Development of New and/or Scale-up of Existing. Aloe-based Business in Laikipia

Laikipia Wildlife Foundation

Development of New and/or Scale-up of Existing Aloe-based Business in Laikipia

Submitted to: The Laikipia Wildlife Forum (LWF)

Submitted by: Susan Wren, Technical Organic & Natural Products Advisor. Bio-enterprise Consultant Product and Market Development Email: [email protected]

Date: April 2008

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CONTENTS

Executive Summary 1. Work Plan 1.1 Goals/objectives 1.2 Outputs 1.3 Methodology

2. Desk Review Summary 2.1 Background to Aloe Enterprise Development in Laikipia 2.1.1 Laikipia District 2.1.2 The Laikipia Wildlife Forum 2.1.3 Laikipia Aloe Bio-Enterprise Project (LAB): 2.1.4 CITES and the Kenyan Government 2.1.5 Kenya Aloe Working Group (KAWG): 2.1.6 SNV Sustainable Utilization of Aloe Resources in the Drylands Study 2.1.7 Summary of the main actors 2.1.8 Summary of the Supply Chain Actors and Functions 2.2 International Aloe Commercialisation 2.2.1 Description 2.2.2 Chemistry: 2.2.3 Historical context 2.2.4 Health benefits/claims: 2.2.5 Commercial cultivation 2.2.6 Commercial processing and manufacturing 2.3 International Market Characteristics 2.3.1 Natural products market trend 2.3.2 Retailed aloe products 2.3.3 Main commercial extracts 2.3.4 Retail Product Forms 2.3.5 Global distribution of commercial aloe 2.3.6 Quality standards and regulation 2.3 Commercialisation of Aloe species in Africa 2.3.1 Background 2.3.2 Eastern Africa 2.3.3 South Africa 2.4 Commercialisation of Aloe sps in Kenya 2.4.1 Description of the main species and distribution 2.4.2 Exploitation crisis 2.4.3 Regulation and Licensing 2.4.4 Organisations of the Aloe Producers and Processors 2.4.5 Aloe Supply Chain 2.4.6 Schematic of the Aloe Supply Chain in Kenya:

3. Laikipia Aloe Enterprise Review and Impact Assessment 3.1 Existing Aloe-based business in Laikipia 3.2 Ecological/conservation impact assessment 3.2.1 Background: 3.2.2 Laikipia Environment: 3.2.3 Laikipia vegetation: 3.2.4 Land use: 3.2.5 Aloe species, distribution and status in Laikipia 3.3 Socio-economic impact 3.3.1 Traditional uses of Aloe species in the Laikipia area 3.3.2 Traditional NTFP enterprise 3.3.3 Status of the aloe collectors/harvesters: 3.3.4 Management issues 3.4 Challenges, Threats, Strengths and Opportunities of Aloe Enterprise in Laikipia 3.4.1 Challenges 3.4.2 Threats: 3.4.3 Strengths 3.5.4 Opportunities

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4. Market Demand and Business Opportunities 4.1 Kenyan Market 4.1.1 Status 4.1.2 Existing products and prices 4.1.3 Case Study. BIOP 4.5.6 Learning points: 4.2 African Market 4.3 International Export 4.4 Summary of Market Characteristics 4.5 Legal hurdles 4.6 Quality Endorsement

5. Aloe Material Supply 5.1 Sustainable Wild Harvesting Protocols 5.2 Domestication Protocols and Standardised Techniques 5.3 Research and Development

6. Value addition 6.1 Physical value addition 6.1.1 Critical points for value addition of aloe products 6.1.2 Processing Protocols and Standardised Techniques 6.1.3 Established Quality Standards and Labelling (GMP) 6.2 Certification - Non-physical value addition 6.2.1 Organic 6.2.2 Fair trade: 6.2.3 Wild Harvest Standards. 6.2.4 Developing the Internal Control Systems for Producer Group Certification 6.3 Product Design 6.3.1 Taking aloe raw materials to a commercial retail product 6.3.2 Formulation and processing quality protocols: 6.3.3 Product Branding 6.3.4 Packaging 6.3.5 Service Providers

7. Business Development 7.1 Basic criteria for commercial bio-enterprise development 7.1.1 Competitive advantage: 7.1.2 Economies of scale 7.1.3 Sustaining the market position 7.1.4 Producer group capacity 7.2 Infrastructure and Equipment 7.2.1 Depot centres 7.2.2 Construction of the Bio-enterprise Central Processing Centre 7.2.3 Harvesting and Processing Equipment 7.3 Production and running costs 7.3.1 Product materials 7.3.2 Processing 7.3.3 Packaging and promotional materials. 7.3.4 Trade finance 7.4. Value Chain Development 7.4.1 Management and organisation 7.4.2 Product flow 7.4.3 Developing producer group capacity 7.4.4 Technical training of the trainers, extension and central processing staff 7.4.5 Business capacity building 7.4.6 Supply chain development 7.5. Marketing 7.5.1 Core product attributes 7.5.2 Pricing policy 7.5.3 ‘Marketing the Story’ 7.5.4 Marketing pitches for possible product for the national and regional market: 7.5.5 Promotional tools:

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7.5.6 Example of potential commercial partners: 7.5.7 Market research 7.5.8 Relevant international trade fairs.

8. Developing environmentally supportive bio-enterprise 8.1 Potential ecological impacts of developing bio-enterprises in Laikipia 8.2 Sustainable production/wild harvest 8.4 Summary of the rational based on environmental and economic consideration

9. Business operating structures and management capacity 9.1 Structure of the business and financial management entity 9.1.1 Commercial bio-enterprise trade association 9.1.2 Stakeholder owned bio-enterprise company 9.1.3 NGO with service providing facility 9.1.4 Trust with separate commercial trading and charitable status 9.1.5 Legal framework 9.1.6 Role of the Laikipia Wildlife Forum 9.2 Producer group structures and business operating capacity 9.2.1 Justification for Producer groups: 9.2.2 Producer group selection 9.2.3 Basic requirements for producer group development 9.3 Commercial partners 9.3.1 Existing Commercial Enterprises 9.3.2 New Commercial partners 9.3.3 Kenyan based companies 9.3.4 Externally based companies 9.3.5 Commercial relationship with co-operatives/producers associations 9.4 Development partners 9.4.1 NGOs operating in Laikipia 9.4.2 Co-operation and linkages with other national or regional initiatives 9.4.3 International trade support schemes 9.5 Research partners 9.6 Corporate sponsorship 9.7 Investors / Joint Venture Partners 9.7.1 Business plan and feasibility study 9.7.2 Technical assistance services 9.7.3 Commercial services. 9.7.4 Marketing and sales 9.7.5 Trade Finance and Micro-credit

10. Basic Business Analysis 10.1 Product profiles for national and regional markets 10.2 Three scale-up approaches

11. Conclusions 11.1 Opportunities 11.2 Lessons Learnt 11.2.1 Poor returns and little incentive 11.2.2 Insufficient scale and poor product quality 11.2.3 Inadequate market knowledge and orientation 11.2.4 Certification and licensing 11.2.5 Business management strategy and ownership 11.3 Focal areas to address 11.3.1 Education and awareness 11.3.2 Environmental degradation – Destructive harvesting / not meeting conservation goals 11.3.3 Suppy chain development – Low organisational and management capacity 11.3.4 Lack of business capacity – Low economies of scale and profitability of existing aloe trade 11.3.5 Certification - Lack of traceability and quality systems/endorsement 11.3.6 Policy, Legal and Institutional Framework 11.3.7 Land tenure 11.3.8 Marketing

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12. Recommendations for Aloe Enterprise Development 12.1 Practical scale up priorities 12.1.1 Sensitization and group selection 12.1.2 Developing stakeholder responsibility 12.1.3 Organisational Capacity. 12.1.4 Extension and training - TOT 12.1.5 Expanding domestication/plantations 12.1.6 Develop sustainable guidelines and protocols 12.1.7 Phased development of the operational framework 12.1.8 Processing 12.1.9 Non physical value addition – Certification 12.1.10 Product development 12.1.11 Market development 12.1.12 Trading structure 12.1.13 Commercial partnerships 12.1.14 Legislation and standards 12.2 Regulating the industry 12.2.1 Harnessing national statutory requirements 12.2.2 Developing sustainable harvest levels and protocols for the aloe species 12.2.3 Quality protocols and marketing standard 12.3 Increasing empowerment of stakeholders 12.3.1 Laikipia communities 12.3.2 Maximising benefits to women at each stage of the value chains 12,3,3 Accessing finance 12.3.4 Market development 12.4 LWF potential role in the scaling up/development of new aloe based businesses

Annex Section Annex 1. The International Aloe Science Council Annex 2. Aloe products retailed in Kenya Annex 3. Formulation of Aloe-based Products Suitable for Rural Processing Annex 4. Commercial Harvesting & Processing Technique Annex 5. Aloe Vera, the Health Branded Aloe Annex 6. Commercial Proposal from AloeTrade America Annex 7. Baringo Aloe Development Programme Annex 8. Commercial Aloe Species and varieties Annex 9. Appraisal of Aloe Domestication in Laikipia, Case Studies Conducted by Kenya Aloe Working Group Secretariat. Annex 10. The HACCP Seven Principles Annex 11. Sustainable Wild Harvesting Protocols Annex 12. Status Report of Aloe Commercialisation in the Coastal Region

ACKNOWLEDGEMENTS AND DISCLAIMER This assignment was completed with the specialist input of Anne Powys, Ethnobotanist, landowner and resident in Laikipia; and the detective work of Maxwell Lumbasi, Bio-prospecting, ICIPE and Alex Kubi of Wild Living East Africa. For background information a number of extracts have been made from the Coast Aloe Business Report conducted ABD-DANIDA and the SNV “Sustainable Utilization of Aloe Resources in the Drylands” study. The excellent quality of these reports makes them sound reference materials for the industry within Kenya and at the international level.

I would also like to thank and acknowledge the assistance of Darryn Payne, Earthblends, UK, in providing guidance in aloe product formulation and the LWF team who have provided key information about the aloe development activities in Laikipia. It is also important to acknowledge the cooperation from staff in government ministries.

This assignment was undertaken for LWF by Susie Wren it is stressed that the opinions expressed in the report are purely those of the consultants based on observations and findings during the study period. It goes without saying that the consultants take full responsibility for any errors or omissions that maybe found in the report.

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ACRONYMS AND ABBREVIATIONS

ALDB Africa Land Development Board AMU Aloe Management Unit ASAL Arid and Semi-Arid Lands AWF African Wildlife Foundation CBD Convention on Biological Diversity CBO’s Community Based Organization CITES Convention on Trade in Endangered Fauna and Flora DRSRS Department of Resource Surveys and Remote Sensing EIA Environmental Impact Assessment EMCA Environmental Management and Coordination Act EU-BCP European Union - Biodiversity Conservation Programme FLO Fair-trade Labelling Organizations International FAO Food and Agriculture Organization GPS Geographical Positioning System ICIPE International Centre for Insect Physiology and Ecology ICS Internal Control System IFOAM International Federation of Organic Agriculture members ITDG Intermediate Technology Development Group KAWG Kenya Aloe Working group KEFRI Kenya Forest Research Institute KEPHIS Kenya Plants Health Inspectorate Services KAPG Kieni Aloe Plantation Group KBS Kenya Bureau of Standards KFD Kenya Forest Department KWS Kenya Wildlife Service KWS Kenya Wildlife Service LDC Least Development Countries LWF Laikipia Wildlife Forum MDG Millennium Development Goals MOA Ministry of Agriculture GDP Gross Domestic Product NGO Non Governmental Organisation NTFP Non timber forest products NAREDA Natural Resources and Development Agency NALEP National Agriculture and Livestock extension Programme NEMA National Environmental Management Authority NGO’s Non-Governmental Organizations NMK National Museums of Kenya PRSP Poverty Reduction Strategy Paper PFM Participatory Forest Management SME Small and medium scale enterprise ( micro-enterprises) SNV Netherlands Development Agency UNESCO United Nations Education, Scientific and Cultural Organization USAID United States Agency for International Development WHO World Health Organization

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1. Summary

1.1 Study Focus This study focuses on the potential methods of developing and scaling commercial uses of identified indigenous aloes and recommends ways to mitigate any negative effects (covering wild harvesting and plantation aspects).

1.2 Development background About three quarters of Kenya’s geographical areas is classified as arid and semi-arid (ASAL) which supports about 28% of human population and about 50% of livestock population. The ASALs are characterized with fragile ecosystems, high poverty levels, poor water resource distribution intense conflict over access to and control of natural resources, under developed markets for a wide range of natural resources products and poor distribution infrastructure. Climate change and variability in face of eroded resilience and tradition coping mechanism continue to pose a serious threat to communities who are already under economic siege. However, these areas are endowed with wide range of rare, endemic plant and animal species, which require innovative conservation approaches including the use of economic instruments and active stakeholder participation. Various interventions have been initiated to link sustainable natural resource utilization, poverty alleviation, wealth creation and biodiversity conservation. The Economic Recovery strategy for wealth and employment creation 2003 – 2007 (ERSWEC) for Kenya, state that also non-timber forest products play a major role for local villages specially women, these include Aloe bitter gum and ethnobotanicals. Major aloe gum producing districts have been Baringo, Samburu, Laikipia, Taita-Taveta and West Pokot. Out of the 450 species of indigenous aloe in southern and eastern Africa and Madagascar, 22 Aloe species are listed in CITES Appendix I with the remainder of the genus listed in CITES Appendix II. In Kenya, about 59 types have been identified, Aloe turkanensis, Aloe secundiflora and Aloe scabrifolia are the main commercial species in Kenya, harvested for Aloe gum. Aloe is also used in rangelands rehabilitation, commonly as a living fence, and as livestock fodder in dry seasons. (Extracts from the SNV “Sustainable Utilization of Aloe Resources in the Drylands” study).

1.3 Commercialisation background CITES, managed by KWS, required that all export and importation of aloe products, or derivative is licensed. In support of this the Kenya government has brought about an Act to protect and guide wildlife conservation and management, the Wildlife Conservation and Management Act (Section 67 Cap376), under which is a licensing system, now a statutory requirement for all aloe commercialisation activities. To provide a baseline to facilitate the licensing process, SNV, in 2005, undertook a resource inventory, mapping and quantification of commercial Aloes in 6 specific zones of Kenya through ground reconnaissance, GPS and remote sensing mapping and conventional plant inventory were undertaken. Aloe gels and bitters are mainly used in pharmaceutical industries; aloe gel is the most trade component of the aloe plant in the global value. Most of the Aloes are exploited from the wild, its only Aloe barbedensis , not indigenous to Kenya, which is under cultivation.

Wild harvesting poses many threats, ranging from unsustainable exploitation, to environmental instabilities, which lead to lose of species. There are little efforts towards establishing resources availability, which need to be scale up, to enable planning for sustainable exploitation. There are commercial Aloe activities in Baringo, Laikipia, Samburu, Taita, Kwale, West Pokot, Marsabit, Moyale and Wajir. These are some of the poorest districts in the region.

The growth in the export market for natural products and extracts from Africa has been limited more by lack of supply and problems in market access than lack of demand. Main factors limiting supply are: • Investment finance limitations and lack of credit • Poor product quality and lack of expertise in serving a market - no or little access to training and extension support • Insufficient economies of scale (i.e. the high per unit cost of dealing in small quantities). • Cost of and access to suitable packaging materials and quality analysis • Lack of market compliance (standards and regulations). • High processing, transport and freight costs.

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1.4 Policy lead conservation tools

Domestication : In light of the CITES the development of community propagation and cultivation schemes for the Aloe species is now encouraged and supported by some development agencies as a strategy to diverse commercial pressure from wild populations to sustainable plantations. Cultivation and propagation guidelines for Aloe species are being developed by KWS.

Sustainable Wild harvest: There is intention that a certification schemes for sustainably wild harvest of cultivated plants is developed, supported and promoted as an incentive for CITES compliance. Sustainable wild harvest can also be certified organic under the EU ISO65 standards, and by the FSC NTFP component. Sustainable wild harvesting protocols and monitoring (also pref certification endorsement) must be established before accepted under any aloe commercialisation initiative. However, compared to most regions there has been little evidence of indiscriminate harvesting in Laikipia, although aloes are challenges by other issues such as grazing pressure and land use change.

1.5 Commercialisation challenges currently hindering aloe enterprise Historically and to this day the exploitation of aloe is crude and the returns to the harvesters are low, being based almost solely on the trading of aloe sap or the extracted aloe gum, for which there is poor returns to the harvesters at the bottoms of the chain provides very little incentive for rural communities to manage the indigenous aloe. The traders also have little incentive to handle and process the gum to preserve its quality.

There is very little domestication of aloe practiced within Kenya. There is also little incentive for this practice if commercialisation is based on the sap alone, at best achieve return of just under 6,000ksh/acre after 3 to 4 years. Poor access to sufficient technical assistance/knowledge to successfully develop and manage the aloe plantations, and to process attractive aloe products is a fundamental problem area.

There is not enough supply to develop a natural product range that can supply wider markets than those directly within the villages. Due to the poor extraction methods, the aloe formulations have less than 1% aloe content, thus having no impact on conservation of the species, encouraging the up-take of aloe as a land management tool and in providing income generation options from any aloe species. Fundamental to aloe scale-up initiative is the improvement in the skills and investment capacity of the processing and value addition of aloe extracts to increase market opportunities and returns.

1.6 Summarising the learning points • Current commercialisation of the indigenous aloe sps in Kenya is entirely based on the sap, crudely processed into gum, and in some case as liquid sap used in product formulations. This results in; (i) a very low value market value as a non-standardised (aloin content) aloe gum, and (ii) a processed bodycare product containing minuet quantities of aloe extract (as sap does not naturally combine well with other ingredients), poorly formulated, packaged and promoted Therefore, these current commercial activities do not provide a very attractive incentive to drive forward ‘conservation through sustainable utilisation’ and ‘development through trade’ of the indigenous aloes of Kenya. • There has been no investment into the processing of aloe, above the crude extraction of aloe gum. It is therefore evident that feasibility studies and business plans have not been carried out of the start of all of the existing aloe commercialisation initiatives/projects and programmes. • Lack of clear marketing and business management strategy within most aloe enterprise initiatives also indicates the lack of this first vital stage in developing any business • Several examples have illustrated that the development of stakeholder own companies have been badly designed and causing, in the case of the EU funded Baringo project ownership problem, suspicion among interested parties and withdrawal of key partners has collapsed the project. • The resource maps developed in Baringo for the EU aloe commercialisation initiative and by SNV have provided the baseline information for a feasibility study and business plan as well as the foundation for sustainability protocols. This activity will need to be replicated in all areas where indigenous aloe species are to be harvested.

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• Wild harvesting of aloe species has been mostly destructive. The licensing requirements now in place provide only a policing framework and a licensing facility • The domestication of aloe has been carried out on a very small scale and the gross margin per hectare has not provided a sufficient enough incentive for others to choose aloe cultivation as a preferred option over traditional crops. • All groups complain of poor access to markets and market information. It therefore indicated the lack of planning (feasibility and business) before the enterprises were developed, and lack of understanding of the market leading to poor product development and thus, lack of markets. • There is no quality certification scheme in Kenya for aloe products, such as the IASC (international Aloe Science Council), despite the initial interest (during the development of the licensing scheme) shown by KEFI and the members of the Aloe Working Group to develop the Kenyan Aloe Science Council. • Most of the aloe producer groups have no or little management capacity and business skills, leading to poor business development and lack of market opportunities (ability to successfully serve a market with consistent product quality and supply). • Aloe plays an important role in soil erosion control, stabilising the soil making it possible for establishment of other vegetation and thus contributing to restoring degraded lands.

1.7 Aloe commercialisation in Laikipia Presently in Laikipia there are no large-scale commercial actors/players, although village level to medium scale industrial enterprises is developing slowly in some parts. LAB, Laikipia Aloe Bio-enterprise Project, has given rise to the start of aloe commercialisation in Laikipia. Maria Dodds, a land owner and farmer in the Laikipia district, has developed a substantial nursery of the indigenous species found within Kenya. She sells the planting material to the producer groups. The formation and development of commercial aloe enterprises with rural communities in the Laikipia was also initiated and assisted by the LWF under the LAB project: Rumuruti Aloe Group, Withare Aloe Vera Group, Koija Aloe Project, Kieni Aloe Plantation Group (KAPG) and Tigithi Pilot Aloe Group that are processing and retailing aloe based bodycare and health care products on a small scale to local markets. These projects have made some impact in stimulating increased awareness of the usefulness and potential for commercialisation of aloe, although, due to poor extraction methodology the quantity of aloe extract used in these products is insignificant and resulting in little incentive to manage the Aloe species. Although LWF is successfully encouraging the up- take of aloe panting for rangeland rehabilitation.

1.8 Harnessing aloe scale-up opportunities in Laikipia Clear steps are required to develop aloe businesses in Laikipia to significantly supplement Laikipia men and women’s income and including ways of mitigating negative ecological impacts of increasing aloe based businesses. On the basis of analysis of this new sub sector, including a broad review of the available capacities in public institutions and private sector players, the modalities of this programme should be discussed in a stakeholders workshop, and the task of developing the aloes industry in Laikipia should be agreed, time-framed and an action plan established. These areas can then be addresses through development and stakeholder commitment, and public and private partnerships.

The proposed interventions and product development strategies will be necessary in order that commercial aloe production and processing becomes a viable and attractive incentive for commercially participation and sustainable management of the species. The following are indication of the primary areas:

Producer groups and partnerships: Establishment and structuring of strong commercial outgrowers/ small holder producer groups is fundamental for the scaling up of aloe commercialisation in Laikipia. As this commercial development requires the collective input of the private sector, development agencies, research institutes and government, these partnerships must be formed on clear grounds at the on-set of the commercialisation initiative, and bounded by MOUs/MOAs. The need for a pilot phase is clear, when analysis previous experiences (Baringo, BIOP etc), to develop the relationships and ownerships, harnessing professional financial and legal advice, participatory involvement of all parties in designing and building the enterprise, etc.

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The learning points extracted with the analysis of the other aloe groups in Kenya indicate the strong need for formal training and on-going extension support to bring about good organisational management and enable adequate recording systems to provide transparency and traceability for buyers, and compliance to certification standards and financial lending organisations.

Domestication of the aloe resource: The poor returns from aloe cultivation can be improved though; (i) introduction of strong planting material from commercial nurseries (ii) training in the improved techniques of production (iii) increase in the value of the raw harvested material through improvement in the harvesting, handling and processing; i.e in the supply chain structure and processing facilities (correct equipment, depot centres, central processing centre, with quality and certification protocols)

Scaling up aloe plantations to increase the volume of the resource will enable market sustainability (as well as conservation of the species), and will lead to increasing market penetration at the national/regional/international level. Training will be necessary on improved production practice, and learning visits to other commercial small-scale producers plantation in Kenya, Uganda and Tanzania. Planting materials should be supplied from licensed nurseries in Laikipia, such as the one already existing operated by Maria Dodds.

Demonstration plots exist in some areas. Developing these and others (more strategically placed) to include aloe as a land-use tools together with cropping/grassland management can promote another incentive for communities to sustainably utilise the indigenous aloe sps.

Sustainable wild harvesting. As policy – licensing is the only mechanism established at this point to manage and control wild harvesting of aloe sps, it is therefore necessary that this is supported by the developing the following steps: (i) Sustainability protocols, (ii) Preferably endorsed through external certification (providing cash incentives through better market advantage and higher price returns) (iii) Training and extension provided by interested commercial partners, NGOs and associations on the methodology of sustainable wild harvest, (iv) Organizational development of producer groups (v) Operational manual should be designed in the local languages, as well as in English, and graphical material highlighting ‘good’ and ‘bad’ practice for collection, processing and other factors along the supply chain.

Certification – non physical value-addition. Obtaining organic certification for products for the international marketplace is a viable and sensibly option. It does require good organization and costs, and the transition period of 2-3 years may present a hurdle, although achieving organic certification of indigenous resource can take less than one year. Pre-certification support is required to organise organic compliance measures and sustainable wild harvest protocols.

The Internal Control System (ICS) is a tool, now a statutory requirement, for organic certification of producer groups. The design of the ICS is very similar to that of a functional supply chain. The pyramid structure methodology of mobilizing information regarding the product from the ground to the marketplace, to provide sound traceability and transparency, is common to both. Training and guidance will be necessary in ICS development and management for the producer groups /CBOs/co-operatives.

Processing : Species determination and testing for active ingredients in the selected commercial varieties should be conducted at the early course. Training and specialist input to bring about capacity development in semi-processed, full processing, packaging and presentation to finished retail ready aloe products stage, is necessary to maximise returns to the communities. This can be focused initially at the local and national markets. Semi-processed aloe product can then be developed for international markets to the market, once statutory standards and the buyer specifications can be consistently and successfully met. Setting up of a local processing and packing centre in the locality will require grant aid or loan

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facilities. Processing for international market should include training and extension support in all parameters concerning traceability and quality control. Third party verification of the aloe content and quality, to endorse the health claim of the products, should be developed with a labelling scheme. This can also be conducted through the standard organic certification (ISO65) processes, which can be developed through the assistance of KOAN (Kenya organic Agriculture Network).

Micro-credit: A revolving fund/interest will provide free loan and enable buying capital for the communities to buy the season’s raw materials and also the necessary processing inputs at a reasonable price. Mico-credit finance could be grant aided and professionally managed by a micro-credit bank/institution. Micro-banking systems can be facilitated through the development of a shareholder company where dividends from profits can be sent direct to the shareholders micro-bank accounts. Micro-banking facility can also operate independently, providing there is sufficient evidence to show that there is enough financial investment capacity within the communities in these rural areas.

Branding and Marketing: For the national market, a promotional campaign may be necessary to develop awareness of the value and health properties of indigenous aloes. In order to enable the communities to make the necessary capacity building, to maintain practical and institutional history, to govern and maintain the sustainable wild harvesting protocols and certification, and to gain bargaining power, it will be necessary to create Aloes (Collectors and Processors) community based organisations The empowerment of these business focused groups in these areas above must take place together with assistance in gaining market information and linkages. The development of supportive linkages with commercial partners can be guided and assisted through the use of the MOA (Memorandum of Agreement). For additional governance, management capacity and security, such partnerships can be set up as a tripartite agreement; i.e between the producer groups/CBO/Co-operatives, the development partner and the commercial partner.

To further increase competitive advantage, branding is important, i.e an interesting and provocative profile of the production, beneficiaries and incomes generation story should be developed as a central theme to the promotion and marketing approach, and attractively presented in the publicity and marketing materials. This could include aspects of community trade/fairtrade (fairtrade certification), sustainable harvest, (and organic certification) the positive characteristics of production and processing methodologies that enable the involvement of women and the less advantaged members of rural communities, etc. Also include complete product specifications, information on quality assurance. Developing website marketing capacity will provide a global facility for promoting the’ feel good factor’ of the nature of this business approach.

Trading structure/s : Once the feasibility and business planning stage has been completed, a forum to present the findings and to agree a way forward should be held with all the stakeholders concerned/interested in the commercialisation of the indigenous aloe sps in Laikipia. From this point forward, the various potential trading structures have a secure position to take form. These potential trading structures could include the following: (i) Commercial operator and outgrower schemes (ii) Small individual aloe enterprises/companies serving local and nationals markets (iii) Small holder owned trading company (purchasing from the producers/harvesters and semi/fully processing aloe products) (iv) Trust structure with multiple investors and shareholders, vertically integrated from purchase of the raw stabilised extract to the finished retailed product.

Role of LWF : There are a number a ways that LWF can support and assist this process, some of which are indicated in 12.4. As the sustainable management through commercialization of indigenous species has now been confirmed as a legitimate part of the LWF remit, it role in such initiatives can now be considered more deeply. The response from the stakeholders forum will provide an indication of what is required from the various existing private, public and development partners in Laikipia, and also provide a platform for LWF to assert its position in overseeing and providing services to these developments.

