For Dan Etherington, the key to business success
is innovation. Hardly an earth-shattering insight, you
might say. But consider that Dan's company, Kokonut
Pacific, manufactures hand-operated coconut oil
machinery that uses a traditional extraction technique
and sells it to rural communities in developing
countries. Even in this low-tech market, innovation is
crucial.
Dan's first innovation was to match supply with
demand. In 1992, when he was an agricultural economist
at the Australian National University (ANU) in Canberra,
he led a consultancy team to Mozambique. There, a
village soap maker said he needed a way to extract oil
from coconuts. Dan later recalled that people on an
island in Tuvalu had developed a method to press oil
from sun-dried coconuts.
Working with the CSIRO, he used this approach to
develop a coconut oil machine. After testing designs,
they came up with a disarmingly simple unit: a metal
plate for drying coconut flesh to the right moisture
content and a hand-operated press for squeezing out the
oil.
Ready to take his equipment to the market in 1994,
Dan retired from ANU and started Kokonut Pacific. Though
a few units were eventually exported to Mozambique and
elsewhere in Africa, Dan set his sights on the island
nations of the South Pacific and Caribbean, where
coconuts were plentiful, but people struggled to make a
living producing copra, the raw ingredient of industrial
coconut oil.
The design and innovation process continued as
teething problems cropped up. For example, villagers
would sometimes damage the press by using more force
than was needed to expel the oil. Now the press has a
shear pin that can easily be replaced if excessive force
is applied.
Dan and his team of four employees have also had to
take an unusually far-reaching approach to marketing.
While some villages produce oil for local use, others
need to sell it further afield. Kokonut Pacific has
helped them with product development and sales of
certified organic virgin coconut oil, coconut oil soap
and coconut oil biodiesel fuel.
In the Solomon Islands, where producers lack the most
basic infrastructure and support, Kokonut Pacific has
created a local joint-venture company that buys back the
coconut oil for export. "Our main problem now is
managing rapid expansion because so many communities
want to join the scheme," Dan says.
Thanks to growing demand for coconut oil among
health-food shops and the successful launch of the
Niulife brand of products, which Kokonut Pacific sells
through its website, machinery sales have boomed. The
company sold 100 units last year and Dan hopes to match
that number this year.
He sees innovation as a way of keeping his team
engaged. Each problem has become an opportunity to
challenge employees to think in new ways. For instance,
the Kokonut Pacific website was developed internally,
even though no one on staff had online experience. It
paid off: Internet sales in the first year were
$90,000.
"It's been a continuous process of learning and
developing in-house expertise," Dan says. "People rise
to the challenge if you give them the chance." |
