific factors (probably the best expertise in Uganda). We should include him in the further development.

 

 

 

5) Cooperation with FABIO

In addition to the joint establishment of the company, we have already drawn up an MoU in which the individual areas of cooperation are described in more detail. In principle, the Ltd. retains the control function. No results are yet available on the cooperation with Nijland Ebike Factory (Holland), as the meeting has been postponed.

 

Caption: Left: German Ambassador Matthias Schauer

New patron of Africrooze Uganda: Jinja’s mayor Peter Okocha

The first-generation HERO ebikes, which are now 2 years old, are often still in use and often come in for a swap: Ebike cab driver Jeko Lubaale still earns 10,000 ush a day despite a weaker battery – but can only take 50% of the motorcycle boda-boda price with this version.
We also held initial talks with potential customers and partners in Jinja:

Patronage:

The mayor of Jinja (Peter Okocha) has taken over the patronage of the project in Jinja District and will support us in all our activities.
support upcoming activities. This also includes marketing for employees of the city administration (“Jobbike”), although the income of the employees is quite low.

Caption: Left: Mayor Peter Okocha

Last Mile Logistics with FABIO

In general, the transportation of goods in small quantities / delivery services throughout Uganda is mainly carried out informally by boda boda drivers, who transport almost everything on their rented motorcycles.
The daily costs are approx. 10 – 12,000 USh rental costs for the motorcycle and 10-12,000 USh fuel costs (2-2.5l) – for 6-9 trips in the Jinja area, mostly up to a maximum of 10km. A cargo e-bike could be competitive here.

 

Caption: Risky ice cream transportation in the heat of the day without cooling

c) STUDENTS

A marketing campaign among students (especially Makarere University) could be just as relevant. This was proposed by several stakeholders. Many live further away and spend a lot of money on boda boda services. You have been at the university for at least 3 years. Parents offer security here. It was suggested that a roadshow be held on campus during Freshers’ Week. FABIOs can “thread” this accordingly.

TOURISM:

The tourism industry is growing again and the interest in e-bike tours could mean a certain amount of sales and more profit per e-bike because tourists guarantee higher rental income. An appearance at the next tourism conference would be feasible. However, this has just ended and we should consider a short-term alternative (e.g. Uganda Hotels Owner Association).

DELIVERY SERVICE:

There are numerous options to enter the delivery service of restaurants, supermarkets, pharmacies, etc. with Africroozes. In initial talks, Sta Cafe Jinja is already interested in our Ebikes as a delivery service and wants to test the bikes in October and possibly integrate them into their fleet / Management: Hussein Kassim hussein@sta.ug

WAHU (Ghana)

Discussions with WAHU (Ghana / www.wahu.me) will be continued shortly in order to transfer the option offered by WAHU founder Toni Heigl to transfer the WAHU business model and its APP in the delivery service sector to Uganda. This is similar in many respects to the ebee business model
(see below).

B2B in the last mile sector / delivery services

Since there is no direct end customer delivery service in most African countries (in Uganda only in Kampala) – and all customers pick up their products from DHL or JUMIA, for example – it is planned to use the updated list of Ugandan delivery and courier services available to us as soon as possible to examine business options where Africrooze offers delivery services with cargo e-bikes and its own drivers – similar to what Ebee does with Glovo, only additionally with cargo e-bikes). Pilot projects are necessary for this. The first 6 Cargobikes, which will arrive at the end of August, could help with customer acquisition. Demonstration superstructures that can safely transport various products should be produced here. A roadshow is then planned for October. However, due to the growing market for delivery services and the increasing collection of addresses, a market for parcel delivery services in urban areas can also be expected in the medium term.

 

DHL issued the following statement shortly before this report went to press:
In Kampala, not our 2-wheelers but 2-3 tricycles are to be tested over a six-month period and their performance and cost-effectiveness as well as their CO2 savings evaluated.
DHL also wants to offer its employees around 10 commuter models. The application for this will be submitted by around the end of July. In order to put the results on a broader level, the aim is to carry out such a test run in Tanzania as well. Nijland has already confirmed that it will continue to produce such models and make them “Africa-ready” for us.

NILE BREWERIES

The logistics management of Nile Brewery (Hillary Muhawezhi and Andrew Lubaale) is interested in loads of e-bikes for use at their 30 distribution centers in the country. The shipments would be handled by stockists who trade in smaller quantities. The company is now waiting for our product launch and is considering testing some models in the delivery service to customers with these smaller volumes in the Jinja area. Further talks are to follow after the product presentation.

Furthermore, you enable us to present the Commuter and Allrounder model to your employees – and also think of a marketing campaign (you can “win one of XX Africroozes” when you buy a bottle/crate)

JOBBIKE APPROACH:

a) COMPANIES

The idea of offering company employees Ebikes for
offering commuting is new throughout Africa and has yet to be
be checked for feasibility. First point of contact in
Jinja are Vitafoam, Unilever, Nile Breweries and DHL (see above).
Saving Cooperatives (SACCOS) could be a possible solution here.
be the entry point for secure financing.

b) TEACHERS

An initial interview at St. Noah Secondary School (with 50 teachers) resulted in an estimated number of buyers of 10%. Principal Ssali Leonard and assistant Edward Musazi are very interested and would like us to present the e-bikes and the financing options to his colleagues on site in October.