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1. Work Plan

1.1 Goals/objectives

The objective of the study is to evaluate the existing uses (commercial and non commercial) of indigenous aloes in Laikipia, identify existing or new uses with the most viable commercial potential and identify ways of scaling up these uses.

1.2 Outputs The output of this consultancy will be: (i) A comprehensive report on the information gathered as per the TORs including an estimation of the he economic returns of developing and/or scaling up the production of selected products. Aspects include: (ii) Aloe products having good commercial potential, Evaluation of the existing and new uses of the indigenous aloe species according to viable commercial potential (iii) Guidelines for scaling up those aloe species with the best commercial and conservation supportive potential. (iv) Broad market analysis conducted, identifying supply and demand trends at the global, regional and national levels (v) Detailed analysis of aloe bio-enterprise, exploring the capacity of Laikipia’s men and women to develop the local markets and to break into other specific markets, taking into consideration the environmental impacts of developing or scaling up aloe based business in Laikipia. Recommendations will be provided on the best economic and sustainable use of aloe species selected and on the steps necessary to develop viable aloe based enterprises in Laikipia.

1.3 Methodology The consultant will be expected to base information on interviews and secondary information. He/she will work closely with the Laikipia Wildlife Forum staff (especially the Community Liaison Officers) and with the Kenya Aloe Working Group.

A. Collect and compile background information • Review existing information on indigenous aloes, on their attributes, on the legal framework, on their conservation and commercialisation. • Investigate existing commercial and non commercial uses of aloes in Laikipia through field visits and interviews with existing stakeholders and support projects.

B. Analyse of global/regional (East Africa)/national markets This will include information on: • The range of products used and supplied from aloes (indigenous to Laikipia) at the global/national market levels • Packaging/conditioning • Supply structure - main suppliers in Kenya, East Africa, Global and their characteristics (large scale, small scale), location • Demand trends per product • Demand structure – main buyers in Kenya, East Africa, Global and their characteristics (large scale, small scale), location • Capacity of the market to absorb aloe products from Laikipia • Price trends

C. Local level aloe market and potential for development and/or scaling up of activities Information will be provided on: • Existing aloe products supply structure and capacity, access to market, know how etc • Existing demand for aloe products, structure • Level of interest in developing aloe based business.

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• Identify market segments in which Laikipia men and women could potentially break into and identify which existing commercial aloe uses could be scaled up effectively • Analyse the economic potential, for community groups, of products with the most commercial potential– investment required, and potential returns of the development and/or the scaling up of aloe business. • Identify constraints to breaking into markets proposed and/or to scaling up profitable aloe uses

D. Recommendations • Suggest ways to alleviate the constraints identified in C. in a realistic timeframe • As a result of the information gathered in B. provide information and recommendations on the potential for scaling up existing commercial uses and/or developing new commercial uses of indigenous aloes. • Identify and propose steps to develop new and/or scale up existing Laikipia based aloe businesses for products with the best commercial potential, including the detailed consideration of out growers schemes • Identify potential investors/partners to support the development or scaling up of a local business • Investigate eco-certifications and fair-trade potential

E. Potential ecological and conservation impacts of developing or scaling up Laikipia aloe based business. Investigate positive and negative impacts of developing and/or scaling commercial uses of identified indigenous aloes from a conservation/ecological point of view (consider wild harvesting, plantations). Recommend ways to mitigate the negative impacts.

F. Guidelines Provide guidelines on commercialisation of aloe products to sustainably supplement Laikipia men and women’s income, taking into consideration the conservation objectives of the Laikipia Wildlife Forum

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2. Desk Review Summary Development of New and/or Scale-up of Existing Aloe-based Business in Laikipia

2.1 Background to Aloe Enterprise Development in Laikipia

2.1.1 Laikipia District The Rift Valley district of Laikipia contains seven administrative divisions and covers an area of 9,693 square kms. It borders the Samburu district, Isiolo, Meru, Nyandarua, Nakuru, Koibatek and Baringo. Laikipia, ranging from 1000m to 2600m asl, remains largely as uncultivated land, prized by the tourist industry for its natural resources and wildlife. 20% of the land cover is a high and medium potential land mainly for agriculture and the rest mainly non-agricultural land. Livestock production is the most important activity, with about half of the land area under ranching activities (large scale, group ranches) and pastoralist. Population in the district is currently around 450,000.

2.1.2 The Laikipia Wildlife Forum (LWF) is a membership based organisation with the mission to conserve the integrity of the Laikipia ecosystem by creatively managing its natural resources to improve the livelihood of its people. The LWF is also representative of its resident stakeholders and seeks to achieve a balance between the interests of these residents and the long term future of the district’s natural resources. The Laikipia ecosystem is highly diverse and rich in biodiversity. LWF has been in biodiversity conservation in Laikipia for the last 12 years. The main objective of the organisation is to promote conservation of wildlife outside protected areas

LWF’s partners in biodiversity conservation within Laikipia include: • Kenya Wildlife Service (KWS) • Laikipia Wildlife Forum (LWF) • African Wildlife Foundation (AWF) • International Centre for Insect Physiology and Ecology (ICIPE) • Kenya Forestry Research Institute (KEFRI) • Laikipia Community representation • Private sector partners • Co-opted Enterprise development and Financing specialists

The LWF has evaluated several different viable commercial bio-enterprise options available to the communities of Laikipia to supplement income generating activities. Laikipia Wildlife Forum is interested in the viable options available to both supplement women and men’s income. It this context LWF was the lead agency in instigating and managing the Laikipia Aloe Bio-Enterprise Project, described below.

2.1.3 Laikipia Aloe Bio-Enterprise Project (LAB): This initiative was focused on the Conservation through Cultivation and Domestication of East African Medicinal Plants . Its aim was to create awareness amongst 6,000 rural households in semi-arid Laikipia on propagation, production and sustainable utilization of naturally occurring aloe species for the benefit of sustaining the endangered species from extinction and use it as a buffer crop for the wildlife prone settlement areas thus arresting the existing conflicts. The main activities were to promote aloe enterprise as a conservation lead livelihoods option for the communities living in wildlife dispersal areas (former migratory routes and corridors), through sustainable utilisation of the indigenous and endemic medicinal plants species and improved and sustainable production techniques. The project was based within the semi-arid parts of Laikipia district mainly pastoral areas in Mukogodo and Rumuruti. It also promoted aloe as a buffer crop in the newly settled areas, particularly those that neighbour wildlife rich regions and wildlife tolerant establishment like ranches. These include: Koija, Lamuria, Sirima, Salama, Ol Moran etc.

This project was suspended due to the government clamp down on aloe exploitation. Instead, it took an active role in the Kenya Aloe Working Group, explained below in 2.1.5.

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2.1.4 CITES and the Kenyan Government Please refer to sections 2.4.2 and 2.4.3

2.1.5 Kenya Aloe Working Group (KAWG) : Aloes stakeholders in Kenya formed a working group which became the ‘Kenya Aloe Working Group’, launched in 2004 to guide in the formalisation of aloe production as well as facilitating sustainable harvesting and processing for commercialisation, and spearhead the process of regularising the aloes sub-sector. The Kenya Wildlife Service was assigned the regulatory responsibility, in addition to its mandate to monitor species listed in under CITES. Trading in endangered species, including Aloes from the wild, is restricted unless certification is granted by KWS and NMK. The basic requirements include an inventory, status and mapping of the resource before an assessment can be made by the authority and certification issued, if deemed suitable, on the basis of total volume of harvest over a given year. An overview of the Wildlife Conservation and Management Act, below, provides an indication of the current statutory requirements for the commercialisation of aloe species in Kenya. The Kenya Aloe Working Group continues to co-ordinate activities related to the Aloe sub-sector in Kenya, with the Secretariat hosted and supported by LWF. The Secretariat works with grassroots community groups in aloe related businesses in an attempt to uplifting the poor and marginalized rural communities through aloe based enterprise.

2.1.6 SNV Sustainable Utilization of Aloe Resources in the Drylands Study One of the initial actions to guide proper exploitation was to establish the resource type, availability and quantities of indigenous aloe in Kenya. To this affect, SNV supported scientists from KEFRI, KWS, NMK and DRSRS to undertake Aloe resource quantification and mapping in Samburu, Laikipia, Marsabit, Moyale, Wajir, Isiolo and West Pokot to establish available commercial Aloes.

The SNV “ Sustainable Utilization of Aloe Resources in the Drylands” study is an excellent piece of work, and provides an important background to this study. Reference is made to the study in relevant parts of this report. This study has resulted in a substantial profile of aloe utilisation and exploitation in 6 regions of Kenya, focusing on the distribution and density of the indigenous species. Global Positioning System (GPS) was employed to register a position of every cluster sampled of aloe. Approximately 129 million plants of Aloe species were counted within the surveyed area. Of these plants, 83% were A. secundiflora , 16.9% A. scabrifolia and the rest 0.1%. West Pokot recorded the highest quantities of A. secundiflora followed by Laikipia and Isiolo district while Samburu and Isiolo recorded high quantities of A. scabrifolia . The other species were in small quantities in the districts of their endemism. However, A. megalocantha and A.rivae were of low quantities and of limited distribution. From the surveyed areas of Kacheliba, Alale, and Kasey, the highest concentration and uniformly wide distribution of A. secundiflora was found. This variety constitutes the main source of Aloe gum in the country. Information obtained by the SNV consultants, during a series of interviews with the local community and dealers in the above divisions, indicates that about 100 tones per year of gum aloe are being exported from these divisions alone.

2.1.7 Summary of the main actors

Individual small scale farmers with individual land parcels Individual small scale farmer’s management their land parcels communally. Producer groups in Turkana, Baringo Arabuka, Samburu as well as Laikipia have been organised into groups and associations by NGOs like Practical Action, institutions such as ICIPE and the Laikipia Wildlife Forum. This has mainly been developed in response to conservation strategy to preserve indigenous species from degradation - eventual extinction, and in more general terms to provide alternative sustainable NTFP enterpriser to traditional less sustainable livelihoods.

Group ranch pastoral communities managing their biodiversity resources separately

LWF - A member’s organization pursuing the establishment the bio-enterprise for the benefit of its members and for its positive effects on the environment and in sustaining the integrity of the local ecosystem. Lead agency.

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KEFRI - A research institution committed to development of non- wood forest products for the benefits of rural communities and general economical development.

ICIPE - Bio Prospecting department who are committed to indulging in products development research that would enable rural communities add value to available resources by converting them to nature based products that can be marketed for their own benefit and income.

KWS - A regulatory arm of the government that deals with wildlife (animals and plants) in ensuring conservation, regulated utilization and trading as well as developing appropriate policy framework.

AWF - AWF’s Conservation Service Center (CSC) enterprise teams would assist with marketing and private sector deal structuring locally and internationally.

Kenya aloe working group (2004) Formed to address the barriers in trade with partners and markets that require accredited certification by an aloe regulating body. It was proposed at that time that a ‘Kenyan Aloe Science Association’ (KASA) is developed to oversee the conservation, regulation and quality control of aloe products within Kenya. However, this association has so far not been formally instigated. Private sector partners - mainly through including those in marketing and trading of aloe raw materials and finished products.

Large Scale Ranches : Private development with plenty of naturally growing aloe plants as well as planted ones. These would link up with the project in adding synergy to the community production system though will not be catered for by the project or its finances.

Research studies/organizations : Being conducted by Mpala Research Centre and California Davis University. Will help quantify impact of usage of aloe plants for range restoration and prevention of erosion as well as growth characteristics though not financed by this project.

2.1.8 Summary of the Supply Chain Actors and Functions

Actor Function

Agro-Pastoralist/ Collector o Collect ‘wild’ aloes o Dry and store o Deliver either to supplier or buyer Small scale plantation farmers o Manage far o Supervise transplantation of wild and cultivated plants o Dry and store plants o Harvest fresh plants for sale Local middleman o Grades and weigh dried plant products o Pay cash on delivery o Transport to supplier ( fresh and dried) Supplier o Collect fresh and dried products form farmers & collectors o Pay cash on delivery o Further dry, sort and grade products o Store and/or deliver to exporters Local farmers/pastoralists o Collect gels and aloin Women/community groups o Produce simple soaps and other products o Market locally Exporter o Further process dried leaves o Phyto-sanitary, packaging and other documentation o Sell to specific market

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2.2 International Aloe Commercialisation

2.2.1 Description Aloe is not a cactus plant as widely believed, but rather a member of the lily family. There are about 360 species of aloe plants known and recorded. They thrive in hot arid areas and are widely scattered from the Mediterranean Sea, Middle East, Africa, China, Japan, Mexico and the southern U.S.A. Only a few of these species are scientifically recorded for their medicinal properties; Aloe Vera (aloe barbadensis) is the primary species selected for commercial production across the world, for its potency and strong growth history. Others include: aloe arborescens, aloe plicatilis, aloe vahombe, aloe saponaria, aloe africana, aloe ferox and aloe perryi. The aloe is a perennial plant with turgid green leaves joined at the stem in a rosette pattern.

In the international market, the pharmaceutical use of gum aloin is for the manufacture of laxatives and other medicines. The gel can be used as an input into in the production of soaps and multiple cosmetics. It can also be processed into a healthy drink that is very beneficial for sufferers of diabetes, high blood pressure, irritable bowel syndrome and the symptoms associated with HIV/AIDS.

Research undertaken by the United States Food and Drug Administration (USFDA) in 1994 of aloe barbadensis resulted in the registration of the active ingredient thought be an immune system builder. Large scale commercial production of the juice requires an initial high capital input and knowledge of manufacturing production technology including traceability - but it can be produced at a ‘low tech’ level suitable for rural based bio-enterprise.

The gel can also be dried and powdered to a required mesh size to produce crystals that can be traded on the international market or sold to manufacturers in the sub-region. The gel contains 99% water and 1% polysaccharide (the active ingredient). The drying and powdering of the leaves is a method of concentrating the active ingredient and reducing freight costs for the transportation of the resource that can be reconstituted by the buyers or importers at their required strength.

2.2.2 Chemistry: Slicing the leaf reveals the outer walls of the epidermis 3 covered with thick cuticles. Beneath the epidermis 3 is the mesophyll which is differentiated into chlorenchyma cells and thinner walled cells known as parenchyma. The parenchyma cells harbor a transparent mucilaginous jelly 1. The vascular bundles 2 with inner bundle sheath cells contain the yellow sap having laxative properties and are sandwiched between the two major cells. The crystals of calcium oxalate, produced as a metabolic by- product in plant cells, are found mostly at the central portion of the leaf. Aloe contains two major liquid sources, a yellow latex (exudates) and the clear gel (mucilage). It is composed mainly of aloin, aloe- emodin and phenols. A number of phenolics, including anthraguinones and their glycosides, are known to be pharmaceutically active1. The mucilaginous jelly from the parenchyma cells of the plant is referred to as aloe gel. There are generally no anthraguinones to decompose and cause discoloration of the gel unless the gel is contaminated by an improper processing technique. Aloe vera gel is about 98.5% by weight water. More than 60% of the total solid is made up of polysaccharides of carbohydrate origin. Organic acids and inorganic compounds (calcium oxalate etc), account for the remainder of the solid.

The U.S. Pharmacopoeia describes the yellow sap portion of aloes, used in medicinal preparations, but not the mucilage. The fresh unpreserved gel is about 98.5-99.2 percent water. The total solid that remains after the water has been removed ranges from 0.8 to 1.5 percent. The major constituents of the solid comprise mucilage, sugars, fibre, proteins, ash, fats, aloin and resin. Depending on how the leaves are processed, mucilage and sugars are the major components of the dehydrated gel. The sugars found are galactose, glucose, man- nose, rhamnose, xylose and uronic acids. When the parenchyma (the mucilaginous material in the leaves) of the leaves is removed, this so called "gel-filet" is grinned and the fibres are removed. An opalescent liquid remains that is commonly called "Aloe Gel" and after preservation this is the liquid that is used in skin preparations and health drinks. Aloe Vera Gel consists for 99.3% of water. The remaining 0.7% is the solids that consist for a large part of polysaccharides of the

1 Bruce, Excelsa 5_: 57 - 68 (1975); Suga et al., Cosmetic and Toiletries, 98: 105 - 108 (1983).

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glucose and mannose type. Together with the enzymes and amino-acids in the gel they give the gel the special properties as a skin care product. The gel stimulates cell growth and as such enhances the restoration of damaged skin. It moisturizes the skin because it has a water holding capacity. This moist on the skin also has a cooling effect. As a drink it protects the mucous membrane of the stomach especially when irritated or damaged.

Presently, Kenya is the main source of aloe extracts traded internationally from the East African region. Its products: sap, bitters and crystalline jelly. There are few species similar to the commercial aloe barbadensis ( aloe vera) used globally for mass production. The most suitable commercial species for bodycare and cosmetic industry are those with similar characteristics; a maximum of inner leaf gel. Certain species such as aloe secundaflora contains very little gel, even at the height of the rainy season, but are commercially interesting for the harvesting gum aloin. Out of the identified species, aloe gramanicola has the most similar characteristics to the commercially important aloe barbadensis Miller, used globally for mass production due to its high inner leaf gel content.

2.2.3 Historical context: Whole leaves, exudates and fresh gels of aloe plants have been used for a variety of human afflictions. Evidence of "their use as a medicinal remedy can be traced to the Egyptians of 400 BC. Aloe extracts were used to embalm the dead as well as to protect the embalmers from the • death- causing agent. Other early civilizations used aloe extracts for skin care, relieving insect stings and bites, treating scratches, wound healing, hair loss, as a purgative and for ulcerated skin. It was the traditional medicine of many cultures as an anthelmintic, cathartic, stomachic, and was used inter alia for leprosy, burns and allergic conditions. The species particularly famed for its long and established historical use of for its "curative" or "healing qualities" is aloe vera, and the subject of numerous books and articles meeting scientific standards. Organizations such as the Aloe Vera Council and recognized medical institutions through publications and case-histories of physicians, veterinarians and other scientists have given credence to the "aloe phenomenon". Aloe vera has been featured extensively in the area of dermatology, especially for treating radiation caused skin conditions. Public interest in Aloe has grown quickly, and now there is a considerable amount of research into the various components of Aloe to find out more about their properties and to characterize these components so that more specific research can provide clues to the "magic" that is attributed to Aloe Vera. Research undertaken by the United States Food and Drug Administration (USFDA) in 1994 resulted in the registration of the active ingredient found in the aloe vera plant, thought be an immune system builder.

The commercial development of aloe as a health product started in the mid 1800, the harvesting of the Aloe Vera, in those days only for the export of the raw material for laxatives. At the end of the fifties, new, synthetic laxatives replaced the Aloes worldwide. The mass retailing of Aloe Vera Gel began 50's, has gained respect as a commodity used as a base for nutritional drinks, as a moisturizer, and a healing agent in cosmetics and OTC drugs.

2.2.4 Health benefits/claims : For centuries, the gel of the aloe vera plant has been used as a soothing topical remedy for minor burns and wounds. It continues to be popular for treating sunburns and other first-degree burns because it appears to speed healing. In addition, aloe vera gel is used to treat minor surface irritations, to reduce psoriasis symptoms, to lessen the painful effects of shingles, and to shrink warts, and a reputation as a beauty aid. Various research studies are underway to explore the potential of aloe vera components to boost immunity and combat the HIV virus, and to treat certain types of cancer (particularly leukemia). It may even have a role to play in managing diabetes.

Aloe Gel can be used both internally and externally. It is obtained from the plants pulp containing approximately 200 biologically active substances which can be broken down into the following groups:

• Vitamins - Antioxidants, D and B12 • Minerals - Trace • Enzymes - Several different types • Sugars - Immune system and detoxification

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• Anthraquinones - Gastrointestinal absorption, pain relief, anti bacterial, anti viral. • Lignin - Helps other constituents penetrate skin. • Saponins - Soapy substance, cleansing, anti bacterial / microbial. • Salicylic Acids - Asprin like, anti inflammatory. • Fatty Acids - Anti inflammatory

2.2.5 Commercial cultivation Large scale production of aloe is predominantly of aloe barbedensis (aloe vera), on large professionally managed farms. The most productive plantations are found in southern Texas, Arizona, Florida, and Mexico. The plants are monitored and sampled at regular intervals throughout the year and checked for any signs of stress. Specially designed irrigation systems and the latest cultivation techniques are employed to ensure that the Aloe plants are kept in peak condition.

Aloe Vera can be cultivated on any soil for 'dry land management', sandy loamy soil is the best suited for it. Aloe Vera is generally propagated by root suckers by carefully digging out without damaging the parent plant and planting it in the main field. It can also be propagated through rhizome cuttings, By digging out the rhizomes after the harvest of the crop and making them into 5-6 cm length cuttings with a minimum of 2-3 nodes on them. Then they are rooted in specially prepared sand beds or containers. The plant is ready for transplanting after the appearance of the first sprouts. The process of cultivating Aloe Vera involves the following:

• The ground is to be carefully prepared to keep free from weeds and the soil is ideally kept ideally slightly acidic. The soil should be supplied supplement in the form of ammonium nitrate every year. • The plants are set spaced out by 31 inches in rows and between the rows. At that rate, about 5,000 plants are set per acre. An 8 - 12 inch aloe pop would take about 18 - 24 months to fully mature. • An Aloe plant is considered "mature" at approximately three years of age. The mature leaves are harvested (every 68 weeks), and one plant yields about 3 leaves each harvest. • Aloe leaves are harvested one leaf at a time and are generally chosen from the outermost edge of the plant, then removed by creating an incision at the bottom of the leaf, nearest to the stalk. • The leaves are immediately packed and transported to an on-site processing plant to be prepared for stabilization. • A single plant produces the equivalent of one 180-capsule bottle of our whole-leaf aloe vera each harvest season. One acre will yield from 30,000 to 75,000 pounds of fresh aloe per year.

The smaller scale cultivation of commercial aloe is mainly found in India and Africa. Here the cultivation and harvesting practices are similar to that of large scale units, although low-tech in character. However, most of these smaller scale enterprises are geared at dried gel extract. This is less bio-active (inactive enzymes), but used widely in retail marketed aloe products.

• The leaves are 1 to 2 feet long and are cut without causing damage to the plant, so that it lasts for several years. • The crop can be harvested 4 times a year. At the rate of 3 leaves cut from each plant, about 12 leaves are the harvest per plant per year. On an average, the yield per acre annually is about 60,000 kg. • The leaves cut off close to the plant are placed immediately, with the cut end downwards, in a V- shaped wooden trough of about 4 feet long and 12 to 18 inches deep. • The wooden trough is set on a sharp incline so that the juice, which trickles from the leaves very rapidly, flows down its sides, and finally escapes by a hole at its lower end into a vessel placed beneath. • It takes about a quarter of an hour to cut leaves enough to fill a trough. The troughs are so distributed as to be easily accessible to the cutters.

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• When the vessels receiving the juice become filled, the latter is removed to a cask or reserved for evaporation. This may be done at once, or it may be delayed for weeks or even months. The leaf residue is composted and returned to field to feed the crop. • The evaporation is generally conducted in a copper vessel; at the bottom of this is a large ladle, into which the impurities sink, and are from time to time removed as the boiling goes on. • As soon as the inspissation has reached the proper point, which is determined solely by the experienced eye of the workman, the thickened juice is poured into large into boxes, and allowed to harden.

2.2.6 Commercial processing and manufacturing

Latex (aloin) the latex is extracted as a liquid, then dried into a yellow powder. Because it's such a potent laxative, the latex is not usually used alone but combined with gentler herbs, such as cascara sagrada. Germany's Commission E approves of using small amounts of aloe vera latex to relieve constipation, but only for short-term use. The original commercial use of the Aloe plant was in the production of a latex substance called Aloin, a yellow sap used for many years as a laxative ingredient. This product became synonymous with the name "Aloe" and recorded in the trade, technical and government literature during the early 20th century. This terminology created much confusion later when Aloe's other main ingredient, Aloe Gel, a clear colourless semi-solid gel, was stabilized and marketed. The sap is also used in good sunscreen and provides the skin with an olive tan colour.

Aloe Gel: The major challenge in processing aloe is collecting and storing its juices without chemically altering the product. When you cut an aloe leaf, it secretes enzymes that heal the severed tissues, thus lengthening its usable time. However, after a few hours, these same enzymes also begin the decomposition process. The best solution for ensuring the maximum biological potency of aloe is to process, stabilize, and preserve the leaf within 3 to 6 hours of its removal from the plant. A good gel is created by hand removing the inner fillet of whole Aloe Vera leaves, and then subsequently sending into a cold pressed production facility. It is a naturally ground product and may contain small pieces of pulp within the gel. Suitable for food, cosmetic and beverage use.

Specifications Microbial Preservatives

• Colour- Pale / Translucent • Aerobic Plate Count - <10 • Sodium Benzoate - • Odour- Mild / Characteristic CFU/G 0.10% • Pesticide residues - should test • Mould - <10 CFU/G • Potassium Sorbate - Negative • Yeast Mould - <10 CFU/G 0.10% • pH - 3.9 • Pathogens - Absent • Citric Acid - 0.12%

When the whole leaves of the aloe plant are ground up to make a liquid, the juice is 99.52% water and excess fiber and only 0.48% other ingredients. That means the juice must be filtered and concentrated in order to maximize the active ingredients. When processed correctly (with the aloin and aloe emodin removed), the resulting juice has no toxicity and has the same pH as healthy skin.

The gelatinous structure of the gel can form a good protection for the wall of the stomach against stomach acid especially when irritated or damaged. These molecules can hold water molecules together and that is one of the reasons that Aloe Vera is such a good moisturizer. Also these molecules are very nutritious, for instance, for microorganisms. Together with the water holding properties of the polysaccharides this forms an ideal environment for bacterial contamination. This is the reason that from the moment the intact leaf has been cut open, the Gel can spoil within a few hours at room temperature. It is a challenge to preserving the Aloe Vera Gel without losing its properties. Natural preservatives such as ascorbic acid (vitamin C) and sodium benzoate are necessary if the products are to be retailed, in order to obtain a reasonable shelf life (12-18 months at least). Sodium benzoate (naturally occurring in nature, i.e cranberries naturally produce well over the industrial product regulatory limits of this particular chemical

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compound) is effective in very low quantities, and is therefore seen as the best and safest method for preserving aloe juice.

Gel Potency : As well as polysaccharides, aloe contains vitamins B1, B2, B6, C, niacinamide, choline and 18 amino acids, in addition to many other nutritional substances. See Annex 5 for further information. The activity of the enzymes is used as a measure of the effectiveness of the Gel. Although, this is not an entirely accurate way of measuring as there are more components than enzymes that account for the activity of the Gel as a skin care product and health drink. Its potency depends on maximizing both the number of nutrients and their ability to be biological available to the cells of our bodies

2.3 International Market Characteristics

2.3.1 Natural products market trend A conservative estimate puts the monetary value of current Global trade in medicinal plants at over US$ 60 billion. With the increasing interest in ‘natural’ products across the world and the resultant upsurge in the demand for medicinal plants, this trade is expected to grow up to US$ 5 trillion by the year 2050. Aloe gel is said to have a market worth US$20 billion, most of it controlled by the US. Aloe Vera is among the few medicinal plants that has major market share across the globe, used in the nutraceutical, cosmeceutical, skin & personal care, health, pharmaceutical, veterinary, functional food and beverage industries and the agricultural sector.

2.3.2 Retailed aloe products In the international market, the bulk of aloe material is used for pharmaceutical manufacturing of gum aloin is for the manufacture of laxatives and other medicines. The gel is used as an input into in the production of soaps and multiple bodycare and cosmetic products. It is processed as a healthy drink and marketed for its benefits to sufferers of diabetes, high blood pressure, irritable bowel syndrome and the symptoms associated with HIV/AIDS. • Most aloe products retailed in the international market contain "aloe vera extract" ( aloe barbedensis ). • Most of these retail products contain low percentage of extract or "reconstituted” aloe vera, this is generally much less potent than pure (more than 98%) aloe vera. • For sunburn preparations, it is necessary that the product contains at least 20% aloe vera. • Aloe vera latex is available in capsule form, usually in combination with other (and more gentle) laxatives. • The juice product should contain a minimum of 98% aloe vera and does not have any aloin or aloe- emoin compounds, the key substances in aloe latex. • "IASC-certified" seal; it is allowed only on products that contain certified raw ingredients that have been processed according to standards set by the International Aloe Science Council, a voluntary certification organization. • Creams and ointments should contain at least 20% aloe

2.3.3 Main commercial extracts The leaf of the aloe plant consists of three different parts, yellow bitter sap, green peel and white aloe gel. The bitter sap lies underneath the green peel. The sap drains spontaneously when the leaf is cut. The inner fleshy portion of the leaf consists of a mucous material, known as aloe gel, which has no bitter taste. The green skin is also rich in nutrients and fibre.

Gel: It is a thin, clear, jellylike substance that can be squeezed or scraped from the inner part of the fleshy leaf. This part of the aloe plant is widely marketed for its healing properties, as health supplement drink, ‘aloe juice’ and as ingredient in skin care products... • Mucilage penetrant, hypo- Matrix allergenic, moisturizer • Gel Fillets ulceroprotective, cell stimulative moisturizer, wound healing • Interstitial natural preservative. Fibers hemostat • Residual Matrix cell growth stimulant

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Latex (aloin) : Know as sap, aloin, aloe gum, bitters and latex, is taken from specialized cells along the inner leaf skin (called the pericyclic tubules). It is used in various products that are used both externally and internally, and has anti bacterial, antiviral and laxative qualities.

• Sediment laxative, antifungal, antibiological, pesticidal and sunscreen • Supernatant mucosal protective action, sunscreen

Outer Rind: The whole sun dried aloe leaves are crushed for aloe tea, or ground into a powder which is pressed to form fibre tablets.

Other products are made with both the green outer skin and inner gel to enhance the nutrient values of the product. These products will generally have the word ‘Whole Leaf’ in their name

See Annex 5 for further information.

2.3.4 Retail Product Forms • spray • lotion • liquid • gel • cream • capsule • health supplements • pesticides • insect repellents (outer rind) • paper pulp fibre (outer rind)

2.3.5 Global distribution of commercial aloe The Aloe plant is grown in warm tropical areas and large scale to small holder based commercial production exists in the United States (Rio Grande Valley of South Texas, Florida and Southern California), Mexico, the Pacific Rim countries, India, South America, Central America, the Caribbean, Australia and Africa.

2.3.6 Quality standards and regulation Aloe Vera Gel, like most natural juices, both fruit and vegetable, is an unstable product when extracted and is subject to discoloration and spoilage from contamination by microorganisms. The great success of Aloe as a commodity for use in nutritional foods and cosmetics is due to the proper stabilizing procedures that enable processors to store and ship the Aloe Gel without fear of spoilage throughout the market places of the world. Research conducted around the world leaves little doubt that certain biochemical properties of Aloe will be proven facts. Such attributes as moisturizing and penetrating properties are

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known, but the attributes such as its healing abilities and analgesic action to bacterial activity has not been clearly defined and documented through properly controlled scientific research and testing. Today, the Aloe industry has established high ethical standards for businesses and their Aloe products. Through the International Aloe Science Council, the industry has solidified its dedication to providing the world with the highest quality Aloe. The wide acceptance of Aloe by society in so many consumer products suggests that the IASC is moving in the proper direction. The image of Aloe has heightened as a result of this endorsement, and IASC’s commitment to assist the further growth, research and marketing of quality of Aloe products.

2.3 Commercialisation of Aloe species in Africa

2.3.1 Background Aloe species grows wild in large portions of the African continent. There are nearly 420 species of Aloe within Africa, the continent has, over the years, become the most important sources of biologically active compounds. Over 130 compounds belonging to different classes including anthrones, chromones, pyrones, coumarins, alkaloids, glycoproteins, naphthalenes and flavonoids have so far been reported from the genus. Although many of the reports on Aloe are dominated by Aloe vera and Aloe ferox, there have also been a number of fruitful phytochemical studies on many other members of the genus. Given the exponentially growing international demand for several of the aloe species indigenous to Africa, the commercialisation of Aloe species presents the most readily available and established commercial opportunity among the various medicinal plants. In addition to the natural abundance of indigenous aloe, the natural conditions essential for cultivation/domestication of aloe and other high potential medicinal plants exists in much of the continent. Yet the full potential has not been reaped, due to a lack of the requisite expertise in the specific techniques of cultivation and processing. Although, the technology is now accessible to individual and corporate entrepreneurs to make the most of aloe through mainstream cultivation, most of the aloe extract shipped from the African continent is from wild harvested sources. Gel production is dominated by companies based in the USA, implying a high research and development component for any new market entrants. Aloe gum ‘Bitters’ production is far less well organised and few, if any, manufacturing companies are involved in production and processing, only trading.

2.3.2 Eastern Africa Tanzania, Uganda and Ethiopia are developing commercial supply of aloe, mostly as gum aloin, but some of which is processed into finished products and sold on the domestic market. In northern Tanzani there is a 60 hectares aloe plantation, representing over one million ‘mother’ plants of between two and four years in age. Juice is processed on site and is sold through a local distribution networks. There are new development initiatives to sustainably exploit indigenous aloe, know to the author, in Ethiopia (Borana), Uganda, Tanzania, Rwanda and Kenya.

2.3.3 South Africa Currently South Africa is the leading producer of Aloe gum from Africa, followed by Kenya. Aloe ferox is the main source of Aloe gum in South Africa; about 1,000 metric tonnes are exported annually. Exports are destined for Europe, Asia and North America, with the main importing countries being USA, Japan and Germany. South Africa mainly exports primary products to manufacturers and re-imports these finished products for retail. However, South Africa is also the largest supplier of aloe products to the African market, primarily South Africa but also transported to most other countries on the continent. Aloe extracts are manufactured as drugs, cosmetics and a health drink, primarily by Golden Products SA (Golden Life Aloe Vera). Many other aloe species are used in traditional medicines and these include Aloe lateritia , Aloe rabaiensis and aloe secindifolia.

Trade in Aloe bitter gum is controlled by CITES appendix II, which recommends among others, sustainable harvesting from the wild through certification mechanisms. A CITES export permit is required for aloe commercialisation, although there are currently no restrictions on volumes exported. South Africa has also statutory government guidelines for aloe products in place, as well as quality controls and certification systems linked to international aloe product standards.

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Primary production appears to be profitable for landowners and traders, but less so for communities involved in tapping. Very little value adding is recorded in South Africa. Primary production has low capital requirements, except for land (33 % of gross sale price is usually paid to landowners upon whose farms the wild aloes grow). Post harvest treatments includes slicing the leaves and the exuded juice collected and subsequently heated up in cauldrons then allowed to cool into lumps. This primary production requires artisanal skills developed by certain local communities in South Africa. Primary production has medium potential for job creation as currently community based harvesting is undertaken. Some small communities (4-600 people) depend entirely upon aloe tapping activities in the Eastern Cape Province.

The Aloe Ferox Trust (email: [email protected]) provides information on the commercialisation of aloe ferox in South Africa. Although the extract from the AFT report, below, eludes to the secondary processing of aloe gel, this is level of manufacturing is currently only practiced by one small semi- industrial facility in South Africa owned by Golden Products SA. Secondary production requires medium to high capital investment, specialised equipment and skilled labour.

Aloe ferox is an indigenous plant that grows abundantly in the Albertinia in the Mossel Bay area. The traditional method of wild harvesting has remained the same for more than 200 years. The plant, harvested every year or second year, is carried out by community harvesters. Six or seven of the lower leaves are cut from each plant; care is made not to injure the growth point in the crown of the plant. The leaves are then placed in a basin-like hollow made in the ground and lined with a plastic sheet. Two to three hundred leaves are stacked in a circle, cut surfaces facing inwards and overlapping, so that the sap can drain into the hollow. After some hours the sap of several leaves drain and can be collected. The bitter sap is poured into a metal drum and then heated over an open fire, continuously stirred until the volume is reduced by approximately half. The warm sap is then decanted into a tin and allowed to cool and solidify. This solid hard block is processed to produce bitter crystals and bitter powder. The leaves, from which the bitter sap has been tapped, are transported to the factory where they are washed, sliced and minced to form the aloe jelly. Most parts of the aloe leaf is used, only the spiny thorns are discarded.

Aloe Ferox Aloe Ferox Ltd. bodycare products

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2.4 Commercialisation of Aloe sps in Kenya

2.4.1 Description of the main species and distribution There are approximately 360 taxa species between Africa and the Arabian states. Kenya has the greatest Aloe diversity in the region. There are so far recorded 57 species in Kenya. There are also several new species waiting to be described. The status of Aloes in Kenya is relatively well known compared with Tanzania and Uganda. In the 1997 IUCN Red List of Threatened Plants there is a record of 22 species of Aloe listed as rare or threatened in the country. The 2002 IUCN Red List includes one species, Aloe ballyi , a rare tree Aloe that, in Kenya, is confined to dense bush near Mwatate in the Taita Hills. The local farmers are cultivating right up to the main road, which is where the last stands of Aloe ballyi occur (Len Newton pers. Comm .) The remaining species of Aloes have not yet been evaluated using the post 1994 IUCN Red List category.

Three of indigenous aloe namely Aloe secundiflora, Aloe turkanensis and Aloe scabrifolia are currently exploited for Aloe gum. SNV, through the Sustainable Utilisation of Commercial Aloe Resources in the Drylands study scoping and mapping exercise of the 6 identified locations, found 18 species, including five species; aloe secundiflora (highest density), aloe turkanensis, aloe scabrifolia, aloe megalocantha and aloe rivae which have a history of commercial utilisation. The region with the highest density of aloe secundiflora was found to be Pokot (est 89 million plants) while a combined total of 40 million aloe secundiflora and aloe scabrifolia plants was estimated in the rest of Laikipia Samburu, Isiolo, Wajir, Moyale and Marsabit. It is estimated by KEFRI that about 1,000 metric tones of aloe gel is currently produced annually, mainly from these parts of the country. The study identified the main threats to this aloe population as being; land use conversion mainly in Laikipia and unsustainable method of harvesting especially in Samburu district. It appeared that unsustainable harvesting increased in season that follow drought or crop failure.

2.4.2 Exploitation crisis Trade in Kenyan aloe begun in the early 50’s at the coastal region, spreading to Taita, Samburu, Baringo, Laikipia, Turkana and West Pokot districts. The trade for the aloe latex (‘bitters’) has not brought sufficiently interesting financial incentives to the local communities to turn this aloe trade into a larger natural product business sub-sector through domestication/commercial cultivation. In 1986, there was a presidential decree banning exploitation of indigenous aloe. The decree only drove the trade underground, and hindered any further investment into this sub-sector which is necessary to enable the scaling up of commercial aloe operations and ability to respond to the growing global demand for aloe products. Following the danger of over exploitation, the Convention of International Trade in Endangered Species (CITES) imposed restriction on Kenyan aloe. The listing of Kenyan aloe species under CITES Convention Schedule II is intended to protect potential endangered species.

CITES records of 2003 showed Kenya as the leading exporter of aloe gum in Eastern Kenya, however there no official records to indicate quantities being exported. It is expected that the majority of supply has been illegally exported from Kenya through Uganda and Sudan, or through the main port of Mombassa disguised as vegetable gum and gum Arabic. What records that do exist indicate the gum aloe has been shipped to the global pharmaceutical and cosmetic industry, approx 30,000 kgs in 1995 mainly to Italy, Singapore and Thailand and over 80,000 tonnes were exported to Pakistan, Singapore and Thailand in 1996. KEFRI (2001) research findings showed about 470 tons of Aloe gum as being exported, disguised as products of vegetable gum between 1994 and 2000. KEFRI’s records indicate that the majority of supply is sourced from West Pokot. As a result it is impossible to estimate exactly how much has been, and is, commercially harvested/propagated in Kenya, mostly.

KEFRI, since 1997, had taken a lead in aloe research in Kenya and is currently studying both exotic and indigenous aloes 2. Importantly, KEFRI have drafted a code of practice for the domestication and commercialisation of selected indigenous aloes, and have also developed propagation protocols.

2 Through domestication of these species, KEFRI envisages that by the year 2020 Kenya drylands will have adopted aloes as a cash crop to serve as an alternative source of income and wealth .

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2.4.3 Regulation and Licensing CITES office in Kenya is managed by KWS. CITES permit and phytosanitary certificates are required for all exportation and importation) of aloe products, or derivative. CITES requirements include proof of exploitation from sustainable source. In addition to this, the Kenya government has brought about an Act to protect and guide wildlife conservation and management; this includes aloe, as described in Sect 67/376 below:

The Wildlife Conservation and Management Act (Section 67 Cap376) The main points of the regulation are centred on the domestication (‘artificial propagation’) and exportation of indigenous aloe plant materials/extracts. Those of note include the following: A. KWS require all persons conducting commercial propagation/domestication of aloe species to apply for inclusion under the Register of Artificial Propagation of Aloe Species. All applicants accepted for registration are then required to pay a fee of Ksh500. (i) Applications must be based on the following: artificial propagation should be based on sustainable utilisation of the species and shall not be detrimental to its conservation in the wild/or of its ecosystem (ii) Conservation of aloe species and their natural habitat and micro-habitat is enhanced.

The application requires information on land ownership, species being propagated, when the operation was established, land size involved, source and quantities of parental stock, evidence of the source.

B. All persons intending to export/re-export aloe material or extracts must apply for an export certificate. If accepted the export certification is issues after a payment of Ksh10, 000.

The application requires information on the applicant’s business, species to be exported, details of the materials/extracts (type, quantities), source of parental stock, evidence of the source.

The legislation mandates the National Museums of Kenya, the Kenya Plant Health Inspection Service, Kenya Forest Research Institute and the Commission of Customs to monitor the activities of registered aloe operators and ensure that they comply with the conditions set out in the certificate of registration.

Mapping - SNV Sustainable Utilisation of Commercial Aloe Resources in the Drylands Study: To provide a baseline to facilitate this process, SNV, in 2005, commissioned specialists from KEFRI, KWS, NMK and DRSRS to undertake resource inventory, mapping and quantification of commercial Aloes in 6 specific zones. To quantify the aloe population in these defined areas, ground reconnaissance, GIS and remote sensing mapping and conventional plant inventory were undertaken. Given the growth characteristic and habitat distribution, a modified sampling method was used. Areas with critical Aloe mass were selected to give an estimate of possible minimum harvestable quantities from a given area.

Extract: Approximately over 129 million plants of Aloe species were counted in the entire survey area. Of these plants, 83% were A. secundiflora, 16.9% A. scabrifolia and the rest 0.1%. West Pokot recorded the highest quantities of A. secundiflora followed by Laikipia and Isiolo district while Samburu and Isiolo recorded high quantities of A. scabrifolia. A. megalocantha and A.rivae were of low quantities and of limited distribution. From the survey, areas of Kacheliba, Alale, and Kasey had higher concentration and uniformly wide distribution of A. secundiflora, and information from local community and dealers estimated export supply as being about 100 tones per year.

Very little evidence of commercial aloes domestication was observed. The only domestication was found to be performed by three communities assisted by the LAB project, some individuals, and a few schools and churches.

2.4.4 Organisations of the Aloe Producers and Processors There are growing attempts to organise aloe producers and processors into trade associations. These initiatives have been/are supported and encouraged by development agencies, NGOs and government departments. One successful example of a growing aloe trade association is the Coastal Aloe Working Group, below:

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Example: Coastal Aloe Working Group (CAWG). The Coastal Aloe Business Report (DANIDA-ABD) There are a number of Aloe producers and micro-processors in the coastal region of Kenya Coast. Micro- processors sell gel, sap and soap within the immediate vicinity via churches and mosques, people at market centers, kiosks, shops and teachers in neighbouring schools. Over recent years the Coastal Aloe Working Group (CAWG) network has been set up and operated as a representative body. There are a number of organised aloe groups and associations, who are also members of CAWG, such as Dida Forest Area Adjacent Forest Association (DIFAAFA) at Kalifi who produce aloe gel. In Mariakani, Samburu and Taru, micro-processors working in partnership with Sombeza/Coast Rural Support Program to produce and market locally aloe soap products. Kwale’s Lima CBO sell aloe soap in a shop adjacent to their processing site. There are a number of small-enterprises groups such as; Kwale Herbal Producers (KHP), Taita Herbal Producers (THP), Simba Hills Ecosystem Center Herbal (SECH) and G-Cline Herbal Works, that have incubated independent business that process aloe as well as other natural products. The small enterprises under these entities are G-Best of Kwale Herbal Producers, RIJOY Herbal Products of Taita Herbal Producers, SECH Organic/SECH Herbal Products of Simba Hills Ecosystem Center Herbal, and Rise Up and Walk of G-Cline Herbal Works.

2.4.5 Aloe Supply Chain The main source of aloe extract (aloin/sap/gum) is from the more remote parts of Kenya, mostly semi-arid regions identified in earlier text of this report. The aloe sap is collected, mainly from the higher yielding aloes, and transported, mainly by foot or donkey, to markets in the local towns often taking 2-4 days between harvesting and sale. The harvesters receive around Ksh30 for 5 litres of sap from informal traders, usually in local market centres 3. There is no standardised quality control, however payment is based on the level of aloe sap viscosity, as adulteration of the aloe sap with water is commonplace. Some of the Aloes are poisonous, such as aloe ruspoliana , and as there is no distinction between the aloe extract purchased by the middleman some of this species can find its way into the market. Once purchased, the traders store the aloe sap in 2,000 litres drums where it is then boiled commonly for 6-8 hours (sometimes longer if the sap contains high amounts of water. On average 4 litres of sap results in 1kg of aloe gum. The aloe now is a hard gum once cooled, and is stored in water resistant bags, bulked and sold to aloe traders and manufacturers within Kenya. It is then sold in Nairobi to export traders or small and medium scale manufacturers (such as Lubanchem Ltd.) for Ksh 85-100/kg. The product is then either further processed as an ingredient in finished retail products (very small quantities) or exported (bulk). The international market buyers offer between US$2,300 – 2,700/tonne for aloe gum, depending on the quality.

There is a small domestic level wild harvesting of aloe that is processed as finished products for the local market. This traditionally has mainly been the sap (aloin) for human and vetinerary health care. To stimulate village level manufacturing of bodycare aloe products, the LAB project has given rise to 4 producer groups with low current output of bodycare products (soaps, body lotions and creams, shampoo and hair conditioners). Aloe gum is the main extract sold within and from Kenya

Commercial opportunities for indigenous aloe appear to be increasing as there is a sustained demand from international as well as African markets. Local market development has been limited by the lack of secondary processing facilities and most retailed aloe products are imported into this country. Where there is potential for commercial partnership and development support, realistic opportunity exists for secondary processing of aloe at the community level, which could increase profit margins substantially. The supply of aloe plant materials, through the processing stages to the end market for the aloe extract, being mainly gum aloe (aloin) can be expressed in the schematic form below. The diagram below is an approximation of the current value chain and, as it does not give a weighing to the actors and activities in terms of frequency/volume, it gives only a limited view of the current trading picture.

3 It is interesting to see in the African Business Development’s (DANIDA) Coastal Aloe Business Report, the proceedings of a workshop ABD held in May 07 for aloe micro and small enterprise, which indicate that the pricing of aloe sap in the coastal region ranges between Ksh80 to 120/litre.

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Schematic of the Aloe Supply Chain in Kenya:

REGIONAL & INTERNATIONAL MARKETS (EAST AFRICA, MIDDLE EAST, FAR EAST CHINA, INDIA, EUROPE)

EXPORT LARGE SCALE ILLEGAL COMPANIES ALOE BORDER TO SUB- EXTRACTION TRADERS REGIONAL COMPANIES MARKETS WITHIN KENYA

LOCAL ILLEGITIMATE ALOE SOAP AND MARKET EXTRACTION COSMETICS NATIONAL OPERATIONS MANUFACTURERS MARKET IN KENYA SMALL SCALE MANUFACTURE COMMUNITY AND WOMEN GROUPS, INFORMAL TRADERS PROCESSING AS BODYCARE & PRIVATE SECTOR CONTRACTED AGENTS HEALTH PRODUCTS (GEL, POWDER & ALOIN GUM )

LARGE SCALE WILD SMALL SCALE PLANTATIONS HARVESTING AND WILD HARVESTING

RURAL COMMUNITIES/PASTORALIST S

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3. Laikipia Aloe Enterprise Review and Impact Assessment (based on stakeholder meetings) covering the following aspects :

3.1 Existing Aloe-based business in Laikipia Presently in Laikipia there are no large scale commercial actors/players, although village level to medium scale industrial enterprises is developing slowly in some parts, as well as a level of traditional rural use by pastoralists for animal health

LAB, Laikipia Aloe Bio-enterprise Project, has given rise to the start of aloe commercialisation in Laikipia. The tangible results seen today include the following:

Commercial propagation of mother plant stock. Maria Dodds. Maria Dodds, a land owner and farmer in the Laikipia district, has a deep knowledge of aloes and has developed a substantial nursery of the indigenous species found within Kenya. LAB developed a worming relationship with Maria to develop a stock of healthy correct planting material from her mother-stock. LAB provided some small financial assistance to the extension of the nurseries to enable Maria to sell the planting material to the producer groups at 10 shillings/plant. This price is seen as affordable for small scale rural enterprises, based on one acre plantations as comprising 10,000 plants.

The formation and development of commercial aloe enterprises with rural communities in the Laikipia was also initiated and assisted by the LWF under the LAB project. There are three main groups in existence, as follows:

Rumuruti Aloe Group (further information in 2.4.6) • Soap making enterprise with Aloe secundiflora sap and lateritia var.graminicola gel/sap • Group started in 2005, training sponsored by the LWF • Started with 35 members now only 25 active members • Aloe sap harvested from the group plantation-seedlings provided by Maria Dodds • No wild harvest of Aloe sap • Products being produced are soap, body lotion, cream . All products sold for 50/= an item

Withare Aloe Vera Group • 35 active members both men and women. • Initiative started two years ago inspired by the Rumuruti Aloe group. • The group meets every second week on Tuesday. • Members are growing 300 Aloe secundiflora plants with seedlings supplied by Maria Dodds of Kifuko Ranch Rumuruti. • Until plants are mature they are harvesting sap from the wild population. • The products currently being made are: soap, shampoo and body lotion.

Koija Aloe Project Aloe secundiflora is fairly common in the Koija area. There is a project ongoing looking mainly at using the plants for soil rehabilitation. A small patch of Aloes is being grown to test growth rate of the plants etc. • The community are interested in making value added products with Aloe • The benefits of Aloe plants to help with soil erosion are being recognised • The medicinal value of the sap is known to the community (mainly for stomach ailments)

There is also the Kieni Aloe Plantation Group (KAPG) and Tigithi Pilot Aloe Group. There are several other aloe producer groups in Kenya that are processing and retailing aloe based bodycare and health care products on a small scale (usually to local markets)

However, due to extraction and formulation issues, the quantity of aloe extract used in these products is tiny and therefore has little tangible impact on plant utilization. These projects have made some impact in stimulating increased awareness of the usefulness and potential for commercialization of aloe.

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3.2 Ecological/conservation impact assessment

3.2.1 Background: Kenya has the greatest Aloe diversity amongst East African countries and is one of the largest exporters of aloe products to China. As a result of indiscriminate harvesting without any regard to conservation, the IUCN, CITES parties and international NGOs are fully support of developments to stimulate community propagation and cultivation, in order to take the pressure off wild populations. Few specific measures are known to be in place in Africa to protect aloes species or their habitats. It only happens within national parks or certain gazetted areas. In a lot of cases the environmental hazard emerged because whole plants were dug up and unsuccessfully replanted in plantations.

The Federal Agency for Nature Conservation in Germany is central in the present efforts to develop a standard for wild harvested species. They have a specific interest in aloes and are interested in undertaking conservation initiatives in Africa relating to aloes preservation (contact: Dr Uwe Schippmann).

3.2.2 Laikipia Environment: Laikipia is an area of approximately 10,000 sq kms. The district is diverse with elevations from 3,000 ft to 7,000 ft. The topography is varied. Much of Laikipia is comprised of basement rock in the form of a variety of granites and gneiss. The overlay in parts of the district is phonolite and other forms of vesicular lava, which came as a result of Mt Kenya’s eruption to the East. The Laikipia plateau was formed in one of many shifts from The Great Rift Valley to the West of Laikipia. In between the granite hills and phonolite scarps lay flats of clay like soils (black cotton), friable lateritic soils and hard capped areas of granitic sandy soils. All of these areas make up important and diverse habitat for a variety of Aloe species in the district. Aloes have preferred soil types and altitude levels, which determine their balanced distribution in Laikipia and beyond.

3.2.3 Laikipia vegetation: Surveys done by Taiti (1992) delineate eleven native plant communities in Laikipia; this presents a complex pattern which largely reflects elevation, rainfall and drainage patterns. For the sake of keeping it simple Laikipia’s vegetation can be separated into four main vegetation types. Areas of highest elevation are classified as upland dry forest; this is of an evergreen forest type dominated by Juniperus procera, olea europea ssp cuspidatus . Lower altitudes present vegetation types such as Acacia/Commiphora bush land, which is dominated by Acacia mellifera, Acacia tortilis, Commiphora habessinica. Acacia drepanolobium grassland makes up almost 28% of the vegetation in Laikipia. Riverine vegetation is vital to Laikipia’s vegetation types. The dominant flora along the Uaso Nyiru and Uaso Narok rivers are Acacia xanthophloea, Vangueria madagascariensis . The Nanyuki River – Syzigium cordatum, Albizia gummifera.

3.2.4 Land use: The changes in land use in the last twenty years have altered at an alarming rate. In the higher rainfall areas cultivation is on the increase including encroachment into protected areas such as forest reserves. In the arid areas of Laikipia the increase in livestock is a threat to loss of habitat and plant species. In some arid areas of Laikipia pastoralists have become sedentary, settling permanently whilst still keeping the traditional lifestyle of moving livestock.

Most of the large-scale ranchers have turned towards tourism and conservation in the last ten years. This trend has seen an enormous change in wildlife movement with particular reference to the larger mammals like elephant. Elephant have become more resident across Laikipia where there were no elephant in the past. There are currently 3,000 elephant traversing Laikipia and 5,000 elephant in the Laikipia/Samburu ecosystem. This has made an enormous impact on the vegetation. Areas of thick bush have been opened up; certain species of trees and shrubs have become extinct whilst several others are threatened. If the current level of pressure continues in the more arid areas of Laikipia by the elephant population, the flora of Laikipia will be adversely affected. This dynamic will mean that the smaller species of herbs and succulent plants will be threatened as they become exposed. Most of the pastoralists coming and going in the Laikipia District are armed with automatic weapons, this means that the larger mammals like elephant still struggle with their journey North and staying there for long due to the constant threat from guns. This forces them to stay for longer periods in Laikipia where they feel safe.

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3.2.5 Aloe species, distribution and status in Laikipia Compared to most regions there has been little evidence of indiscriminate harvesting in Laikipia. Aloes in Laikipia are threatened by a number of other different reasons, as cited in 3.2.4.