 

6) “Spy” visit to Ebee

The (incognito) visit to Ebee’s only store (also a loading/swapping station) and an interview with a driver yielded the following findings:

  • In the store there were 2 mechanics, a Dutchman (from whom I hid) and a sales lady
  • There are currently 70-80 delivery bikes (almost all via Glovo)
  • You ride with the Glovo app (Glovo also has motorcycles in service)
  • Official rate 8500 Ush per day or 60 000 Ush per week (makes 3.1 million ush per year)
  • Glovo pays per job to ebee and ebee minus the 60 000,- Ush (15 Euro) the salary to the driver, who can earn up to 150 000Ush per week (7-10 trips per day)
  • This continues until the bike is paid off or the rider “no longer feels like it”
  • There seems to be no bank and no asset financier
  • Repairs are included (there are 1-2 per week), an Ebee helmet and a strong lock, the brakes are the weak point
  • Direct sales: 3 million USH with 50 km battery/ 3.2 million USH with 80 km battery for the EbX and 3.5 million/ 3.8 million USh for the “HERO-Africrooze sister” (970,-)
  • No bikes have been stolen so far
  • Riders can take the bike home (the interviewee rides 20km each way)
  • Ebee has a partnership with KCCA – organizes a bike day once a year

FIRST CONCLUSION: If Ebee lets the drivers pay back 18 months, ebee will have earned Ush 4.32 million (1100 euros). Ebee is likely to get an ebike from HERO for around 650 euros FOB. Even if we are more expensive at Africrooze: If our bikes become refundable on the basis of warranty and quality even 24 months, at least the Uganda office could pay for itself quite quickly…is something for the financial model…

 

HARRAKA Ebikes (Kampala) is not a competitor as they do not specialize in Ebikes but offer solar systems. They sell the Indian bikes with a small battery as FunBikes for 2.5 million Ush and offer no further service. You only sold a total of 17 bikes in 2024. The website speaks volumes about this.

John Goslino (CEO of a drone company in Uganda) would support us with the acquisition, especially in Kampala. The idea is to give him a performance-based job that is clearly defined and for which there is only a transportation fee of 150-200,- upfront, because he has to drive around quite a lot. In general, this would be possible immediately – we are waiting until the brochures and website are available and we are then in a position to carry out test ride events on company premises.

Herbert Kisara is a young, likeable lawyer who is interested in working with us, but at least during the interview did not give the impression that he could match Mark Shaka’s level of expertise. We should add him to our (yet to be developed?) contact list.

Katesi Najiba (former CEO FABIO with business experience, also GmbH-Advisory Board Member) is still willing to support us in direct acquisition activities – specifically the last-mile logistics company approach (new daily rate 140,-). In addition, she would now be able to come to Jinja 2 days a week and take over the position of CO-CEO / Secretary and also be the 2nd authorized signatory.

Geoffrey Mutabazi / KARAA (Ebike Company Kampala)

KARAA – a bit of a one-man show with a British co-founder (Brenton Ford) – has been working with us for 1 year now. The endurance test of our first pilot with KARAA battery and motor in the first half of 2024 is quite good but not completely convincing

However, KARAA no longer produces ebikes and no longer pursues its business model (B2B with employment contract – similar to WAHU) – presumably because its Buffalo bikes are not well received (?)

Geoffrey would work for us as a Technical Advisor on a consultant basis (also on call), so it would be good to train him on the new Ebike and also bring him into the Nijland project

He can offer us a self-developed EDU system with GPS, intelligent battery and charger at the end of the year (for USD 450) – he has several Chinese partners who can produce these in large quantities

He would also propose for a pilot with 1 new NNE bike and his new EDU system – if it turns out that this fits, you could negotiate NNE or NNE only supplies the bike without EDU (diversification of the supply chain)

He is prepared to provide our spare parts warehouse in Kampala (strategically well located) and carry out small repairs – then report larger problems. But someone would have to come from Jinja.
Should bring him together with Hannes and Bernhard

Wants us people for technical management (must also be able to do solar, costs 600USD/M.) and also a
Suggest “Mechanical Person” (costs 250USD/M.)

Incidentally, he has a reliable clearance agent!

 

Incidentally, he has a reliable clearance agent!

8) Office, warehouse and production space

 

In the Jinja Innovation Village, the new shared office space on Main Street – 250m away from FABIO – is available for 120,-/month. We would be offered our own office space with room for demo bikes, meetings and 2-3 workstations. This office is rented for 2 months. We can then decide whether we need larger areas or are looking for something else. The Solar Maintenance Hub does not fit there.

 

Caption: Jinja Innovation Village and FABIO Office/Workshop

LONGTERM: Further option for production site near Jinja

Justin Ojambo, Chair of Board FABIO offers us – as soon as we need space
(warehouse/production facility) To use his land. It is well located on the outskirts of Jinja on the way to Kampala and will also be very cheap. It is about 3km away from the above mentioned office. In addition to the FABIO site (north of Jinja, less conveniently located), this is a second option.