Species in Laikipia Location Status Uses Aloe archeri West/North Uncommon Not recorded Aloe dumatorum Ol doinyo Nyiru Rare Not recorded Aloe francombei Ol Ari Nyiru Endemic Not recorded Aloe lateritia var.graminicola Widespread Locally common Burns Aloe myriacantha Grassland Uncommon Not recorded Aloe nyeriensis Widespread Uncommon Burns, stomach Aloe powysiorum Lekurukki hill Rare Not recorded Aloe ruspoliana Low altitude Uncommon Poisoning hyaena’s Aloe secundiflora Widespread Locally common Stomach/burns Al`oe scabrifolia North/West Uncommon Not recorded Aloe vituensis Kimanjo Uncommon Not recorded

Aloe in rangeland rehabilitation: Aloes are xerophytes well adapted to bare degraded areas that are common in drylands. Their root system and physiology is well adapted, imbibe minimum precipitation and withstand severe drought conditions. His adaptation enables Aloes to grow well in dryland areas. LWF is encouraging the up-take of aloe panting for rangeland rehabilitation. Aloe provides forage for bees. Honey production is a thriving industry in drylands. Its production depends on flowers and water where Aloe flowers play a major role.

3.3 Socio-economic impact

3.3.1 Traditional uses of Aloe species in the Laikipia area Since ancient times, the indigenous aloes of Laikipia, and in other districts in Kenya, have been used for; (i) human medicine (the sap for laxative, worms, the gel stomach ulcers and other stomach and colon dysfunctions, wound salve and for skin ulcers, eruptions etc, even malaria, (ii) the sap and gel as a veterinary treatment for skin conditions mainly of cattle and goats, and (iii) the gel for skin softening as a crude but effective beauty treatment (iv) traditional ingredient in the brewing of alcohol, (v) poisoning of rats and other vermin rodents, (vi) live fencing and (vii) control of soil erosion by encouraging growth of grass in the range lands.

3.3.2 Traditional NTFP enterprise Dependency of the resident and pastoralist communities within Laikipia on its natural resources is higher than many parts of the country. Over exploitation has increased as population pressure has increased. Dependence on NWFP is also a poverty indicator; rural people rely on NWFP because they have no other option. As remuneration is commonly low the communities remain poor and food insecure. Therefore, if NWFP are to play a role in poverty reduction it will have to be through increased and/or more efficient commercial production and trade. In response to this conclusion, the Government, through National Poverty Eradication Plan (NPEP), has laid down strategies to reduce poverty in ASALs by 50% by 2015, and encourage gender mainstreaming in all aspects of livelihoods improvements and domestic welfare. The strategy seeks to support integrated natural resource management; promote best practices in natural resource conservation; and to educate communities in sustainable use of natural resources.

3.3.3 Status of the aloe collectors/harvesters: Those community members that constitute the aloe wild harvesters/collectors are amongst the poorest areas of Kenya; Baringo, Laikipia, Samburu, Taita, Kwale, West Pokot, Marsabit, Moyale and Wajir. Despite being primary agents in the supply chain they receive little reward. The majority of supply is harvested crudely either by independent community members or by labour hired from pastoral nomadic communities who receive a very low reward of between Ksh35 (Tukana) and Ksh60 (Baringo) for 5 litres

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of sap for their efforts. As there are no statutory sustainable wild harvesting protocols in place there has been little regard to the survival of the plant.

3.3.4 Management issues

Source of aloe material: The concept of Aloes utilization and sustainable management arose from the need to exploit existing natural resources that have potential to sustain as well as boost economic status of local people for future livelihood. Aloes have been exploited in the ASAL for many years, particularly during drought years. However, there is little understanding within the government and policy makers of the true opportunities that exist in terms of NTFP exploitation and its potential impact on conservation of the natural resources. Sustainable utilization of the indigenous aloe species requires a wide and full assessment of the current status (as undertaken in specific areas by SNV) and sound governance (using licensing and certification systems). The up-take of NTFP enterprise opportunities by rural communities will increase if they are adequately sensitised and trained in sustainable domestication, business management and marketing, and linked to commercial buyers.

As identified by the Laikipia Aloe Bio-Enterprise Project; currently most of the areas are experiencing drastic change in land use mainly from open grazing pasture fields to cultivated agriculture. This is mainly due to recent subdivisions into small holder units and settlement. The process has caused uprooting or destruction of thousands of aloe stems in the area to pave way to numerous combinations of peasantry activities. This has put the trend in biodiversity status on the decline.

Management of the indigenous aloe in terms of meeting sustainability and conservation goals will require the interest and assistance of the extension/field staff of the relevant government offices. These personnel, as well as those of the key CBOs and NGOs, based within these regions will require training and guidance in all aspects and protocols relating to sustainable wild harvesting and domestication. The successful implementation and impact of the Kenyan government licensing system for aloe utilisation and commercial exploitation will rest on this factor.

Low returns: The current exploitation is crude (the sap is boil for 3 hours and the crystal gum is then sold) and the returns to the harvesters are low, as cited in 3.3.3, being based almost solely on the trading of aloe sap or the extracted aloe gum (crudely achieved through boiling off the water from the sap). There is very little domestication of aloe practiced within Kenya, including Laikipia, and therefore in the current situation there is no opportunity to increase the commercial plant performance of the indigenous aloe species that are currently traded.

Aloe gum processing Coastal region Kenya

Poor competitive advantage of Domestication : The SNV report illustrates well the current level of return from commercial aloe domestication. The results of the 2005 case study on aloe secundiflora regarding production and market forces indicate:

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Plantation of aloe secundiflora is propagated at spacing of 1x1m will require 4,900 plants/acre and take 3 to 4 years to mature from nursery to harvesting. Sap yield on average is 50 ml per mature plant resulting in (4900 x 50/ 1000) 245 litres of sap per acre. 4 litres of sap, when boiled, produces 1 kg of crude aloe gum; this results in 82 kg/acre of crude aloe gum, which is sold to dealers at KSh 70/kg. The income/acre is less therefore less than Ksh6000/acre which is only achieved after 3-4 yrs of tending the plantation. The cost-benefit analysis may be different depending on the Aloe species; for example aloe turkanensis has a faster maturity and higher Aloin content compared to aloe secundiflora .

There are, so far, few commercial nurseries engaged in the production of aloe seedlings due mainly to the lack of / cost of licensed planting material. It takes about 10 months for the seedlings to be ready for planting out.

Aloe farm in Kwale

Lack of knowledge and expertise: Poor access to sufficient technical assistance/knowledge to successfully develop and manage the aloe plantations and to process attractive aloe products is a fundamental problem area.

The example used in the case of Laikipia aloe study, is based on the experiences of Rumuruti Women Aloe Group, Tigithi Aloe Group, Kieni Aloe Planting group and Withare Aloe Group. These groups produce various aloe products at a small scale and sell their products locally (occasionally to Maria Dodds and Mr. Grant of El Karama ranch in Nanyuki). The products include soap, herbal tea, face and body creams and lotions. The groups face the challenge of having very limited knowledge of value addition techniques for small scale aloe manufacturing. The other challenge is that the community groups’ products have not been standardized, or licensed by the Kenya Bureau of Standards (KBS). This presents not only the problem with quality assurance but also marketing, particularly to customers beyond their local areas of residence. The groups have received training in value addition, so far, through LWF support. However this seems to be insufficient. This is particularly the case in addressing agronomic issues, for instance over 50% of all aloe seedlings from nurseries planted dried up on planting.

Poor post harvest care (Independent operator in Laikipia)

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3.3.3 Case Studies of Aloe-based business development in Kenya

Case Study 1. Practical Action Aloe Project, Turkana Commercial projects have been developed with the Turkana people over recent years, which have been focused on the commercialisation of the aloin extract from the indigenous aloe species ( aloe turkanensis), as an export item for niche markets as well as an income generation initiative in the production of medicinal soaps and other human health products for local markets.

Practical Action is an international development agency working with poor communities to help them choose and use technology to improve their lives today and for generations. Practical Action has been working with the people of Turkana to address the chronic food insecurity (50% of Turkana’s depend on relief food) through sustainable enterprise development. Turkana is well endowed with commercial aloe, aloe turkanensis and aloe secundiflora , which have been found to have compounds similar to those in aloe vera, and have comparable leaf sizes making them good candidates for commercial exploitation. These varieties are already harvested extensively from the wild for their medicinal properties for the local, national and export market. Practical Action has assisted the Turkana aloe group (with over 200 members) to process aloe into soaps, shampoo and lotions. These aloe products are sold locally within the Turkana district, however Practical Action (through funding from CORDAID) plans to increase the scale and improve the techniques of aloe processing to enable the products to reach national and regional (such as Southern Sudan and Uganda) markets.

There are two processing centres: Kalemngorok and Namoruputh. Currently, there are 320 members in Kalemngorok, 572 in Namoruputh and 480 members in Komera. Aloe trade is now becoming more profitable than livestock. Each community group has planted 10 acre with domesticated indigenous aloe species, and there are now 21 such farms in Turkana district.

Case Study 2. Baringo Aloe enterprise development Baringo District although endowed with vast range of biodiversity is one of the poorest districts in Kenya with over 38% of the population living under the poverty line. Livestock production is the only source of livelihood for the community. The community recognizes Aloe as an important plant species with medicinal properties and a pillar for honey production. The community has also used Aloe for soil erosion control. KEFRI conducted successful research work in the area aimed at enhancing the conservation and management of Aloe species. To promote sustainable harvesting, KEFRI and partners are implementing an aloe bioenterprise in Baringo, the Koriema Aloe Processing project, which was launched by KEFRI on 18/11/2004, funded by European Union, Biodiversity Conservation Programme, by KShs 13 million. KEFRI has taken an active role in this project as part of their attempts to promote aloe cultivation for improved livelihood wealth generation and enhance biodiversity conservation. As part of the same initiative, the processing factory has been built, farmers trained and plantations established. The main actors in the project are KEFRI, Landmawe Investor and the residents of Baringo District. KEFRI was to head research while Luban Chemicals was to handle the manufacturing aspect. Further European money over a four years fund has been pledged to enable a conservation programme to protect aloe species, through capacity building of Kenya's National Environment Management Agency, and training of local communities in the implementation of environmental action plans.

The KWS has already developed draft guidelines on issuance of CITES permit for domestication and has recommended that groups show resource inventory and sustainable resources utilisation and community benefits. KEFRI has challenged Kenya's authorities to fast-track establishment of a legal framework to formalise the industry. Several export contracts between Baringo and buyers in Britain and China have already been lost because regulation and legal guidelines have not been completed.

In the Baringo and Koibatek areas, farmers are already strategizing on how to benefit from the new project. For example, Jane Chepkonga's 20 acre farm at Ngoswet in Mogotio, is currently covered by acacia, leleshua and other hardy shrubs of insignificant value. She is converting her 20 acre farm to aloe cropping (secunduflora species) following advice of the Equator Nature Conservation Project, and will also develop beekeeping as the flowers of the fleshy aloes attract bees.

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The processing plant, which has been licensed under the Kenya Wildlife Services, is expected to produce crude aloe gum at first, for sale to the pharmaceutical and cosmetic industries. Value added products will follow, exploiting the properties of a range of aloe-type species found in arid and semi-arid parts of the country. These will compete with products from South Africa, which currently account for 60% of the aloe products sold on world markets. KEFRI is supporting the project through research on aloe species, artificial propagation and the development of guidelines on sustainable exploitation.

However, currently the factory lies dormant due to a dispute over its control. Suspicion among interested parties has stalled the project. Local leaders and a private investor, brought on board by the Government to help solicit market for its products, are haggling over the control of the firm. The firm's establishment was meant to legalise the export of aloe extract to pharmaceutical companies. The Kenya Wildlife Service (KWS) and the Kenya Forest Research Institute (KEFRI) are key partners in the project. The two organisations were expected to provide the regulatory responsibility and carry out research. The Baringo community is currently "managing" the factory and plans to install a management team once the factory is up and running. The residents claim they are the rightful owners of the project, but government officials maintain that a third party has to be included to help play the role of marketing the business and the products. The administrator said that the biggest challenge was on the side of the farmers to satisfy the required capacity to ensure that the factory remains operational once it opens.

For full information see Annex 6.

Case Study 3. ICIPE Commercial Aloe Farming. Kwale Project with Coastal Rural Support Programme Aloe farming is an emerging source of income generation for communities living in the coatal region, as well as the inland arid and semi arid areas. Being aware of the policy framework of CITES, the Coastal Rural Support Programme (CRSP) carried out a survey to determine the areas in which aloe was naturally growing. The communities, where aloe was naturally abundant, were organized into aloe farming groups and each group was supported to establish an aloe farm. Currently 1073 community members (871 women and 202 men) in 36 villages (in both Kwale – now Kinango and Kilifi districts of Kenya) are involved in Aloe farming and have planted a total of 200,000 ( representing appox 50 acres of land) aloe plants and established 9 nurseries. Group aloe farms are managed by all group members. However, some group members have also established individual farms which they manage on their own.

CRSP-Kwale Project has continuously built the capacity of the groups to manage aloe farms through training on aloe husbandry. In addition to training on general husbandry and management, group representatives have received training on small scale processing of value added products such as soaps, lotion, detergent and candles. Through the sale of aloe products, household incomes are being raised among participating groups. Aloe sap and stone are sold to brokers while value added products such as soaps, lotion, detergents and candles are being sold locally. Where products sold are from a group farm, the benefits are distributed among all the group members. The biggest challenge facing aloe farming as an enterprise is that of limited access to markets and market information and thus there is need for other actors to facilitate the marketing of aloe products. To make the products more competitive, the support of other actors in packaging and standardization is also highly needed.

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Aloe farming can been seen in this region aas being successful as a complimentary incomes generation activity, but also plays an important role in soil erosion control. When aloe farms are established in waste lands (lands not suitable for crop farming) the plants control soil erosion, making the land suitable for establishment of other vegetation and thus contributing to restoring degraded lands.

Case Study 4. Rumuruti Aloe Womens Group With extracts from the Appraisal of Aloe Domestication in Laikipia, Case Studies Conducted by Kenya Aloe Working Group Secretariat.

This group was established in 2004 and registered in 05 by the Ministry of Culture and Social Services. The group has 25 members all of whom are women. They have been assisted by Mr. Aden Mohammed (aloe trader and husband of one of the members) and Maria Dodds (GG Kariuki ranch, P&D ranch and Narok ranch in Rumuruti), LWF, Ministry of Agriculture, Kenya Forestry Department and other line ministries help in the domestication and value addition to the indigenous aloes, Aloe Secundiflora and Aloe Lateritia (gramanicola). The group has planted a 0.5 acre plot with these aloes, donated to them by the Muslim Community of Rumuruti and have a 2 acre plot, not yet planted, donated to them by the Municipal Council of Rumuruti. The seedlings have been provided by Laikipia Aloe Nursery, but they also occasionally plant from wild seedling which happens to do better in survival than the seedling from the nursery (due to better adaptability to local conditions). The group lack sufficient skills to nurse the seedlings and require capacity building in this area. The small plantation is rain fed.

The group currently harvests only a little sap for the products they manufacture, harvesting of the whole plot is expected to be done only once per year during the dry season, when largest quantities of sap can be gained. The harvesting is carried out by cutting the leaves at the base using knives and collecting the sap in basins. The sap is sieved and put in plastic bottles for sale or storage. The group expects to collect between 60 and 100 litres each harvest season in the future. This group makes aloe products such as soap (50grams), Creams (50grams) and Lotions (100grames), and plan to expand their range and improve their formulations if training is provided for this. The group was trained by Francis Keah, supported by the LWF, and by Maria Dodds. They market their products locally and some occasional deliveries to Maria Dodds and to Mr. Grant of El Kariama ranch in Nanyuki. The group is aiming to obtain approval by the Kenya Bureau of Standards for their products, enabling them to reach wider markets. The ain challenges cited by the group include improved facilities, improved labelling, bar code, and training in better product formulation.

Aloe Gramanicola

Aloe Secundiflora

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Learning Points:

Drawn from field visits under this assignment and the Laikipia Aloe Bio-enterprise report, 2007 Challenges faced by the Aloe producer groups: • The groups set up under LAB are striving to domesticate aloe with enthusiasm. • Indigenous aloe seedlings establish more easily than the seedlings from the nurseries (possibly a factor of enviro-adaptively). • The product marketing minimal • Products are not standardized in formulation, or well formulated and therefore not seen as an attractive, effective and safe product for medium and upper income bracket consumers • Product packaging is not attractive • Products are not registered under KBS. This limits the groups from sourcing for external market. • The groups are small and the scale of the operations are limited • The groups have very little financial capacity for scale up within their own resources. • The aloe products are made from 95% plus other ingredient, a very small amount of aloe is used. • The groups have difficulty sourcing some of the major ingredients (i.e coconut butter) • The aloe plants are affected by prolonged drought, but once it rains the plants regenerate, which makes aloe survival rate considerably higher than food crops grown in the areas. • Where aloe is planted, soil erosion is reduced, assisting range land rehabilitation.

Drawn from the Coastal Aloe Business Report (DANIDA- ABD) The output from interviews and workshops conducted/organised by the DANIDA Agriculture Business Development programme and captured in the Aloe Coastal Business report, 2007 (commissioned by the same): The microprocessors need to: • Heighten their promotional campaign for aloe soap to increase sales volumes (field days and displays in local market centers were suggested) • Improving packaging, • Establishing quality control and quality assurance procedures (such as establishing standardized aloe soap formulations was suggested), • Better technical support on quality aspects. • Expertise business planning and development • Refresher training on aloe product development, business management, record keeping and accounting, orientation • Training in new technology and any newly purchased equipment etc. • Emphasis on the use of service providers and technical personnel within the Coast Region • Field trips and exchange visits to other successful related commercial operations.

Drawn from the ICIPE Commercial Aloe Farming. Kwale Project To add to those mentioned above, the challenge facing aloe farming in this region include: • Limited access to markets and market information and thus there is need for other actors to facilitate the marketing of aloe products. • To make the products more competitive, the support of other actors in packaging and standardization is also highly needed. • Aloe plays an important role in soil erosion control, stabalising the soil making it possible for establishment of other vegetation and thus contributing to restoring degraded lands.

Drawn from the Baringo Aloe enterprise development programme • The resource maps has provided the baseline information for a feasibility and business plan as well as the foundation for sustainability protocols • The development of the stakeholder own company, but ownership problem causing suspicion among interested parties has stalled the project. Local leaders haggling over the control of the firm. • Lack of clear marketing and business management strategy. Most of this NBEs were started with different goals and just converted to enterprises when opportunities came in and therefore don’t have clear business mind which can help develop good competitive strategies

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3.4 Challenges, Threats, Strengths and Opportunities of Aloe Enterprise in Laikipia

This section is a summary of the collective findings from the desk study and the information gain from field visits and from meetings with stakeholders, LWF team, other NGOs and CBOs working to support the development of aloe enterprise in Laikipia and other parts of Kenya.

3.4.1 Challenges: • Lack of awareness: Little rural based knowledge of aloes species as a viable wild resource for the generation of incomes and employment. Sensitisation and awareness work will need to be done with the targeted communities to bring to them an awareness of the multiple benefits with regard to human health. Sufficient information needs to be disseminated to communities, through local CBOs /NGOs and government • Lack of commercial investment: Research needs to be increased on appropriate processing techniques that can be undertaken at the small scale business level that will enable retentions of the majority of the active ingredients of the aloe plant. • Limited research work published on indigenous aloes species • Propagation protocols have been established by KEFRI but there is little training in these protocols available to aloe producers and harvesters • No institutionalised marketing channels developed for this product as a result if the little commercial and development • No processing facilities available at the community level. Low technology equipment is required to process and pack the aloe products at the village level • Low levels of domestication achieved so far to create viable enterprises in most parts of Laikipia. • Little access to transport to reach better markets – moving the semi-processed crop to the central processing facility/centre will need to be secured and financed • No adequate supply chain . Currently there is no supply chain in existence that provides traceability, transparency and allows benefits of value addition and better marketing to filter down to the community level – the harvesters/suppliers. This needs to be developed. • Lack of entrepreneurialism: there are no entrepreneurs engaged with developing sustainable aloe production and processing in Laikipia • Commercial partners will be unlikely to bear risk of investing capital to engage with small scale producers where the opportunity cost is high – as it is at the present time. • No central processing facility/centre . Either an entrepreneur and adequately resources and well managed producer association needs to invest (or have access to resource to invest) in this facility. • Community based production of value added aloe based products. Skills development is required, training on processing methodology, use of equipment, small scale business development etc.. • Financial assistance is necessary to meet (i) the certification costs (ii) the pre-market finance – buying capital, and (iii) value addition/processing and marketing • Market risk . Currently there is no market assurance Guide prices from buyers locally and internationally need to be established and equitable trading linkages. • International buyer specifications for finished products are not know • Relatively high investment / capital cost of developing the infrastructure and equipment, training and extension to develop this sub-sector adequately to have meaningful impact in the Laikipia region.

3.4.2 Threats: • Encroachment into arid areas for cultivation i.e. Nairobi area, farmers are uprooting Aloe secundiflora to make space for cultivation and pushing all the plants into a pile or using them as boundary mass but not re planting. • Destruction and reduction in sizes, availability and productivity of aloe species most of which are in CITES appendix II. • Conflicting land use in newly settled areas resulting to orchestrated Human- Wildlife Conflicts. • Increase in small scale plots around the Nanyuki area threatening the Aloe lateritia population • Population increase of people in Laikipia leading to loss of habitat

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• Increase in Greater Kudu populations on large-scale ranches and community group ranches. Kudu LOVE aloes and will decimate populations completely. • Increasing elephant numbers altering the vegetation dynamics creating open grassland. This behaviour will be a threat to certain Aloe species not all. • Lack of knowledge in communities of the importance of Laikipia’s succulent plants, incl Aloes. • No sustainable wild harvesting / domestication protocols as statutory required of aloe commercial utilisation have been established as yet.

3.4.3 Strengths There is presently a huge demand for aloe extracts, both in Africa and internationally. Production of the correct plant material can give rise to three production channels to produce aloin gum, clear gel, whole leaf gel and aloe crystalline powder. • The plant is known by the pastoralists and is within their system of indigenous knowledge • Drought resistant crop and can survive during times of drought • The dry leaves of Aloes are also livestock fodder, • Low skill requirement for processing. The skills required for the processing of wild harvested aloes is no greater than that required of beekeeping • Enrichment planting can be undertaken to stabilize and enlarge the crop to ensure resource sustainability. • Large resource base. Once the realistic assessment of volumes is established, production and trade can take place quickly and on a relatively large scale – impacting on large numbers of rural communities.

3.5.4 Opportunities • Aloe is known by the pastoralists and is within their system of indigenous knowledge • Low skills requirement for the processing of wild harvested aloes is no greater than that required of beekeeping • Domestication can be undertaken relatively easily to enlarge the crop to ensure resource sustainability. • Aloes products are well known in external markets and are considered ‘high value’ products. • Strong potential domestic and sub-regional markets for finished ‘shelf ready’ aloe products • It is a drought resistant plant • Viable profit margin can be made at relatively low risk, in business terms, providing that the appropriate markets are targeted. Very few inputs will be required for the establishment and management of the crop as it is already in existence. • Labour in the main input required to harvest the product. This is abundant and inexpensive in global terms. • Technical knowledge exists in the East African region on the development of the main products and the by-products. This can be prepared as a set of technical operational manuals that can be used as a training resource for the collection/harvesting and processing and of the plants. • Multiple natural products can be handled through the same supply chain and processing centres, certification system and by the same communities once identification and evaluation has been made regarding feasibility, viability (economies of scale, pricing and market demand etc) and sustainability. • Market studies can be readily conducted, as information is available through known market contacts. • Market linkages, initially to domestic industries and sub-regional consumers are relatively easy as the product is established in a number of nationally and regionally consumed bodycare and health products. International market demand remains strong and the potential for ethical trading relationships with international buyers is good.

The defining factors between success and failure of a community based aloe enterprise will be the marketing of the value added aloe products as inputs to domestic industries and the ability to source the capacity locally to manufacture the products to retail/market standards.

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4. Market Demand and Business Opportunities

4.1 Kenyan Market

4.1.1 Status Aloe has been used throughout the ages to cure headaches, stomach upsets and many other ailments. Aloe varieties in Kenya are traditionally used for the treatment of burns and cuts, acne and skin disorder, stomach upsets, hair restoration and skin rejuvenation. Most pharmacy, cosmetics store and supermarket in Nairobi have a number of pricey, imported products (mostly from the UK, US and Australasia) containing varying degrees of aloe content - mostly promoted as ‘aloe products’ (i.e as the primary ingredient).

The demand for both aloe bitters for medicinal products and aloe gel for bodycare and nutraceutical products manufactured in Kenya is potentially worth over seven million shillings a year just at the middle and upper income bracket of consumers. The potential market size at the lower end of the market could be many times greater if the products are appropriately prices, as well as being effective and attractive.

However, the production, processing, product design and market orientation of commercialised aloe is currently under developed. The established market is still almost entirely for aloe gum, the supply chain from the harvesters to middlemen is not clear. Due to the multiply intermediate traders, the protectionism within the market, the pricing is therefore maintained at the lowest price-taking level, and equitable benefit sharing is non existent. For example; Mr. Aden Mohammed, a former food processor and aloe trader since the early eighties, sold to Latif Wood Works, a major aloe traders based in Mombassa. The price in 1982 for 1kg of Aloe gum was Ksh30. He also started selling the aloe gum in Nairobi for Ksh55/kg. Aloe sap purchased in the rural areas at that time (1982) was worth Ksh20-25 for 5 litres (4 to 5 litres of aloe sap makes 1 kg of aloe gum).

4.1.2 Existing products and prices The current price of aloe sap of Ksh 85 to 100 for 5 litres is still as small reward for a natural product. Quality control is poor, and aloe sap price vary according to viscosity (as harvesters often mix aloe sap with water to increase volumes). It is reported in the SNV study that poisonous aloe species could enter the supply chain (such as aloe ruspoliana) as there is no traceability or governance regarding the areas and the species harvested. Other species, such as aloe multicor has poor gum quality which can lead to rejection of the whole consignment.

There are no manufacturers of aloe extracts, other than from aloe sap/gum, within Kenya. As there is increasing demand for natural products and high importation of natural health and beauty care products, there is significant opportunity to fill this void for the manufacturing and retail of good quality aloe healthcare and bodycare products for the East Africa market.

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Figure 12. The example below illustrated the products and prices of one manufacturer and wholesalers based in Nairobi, Benhar Engineering Ltd.

Aloe Product Range Product Size Ex Factory Ex Factory W/Sale W/Sale RRP Unit Unit Price Case Price Unit Price Unit Price Price

Lotion 50ml 61.50 738.00 67.50 810.00 90.00 100ml 112.50 1350.00 124.50 1488.00 165.00 200ml 211.50 2538.00 232.50 2784.00 300.00 350ml 264.00 3168.00 291.00 3492.00 375.00

Cream 75gm 75.00 900.00 83.25 999.00 112.50 125gm 144.00 1728.00 158.25 1899.00 210.00 250gm 298.50 3576.00 328.50 3936.00 427.50

Shampoo 250ml 126.00 1512.00 140.00 1680.00 200.00 500ml 236.00 2832.00 263.00 3156.00 375.00

Conditioner 250ml 121.00 1452.00 133.00 1596.00 180.00 500ml 240.00 2880.00 264.00 3168.00 340.00

Prices Inclusive of VAT. Prices are those prevailing at the time of delivery and are subject to change We endeavor to deliver within 48 hrs. For Bulk Orders Please Contact Us

Value addition - Aloe products sold in Kenya

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4.1.3 Case Study. BIOP Biop was established to commercialise the research finding and help alleviate poverty among the rural poor through establishment of activities that will generate income. Before going under due to mismanagement Biop had a monthly turnover of about 3,000,000 Kes with 50% coming from aloe related product lines. Founded to provide a link between research findings at icipe and the market and owned by Bridgeworks which is a venture capital company incubating and commercialising technologies addressing key global concerns associated with soil, health and education. Ideas are carefully assessed for their potential to contribute to solving a challenge of global concern and their economic viability. Biop had a range of cosmetic, herbal and agricultural products this includes o Neem products - soaps, lotions creams, shampoos, neem tea and oil o Aloe products - soaps, creams, lotions, aloe juice, aloe capsules. o Agricultural products included organic fertilizers o Various herbal products for various remedies., Product development was carried out through consultation with various researchers of universities and other institutions like Kenya medical research institute, university of Nairobi among others

The aloe sap was being bought from farmers and used to manufacture product. Manufacture of products was carried out at the processing facility at icipe complex. Other products like soaps and tablets were manufactured by contract out to manufacturing in Nairobi due to high initial capital required for the equipment needs.

The products were distributed through super-market chains, retail shops located in various parts of Nairobi, stockists located in various parts of the country, pharmacies and chemists. Some products were sold during farming schools meeting with various farmers and even in agricultural shows and scientific gathering. Equipment included: o neem oil cold presser, o grinding equipment o sacheting machines for herbal teas, o mixing vessels for creams and lotion o Capsulating equipment

4.5.6 Learning points: Demand is likely to increase with supply, either as a substitute ingredient within existing product formulations, as new attractive well branded and packaged products properly formulated for the African market, and for semi-processed bulk export. The marketing, with the health claims associated with aloe, need to be accompanied by nationally and internationally recognised certification endorsement. This factor will become increasingly important to provide quality assurance and product traceability.

Drawn from field visits under this assignment and the Laikipia Aloe Bio-enterprise report, 2007 In order to cross these hurdles producer groups require • Training in production and harvesting protocols, according to the licensing requirements and sustainability/organic certification principals, product handling and processing protocols, organisational and management capacity building, record keeping and business management • Finance for the licensing fee / organic certification inspection costs / bar coding • Adequate management capacity to organise and manage the producer groups, recording systems and to ensure compliance is maintained. • Combine efforts to achieve economies of scale • Working with service providers to enhance expertise in business planning and business development; utilize the local skills; utilize local service providers • Improve processing facilities and skills • Enhance learning through exchange visits; experiential learning etc .

Drawn from the Coastal Aloe Business Report (DANIDA- ABD) During the workshop small and mico-processors expressed the following: • Create a central processing unit: For quality control

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• Self-regulatory mechanisms for quality control (Associations) • Further training to improve quality: quality control • Monitoring & control of quality • Lobbying for aloe guidelines • Enable centralized standards • Marketing • Monitoring • Training on sustainability of businesses

Drawn from the BIOP experience • Business management skills are critical for enterprise operations • National/regional market is sensitive to product quality, product development to match the quality of packaging of competitive imported brands is imperative • Nature based enterprise should adopt value chain approach in product development and distribution in order to get a substantial market share

Due to the growing interest in health matters, off the shelf beauty products and the concerns about product quality, there is significant scope for well formulated, quality endorsed and attractively packaged/presented aloe based products in Kenya.

4.2 African Market

The sub-region and Africa in general provides a huge potential market for processed aloe products from Kenya. The imported aloe based products are prohibitively expensive for the average African consumer. Many African consumers are becoming aware of the benefits of aloe to human health and are also seeking complementary supplements that can support and assist in controlling many modern lifestyle related illnesses like diabetes, hypertension, obesity and stomach ulcers, to treat skin ailments and dysfunctions, such as from the effects of HIV/AIDS.

Products manufactured in Kenya to international quality standard established for aloes based products, and certified will more readily access markets across the African continent and in the Middle East. As shown by the company Ikhala in South Africa, product branding and certification provide real competitive advantage in a market dominated by imported, affordable (to the top and middle income brackets) and attractively presented aloe products.

Example of Product Branding - Ikhala for Men by Ikhala Products (Pty) Ltd. ( www.ikhala.co.za) Ikhala is a successful example of rural community development through the commercialisation of indigenous natural resources. The Public Private Partnership has led to the skills development and to the raising of living standards for an estimated 1000 workers above the poverty line. Khala is made from naturally processed aloe ferox, an indigenous aloe growing in abundance in its natural habitat and endemic to the Southern and Eastern Cape region of South Africa. As a species that requires a CITES certificate for entry into international markets, the resource is carefully monitored and sustainably harvested. Historically aloe has been widely known and utilised as a base or additive in many cosmetics. However Ikhala has innovated both in its novel Joint Venture structure and also by its commitment to market a male range of cosmetics targeted at the Black African male. Focusing on the trend to market cosmetics to today’s modern man based on the efficacy and benefits of natural African ingredients, and thereby contributing to the social and economic upliftment of the lives of many rural South African people, is setting a leading example from a South African Company. Khala was formed as a co-operative to include marginalised rural communities, in order to create employment and income generation. The primary aim was to empower the local Aloe ferox harvesters in a partnership and share-ownership of the business on a sustainable level. A percentage of all sales of Ikhala is returned to these communities for further development and the improvement of their livelihoods. Ikhala has been manufactured as a committed response to the South African Government’s Poverty Relief Programme

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Again, the integrity of the product is of central importance. Marketing the benefits of aloe must be supported by the efficacy of the product. The input of sound biochemical research, evaluating the health properties of Kenyan wild aloes, and the best processing techniques that preserve these benefits, is a fundamentally important component of the future commercialisation of Kenya’s indigenous aloe and the future prospects of the related bio-enterprises. Partnerships should be further developed between national and international research bodies in order to move this work forward to a higher level.

4.3 International Export

The opportunity for export to international buyers has already been harnessed, although for a very low grade product in the most part, being aloe gum. The dealers export the crude aloe gum to countries like China at US$2.40 to 2.70 (depending on the quality).

The potential for exporting finished products is limited and may not be competitive in most northern markets with the large-scale plantation and manufacturing of aloe vera across the US and the developing world. Unless the aloe products are well branded (story line marketing etc), have excellent formulation and packaging (at least compliant to international market standards and competitive) and endorsed with organic/fair-trade/IASC certification.

There is good potential for selling finished retail packed aloe products into the Middle Eastern market providing the product is again attractive and well formulated, and preferable certified – although the standards are not as rigorous as those in the EU, Australasian and US.

In the short to medium term, apart from small consignments of highly branded and endorsed finished - retailed packed aloe products, the most appropriate section of the market to expand export into is the semi-processed aloe extracts; i.e aloe bitters for natural health products and pharmaceutical use, and the stabilised gel to the bodycare industry. Again, the criteria that must be met will include; good traceability, statutory quality standard compliance, buyer specifications, preferably certification (organic and possibly also HACCP for competitive entry to the health care industry). However, potentially, by far the most lucrative market is the African market for (well formulated, attractively packaged, competitively priced) finished aloe based bodycare and healthcare products.

An example of an aloe product wholesaler in the UK. Aloe Vera juice (formulation; aloe baradensis, acrylates, phenoxyethanol, methylparaben, propylparaben).

Quantity Price Per Litre 1 Litre £11.45 2 Litre £10.70 4 Litre £9.95 6 Litre £9.20 8 Litre £8.45 10 Litre £7.70 20 Litre £6.95 40 Litre £6.70 60 Litre £6.45 80 Litre £6.20 100 Litre £5.95

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4.4 Summary of Market Characteristics

Aloe product Market size Example Price range (2007-08)

Bulk aloe gum to traders in Demand and price competitiveness of Approx Ksh85-100/kg Kenya Kenya aloe gum are inter-twined. World demand remains high, but competition is also high. (i.e demand is v. price sensitive) Bulk Aloe gel to traders in As above, the world demand for aloe gel is No current supply Kenya significant, offering good prospects providing the export price is competitive and the quality is acceptable to international standards, preferably certified. Bulk aloe gum and gel to Potentially high as a substitute ingredient Aloe gum - approx Ksh100/kg Kenyan based in existing product formulations. Price and manufacturers of health quality must be competitive with imported No current supply of aloe gel products aloe extract and preferably certified. Bulk aloe gum, stabilised Growing international market. The demand US2.50 (Ksh185)/kg for aloe sap and gel to export will be based on quality endorsement and gum. No current sale recorded buyers traceability (trade and organic for aloe gel and sap certification). Aloe bodycare products Potentially high as a there is a growing Kenyan made aloe health direct to national/export interest and demand for healthcare products are sold in Nairobi for: market manufactured by products in the middle and top brackets of Ksh 50 for 100ml soap small to medium scale the Kenya/ EA market. Also a growing Ksh350 for 200ml aloe lotion businesses demand for authentic, feel good products Ksh 225 – 125gm aloe cream in the northern/western markets. Demand Ksh 210 – 125gm aloe cream based on quality and traceability Ksh200 – 250ml aloe shampoo (certification). Ksh180 – 250ml aloe conditioner Aloe health products direct As above Kenyan made aloe health to national/export market products are sold in Nairobi for manufactured by small to Ksh 250 for 300ml aloe juice medium scale businesses. Ksh350 for 200gm aloe capsules Ksh 220 – 125ml aloe bitters Aloe bodycare products Although this represents the lowest end of Examples are Ksh50 per aloe sold in local market the consumer range, there is still a product (Rumuruti women aloe manufactured by small growing interest, on top of the established group) prices range from ksh 50, scale village based traditional use, in natural health products. 70 and 100 in the coastal region enterprises Demand will be based on more on price for aloe soap. and functionality of the products. Aloe healthcare products in As above Very few such products are local market manuf-actured formally marketed by small scale village based enterprises

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4.5 Legal hurdles The aloe industry is lack of regulatory and guiding framework for the aloe sub-sector. The legislation governing the exploitation of Aloes is addressed in different acts of different departments. For example, the EMCA (1999) has been cited to ban the harvesting of wild Aloes in Samburu district, licensed by the local county council. This is further aggravated by proliferation of myriad sub-standard and counterfeit aloe brands that have no quality requirements or standard attached to them. These conditions have created an environment of uncertainty and anxiety around aloe sub-sector, and thus hamper the progress of harnessing the huge market potential for authentic aloe products.

Under the existing statutory requirements, every commercial operator needs to first gain from the KWS a CITES permit and phytosanitary certificates for all exportation and importation of aloe products, or derivative. Producers must also obtain, under CITES requirements, a certificate of proof of exploitation from sustainable source; the Kenya government has brought about a section under the Wildlife Conservation and Management Act to regulation domestication (‘artificial propagation’) as well as exportation of indigenous aloe plant materials/extracts. It requires that all persons conducting commercial propagation/domestication of aloe species must apply for inclusion under the Register of Artificial Propagation of Aloe Species. KEBS must monitor the aloe operation for one year before issuing product certification (diamond mark). An annual fee at a flat rate of Ksh55,000 + VAT is charged by KEBS. KEBS also charge a levy of Ksh.1,000/mth for free testing of products.

Most small enterprises are yet to fulfill legal and statutory requirements for their businesses, thus aggravating the competitiveness of the enterprises. Currently, the small enterprises that are within the network of Coast Aloe Working Group (CAWG) are establishing a working relationship with the Kenya Bureau of Standards (KEBS) with a view to aid the small-enterprises meet the statutory requirements of licensing, certification, standardization and the attendant functions of quality control and quality assurance. In addition, the small enterprises that attended the workshop organised by DANIDA-ADS are considering forging closer working relationships with aloe service providers with a view to improve technical and professional competencies of small-entrepreneurs.

The statutory requirements for retailing products in Kenya are relatively expensive for small scale businesses. Government regulations require that all retail products should be licensed (high fee e.g. Ksh.7,500) and display a trademark, which generally costs Ksh.8,000. VAT must also be paid (at 16%).

4.6 Quality Endorsement There is no quality standard enforced by the KBS for retailed aloe products. This currently weakens the potential of this market is that all aloe products are marketed on an equal footing. However, the actual content of aloe in the products may be from less than 0.25% upwards. This reduces the incentive for manufacturers to increase the aloe content to a more active level of over 50%. It is also results in poor consumer reception and interest as the product is not bio-active and has very little additional beneficial properties than any other cheap bodycare product.

To compete in the regional and global market product certification is very necessary to provide endorsement of quality and efficacy of the product. This starts with the National Bureau of Standards certification, licensed bar coding and third party verified certification of authenticity (traceability and transparency of the unadulterated and natural status of the material). The latter can be provided through internationally recognized organic certification. An internationally recognised certification scheme has been developed and governed by the International Aloe Science Council (IASC); see below. The certification scheme is widely promoted in the global market and subscribed to by commercial aloe producers and processors (mainly of aloe vera) across the world.

The International Aloe Science Council - International aloe product certification The International Aloe Science Council is a membership based, non-profit trade organization for the Aloe Vera Industry world-wide. Membership includes Aloe growers, processors, finished goods manufacturers, marketing companies, insurance companies, equipment suppliers, printers, sales organizations,

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physicians, scientists and researchers. Its purpose it regulation, promotion, standards setting and certification, as well as information support and advice to its members.

The Code of Ethics for members is designed to promote and maintain the highest standards of Service and Personal conduct among its members. The certification program is designed to allow aloe growers, processors and manufacturers to submit their facilities and products to a series of rigorous tests and audit program, which, if they passed, allow for the certification of their aloe and aloe products and to display IASC authorized Seal of Certification on all of their product and literature.

Subscribing to this certification scheme may be impractical and inessesible for most small scale aloe operators in Kenya, however there is considerable scope and reason to developing a similar quality endorsing certification system governed by the National Bureau of Standards ion the first instance. Setting up an Eastern Africa Aloe Science Council, attached to the International Science Council should be considered as a future step to promoting and regulating the aloe industry in the region. See Annex 1 for more information.

Aloe Council, South Africa The Aloe Ferox industry in South Africa has given rise to the Aloe Council in South Africa. It function is to provide a research and quality guidelines to the industry. The Aloe Ferox Trust was a founder member. This company is also a member of the Society of Cosmetic Chemist and the IFSCC, which the companies use as an endorsement of the integrity of their products.

HACCP Hazard Analysis and Critical Control Points ( HACCP ) is a systematic preventative approach to food safety and pharmaceutical safety that addresses physical, chemical, and biological hazards. HACCP is used in the food industry to identify potential food safety hazards. Critical Control Points (CCP's) are taken to reduce or eliminate the risk of the hazards being realized. HACCP is recognized internationally and certification provides market advantage in a competitive global health product industry.

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5. Aloe Material Supply

5.1 Sustainable Wild Harvesting Protocols Sustainable wild harvest standards are based on the assessment of compliance to sustainability protocols. For internationally recognised certification, such as organic and FSC, protocols are based on general guidelines and need to be developed for each situation, taking account of the distribution, abundance and vigour of the plant species, historical knowledge of climatic and other environmental stresses, and mapped (pref using GPS) to identify the harvesting zones and the harvesting rotation across these zones. The protocols should include harvesting interval, parts of the plant to be harvested, timing within the year and growth stage at which harvesting can take place, etc..

In the context of sustainable wild harvesting of indigenous aloe species, once the protocols have been assessed and recommended by a suitable contracted botanist, these should be issued to the Kenya Wildlife Service to establish level of compliance before approval for harvesting, processing and export of Aloe products is granted by KWS. For the Artificial Propagation of Aloe Species KWS could then issue a certificate of registration under The Wildlife Conservation and Management Act (Section 67 Cap376)

An assessment and mapping of the indigenous aloe across Laikipia is the first requirement for sustainable wild harvest protocols and certification. This first stage has been already conducted in specific areas by SNV in the 2007 SNV Sustainable Utilisation of Commercial Aloe Resources in the Drylands Study .

The application for sustainable wild harvesting can be conducted along similar lines, or according to, the established organic / FSC certification requirements, and through the development and management of the ICS (Internal Control System) – a statutory requirement for group organic certification under ISO65/EU and NOP/US.

The advantage of certification is that it provides access to premium priced-return in the international market, and therefore provides an incentive to up-take of the protocols and compliance, encourages cooperative approach the management of the indigenous resource, and provides third party verification system – providing sound transparency and traceability down through the supply chain to commercial partners/buyers.

5.2 Domestication Protocols and Standardised Techniques KEFRI have drafted a code of practice for the domestication and commercialisation of selected indigenous aloes, and have also developed propagation protocols. These will be provided to LWF once they have been received from KEFRI.

5.3 Research and Development Since the planting and harvest interlude is long, the Aloe bio-sector should be promoted in the context of integrated Agro-pastoral systems. Provide education on the Aloe plant and its potential for multiple use. Research is required to improve harvesting and processing efficiency Emphasis should be on continued research on the bioactive elements of Aloes, improved propagation and harvesting methods and processing of the products with a focus to adding value to those products.

Further, demonstration sites including school grounds should be established to support continued research on Aloes and also provide information at accessible outlets to enhance local knowledge of the resource.

Establishment of processing plants for locally consumable Aloe end products preferably in Aloe growing areas identified as Aloe Management Units is recommended by the SNV 2007 study. This approach will trigger demand for Aloe products and consequently spur large-scale Aloe production and diversification of the resource uses. Provision of technical assistance for Aloe crop management though agricultural extension services is recommended with a focus on training on value addition to support domestic production for household use.

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6. Value addition

6.1 Physical value addition

6.1.1 Critical points for value addition of aloe products

Immediate Stabilization: Because Aloe loses its healing virtues within 4-6 hours after being harvested, it is necessary to trim, clean, stabilize and seal the leaves/extract in 50 gallon drums within the first 2-6 hours after being cut.

Carefully and Delicately Processed: No damaging filtering (No charcoal filtering), No strong solvents, and No damaging centrifuging are used on any parts of this product at any time from field to bottle.

Aloe gel should be processed to protect: • the biological structure of all the individual nutrients and • the original biological design and balance of the aloe compound

Never Heat: No applied heat (zero heat) should be used at any time or in any part of processing from field to bottle. This protects the Aloe's biological integrity and biological activity.

The majority of skincare products on the shop shelves in Kenya contain petroleum oils, parabens and other derivatives, synthetic colorants and preservatives. These are degrading for the skin, and can act as mild irritants to those of us with sensitive skin, causing it further stress and increasing the rate of aging. No other ingredient harmful to you and our planet, such as GMOs and synthetic hormones, are used in any of our products.

6.1.2 Processing Protocols and Standardised Techniques The leaf of the Aloe plant consists of three different parts, yellow bitter sap, green peel and white aloe gel. The bitter sap lies underneath the green peel. The sap drains spontaneously when the leaf is cut. The inner fleshy portion of the leaf consists of a mucous material, named aloe gel, which has no bitter taste. The green skin is also rich in nutrients and fibre. The leaves, from which the bitter sap has been drained, are transported to the factory where they are washed, pressed or sliced and minced to form aloe gel. This is further processed to create an aloe juice. or as an ingredient in skin care products. The dry aloe leaves can also be crushed to form tea leaves or ground into a powder which is pressed to form fibre tablets

Processing Aloin By placing the leaves at an angle the aloin, the first exudates from the aloe species, can be drained and collected into a container for sale as a commodity. This can be done locally, in a very 'low tech' manner, by harvesting the larger lower mature leaves and draining the initial greenish yellow sap that emerges from under the dermis of the outer leaves into a pit or hygienic receptacle place in the ground. This substance can then filtered later for clarity and cleanliness, before being graded for quality at a central processing unit. (This unit can be the same facility set up for processing gums and gum resins with separation handling protocols in place to ensure product integrity.)

The process of first extraction of the aloin from the leaf also removes the compound that gives aloes it's bitterness. Thus the remaining leaf now minus the aloin gum can be further processed into other products. This is most appropriate for drinks like juices and gels as well as facial cosmetics when the extremely bitter taste is often considered unpleasant. Most fully processed aloe products sold in western markets have had the bitterness removed.

Processing Gel: There are two types of gel that can be produced from the leaves:

(i) Inner leaf gel contains the clear liquid that is extracted from the inside of the leaf leaving the outer leaf chlorophyll covering. This clear liquid can be used locally in production of soaps and cosmetics by women's groups or by manufacturing enterprises in Addis. For the village level industries that can be run

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by women. Other inputs such as base oils can be sourced locally form NTFPs thus allowing further feeder enterprises to be set up or incorporated into the main aloes enterprise thus expanding the whole operation

(ii) Whole leaf aloe gel is the liquefied whole leaf containing the outer leaf covering, the inclusion of the chlorophyll make the compound to be a much more volatile substance but it is still required by certain markets as an input for specific products.

Simple formulation: Organic Aloe barbadensis Leaf Juice, Potassium Sorbate, Citric Acid.

Processing Crystals . The inner and outer leaf can be dried and be dried and powdered separately or combined to remove the fluid content to < 5% or to a 1% concentration. What remains is a dried substance that can be dried and powdered in a simple maize mill. The resulting powdered leaf can be sieved to a required mesh size to remove impurities and large matter.

Aloin Oil or Oil of Aloes. One of the most valuable of the aloes products – can be produced by solvent extraction thus cannot be done at a village level and is a very low yielding product.

6.1.3 Established Quality Standards and Labelling (GMP)

Good Manufacturing Practices and HACCP . See Annex 10.

Certificate of Analysis - Each raw material is accompanied by a Certificate of Analysis verifying material source and content.

Micro-biology testing. Full time bench chemists take product samples from the beginning, middle and end of every production run. These samples are tested to make sure that the product is within quality control specifications. In addition, samples from each production run are sent to an outside lab for additional microbiology testing.

International Aloe Science Council (IASC) : A non-profit regulatory agency that helps monitor Aloe quality and content in Aloe Vera products around the world. The proposed Kenya Aloe Science was to be instigated and developed to provide a similar facility and services.

Example in the text box below of a company aloe products endorsed through multiple certification.

ALOE WELLNESS AUSTRALIA is the largest grower, processor and exporter of top quality Aloe Vera products in the Southern Hemisphere. With fully vertically integrated company, which means full control over all aspects of the operation, from planting in the farms to when the finished product. The company has a range of 30 packaged products under the ALOE WELLNESS AUSTRALIA brand including the Premium Aloe Vera juices (drinking gels), therapeutics, cosmetics, and beauty products in addition to a complete range of Aloe Vera raw materials. The company has high ethical standards and a strong commitment to provide customers with only the best quality products. The company has developed its private label and R&D services, and is certified by a license from the Therapeutic Goods Administration of Australia (TGA) and operate under the world standard of Good Manufacturing Practices (GMP). The processing facilities are certified organic by BFA (No. P479). Quality standards are maintained at a high level; once the leaf arrive at the processing plant the production starts. After an initial inspection the leaf are sent through a 7-stage cleansing and preparation process. Once the pure gel is extracted from the leaf it is stabilized and pasteurized, before being bottled or formulated for further processing. Processing technicians monitor the operation from start to finish and tests are conducted at several stages throughout the process.

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6.2 Certification - Non-physical value addition

Certification provides non-physical value addition, and serves more purposes than control of compliance alone. The certificate communicates to the consumer that certain standards have been met in the production and provides buyer confidence in the supply chain. Certification therefore is a useful tool in building partnerships along complex and international supply chains.

The assessment of sustainability threshold for wild harvested plant products, according to certification protocols, and the organisation and structuring of the producer groups and the education of the wild harvesters as to the criteria of a sustainable commercial operation, is a core criterion. The majority of the supply will be sources from the sustainable wild harvest of indigenous plant products.

6.2.1 Organic With the growing market for organic products, many countries have developed national organic regulations to be able to protect producers and consumers against misleading organic claims. Certification provide transparency and traceability, therefore all parts of the chain, from the small producer to the consumer must be recorded and operated to international approved certification standards. Also all processing equipment and storage facilities must be included in the inspection process. An organic certificate relates to the land on which the product is grown or harvested and the system involved. For small scale producers to be economically certified an internal control system must be developed and managed, as mentioned below.

Organic certification provides non-physical value addition, and serves more purposes than control of compliance alone. The certificate communicates to the consumer that certain standards have been met in the production and provides buyer confidence in the supply chain. Certification therefore is a useful tool in building partnerships along complex international supply chains.

The assessment of sustainability threshold for wild harvested plant products, according to certification protocols, and the organisation and structuring of the producer groups and the education of the wild harvesters as to the criteria of a sustainable commercial operation, is a core criterion. The majority of the supply will be sources from the sustainable wild harvest of indigenous plant products.

In most importing countries description of goods as organic requires formal certification in accordance with legislation. Import regulations for organic produce apply in most markets as well - for example, an EU importer must be both certified by an accredited certification body and also registered with the national organisation responsible for organic legislation. The importer must then obtain a permit covering each product to be imported from each source, unless the country of origin and the relevant certification has been accepted by the EU as equivalent - achieved by few developing countries. Exporters should confirm with their customers that the necessary registrations are in place before shipment takes place. Details of specific regulations affecting organic imports into target markets can generally be obtained from the importer’s organic certification body.

In the European Union the basic regulations on organic food products are set out in Council Regulation (EEC) No. 2092/91. The administration and enforcement of organic standards are carried out by national authorities. A consolidated version of the 1991 Regulation and is at www.organicts.com/organic_info/certification/links/index.html . This regulation and subsequent amendments establish the main principles for organic production at farm level through to the end buyer (the consumer) www.ifoam.org www.soilassociation.org In the United States, the National Organic Program (NOP) came into effect in October 2002, and is administered by the US Department of Agriculture. More detailed information on the NOP is available at the USDA NOP web site www.ams.usda.gov/nop Organic regulations for plant based products took effect in Japan in 2001 Organic products must carry the mark of the Japanese Agricultural Standard (JAS). In general, the regulations require the registration of certification bodies, as well as the certification of operators by registered certification bodies based on the technical criteria for certification. For details see www.maff.go.jp

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6.2.2 Fair trade : In the international market, fair-trade is an identified sector and products labels fair-trade often receive price premiums and, in general, higher demand. The fair trade initiatives try to provide better market access and better trading conditions to small farmers. This includes a price premium for producers to be invested in social and environmental improvements.

The Fairtrade Labelling Organisation (FLO) is becoming the most well known, marketed and promoted international fair-trade label in the global market. FLO mainly catering for food product labelling. It must be emphasized that essential oils are not current covered by FLO certification, however herbs and spices are covered. Some certification agencies have arrangements for fair trade and organic inspections to be carried out together. An example of this concept is BioEquitable in France (with fair trade inspections combined with Ecocert organic certification).

Fair-trade certification involves the training of the participating companies and producer associations, the lead farms in the communities and field staff in the necessary standards and protocols. Traidcraft and Max Havelier are examples of private fair-trade certifiers.

6.2.3 Wild Harvest Standards. The development of sustainable wild harvest standards is imperative where products are sourced from indigenous resources. Sustainable wild harvest standards are devised to ensure that wild production comes from a clearly defined area and using methods that meet FSC international standards criteria. The Forest Stewardship Council (FSC) is a body that has been setup to certify organic, sustainably produced, timber. Certification criteria for non-timber forest products being part of the forest have developed out of that. Their standards are therefore generic and for forestry certification – initially for timber. The non- timber forest component to these standards has been developed over the last five years. Other labels also exist which covers sustainable wild harvest of products. The Rain Forest Alliance in Southern America have their own labeling for sustainable wild harvest. EcoCert has been active already in Africa Region, such as in Zambia, in the certification of wild harvested products, but under ISO65 organic standards. Soil Association also provides certification of sustainably wild harvested honey in Zambia under the ISO65 organic certification system, and working in these honey areas for almost 15 years ago.

Woodmark, UK, is an independent company that works as an inspection and certification agent for FSC (Forestry Stewardship Council), and act on behalf of FSC to train producers in sustainable wild harvest and to prepare them for certification. Their separate company, Ecosylva provides inspection. Sustainable wild harvest certification can be developed to dovetail with organic certification. There is a project developing to provide certification of organic and sustainable wild harvest and achieve separate product labels through collaboration with Woodmark and the Soil Association. This system would utilize the same ICS, the same documentation, but add on the other measures that sustainable wild harvest standards would require over the standard organic certification criteria.

In Namibia there is an NGO called Pytotrade that has been working with SanProta which has set up a project for sustainably harvested wild devil’s claw. It has now exporting about 1,000 Tonnes of devil’s claw, worth 2.7 million Euro; it involves about 400 000 hectares. This has been certified for 4 years by the Soil Association using their own non-timber forest products standards. See Annex 11.

6.2.4 Developing the Internal Control Systems for Producer Group Certification . The development of internal control systems is necessary to fulfil the international requirements for the organic certification of producer groups. ICS also minimises the overhead costs of certification and provides a traceability system within the supply chain. Training in the setting up and management of Internal Control Systems for Producer Group Certification is required by most of the selected companies and associations. This same structure (ICS) can also be used for other certification systems such as for fair-trade and sustainable wild harvest. (i) Producer group development: • Initial assessment for suitability for certification and realistic export potential • Training of extension staff and lead farmers in the organic production and processing techniques/methodologies

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• Demonstrations and field days • Development of demonstration sites within each community/village and the producer group (in walking or cycling distance of all members). • Nomination of internal structure to the group, with co-ordinator, and farm group managers (within each geographical area or village within the producer group). • Training of extension staff, producer group co-ordinator and lead farmers in organic certification and product development for the export marketplace • Product selection if required. Training in detailed production/processing techniques for the specific products concerned • Market contact established for the potential supply.

(ii) Preparation for certification: • Training of extension staff, producer group co-ordinator and lead farmers (group managers) in the set up and management of internal control systems. • Intensive training of extensionists and government field officers as support agents if required. • Extension staff and lead farmers (group managers) train their farmer groups (referred to as ‘pod groups’) in all techniques of production, processing, and certification criteria. • Regular assessment (at least 4-5 times prior to first inspection) of progress by a ‘Training and Extension Manager’, if available, and additional group trainings inserted as required. • Reporting structure identified and fully in place. The group manager, (if not literate but the most suitable and respected person for this post, then he/she works with a fully literate secretary) operating to collect information for each farmer/wild harvester member at village level (within the ‘identified group’) working with an extensionist (know as the ‘supervisor’, often working with the support of the Government field officer) collects information and checks each farmer. The extensionist will conduct this activity with several other groups in his working area (numbers of groups he works with depends on the size of the area concerned and numbers within each pod group. Maximum group size is 50 farmers/extensionist).

(iii ) Pre-certification activities: • Preparation for first certification completed – accurate mapping of area concerned, and of each of the farms/holdings, field histories, forward cropping program, (crops, yields, harvest dates etc) and a tight, transparent and traceable system in place to ensure the accurate translation of information from the field to the office for the total membership of the producer association. • Information then collated in a recommended recording system by the producer groups co-ordinator. • Preparation for the inspection round of several (usually up to 18) producer groups to be inspected one after the other. Transport and accommodation arranged to allow for time and motion efficient inspections (cutting down on overheads of time). • Inspection reporting is supported by the Association’s or company’s management personnel to ensure that the information is well understood by the inspector and the producer. • Follow-up after the inspection to help the producer group managers and co-ordinators understand the certification decision document and to put in place any of the recommendations or to address the non compliance items by the specified deadlines. • Training up-dates continue in the year. The procedure starts again before the next inspection.

(iv) Internal Control Systems Training Course : Once the well structured producer groups have been selected for organic certification, a 3 day training course is advised to develop the management required for the groups to set up and operate an internal control system. 1. To build technical knowledge of the field supervisors and field officers to understand the ICS 2. To generate principles of practice on how the ICS in the context of the region, the products and the producer association/co-operative structure. The training course should target the following: Overall Manager, ICS Field supervisors / extensionists, Producer group ICS data officers (existing producer group secretaries, Producer group representatives (existing producer group chairmen), Purchasing officers, Receiving officers, and Government staff.

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6.3 Product Design

6.3.1 Taking aloe raw materials to a commercial retail product There is a great deal of confusion regarding Aloe products. The main aspect is regarding the viscosity of aloe products. Consumers expect Aloe Juice to look and feel like Aloe Jelly, but in reality the jelly like product is made by adding a thickener. The most common thickening agent is a combination of Carbomer (a.k.a. Carbopol) and TEA (Thiethanolamine); however there are a few on the market that use a gum like Xanthan or Guar Gum. Carbomer and TEA chemicals that work in conjunction to create a synergetic force that both thickens and changes the surface tension of any water based product, thus creating a jelly. The aloe gel fillet reduces to a liquid when filtered and pulped.

Large-scale commercial manufacturing is mainly carried out in South Africa, US and Australia. The retailed Aloe Juice is created by reconstituting freeze dried or spray dried aloe powder with deionized water to a single strength equivalency (SSE). Once the Aloe Powder is reconstituted the finished product requires preservatives in order to remain stable. For cosmetic purposes, aloe must first be preserved. If you make a product using this unpreserved aloe the product becomes unstable, despite preservatives added to the finished product! You must start the formulas with stable ingredients. The only way around using preserved Aloe Juice is to formulate using Aloe Powder, Aloe Oil or Aloe Butter and then use a preserve such as Potassium Sorbate, plus Citric Acid to adjust the pH, as the safest and gentlest method.

Aloe Oil and Aloe Butter are created when the constituents of aloe are extracted into a carrier oil. The aloe plant does not naturally create an oil or butter. Using Aloe Oil or Aloe Butter in a formula is a great alternative to Aloe Juice because the butter and oil do not require preservatives. When creating a product that does not have a water phase, formulating with Aloe Oil and Aloe Butter allows aloe to be added simply to your product. Aloe Butter is created by extracting aloe into coconut oil. Aloe Oil is created by extracting aloe into soy bean oil with added vitamin E to enhance the shelf life and antioxidant properties of the finished product.

6.3.2 Formulation and processing quality protocols: In Kenya there is considerable work that needs to be invested in product formulation. Most marketed aloe products are not competitive with imported aloe products in their effectiveness and attractiveness as a bodycare and healthcare product. The formulations are mostly not well researched, unstable (shortening the shelf life) and do not act effectively. Most have an unpleasant smell (of cheap soap or plant based odours) and textures. The formulations are also inconsistent and, in some case, are not safe to use (e.g too much sodium hydroxide and other damaging chemicals). The minute level of aloe commonly used in these formulations also belie their health product labelling / promotion, and has little impact on driving forward incentive lead conservation of the indigenous aloe species and its habitat.

There is also much to be gained from the ‘lessons learnt’ in neighbouring countries. Due to increasing publicity and demand, many companies moved into the manufacturing of aloe based products. Unfortunately, many of these products do not contain much of the plant’s original benefits, as a result of over-processing. Some claim to have removed the disagreeable taste of the plant’s juice, for example, but in doing so they develop a product with low active ingredients, and/or have less than 10-15 percent aloe content at best. Processing aloe to avoid the loss of essential vitamins, minerals and other active constituents is very important to the efficacy of aloe based products.

6.3.3 Product Branding Product branding is the non-physical value addition to a product that must be professionally and innovatively embraced in order to maximise on market opportunity and competitive advantage. Product branding includes the ‘story line’, the ‘feel good factor’ - the image that you are selling with the physical product. An example of branding is illustrated by Ikhala, based in South Africa. This company has pitched its marketing at a specific niche, its emotive ‘messages’ enhances its claims. See; www.ikhala.co.za

The focus of product branding is to generate product/brand lloyalty amongst the consuming public and to increase market share. In the national market, aloe health and beauty products need to be target consumer perception of aloe product as having better qualities than other available health and beauty

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products particularly the imported brands. As the health and beauty market sub-sector is relatively young, consumer’s perception is largely subjective and is defined by consumer’s orientation that is defined by values, beliefs, needs, experience, environment, etc. Kenyan aloe health and bodycare products will have more appeal to consumers when the health properties of aloe are specifically promoted.

6.3.4 Packaging A major factor of product competition is its customer appeal. Unfortunately the vast majority of aloe products retailed in Kenya are both poorly promoted and poorly packaged. The level of competition presented by imported aloe products, attractively presented and pleasant and effective to use, means that this area has to be addressed in order to enter and hold a position in the middle and upper income bracket of the national bodycare – healthcare market. In addition, these products have to compete with conventional mainstream health and beauty products, now also increasingly using aloe in their formulations and promotional materials. Clear packaging, promotional and marketing strategies are as fundamental to natural products businesses as they are to all commercial operations.

Examples of aloe products retailed in Kenya

The basic legal and quality requirements for packaging are; KBS packaging compliance, tamper proof lids, certification, batch sampling and quality control (pref HACCP), ingredient lists, bar code, clear product pricing The characteristics of the aloe products assessed under the Coastal Aloe Business Study identified that most aloe products are marketed in a very compromising manner (incorrect spelling/grammar, lack of clear labelling, insufficient or inaccurate ingredient listing, no safety seal, poor label design and affixment, poor quality containers and non standard product package size). The cost of packaging ranges from Ksh5 for 25gm at over 2000 run of food grade plastic pots with screw lids, to Ksh9 for 200ml food grade plastic bottles with lids; Ksh10 for 50ml glass bottle with screw metal (plastic lined) lids; and 15 cents for 100ml glass bottle with screw metal (plastic lined) lids and Ksh22 for 500ml glass bottle. Labels are around Ksh9-12 per label for 20,000 labels; and the security seals are Ksh5/seal for 20,000 seals. Prices as quoted by suppliers in Kenya

6.3.5 Service Providers There are a number of service producers offering services directly to aloe producers and processors, who also create important linkages between producers and processors, such as the Kenya Bureau of Standards, Kenya Industrial Property Institute, Micro-finance institutions, marketing institutions, and buyers of aloe products. The most effective capacity building strategy for producer groups and bio- enterprises focused on aloe commercialisation is to foster commitment amongst all parties to conservation principals (sustainability of the species), business integrity and credibility. Lobbying and advocacy mechanism need to be developed to assist with the ratification of aloe sub-sector guidelines. This will then greatly enhance the competitiveness of the aloe industry in Kenya. The ABD workshop proceedings in the Coastal Aloe Business Report record the range of relevant service providers in Kenya and their area of activity. ABD promotes the need to standardise aloe-orientated services, and of forming a curriculum or training module for aloe micro & small enterprises. The service providers could also assist this sub-sector to develop quality assurance system and accredited certification scheme under the KEBS, with the promotion of the associated quality mark, as well as facilitating a national level marketing campaign to promote aloe healthcare and bodycare products.

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7. Business Development

7.1 Basic criteria for commercial bio-enterprise development

7.1.1 Competitive advantage: As previously discussed, the main factors of competing in the international market are the price and the quality. Therefore, in order to successfully serve a market it is vital to first ensure that there is competitive advantage of the selected products. Bodycare products must be well formulated, packaged and price appropriately to compete with imported aloe products of a similar kind in the national and regional market.

There is a strong competitive advantage for the production of a range of herbal supplements in the national and regional market if quality endorsed (including reference to regular efficacy monitoring).

As the Laikipia is a unique and internationally revered location, and currently hosts growing tourist numbers and numerous educational programmes every year, the development of education-tourism and eco-tourism linked to an initiative.

7.1.2 Economies of scale In order to enter the marketplace producers need to first identify the initial minimum supply levels. It is then necessary to achieve the economies of scale that maintain the market position / open up greater markets, to ensure equipment is efficiently utilised and down time is minimised, and the overhead, loan servicing and investment requirements of operating a developing business are covered by adequate turnover.

The slow progress of aloe domestication/plantations will mean that if aloe is only to harness from domesticated/cultivated stock then the aloe scale up initiative will be protracted and the opportunity for the aloe producers entering wider markets with value added aloe products would be limited to local market for some time. The development of sustainable wild harvest protocols for the identified high aloe population areas (such as in Mutara, Maundi in Mere, Pesi, Kiawara, Thome, Matanya, Kiamariga), endorsed by the KWS, and extended to incorporation under the national the licensing agreement, would allow sufficient volumes of raw materials and throughput to operate a medium scale factory and a range of value added products for the national market (with capacity to scale up further to serve regional and export markets).

7.1.3 Sustaining the market position For the producer to reach and maintain a position in wider (national and regional) markets then to gain a foothold in the international market, the two major factors are consistent quality and consistent quantity. Both are equally important. Africa has gained a name in the marketplace for being ‘here today and gone tomorrow’, and none more so than in the natural product sector. In order to meet the economy of scale to service wider markets the producers, both large and small, and buyers/traders need to work in co- operation.

It is vital for commercial operators and the associated producer groups to gain sufficient market knowledge before undertaking production. Thus, ensuring that adequate market information is available to the producer co-operatives/enterprises, to include relevant quality and market specifications is an important role for the programme. The fostering of long term trading relationships is all highly important for the bio-enterprise to ensure the viability of the investment (costs recovery over successive seasons) and sufficient annual profits to continue to build and expand the enterprises. The buyer also needs to secure the quantity and quality of raw or semi-processed material supply; his business is dependant and meeting the orders of the manufactures or retailers. Therefore the establishment of long term trading relationships is both advantageous to the producer and the buyer.

There are international aloe companies who may be interested in provide a good working relationship with aloe producers in Laikipia – or investing in a collective aloe enterprise and factory.

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7.1.4 Producer group capacity

Organizational and management ability: A careful assessment must be made of the organizational and management ability of the producer group/association/co-operative and commercial operator. The majority of the project effort will need to be placed in developing well organised, structured and technically competent groups/co-operatives, and then in the relevant technical skills development. This input is not technically demanding, but required significant manpower and time. A programme of training is required to enable the producers to operate efficiently, sustainably and viably to achieve market entry and sustain the business, and for replicable models to emerge within the programme term.

The piloting phase will enable the programme to make a grant to the set up of the operations and then later assist the co-operative in seeking affordable loans for the expansion of these pilots into fully commercial enterprises. Strategic grants and loans can be also provided to the producers groups as a participatory activity, carried out in conjunction with the commercial partner.

The geographical logistics will also need to be carefully considered when selecting appropriate producer groups and organising infrastructure, for example; the distance between commercial entrepreneurs and small grower group operation (transport, extension, management considerations).

Capital investment and risk bearing. If community owned aloe bio-enterprises are developed to make an impact on/change in the utilization of the natural resources in the target region within a reasonable time period (i.e 5 years) it is necessary that the economic huddles are crossed in a manner that does not distort or greatly compromise the future independence of the enterprise. This is one of the most difficult balances in development to understand and to achieve. Even when structured as producer groups, in practical terms, the rural communities rarely have the capacity to bear the risk and raise the necessary capital.

External grant or loan assistance is therefore required to reduce the risk bearing sufficiently to enable commercial viability from the one-set. The business planning should be undertaken with the involvement of the producer associations so that the business requirements (investment and breakeven points) are well understood by all parties, including the level risk involved.

Ownership: If this is achieved before the development partners are introduced there is then a strong chance that the community will full own and drive the enterprise, accept the responsibility of the investment and of further requirements and risk bearing as the operation grows.

Phased development: In order to develop this initiative relatively quickly it is advised that the central processing centre is developed for serving national markets, at the same time as the participating producer groups at the community level are facilitated and trained in the simple processing techniques (based at the depot centres) for small scale manufacturing of bodycare products for local markets.

As very little inputs are requires for the establishment and management of the crop - there is a clear indication that the labour to harvest the product is the main resource input, along with the equipment required to process, packs and transport the crop.

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There is room for a viable profit margin provided that the extracted aloe product meets international standards, certification is gained and appropriate markets are targeted.

For the manual processing of value added products for the local market, with an output of less than 300kg of product a month, only low cost processing equipment and infrastructure is required. Capital requirements approx: Euros 7,000 -10,000

For developing a range of retail products for national and regional markets, with an output capacity of 10 tonnes of finish goods/month, the capital needed will be more in the region of Euros 120,000-180,000

For developing a range of retail products for export markets, with an output capacity of 50 tonnes of finish goods/month, a significantly higher capital is needed; Euros 450,000-500,000

7.2 Infrastructure and Equipment

7.2.1 Depot centres The construction of depot centres in key locations to serve the product groups clusters (focal areas of production/sustainable wild harvesting) is fundamental to harnessing the opportunity to develop any aloe product over and above crude aloe gum. The need to stabilise the aloe extracts is imperative within hours of harvesting the leaves. The leaves should be harvested into a suitable basket to allow draining of the sap away from contact with the juice/gel leave. The depot centre infrastructure and equipment should be developed for each of, or at least two of, the following; dried (sap drained) whole leave, gel extract (immediately stabilised with a suitable preservative such as sodium benzoate) and the sap extract.

7.2.2 Construction of the Bio-enterprise Central Processing Centre From the evaluation process, it is clear that a central processing facility will assist producers to meet the market demands for sustained quality and supply; i.e to ensure correct and consistent product handling, final grading, high level maintenance of quality and hygiene standards, processing and packaging and storage conditions. It will also serve to consolidate consignments and to serve the market outlets effectively, transparently and commercially competently. Other bio-enterprise could also utilise the same centre and share the operating overhead costs of operating the centre and its facilities. The centre can also act as a commercial income generating entity in itself by providing demonstration, training and as an eco-tourism attraction (including a natural products retail outlet – e.g Africa Rift Valley Products).

7.2.3 Harvesting and Processing Equipment Semi-processing of the plant materials for sale in local and national markets will involve primarily the following:

Harvesting : Food grade plastic baskets with inner mesh basket drying and milling. Modified solar driers can be simply constructed (using thermos with clear drip space below.

Depot Centres : Solar drying equipment (with solenoid, thermostat, fan and baffles). Roller press. Food grade storage drums for the separated sap. Food grade plastic storage drums for the separated gel/juice (preservative will be added to stabilise the liquid, i.e sodium benzoate).

Central Processing Centre:

Option A: Small-scale processing factory operating to national standards, using equipment largely constructed in Kenya

Equipment: A commercial maize mill with variable sieve sizes for grinding of the dried plant materials, small secondary plate grinder, double jacketed heating unit, centrifuge, sieves, Full processing of the dried and ground plant products into retail packed products (as body and hair care creams, oils, scrubs etc) can then been made using stainless steel commercial equipment such as mixers, blending vats, etc… These can be purchased in Nairobi imported new or second hand, or

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constructed. The packaging materials are the main item that needs careful evaluation regarding sourcing appropriate type, at a viable cost and reliable supply.

Alternatively, final processing and distribution within Kenya and regional markets can be made through sale to or partnership with a national commercial partner such as Pure Health or Universal Trading, a pharmaceutical company in Nairobi.

Example suppliers of aloe processing equipment in Kenya (Extract from the Coastal Aloe Business Report, ABD-DANIDA)

Service Site Service category Contact(s) Telephone/Email/Postbox Provider • Design & manufacture Benson M. Mahogo Benmah Kariobangi of machinery & 0722-237869 Engineering Light Industries equipment for extraction Rachael Warucu 020-792865 Services Ltd Komarock of oil seeds, distillation 0733-404468 Road, of essential oils, herbal Nairobi extraction and products Benmah • Training on use of [email protected] equipment P.O. Box 74364 Nairobi • Training on micro- processing Asami Limited Downtown Retails & Stocks Manager 0722-324945 (ASL) Nairobi, Tom • Electric cup sealers 020- 253464 Mboya & River • Safety sealing air-blow 020- 253442 Road for bottles [email protected] Roundabout, • Polythene impulse m Next to Khodja sealer Box 32910-00600, Nairobi Mosque ESDC, Design & manufacture of Eng. J.K. Kamau 0722-704410 Kenya South C machinery A.K. Koske 0733-952972 Industrial Branch, Nairobi • Aloe extractor D.O. Okach 020-603842/603493/609440 Research • Soap plodding machine C.M. Wanangwe 020-602817 (ESDC Direct Development • Bottle cupping machine Line) Institute • Volumetric filler (KIRDI)

Option B: Medium scale processing factory equipped and operating to international standards

Equipment costs for a small factory (excluding installation, fittings, infrastructure) are as follows: a) to process aloe juice - approx USD 150,000 to 350,000 b) to obtain concentrated aloe sap – approx USD 120,000 to USD 200,000, dependant on the actual volume and selected technology c) to obtain freeze dried – approx USD 1 million to 1.5 million. Spray dried - USD 200,000 to 500,000 d) to manufacture bodycare products - approx USD 60,000 to 90,000

Potential suppliers of aloe processing equipment suitable to import to Kenya For example, please see Annex 6 Aloe Trade America.

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7.3 Production and running costs

7.3.1 Product materials (i)The purchase of plant materials from the producers of this and related bio-enterprises, such as; avocado oil/pawpaw oil/ cape chestnut oil/borage oil, mango nut butter, nettle, comfrey, beeswax, honey, henna, fullers earth, essential oils for the formulations.

(ii) The requirement for other non indigenous product ingredients which will include; borax (emulsifier), benzion (preservative – naturally occurring such as in cranberry juice), iodine/cidar vinegar, alcohol (pure from sugar cane industry).

7.3.2 Processing running costs, such as fuel, labour, transport etc. will also need to be carefully budgeted

7.3.3 Packaging and promotional materials. Jars, lids, labels, security seals. Website, broachers, posters, media articles and ads, market trials.

7.3.4 Trade finance Lack of trade finance and capital hold back most groups from developing the business and sustaining product supply. Trade finance and operating capital can be achieved through partnerships with ethical financial investors and ‘Green Banks’ and also commercial partners. Joint applications with commercial partners for trade support schemes such as the Dutch PSOM and the German PPP, or the EU CDE- ProInvest etc can also provide a route to trade finance.

7.4. Value Chain Development

7.4.1 Management and organisation Management and organisational capacity are fundamental aspects for successfully achieving the scaling up of aloe based enterprises in Laikipia; this also required adequate financing and a third party involvement to ensure good practice and transparency. Overseeing the conservation/ ecological perspectives of wild harvesting and the source of material for domestication is also an important role and one that can be governed through a management board comprising the right mix of parties with conservation and ethical trade agendas from the pool of shareholders and advisors

7.4.2 Product flow Once the producer groups harvest the plant materials and primary processing, as explained above, is conducted at the depot centres, the aloe can then be developed at two levels; a) processing at the community level for sale to local market outlets, b) the dried and extracted raw material is sent to the central processing centre, where a full range of bodycare and healthcare products will then be made at for national level market outlets (and in the second phase small export consignments for niche markets). See the product flow summary below;

Harvesting fresh material – in specifically designed baskets and carried in to the depot centres ▼ Depot centre – graded, weighed, producer paid. Drying whole leaf / extract gel, stabilise and storage. Transport bulk to the CPC. Alternatively, the extracts can be simple processing into bodycare products for local markets ▼ Central producing centre – grading, milling, sieving and cleaning, mixing etc, and final processing and formulation ▼ Market – (i) retail packed, transported and sold to national market outlets (ii) commercial partner collects from central processing centre. Payment through bank account. Income to producers placed in each micro-account

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Equipping the processing facilities at the central processing centre and training of the processing personnel should take place in the first quarter of the initiative

There will be need for a purchasing agreement between the bio-enterprise for ingredient materials, i.e between the essential oils and cold pressed oils bio-enterprise and the bodycare products bio-enterprise for inclusion of these materials in the bodycare product formulations.

The participating producer groups at the community level are facilitated and trained in the simple processing techniques (based at the depot centres) for small scale manufacturing of bodycare products for local markets.

The central processing centre is also constructed and equipped in the first phase, to cater for this and other related bio/NTFP-enterprise, thus enabling greater impact of this initiative in a short time period.

7.4.3 Developing producer group capacity There are already some groups established and operating to produce bodycare products from aloe extracts. There are two small commercial companies producing and processing raw materials, selling high quality, hand made, retail packed bodycare products to national outlets (lodges, health product and tourist orientated shops in Nairobi, etc). There is currently a low level of community involvement in these operations, and in order to stimulate significant numbers of community members to participate in this bio- enterprise type it will be necessary to take the following steps: (i) Organise an exploratory visit for the interested groups to meet other producer groups who are successfully processing plant materials and retailing bodycare products. (ii) Training of the producer groups in the domestication/plantation and sustainable harvesting techniques according to the defined protocols . (iii) For processing at the community level, the producer groups will require training and financial assistance to purchase the basic equipment and construct the simple processing rooms. Training of the producer groups will be necessary in the basic formulation and simple production of small range of bodycare products at the community level

7.4.4 Technical training of the trainers, extension and central processing staff The majority of the project effort will need to be placed in developing well organised, structured and technically competent groups/co-operatives, and then in the relevant technical shills development. This input is not technically demanding, but required significant man-power and time. A programme of training is required to enable the producers to operate efficiently, sustainably and viably to achieve market entry and sustain the business, and for replicable models to emerge. Using the co-operative structure and carefully evolving it to meet the commercial demands and market should be achievable. The piloting phase will enable the programme to make a grant to the set up of the operations and then later assist the co-operative in seeking affordable loans for the expansion of these pilots into fully commercial enterprises . There is adequate capacity within Kenya to provide training in sustainable wild harvest, domestication and cultivation of aloe, technical production and processing of aloe body/healthcare products. This skills development will require on-going training input and guidance over at least the first 5 years. Expert advice can be readily sourced from specialists for product formulations (SW contacts).

7.4.5 Business capacity building Assistance will be required to enable the producers to operate efficiently, sustainably and viably to achieve market entry as agri-product businesses. On-going training in organisational structuring and operational and business management will be crucial to the success of these enterprises. If successful, replicable models are to be achieved it is also clear that there is a need to carefully evaluate and select the most ready and able producer groups with which to work in developing commercial natural products enterprise.

7.4.6 Supply chain development: Through a wide range of activities, including market information systems, product research and development, trade promotion, direct technical support to producers and

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linkages to progressive fair-trade markets, a future initiative can assist producers to successfully access and sustain their participation in the national, regional and global market for natural products. The main focus is to develop business partnerships between rural producers and buyers. Suppliers must be organised as producer groups under a strong structural framework, develop reliable and transparent supply chains.

Supply chain efficiency: These steps should result in the sound functioning of the market-lead supply chain for smallholder farmers and wild harvesters:

1. Increased access for smallholder farmer’s to relevant technologies and market information through training, capacity building and the creation of marketplaces with requisite equipment and Internet access. 2. Increased ability of smallholder farmers to organise themselves into effective Producer Associations capable of complex marketing and distribution operations. 3. Improved access to credit by smallholder farmers through revolving fund mechanisms tied to the natural product enterprises. 4. Developing the necessary guarantee systems to gain organic certification, fair-trade or FSC (Forestry Stewardship Council) certification; thus enabling access to incentives resulting from these internationally accredited certification schemes. 5. Facilitation of public private sector partnerships 6. Value addition of the natural products by setting up the necessary infrastructure and operations for product processing and packaging; 7. Establish product storage and handling systems and distribution networks; 8. Clear identification of suitable markets and market niches for the specific product types 9. Economies of scale reached through a careful and supported scaling-up process; 10. Viable and sustainable sales of the natural products reached and maintained through strong extension support to the producers, and regular market interface by processors and traders.

7.5. Marketing

7.5.1 Core product attributes The many Health benefits/claims, including the treatment of the many symptoms of HIV-AIDS, and to treat other common major illnesses such as diabetes, stomach ulcers, bowel malfunction, skin diseases and certain types of cancer (particularly leukemia).

7.5.2 Pricing policy National Markets: The price will be more determined through negotiation with the identified companies, it will be based on replacement cost of existing supply. Once market trails have been completed, the information must be fed back to the product development activities. The products should be re-designed or defined as information suggests. Re-trialing in the market will then be necessary until the products are designed and formulated at their most attractive to the target market. Agents can be engaged to assist this process (such as The Olive Marketing PLC, Nairobi). Once order sizes and prices have been agreed these must be adhered to, therefore it is important that the enterprise feasibility captures all prior aspects of ingredient availability cost of supply, cost and scale of processing, cost and scale of packaging and transportation, time framed stages of enterprise development and gearing, cost of servicing the financial loans or commitments etc… The guide product retail prices for the product range can be then more reliably determined for negotiation with the buyers/retailers.

International market: Guide priced are available within the industry, these bench mark price can be negotiated but price setting needs to be close to these established guides. However sale is made through a commercial partnership the pricing will be determined by the risk and ownership factors (at what point the essential oil or material is purchased, who owns the equipment and infrastructure, etc).

7.5.3 ‘Marketing the Story’. To further increase competitive advantage, an interesting and provocative profile of the production, beneficiaries and incomes generation story should be developed as a central theme to the promotion and marketing approach, and attractively presented in the publicity and marketing

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materials. This could include aspects of community trade/fairtrade (fairtrade certification), sustainable harvest, (and organic certification) the positive characteristics of production and processing methodologies that enable the involvement of women and the less advantaged members of rural communities, etc. A website marketing facility will provide a significant global facility for promoting the’ feel good factor’ of the nature of this business approach.

7.5.4 Marketing pitches for possible product for the national and regional market :

Soaps & shower gel Luxurious lather. Refreshed and clean

Cleansers Eliminating environmental toxins. Formulated without detergents, sulphates or synthetic preservatives. Relies on nothing other than nature. Hand crafted with the finest ingredients. Gently massage and remove with warm water… Facial lotions Nurturing and nourishing

Facial toners Also contain natural plant hormones affecting both firming and softening, reducing the appearance of fine wrinkles

Hand and body lotions Leaving skin sensuous, smooth and soft. Natural and therapeutic. Whole body effect, inside and outside, as the therapeutic effect of the selected essential oils absorb into the skin has a deeper action on repairing and renewing the skin tissue.

7.5.5 Promotional tools : Tools: Website, media, product promotion within retail outlets. Also self promotion as an attractively packaged and presented product, word of month as an effective high quality well formulated product

Activities: Product branding, story line development, marketing campaign to include endorsement by national sports stars by sponsoring charity runs and games etc… Interaction with the tourist service providers, lodges etc, encouragement to use and endorse the products to visiting tourists – using the product branding and story

7.5.6 Example of potential commercial partners: International Market: Wild living East Africa (Kenya / UK) – Rob Barnett, Organic Partners UK – Mike Brooks, Earthblends Ltd - Darryn Payne, National Market: Universal Ltd and Pure Health PLC, Kenya

7.5.7 Market research Major brokers and traders publish regular market reports to advise their customers about supply, demand and price developments on websites. Regular information on prices and market trends. • Price information on spices and herbs can be obtained from: • ITC - International Trade Centre Market News - www.intracen.org/mds • The Public Ledger Weekly publication on - www.public-ledger.com • CBI, Netherlands www.cbi.nl • FiBL Helga Will er and Minou Yussefi (Eds.) The World of Organic Agriculture Statistics and Emerging Trends 2004 www.soel.de/inhalte/publikationen/s/s_74.pdf Also from: Food and Agriculture Organization of the United Nations (FAO) Organic Agriculture, Environment and Food Security, 2003 www.fao.org/organicag/ Organic Trade Services www.organicts.com Organic market forum with buyer and seller information, news and statistics. Related sites: www.planetaorganico.com (Brazil) Greentrade www.greentrade.net . Organic trade website linked with Organic Trade Services.

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Food Ingredients www.foodingredientsonline.com Market information. International Food Ingredients www.ifi-online.com

7.5.8 Relevant international trade fairs. Excellent opportunity to gain an indepth understanding of market trends, met potential buyers, evaluate new product designs, pricing development etc…The websites for suitable fairs are listed below: • BIOFACH Germany www.biofach.de • BIOFACH US www.nuernbergglobalfairs.com • BIOFACH Japan www.nuernbergglobalfairs.com • Natural products Expo( for US, Asia and European countries) www.naturalproducts.com

Nationals market surveys and consumer feedback questionnaires can be conducted by university students (as arranged through organizations such as KOAN over recent years).

8. Developing environmentally supportive bio-enterprise

8.1 Potential ecological impacts of developing bio-enterprises in Laikipia Natural resources have long played an important role in the livelihoods of rural people in the region; however, the environmental impacts of large-scale commercial harvesting of natural products can lead to unsustainable exploitation. Therefore a primary objective of supporting the development of natural products commercialisation is to promote better environmental management. Sustainable trade in natural resources creates an economic incentive for rural communities to actively engage in long term resource management.

Wild collection of natural plant materials has long been a serious commercial activity, and has expanded particularly in the last decade. These markets present real opportunities for rural small-holder farmers to access providing transport and processing centres are organised effectively and the desired quality can be reached and consistently maintained. The collection of these indigenous plant material present a unique means to develop a viable enterprises for remote rural communities, utilising the existing natural resources through sustainable management and harvesting methods, and providing an incentive for the future welfare of these natural resources.

8.2 Sustainable production/wild harvest Sustainable production is a critical feature of all indigenous plant product development and it is of concern to the western market as well as the environmentalists. As previously identified, western societies are becoming more concerned about the environment and the quality of the products they consume, the trend in the marketplace shows that consumers are looking for a ’feel good factor’ to the product they buy, therefore traders and retailers are keen to promote the right image of their companies and their products.

Bio-enterprise development can provided significant potential for both the disadvantaged rural communities and the farming sector in Laikipia. The unique climatic conditions and access to a large biodiversity of indigenous plant materials sets Laikipia apart as a highly competitive supplier of natural and indigenous plant products, particularly when certified organic as sustainability produced or harvested.

8.3 Environmental and social welfare endorsing certification Certification (organic and FSC) with the development of an ICS (Internal Control System) provides a sound, well tried and tested structure for ensuring sustainability protocols are adapted and maintained by the participating producers/wild harvesters, at the same time as providing competitive advantage and price premiums in the international market.

The low processing overheads and labour cost also provides competitive advantage in global terms, fairtrade certification to ensure that social and economic exploitation does not occur and commercial partnerships are founded on ethical grounds not only protects the ethical integrity of these bio-enterprises but also provides greater market leverage and, often, price premiums.

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8.4 Summary of the rational based on environmental and economic considerations

Aloe Enterprise Development

Aloe-enterprise type Example plant Rational based on environmental and economic considerations Area of the Laikipia species Aloe sap for bitters / Aloe secundefolia • Available indigenous medicinal plant products that are established in the aloe gum Aloe turkanensis national, regional and international markets To be completed after … • Plentiful and diverse in Laikipia, and several sub-species can be used a detailed botanical • National licensing scheme to regulate the industry now in place study • For these species and others with commercial potential but readily destroyed through exploitation, supply from domestication rather than wild harvest should be ensured. • Developing sustainable wild harvest supply will mean the establishment and promotion of sustainable harvesting levels and protocols, and the enforcement through externally (Organic and FSC) and internally driven (ICS) certification and as part of the purchase criteria of the buyer/s. • Developing the processing of herbal supplements for the African market is not capitally intensive, and effective equipment can be inexpensive to purchase. Aloe gel for Aloe Lateritia / • African market for bodycare products is immense Bodycare products Gramanicola • Demand outstrips current supply for high quality natural ingredients based, To be completed after well formulated bodycare products a detailed botanical • Due to the widely known properties of aloe there is low risk attached to study developing range of herbal remedies processed as easy to take supplements and ointment/creams, retailed through local shops/clinics • Already successful bodycare product enterprises operating in Laikipia region • Community owned enterprises also exist in Laikipia, producing aloe based bodycare products for the local market. • Majority of ingredients can be sources and processed in Laikipia • Processing equipment is relatively inexpensive • This bio-enterprise type can operate in synergy with other bio-enterprise Aloe leaf powder All sps • Herbal supplements into established national and regional markets. • The quality parameters are easily controlled and met at the processing stage, To be completed after • Equipment is simple and not expensive to purchase/construct a detailed botanical Aloe tea bags All aloe types • Processing is also simple and inexpensive, study • The nationally based company, Meru Herbs, can provide a sound commercial partnership

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9. Business operating structures and management capacity

9.1 Structure of the business and financial management entity An analysis has been made of viable and feasibly options for developing a successful working structure for developing bio-enterprises in Laikipia, these are outlined below. The most suitable structure can be readily evaluated from these options; however financial consideration, the involvement and commitment of the LWF and other potential stakeholders are primary factors in determining the most appropriate approach.

9.1.1 Commercial bio-enterprise trade association The development of a commercial bio-enterprise trade association could be set up to comprise representatives of all the existing bio-enterprises in Laikipia, and provide a representative and co- ordinating functions, and operates promotion and marketing roles for the member bio-enterprises. It can promote bio-enterprise options to stimulate formation of new producer groups through publicity materials, demonstrations and training sessions provided by partner NGOs, such as SITE, KOAN, LAB and ICIPE. The trade association would be inexpensive to operate and would need only one full time co-ordinator to arrange and carry out the basic functions

9.1.2 Stakeholder owned bio-enterprise company A stakeholder owned bio-enterprise company could comprise a wide range of shareholders from small scale producer associations, existing bio-enterprises, commercial ranchers and the tourist lodges / ecotourism enterprises in Laikipia. The company could provide a stakeholder owned trading facility for the natural products. It can provide services such as product promotion, marketing, pre-market finance for seasonal purchases of its shareholders (through organised pre-agreement with the company stakeholders), create economies of scale by consolidating consignments of the bio-enterprises, soliciting funding for training and expert advisory input to product design and development etc, trade fair exhibitions/representation, arrange micro-finance facilities for its small scale members, act as an intermediate buyer for its members, conduct sales and distribute dividends to the stake holding members from premium returns (i.e from organic and fairtrade premiums). The stakeholder owned company can also own and run the central processing facility for the selected bio-enterprise previously discussed in earlier sections. The company will need to raise sufficient funding to at least employ an accountant, an executive manager, an operations manager and a secretary, and for its marketing and promotional activities, trade finance and micro-credit facility for its members. This could be achieved through trade support schemes (PSOM/PPP/CDE etc) but significant financial investment from the main stakeholders may still be required in order to fully operate the company in its first few years from inception. Eventually it will reach a position where it can operate effectively from profits, i.e by taking an operating levy (example; 1.5%) from all sales made through the company.

9.1.3 NGO with service providing facility A membership organisation with NGO status can be developed to provide a co-ordinating role and service provision to the bio-enterprise members. The services could include marketing and promotion (website, trade fairs, buyer missions etc), training and extension support, certification and business development support to the members. As an NGO it will need to solicit funding to support these activities and to expand its service provision to the members. It will need 4-5 management staff, an accountant and an extension team, vehicles and an office in order to operate effectively. This will cost at least Euros 250,000/yr if it includes adequate extension facilities and operating capacity.

9.1.4 Trust with separate commercial trading and charitable status In several situations across the world very successful commercial agi/bio-enterprises have been set up and operated through a Trust structure. The Trust can comprise two independent operating components; a separate commercial trading arm and a charitable status under which a service providing facility can be supported. This provides the Trust the opportunity to fund raise, operate grant supported services and facilities to its stakeholders through its NGO charitable status entity, and the full advantage of business and trade through its ownership of a full commercial PLC/LTD company. The Trust provides the potential

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to bring in charitable funding to assist its commercial operations and grant aid to support the provision of services to its small scale producer members through to the larger bio-enterprises. The commercial company arm has also invested some of its profits (this reducing tax burdens) into the NGO arm on the Trust to support the bio-enterprise development activities. A Trust structure such as this can also attract investment from ‘Green Banks’ / ethical investment companies such as Triodos, Rabobank and shared interest, and from commercial partners such as those preciously cited.

One design idea for the commercial trading is for an ethical investment company to provide >49% of the initial equity, this would be held in ‘trust’ for release to the small scale producers after the third year when they have achieved sufficient income from sale to buy the shares. The share price would be released at the initial value. In this way an interest free loan for the company is achieved at its initial development stage and affordable shared made available to the smallscale producers of the bio-enterprises at the point when they are able to purchase them. The remaining shares can then be purchased by major stakeholders (incl LWF) and also by commercial business partners.

A similar model, developed for small scale coffee producers in Bolivia, expanded to the degree that the shareholder producers owned shares in a chain of coffee shops/cafes in the US.

9.1.5 Legal framework To evaluate further the legal framework for a Trust structure illustrated above, a meeting was held with Rupert Watson, a Kenyan resident lawyer with strong conservation interest and experience in terms of legal frameworks for conservation initiatives, and also in the setting up and running of Trusts in Kenya. He confirmed that the proposed Trust structured with separate trading and charitable status can be set up as a legal entity in Kenya under the existing law. The Trust itself has charitable status and would finance the service providing facility to the producer associations, etc. The Trust can own a fully operative limited liability company that would develop its business operation independently to the Trust. Rupert Watson offer to provide advice and the legal work required in developing such a structure, and is willing to provide (free of charge) his professional input to a stakeholders forum/discussion on the way ahead.

9.1.6 Role of the Laikipia Wildlife Forum The role of LWF could take several different angles, and is more specifically dependant on the; (i) level of risk bearing, (ii) level of responsibility that is prepared to be taken (linked to the former), (iii) management capacity, and (iv) financial capacity (or ability to raise and manage new targeted funding). For further considerations please see Recommendations section 12.

9.2 Producer group structures and business operating capacity

9.2.1 Justification for Producer groups: The need for creating, or facilitating existing, producer groups is justified in the requirements for; (i) creating the economies of scale for basic traiing and skills development, (ii) maintaining sufficient supply to operate depot centres efficiently, and (iii) to secure a critical supply levels to viably operate an aloe processing factory/central processing centre, (iv) a requirement for developing organic certification systems and (v) for micro-credit facilities. It is important to stress this point, as individually producers can not easily access training, micro-credit, or afford transport, processing and certification to reach more attractive markets than those locally available for aloe sap/gum.

Once the need for a producer group structure is justified, it is necessary to acknowledge the need of the individual producers/harvesters to operate their own aloe businesses to optimum advantage. For example; these group members are each responsibly for the success of their own enterprises within the overall business enterprise of the group, they are also responsibly for the commercial success of the group. Developing a system which guarantees cash payment on delivery of their raw or semi-processed products (i.e at the depot centres), together with dividends earned through a shareholding in a collectively owned company (see ??) will provide the incentive to work together and to promote and protect the future of the processing and marketing company, but also gives the producer members independent control over the income he/she earns.

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9.2.2 Producer group selection In order to focus the activities where measurable results can be achieved products and producer associations have to be carefully selected. Selection criteria can be based on: • The track record, good governance etc.. • Potential for production, processing and marketing • Level of capital investment existing and required • Economies of scale can be achieved in a viable time-span • Organisational ability to develop and manage a supply chain to reliably serve the target market/s • Experience in value addition and product quality management. • The processing facilities and capacity to develop adequate value addition to buyer specifications

There are certain basic reality that need to be recognized and addressed in order to successfully use the auger of ‘utilisation’ and ‘trade’ to achieve tangible economic improvements in the livelihoods of rural communities at the same time as conserving the ecology and environment of Laikipia, and to ensure that the impact is long term, the enterprise is sustainable and the effort is replicable. These include the following:

9.2.3 Basic requirements for producer group development

The need for well organised and managed producer groups: In order to develop a supply chain, to enable the community owned business operation to develop and to meet certified requirements for group certification, the small scale producers and wild harvesters need to operate within a strong organisation structure, with transparent financial handling systems, sound and sufficiently skilled management, and with effective traceability/recording systems in place.

The need for training and advice : It is clear that most producers and operators in rural community have limited experience of business, enterprises and market development, have only local community level organizational skills, and have not operated supply chain orientated recordings systems and have not had to meet protocols and compliance requirements that are externally audited. Therefore substantial assistance and training is required to enable the producers to operate efficiently, sustainably and viably to achieve market entry and sustain the business.

The need for careful group selection : If successful, replicable models are to be achieved within the programme term, it is also clear that there is a need to carefully evaluate and select the most ready and able producer groups with which to work in developing commercial natural products enterprise. This is equally important as selecting groups that are located in or close to the areas that provide the best commercial resources.

The need for appropriate design : The third aspect is the design of the structure. In order to harness the full support of the government it may be necessary to use the framework of the co-operative system, but also to design it carefully to meet and fulfil the commercial requirements of private sector industry, to operate within the dynamics of the national, regional and international business arena. This is very achievable, as demonstrated by Oramio Coffe Co-operative Union in Ethiopia on a large scale, and North Western Bee-products, Zambia and Meru Herbs in Kenya, on the small scale enterprise level.

The need for capital assistance: If community natural products enterprises are developed to make an impact on/change in the utilization of the natural resources in the target region within the programme term it is necessary that the economic huddles are crossed in a manner that does not distort or greatly compromise the future independence of the enterprise. This is one of the most difficult balances in development to understand and to achieve. Even when structured as producer groups, in practical terms, the rural communities rarely have the capacity to bear the risk and raise the necessary capital. Therefore, external grant or loan assistance is required. If the business planning is undertaken from the onset with the producer associations, the capital investment and breakeven points is understood by the producers and the level of capital and risk involved. If this is achieved before the development partner arranges the participatory ownership of the grant or loan, there is then a strong chance that the community will full own

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and drive the enterprise, accept the responsibility of the investment and of further requirements and risk bearing as the operation grows.

The need for commercial partners: For producer groups of natural products (i.e as a producer-owned enterprise) to gain the capacity and opportunities to trade in better markets and receive greater incomes they need to make significant steps in their organisational and business capacity, as explained. If this is to be achieved to make positive impact on livelihoods and the environment within a given period and before the natural resource is lost through economic need forcing non-sustainable utilization, it is necessary to secure commercial partners.

9.3 Commercial partners

9.3.1 Existing Commercial Enterprises The strongest starting position for a bio-enterprise development programme is to assess the existing active commercial enterprises that are well established such as for bee products, and through consultation ascertain the central needs of these enterprises in terms of expansion and increasing the returns. If all future development are focused through a programme working directly with these commercial operators and interested landowners, primary aspects required for successfully developing bio-enterprises in Laikipia will be achievable and manageable into the future. Such aspects include: achieving sustainability of wild harvesting (i.e through setting sustainability parameters and organic certification), developing/strengthen the supply chains through organisational support, training and extension, increase the returns to the participating communities through improving techniques of production, developing handling and processing facilities, and expanding the enterprises to include large numbers of the resident communities.

9.3.2 New Commercial partners The programme could concentrate its support to specific identified commercial projects, through tripartite MOAs (memorandum of Agreement) between the Programme, the co-operative/producer groups and the commercial operator. The commercial operators will be selected according to the programme criteria which requires the commercial operator to fulfil the following: • Wish to develop or currently developing organic markets (international, regional, national) • Willing to follow fair-trade principals • Willing to abide by the terms of the Memorandum of Agreement (MOA) • Interested in maintaining a long term trading relationship with the producers/harvesters • Take full responsibility of the financing of the operation • Take full responsibility for certification compliance (organic/fair-trade/product quality) • Provides adequate and appropriate management capacity to the project.

In developing the commercial operations, the producer groups need to be capable of: • Developing exportable quality and quantity of product in demand in the export market • Reaching and maintaining the required quality and hygiene standards • Developing and managing an Internal Control Systems for organic certification • Obtaining the grading, processing equipment to meet the market requirement, or developing a working relationship/partnership with an entrepreneur with the appropriate equipment.

9.3.3 Kenyan based companies To establish commercial partners the first consideration is to engage the interest of Kenyan based companies/entrepreneurs in the potential business opportunities. If such commercial partner companies are interested in developing any of these products it will be necessary for the company to gain detailed information about the specific nature of the production, processing and market requirements so that an appropriate management decision can be arrived at. This could entail an evaluation visit by the company, the drafting of a MOA, and a business plan. The programme could support the production of the appropriate business plans.

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9.3.4 Externally based companies There are a number of commercial operators in the natural products industry who are based in the Eastern Africa region, or outside of the region, with existing business interests in Eastern Africa. Similar criteria would be necessary to develop a commercial partnership; a recognisance visit by the company to evaluation crop selection, seed/plant material sourcing, equipment and operational design, management time and labour requirement etc, then a MOA, and a business plan can be drafted. See Aloetrade America, section 9.6 and Annex 6.

9.3.5 Commercial relationship with co-operatives/producers associations Commercial partners can engaged purely as service providers if the producer-owned enterprise has raise sufficient funds/profits to pay for these services, and also if the communities have the knowledge, skills and vision to drive their enterprise independently. As an example, this is now the case for NatureRub, Kenya. However this took place after 7 years of donor support to the development of NatureRub. Similar scenarios exist in the Eastern Africa region. Therefore this option is not realistically relevant to even the stronger producer groups in the target region.

Alternatively, commercial partners can take part as shareholders, bringing in share capital from which to operate the enterprise (or contribute to..) and also provide the drive to enable the future success of the enterprise (and the investment). This most often results in a win-win scenario, a mutually beneficial relationship, as with Forest Fruits, Zambia, POGUM in Malawi and Nature Nurture in Zimbabwe.

The third option is for the commercial partner to interact with the producer-owned enterprise as a buyer of the semi-processed/processed material, under an official (e.g implemented under MOA) or unofficial equitable long term trading relationship. This is the case for such examples as North Western Bee- products, Zambia and Meru Herbs, Kenya, Langu Organic Cotton Co-operative, Uganda.

9.4 Development partners

9.4.1 NGOs operating in Laikipia The extension, training and some of the advisory input could be developed through working partnerships with specific identified national intermediary organisations (IOs) and the relevant government offices. Partnerships should be secured through MOU (memorandum of Understanding) between the parties. Working in co-operation with these partners this programme can develop a collaborative framework to ensure that the best synergies are gain and a professional and well-informed approach is taken.

Example: For the commercial small scale producer group production of organic certified borage oil for processing and export to the Bodyshop, UK, Earthoil – Kenya Ltd is working under an agreement with the local NGO, MOOF (Mount Kenya Organic Farmers). The project is supported by Fintrac and CDE. KOAN provides practical training, pre-certification support, assistance in the development and management of Internal Control Systems, market exposure through participation & exhibition at international trade fair, and promotion through its website and publications.

The nationally based NGO, SITE, has provided input to the development of bee products on Laikipia for the past seven years. ICIPE has also provided input through their applied research work to beekeeping groups in Laikipia. Both organisations have introduced modern and intermediate hives, equipment and training in bee keeping technologies.

Over the last three years, the national organic association, KOAN, has worked with the organic certified producers of herbs, spices, essential oils and nutraceuticals /medicinal plant products to develop organic certification, organic production and processing technologies and support field days and demonstrations.

Other NGOs have provided input to small scale bio-enterprises over the year, but generally not resulting in consistent long term financial assistance or advisory/training support.

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9.4.2 Co-operation and linkages with other national or regional initiatives Application to trade support schemes can be made during the pilot phase / this first operational year for the existing commercial enterprise. See 4.8. Contact addresses are listing in Annex 4.

9.4.3 International trade support schemes European Union trade support schemes, such as the GTZ managed P.P.P scheme and the Dutch PSOM scheme, operate through the national governments of the EU countries, facilitates and strengthens new partnerships between purchasers in the West with commercial producer operation and companies in the two-thirds world. These schemes help to absorb some of the opportunity costs of the initial stages of business development (specialists advice, trade missions, etc). ACP countries are entitled to some import tariff relief under the Lome Convention. National market import and trade support organizations, such as SIPPO in Switzerland, CBI in the Netherlands, and regional organizations such as the Scandinavian NORAD and the EU central trade support body CDE is geared to facilitate or support trade between their counties and LDCs or developing countries such as Kenya. The International Trade Centre, ITC-Geneva, provides a comprehensive range of market information and market research. Several publications are dedicated to the organic and herb, spice and essential oil markets. ‘The Market News Service for Herbs and Spices’ is published via the ITC website, on a regular basis. Ref. www.intracen.org/mns

9.5 Research partners Developing research partnerships with nationally located institutes such as ICIPI and ICRAF not only provide a wealth of information, laboratory facility for testing and analysis, but also the opportunity to gain accredited research input to the pilot phase. The provision of services such as regular efficacy testing of the herbal supplements is a key area for collaboration. It also may be possible to negotiate a low fee for these services based on shared finding and research information.

Other international institutions that have relevance are Hoehium University, Germany who provide services to the development of bee products (particularly apitherapy) in other Africa countries, the International Trade Centre in Geneva which can provide a website linking facility for promoting organic and natural products and also wide market research data.

9.6 Corporate sponsorship The opportunity for gaining corporate involvement in the development of the bio-enterprises should not be over looked. The potential to involve corporate sponsors such as Safaricom, Celtel, Kenya Airways and petrol companies such as Shell and BP in some of the conservation lead initiatives can be strong if these initiatives provide sufficient publicity for the corporates (to provide ethical and conservation ‘goods’ to their company portfolios) and/or financial reward in terms of advertising their products and services. This area can be explored in detail once the focus, structure and activities of this future initiative are finalised.

9.7 Investors / Joint Venture Partners Through the research and communications made through this study a particularly interesting opportunity has arisen to develop a joint venture or investment partnership with a large aloe trading and service providing company in the US. AloeTrade America is one of the largest global aloe operators of its kind. This company has been in direct communication regarding the development of a full-scale aloe business operation in Laikipia as has submitted a business proposal to this effect. See Annex 6.

9.7.1 Business plan and feasibility study The company is willing to develop a business plan and feasibility study and the consequent investment project to establish an internationally competitive aloe industrial processing plant within Laikipia, to obtain aloe raw juice, aloe juices for final consumption to be sold at local, national and international markets mainly, and aloe bitter sap and/or concentrated sap for international markets. This technical information is offered as a written final document that constitutes the complete business plan that will be used to

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justify and to define the final amount to be invested and the related operational costs when the factory is in operation.

It is proposed that in the first stage, the investment project will produce two main product lines: • Aloe bulk juice for its use in different industries, using raw material sourced from wild and commercial plantations located at Laikipia region, and finished aloe bottled juices ready for wholesale, using the aloe bulk juice produced firstly. • Aloe bitter sap, aloe bitter in block and concentrated aloe bitter with different specific aloin content.

At the second stage, aloe bottled juices will be manufactured for sales into the national, African regional markets and international markets .

9.7.2 Technical assistance services AloeTrade is also prepared to provide technical assistance services and skills transfer to the new company formed in LAIKIPIA, related to the aloe industrial process, from the reception of leaves until the obtention and stabilization of either aloe juice or aloe gel as raw material, or aloe juice bottled ready to be marketed at wholesale, with the necessary adaptations of processes and products.

This technology transfer process includes information related to the layout of the plant, engineering related aspects, definition of equipments and their installation, know how to manufacture the products – from the reception of aloe leaves to the final product to be manufactured, including product development phases. The technical information to be provided in this stage is offered both in written format (documents) and in location with our consultants. The information is for the industrial process above described, and do not cover other aspects such as marketing research, distribution channels, fiscal and financial aspects, human resources, organizational aspects, and legal issues.

9.7.3 Commercial services. Such activities imply marketing and sales efforts to sell and/or distribute the products to be manufactured by the Kenyan aloe industrial processing unit owned by the new aloe company in Laikipia. The services may be performed through the use of the business network established by Aloetrade America LLC, Aloetrade and its affiliates, either through the owned companies, subsidiaries and companies where Aloetrade has commercial joint venture agreements, as described below in our background, or through the various e-commerce sites fully owned by Aloetrade America.

9.7.4 Marketing and sales Costs are to be discussed in different ways depending if sales involves raw materials or finished products, and if sales are to be conducted in an off line concept or under on line methods (through e-commerce sites), be directly through Aloetrade or their affiliate companies. Later, the values of commissions or price differentials will have to be negotiated between ALOETRADE and the new company in Laikipia.

9.7.5 Trade Finance and Micro-credit Trade finance for the communities to buy inputs at a reasonable price is a very necessary component for a business enterprise. Micro-credit and financial services should be offered at all levels of the proposed intervention throughout the supply chain. This will enable particularly women to save their earning in a personal small bank account, particularly important in traditional societies where the man of the household controls all financial rewards from the families’ toils and commercial activities.

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10. Basic Business Analysis :

10.1 Product profiles for national and regional markets

Aloe-enterprise Priority/ Producers Potential partners Investment Business development type Timescale Euros approx. Euros approx. (establishment) Basic Aloe gum Existing groups need National: Very low investment cost. Just quality Aloe gum @ 2.20 per kg a) Phase 1 evaluation Leban Chem Ltd handling and processing protocols and Yr 1: 25 tonnes = E 55,00 Sensitisation of grading system need to be developed. Yr 2: 30 tonnes = E 66,000 community Yr 3: 50 tonnes = Euros leaders/reps to International : Depot centres – as itemised below 110,000 stimulate new groups Equipment – minimal (indirect heat boiler) Kenyan equipped a) Phase 1 Need for well a) ICIPE Example: For all districts and 20 groups Av retail pack of 100gm small scale Aloe b) Phase 2 structured bio- Pure Health Fixed costs: approx Euros 1.5 factory for: enterprise groups, Depot centres: 5 x 5,000 (1000 packs/tonne) strong extension and b) Universal DC equipment: 5 x 2,500 • Aloe liquid training increase in Industries/NEL Central processing centre: 30,000 Yr 1: 10 tonnes retail • Aloe bitters level of raw material CPC equipment: 70,000 packed = E15,000 • Aloe powder supply from Collection vehicle: 6,500 (secondhand) Yr 2: 15 tonnes retail plantations Motor bikes x 4: Approx 9,000 packed = E22,500 And formulated retail sustainable wild Running costs: Yr 3: 20 tonnes retail packed aloe harvest – sustainable Extension x 4 : Approx 12,000/yr packed = E30,000 products wild havesting Processing centre staff x 3: Approx 9,000/yr protocols, approved Part time: Approx 2,000/yr and licensed. Processing unit costs: Approx 3,500/yr Retail packing: (10,000 jars and labels) Approx 1,800. Licensing: 4,500 International Need for well Example: Some districts and 50 groups Av retail pack of 100gm standard/competitive b) Phase 2 structured bio- b) AloeTrade America Fixed costs: approx Euros 1.5 medium scale Aloe enterprise groups, Universal Industries/NEL Depot centres: 8x 5,000 (1000 packs/tonne) factory for: strong extension DC equipment: 8 x 2,500 Bulk export conc. aloe Increase in level of Central processing centre: 70,000 bitters:10 tonnes x Euros 5 • Aloe liquid raw material supply CPC equipment: approx 300,000 Bulk export of aloe liquid • Aloe bitters from plantations and . Collection vehicles x 2: 16,000 20 tonnes x Euros 2/kg • Aloe powder sustainable wild Motor bikes x 6: 10,000 Powder 10 t x Euros 3.50 • Aloe gel harvest – sustainable Running costs: Sub-total: Euros 120,000 • Aloe tea bags wild havesting Extension x 6 – 18,000/yr Yr 1: 20 tonnes retail protocols, approved Processing centre staff x 6 :18,000/yr packed = E30,000 And formulated retail and licenced. Also Processing unit costs – approx 6,500/yr Yr 2: 30 tonnes retail packed aloe organic certification Packaging materials - approx 3,500 packed = E45,000 products Licensing and Certification – 9,500 Yr 3: 50 tonnes retail packed = E70,000

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10.2 Three scale-up approaches Table 10.1 provides a brief comparative analysis for the scale up of aloe commercialization Laikipia. It demonstrated that this can be conducted at three distinct levels; each of these levels can be developed concurrently and in synergy as a realistic and holistic approach.

Level 1: The expansion of the village based aloe processing and value additional activities for retail- packed aloe body/health care products for local markets. This would include improvement to plantation management, processing/extraction techniques and value addition skills and improved product formulations. Also product standardization, product branding, licensing under the national bureau of standards and bar coding. Processing costs are nominal.

Output : Aloe gum (cooked aloe sap) is currently exported from Kenya at US$2.20 - US$2.70/tonne. The output over 3 years grow from 20 to 50 tonnes per year.

Level 2: The development of a medium scale aloe processing operation would include the following: Stepping-up significantly the development of small commercial plantations; organisation of ethical harvester groups; sustainable wild harvesting protocol and governance, organic certification, quality certification, licensing; product range with high quality formulation with regular efficacy testing. The allocation of correctly designed collection baskets, collection and handling protocols; construction of collection and aloe stabilization depots, and a central processing center with nationally manufactured equipment (see Benmah Engineering). (i) Stabilizing aloe juice (ii) Aloe sap (as for health bitters) (iii) Solar drying aloe powder (iv) Processing aloe gel for bodycare (v) Processing retail finished bodycare/healthcare products (e.g lotions, creams, shampoo and soap).

Output: Av retail pack of 100gm approx Euros 1.50 (1000 packs/tonne) with an anticipated output of 10 to 20 tonnes per year over the first three years.

Level 3: The third level is captured in the proposal made by AloeTrade America (see 9.7 above and Annex 6), as requested by SW. The proposal is for a business plan and feasibility study to set up an aloe processing factory to a competitive international standard, with capacity for processing aloe extracts in to the following products: (i) Stabilizing aloe juice with pulp (as for aloe gel products), (ii) Concentrating aloe sap (as for health bitters) with 22% of aloin content (iii) Freeze drying aloe powder (iv) Processing aloe gel for bodycare (v) Processing retail finished bodycare/healthcare products (e.g lotions, creams, shampoo and soap).

Output: Bulk export conc. aloe bitters:10 tonnes, aloe liquid 20 tonnes and aloe powder 10 tonnes; plus 20 tonnes per year, reaching 50 tonnes of retail finished products per year by the end of year three.

International market price guide (2008) for aloe extracts Stabilized aloe juice with pulp, or crude aloe sap, concentrated aloe sap (bitters) with 22% of aloin content and aloe powder have a far higher value. Current average international prices are indicated below: • Aloe gum, cooked aloe sap - 2.20 to 3.00 USD per kg (depending on quality) • Stabilized aloe juice - USD 1.30 to USD 2.50 on average per kg • Crude aloe sap - USD 1.50 to USD 2.00 per kg • Concentrated aloe sap with 22% of aloin - USD 6.50 to USD 8.00 per kg • Concentrated aloe sap with 40% of aloin - USD 28 to USD 32 per kg • Aloe powder (aloe dry extract, not concentrated) - USD 4 to USD 6.50 per kg

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11. Conclusions

11.1 Opportunities Indigenous natural products represent a significant opportunity for the starting of businesses that contribute to economic development on a sustainable basis. They are particularly attractive as they rely on biodiversity and often also knowledge that is unique to Africa.

The current position within the aloe industry in Kenya is no different than that of hundreds of years ago. The advancement in utilising and marketing aloe as a primary health and bodycare product, has only reached the first small step. Developing the indigenous aloe, as for the highly exploited aloe barbadensis in other developing and developed countries across the world using, and the aloe ferox in South Africa, requires investment, plant breeding (for plantation using selected species such as aloe gramanicola), and international partnerships – commercial, research and green financing.

Once the immediate requirements have been achieved, of; resource mapping, sustainable wild harvesting standards, improved domestication protocols, group organizational structuring, training and extension, followed by the development of a good range of competitive, well prices aloe based products with long term programme of marketing, the aloe industry in Kenya has the opportunity to provide a viable complimentary or alternative livelihoods option for large number of the most vulnerable and poor in Kenya.

There are wider benefits from the commercialisation of the indigenous aloe, such as:

Reduced conflicts between Aloe conservation and other land use systems
Create long term income earning capacity from habitats that may otherwise have little or no economic value and are vulnerable to being destroyed or replaced for other forms of gain
Create economic incentives to rehabilitate habitats degraded through unsustainable use
Enhanced value of Aloe as a resource
Reducing illegal trade in Aloe as owners will be able to earn more selling through legitimate market channels.
Increase the knowledge of Aloe and its ecosystems
Monitoring scheme for indigenous aloe to manage sustainable wild harvesting

11.2 Lessons Learnt Most of the lessons learnt centre around the lack of market access for aloe products, the lack of knowledge concerning domestication, processing and formulation, marketing and the low price received by particularly the bottom of the supply chain for aloe gum.

More specifically, the experiences afforded by the efforts made so far to commercialise the indigenous aloe species of Kenya include the following:

11.2.1 Poor returns and little incentive As the market is almost entirely geared for aloe gum, the returns to the harvesters at the bottoms of the chain provides very little incentive for rural communities to carefully manage the indigenous aloe – or to invest any time over and above opportune and often indiscriminate harvesting. The traders also have little incentive to handle and process the gum to preserve its quality, grading is crude and price differential offered by the middlemen in Nairobi/Mombassa is small between the grades. Although poor quality (adulterated and beyond the normal commercial definition of low grade) are usually rejected.

With regard to domestication; in the best scenario, when aloe gum is sold direct to internationally buyers at the current export market price and plant health and yields are good, aloe plantations will, at best achieve return of just under 6,000ksh/acre. As this is after 3 to 4 years from planting (ex-nursery), when divided return per acre over the first three years this results in a paltry reward of Ksh2,000/acre/year for tending and caring fro the plantation.

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11.2.2 insufficient scale and poor product quality At the present level of domestication, there is not sufficient supply to develop a natural product range that can supply markets any further than the local markets, kiosks and dukas. The quality of the extracted aloe is too poor for product formulations to handles without breaking down over a very small percentage (mostly 0.25-1%) due to poor separation and the resulting high aloin content in the aloe juice. This has no impact on conservation of the species, encouraging the up-take of aloe as a land management tool and in providing income generation options from any aloe species.

In simply terms, in order to address this challenge, it will be necessary to improve the skills and investment capacity of the processing and value addition of aloe extracts to increase market opportunities and returns, and to improve the performance of the planting material and methods of domestication, and to enable sustainable wild harvesting of aloe to achieve the basic raw material supply requirement for accessing wider markets for value added aloe products.

11.2.3 Inadequate market knowledge and orientation There has been very little attempt to develop the national or regional market for value added aloe products. As there is not enough supply in most areas where some level of value additions takes place to consistently maintain the product supply on the shop shelves, there is little opportunity to increase the demand through marketing efforts alone. As the first requirement is increase supply of the raw material, and then to process and formulate attractive, quality and price competitive (with other regular bodycare and health cae products) range of aloe based products, a marketing campaign at the national level conducted at this present time would be in vain. Once there is progress in at least the supply of the raw materials is created, processing of retail products viable, effort and finance will the need to be committed to product branding and marketing. Prior to this, increasing market awareness and the business skills of the producer groups is important, much capacity development is needed in these areas.

11.2.4 Certification and licensing Once of the areas that has advanced over the recent years, is the development of the KWS managed licensing scheme, now a statutory requirement for commercial utilisation and trade of aloe species in Kenya. There are several grey areas existing within the licensing scheme, for example for sustainable wild harvesting of indigenous aloe. In addition, there are no quality certification standards in place in Kenya for retail aloe based products. There has been some attempt to put for the need for a Kenya Aloe Science Council to provide certification standard guidelines, registered under the Kenya Bureau of Standard, and a certification ladling scheme, following the facility provided by the International Aloe Science Council (IASC), which has been developed for co-ordinated and regulate the commercialisation and marketing of aloe vera in the US, and also taken up as a certification scheme in other countries.

For harnessing export opportunities organic and/or FSC certification, along with the useful auger of the Internal Control System (ICS) mechanism for group certification and supply chain management, are significantly important in gaining competitive advantage and price premiums. The skills t develop these systems are available through KOAN, Nairobi, the cost of the process and annual inspections over the first 3-4 years, however, will require external funding before producer groups/association/share-holder company reach a position to afford this additional overhead.

11.2.5 Business management strategy and ownership The Baringo Aloe Commercialisation experience illustrates the importance of developing commercial structures with rural communities in a collaborative and well structured and legally bound manner, involving equitable, ethical and rewarding participation of the parties concerned; producer groups, landowners, private partners/investor and support NGOs. The involvement of other third parties, such as government actors, should be clearly defined under an MOU or similar agreement

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11.3 Focal areas to address

11.3.1 Education and awareness Currently, different organizations freely participate in the dissemination of information on Aloes, but their potential for other uses are remotely understood. Due to this and for historical reasons, communities and individuals have different levels of awareness about the Aloe resource. There is need to streamline the provision of relevant information to the interested public.

11.3.2 Environmental degradation – Destructive harvesting / not meeting conservation goals The conservation of the aloe species as a primary component of commercialisation strategy should include some basic steps: Mapping, zoning and then developing specific sustainable wild harvest standards according to the zoned areas; government managed licensing and certification scheme which is audited through third party verification, gazetting critical natural populations; establishing aloe plantations using advanced production techniques; increasing the return from the raw aloe material through improved value additional and marketing. Without addressing each of these areas, the long-term conservation of the indigenous species will still be at risk.

Environmental threats Frequent or prolonged drought threatens Aloe growth. The seedling stage is particularly vulnerable. Dry spells also affect the production of Aloe sap, besides making the plant susceptible to pests and diseases.

Illegal harvesting As a result of illegal harvesting:- • Local people involved in sap tapping are paid poorly, about Ksh 20 per litre. • There is no quality control. • There is no certification procedures enforced through monitoring to enhance sustainable harvesting. • The government does not earn taxes and related fees. • The smugglers export the Kenyan Aloes cheaply. • Aloe species conservation especially that of the narrow endemic is at stake

Poor harvesting practice Although extensive collection and harvesting of aloe sap do not threaten the predominant species such as aloe secundiflora, there is real danger of over-exploitation of aloe scabrifolia, aloe rivae, aloe turkanensis and aloe megalocantha, which are in small volumes and found in more fragile habitat. This point was also brought out in the SNV mapping exercise (2007).

Commercial nurseries As well as threat from over harvesting, their removal from the wild for domestication will be an increasing challenge once aloe domestication/production becomes more financially rewarding. The important of developing a number of well positioned commercial aloe plant nurseries (such as the one instigated and managed by Maria Dodds, Rumuruti) is particularly highlighted as a core strategy for aloe scale-up planning. There are other large scale landowners who have already shown an interest in providing this service. The nurseries are also important to ensuring that small scale producers received the correct and healthy plantation stock, to enable faster take off and commercial availability of the correct aloe material.

11.2.3 Supply chain development – Low organisational and management capacity The development of strong well managed supply chains is equally important for aloe commercialisation as it is for any other commercial product. In order to achieving this, adequate training, extension and management guidance, as well as well organised producer groups, and market linkages, is imperative. Due to the comparative advantage of a number of resident NGOs and CBOs in Laikipia who are in a position to provide this support, the opportunity to develop such partnerships is relatively high compared to many other districts and regions in Kenya and Eastern Africa. These partners will, themselves, need training and guidance to develop their own long term capacity to effectively support these areas, which can be achieved through specialist and other national level NGO input (such as from SNV, KOAN, ICIPE and Wild Living East Africa).

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11.2.4 Lack of business capacity – Low economies of scale and profitability of existing aloe trade In terms of business skills, this appears to be as limited as the business financial capacity within the small scale producer groups, and rural communities at large. It is very evident that the opportunity cost of developing aloe enterprise, even at the lowest level, is out of reach of the majority. The need for develoing commercial partnerships from the onset of a scale up programme, or outgrower schemes with a commercial operator/s is a core area to address. The financing of depot centres construction and equipping to receive and stabilise the fresh gel from cut aloe leaf is critical in enabling any further value addition than low value crude aloe gum. The processing facility to provide the necessary standard and through put of aloe material to achieve the quality and economies of scale for accessing national, regional and international markets will also require financing as either a smaller scale Kenyan fabricated and equipped facility, or as a factory build and equipped to international competitive standards. These physical items will require a commercial partner/joint venture investment and/or development grants.

11.2.5 Certification - Lack of traceability and quality systems/endorsement Certification provides non-physical value addition, and a useful tool in building partnerships along complex and international supply chains. The assessment of sustainability threshold for wild harvested plant products, according to certification protocols, and the organisation and structuring of the producer groups and the education of the wild harvesters as to the criteria of a sustainable commercial operation, is a core criterion. It is expected that in the first phase of a scale up programme, the majority of the supply will be sources from the sustainable wild harvest of indigenous plant products.

11.2.6 Policy, Legal and Institutional Framework There still exist bottlenecks in the area of policies that govern the exploitation of Aloes. There is a fundamental need to streamline policy regarding the utilization and marketing of Aloe resources.

11.2.7 Land tenure The land tenure system is changing from community to individual ownership. Sub-division in Laikipia district particularly Tharua area, which is endowed with natural populations of aloe secundiflora, is at advanced stages. Given that these areas have low productivity, reduced land area per person translates to limited capacity for commercial Aloe production, larger parcels of land would be more practicable. This is compounded by the problem of increasing division of the group ranch systems.

11.2.8 Marketing The poor product capacity, in terms of competitive and consistent supply and quality, together with lack of market awareness, linkages and promotion underlay the chronic marketing challenge. It is the most frequently expressed constraint cited by rural communities and small business alike. Unless external intervention is made (i.e the development assistance to the opportunity cost of developing natural products business in Kenya), the enigma will continue to presides over the potential of this sub-sector; this being that in order to develop market linkages there needs to be adequate and consistent supply of marketable and competitive quality products; to develop such a supply producers need to have the security that there is a sufficiently rewarding market for their investment of time, effort and finances. Lack of supportive and enabling government policy towards natural products enterprise development compounds these challenge.

Opportunity cost areas include: • Producer group organisation • Management and business skills development • Increasing technical skills in production (domestication) and harvesting • Developing sustainable wild harvesting protocols • On-going training and extension support • Equipment and infrastructure (harvesting baskets, equipped depot centres, central processing centre) • Trade finance • Micro finance for the producers

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12. Recommendations for Aloe Enterprise Development

Many of the indications made in conclusion and recommendations section of the Laikipia Bio-enterprise Development Report, produced by the same consultant and Author (SW), apply to the scale-up of aloe commercialisation in Laikipia. To ensure the completeness of this report, some of these overlapping areas are included here. The recommendations are collation of the relevant experiences and observations of the consultant (SW), and also draw from the remarks and recommendations made in the DANIDA-ABD Coastal Aloe Report, and the SNV Sustainable Utilisation of Commercial Aloe Resources Drylands Study.

12.1 Practical scale up priorities

12.1.1 Sensitisation and group selection Sensitise agro-pastoralist extension officers on the importance of the crop as a wild harvested product that can create an income generating opportunity through exchange visits to Turkana (Practical Action) and the Coastal region. Develop a series of posters and leaflets on the technical aspects of commercial aloe enterprises, encouraging selected producers to develop demonstration sites (i.e provide free planting materials in exchange of access for sensitisation and training visits), visits for interested groups and NGO/ministry staff to demonstration sites and exchange visits to groups that have advanced in aloe commercialisation.

Select producer groups through the use of a participatory appraisal system and use of a criterion for suitable commercial producer groups. After group selection, the provision of a series of on-going training activities for the key group members in organisational skills will need to be arrangement with implantation partners (NGOs and CBOs).

12.1.2 Developing stakeholder responsibility For responsibly develop community owned/participated enterprise there must be fully knowledge of what is entailed in setting up and developing the business operations to market quality and statutory compliant standards, and sufficient capacity with which to develop the necessary training and extension support, infrastructure and equipment, crop finance and operating capital. As for many other similar models across the world, this can be achieved through a combination of public and private investment, grants and loans.

Workshops can be carried out at the early stages of a bio-enterprise support programme to provide this information to communities and enable a more sound understanding of the realistic options and provide the ground for communities to make strategic choices on livelihood options. As a result there is greater likelihood that the community members will take ownership and responsibility of their selected bio- enterprises and work in a more focused manner with development support agents and commercial partners. It is envisaged the assistance given to the development of aloe enterprises in Laikipia will go hand in hand with that of other related/interlinked bio-enterprise types (such as bee products, ethnobotanicals and natural bodycare ingredients/products)

12.1.3 Organisational Capacity . Management and organisational capacity are also key aspects for achieving successful and replicable enterprises; this also required adequate financing and a third party involvement to ensure good practice and transparency. For example; supporting the salary of a literate person, such as a school leaver, to ensure adequate recordings systems are developed, for the first three years after which time the group will be earning enough income from the enterprise/s to independently support this post (e.g through a 1.5% levy on sales for group running costs). The groups can have a MOU arrangement with an aloe scale up assistance programme (see12.3) and an MOA with the commercial entity.

Suitable NGO/CBO partners can carry out these activities. This could also include training provision in business and entrepreneurship skills, see below.

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12.1.4 Extension and training - TOT As there will be an on-going need for training producers and harvesters in each area of production- domestication and sustainable wild harvesting, product harvesting and handling. It is suggested that the NGOs and CBOs operating in the Laikipia district are trained (TOT) through a series of training course, possibly held at ICIPE campus. The financing of these support activities will need to be budgeted and it is likely that assistance will need to be provided to these development partners, bounded by MOU/MOA.

12.1.5 Expanding domestication/plantations Although the indigenous aloe species are hardy and adaptive, domestication takes skill and on-going care; there is a three to four period from nursery to first harvest. Post harvest care is also important to enable the plants to recover quickly and to the overall return per acre of production.

Developing commercial nurseries will not only enable access to strong planting materials, but will ensure that the correct species are utilised and will reduce the occurrence of unsustainable removal of mother plants from the wild. Training course, preferable held at the demonstration plots, should be conducted on cultivation and management techniques of cultivated plant products. This could be carried out by NGO and CBO partners. A range of simple information and training materials should be printed in Swahili on the above.

12.1.6 Develop sustainable guidelines and protocols In terms of larger scale commercialisation/scale-up, it will take a number of year for raw material supply from plantation, it is necessary to work pro-actively on the development of sustainable wild harvest of selected aloe species. This starts with the mapping the distribution and health of the species, zoning the target areas for harvesting, and then developing sustainability protocols to describe the methodology for wild harvest of the identified species within the defined zones. This should be conducted by an appropriately training and experienced botanist. Enrichment planting of ‘suckers’ from the ‘mother’ plants can also be a component of the guidelines. Guidelines for sustainability protocols are held in Annex 11.

Training the harvesting and relevant producers groups in the sustainable wild harvesting techniques and protocols of the indigenous species, should be followed through with explanatory literature, posters, laminated guide sheets, and is also a defined criteria within the organic certification standards. The development of the ICS (internal control system, see 12.1.9) will further endorse and regulate these protocols as critical control points .

12.1.7 Phased development of the operational framework By taking a phased approach to the aloe scale up initiative, developing a programme support facility and combining this initiative with the development of the other identified (once agreed with rural communities) bio-enterprises, LWF will have the opportunity to instigate and assist tangible economic growth of aloes and other bio-enterprises in Laikipia in a strategic and streamlined manner. To achieve this following recommendations are made:

Phase 1: • Mapping and zoning the resource, developing sustainability protocols • Develop the training and extension capacity in Laikipia and relationships with development partners to provide implementation support for larger scale commercial aloe development • Increasing number of plantation and improving technical production skills • Stimulate the development of commercial aloe nurseries to supply healthy correct planting material to the producer groups • Improving harvesting techniques and village level processing • Improve formulation and packaging of aloe products for local markets • Business planning for the central processing factory and formation of commercial partnerships/investment whilst economies of scale increases for the raw materials supply • Binding agreements secured between all partnering parties • Develop a national quality standard for labeling approved sloe retail products (possibly with National Bureau of Standards).

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Phase 2. • Engagement of commercial partner/s • Develop capacity of the bio-enterprise trading company • Securing development grants and trade finance • Product development and branding • Marketing and promotional campaign • Micro-banking schemes Etc…

12.1.8 Processing The processing approach and scale up options, as outlined in 7.2, will depend on several aspects: (i) the level of engagement of LWF in co-ordinating or facilitating the various private and public partnerships required support the opportunity costs of setting up a commercial aloe venture in Laikipia (ii) and/or the involvement of a commercial partner and the level of investment and management committed (iii) the level of grant assistance/investment secured from development partners/ethical finance companies (iv) the level of interest in and commitment of the rural communities to this commercial bio-enterprise

A phased approach to the aloe scale-up will allow LWF to seek commercial and development partners to invest in/support commercial processing facilities (i.e from small scale factory to international level processing facilities), whilst expanding the village-based aloe enterprises and raw material supply. In phase 2, LWF can then facilitate the process of setting up a larger commercial operation achieving greater turnover of value added aloe products and resulting in a growing scale and reach of the impact

Benmah Engineering, in Nairobi, has agreed to provide a design and costing of a fully equipped small scale aloe processing factory. AloeTrade America in the USA is willing to conduct a full business plan for the construction, equipping and operation of a high quality-processing factory, to international standards. The assessment of most appropriate route for the scale-up processing of aloe products will only be clearer once this information is gained and commercial partners identified. With regard to the latter, the consultant (SW) will holding meetings with potential investors located within Laikipia/Kenya over the next few weeks. The outcome of these meetings will be annexed to this report.

12.1.9 Non physical value addition – Certification As discussed, organic certification provides competitive advantage and premium price returns in the international marketplace, and also provides a designation to the land for sustainable utilisation. The internal control system provides a strong supply chain structure with risk assumptive compliance criteria for the members. The incentives to comply with the standards are tangible and attractive, being higher prices and strong market participation. Please refer to section 4 and Annex 8 for detailed information on developing organic certification.

By working with partners such as KOAN (Kenya Organic Agriculture Network), based in Nairobi, the development of the ICS and all other pre-certification assistance for the selected bio-enterprises can be professionally and smoothly achieved. The most appropriate approach would be to develop an MOU with KOAN for this purpose and for KOAN’s assistance in developing organic premium markets for the natural products. KOAN can also assist with developing market exposure and market information for these bio- enterprises, and sourcing suitable commercial partners (both nationally and internationally).

ICS and developing the supply chain The internal control system (ICS) will list every collector and processor involved in the value chain to bring the product to the market place. This is necessary to bring a quality assurance to the aloes products and ensure that there are checks and balances throughout the process to ensure that any defects can be monitored and will not be allowed to reach the final market stage. New players and stakeholders will join the process as the product becomes more will known and viable. Even within the association channel the tools of ICS can be applied by the women groups or trading associations to ensure product quality.

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Adequate extension field staff for the development of the ICS / supply chain could include the following: Existing trainers and management staff can be trained in natural bodycare enterprise development, the ICS and organic certification processes and management. Processing centre staff. The number of staff will depend on the relationship with the commercial partners (i.e who will provide and pay for the staffing requirement), and scale of the operation.

Example : for 1,200 producers in 20 groups 6 extension staff (responsible for approx 200 producers / 3-4 producer groups each) I extension and training manager plus 2 other part time trainers Supervisors for village based semi-processing x 4 Central processing centre: 1 processing supervisor and 3-5 processing staff

12.1.10 Product development It is important to the successful development of a range of aloe products the value addition techniques a Go through a pilot period, enabling strategic product development according to the results of adapting formulation to include optimum aloe extract and using other natural ingredients (as possible), brand development and market trials.

Once the raw aloe extracts are available (potentially alongside bodycare ingredients from other bio- enterprises), assistance in developing an attractive bodycare products can be gained by international specialist such as; Earthblends, Organic Partners, or nationally from ICIPE and KEFRI. These parties and others (such as Olive Marketing) can also provide advice on packaging and presentation for the national market, and the export market once economies of scale and quality standards have been met.

Sourcing and costing the other aloe product ingredients will part of the detailed business planning phase. Sourcing natural alternatives for the formulations will need to be balanced with effectiveness and achieving a competitive and attractive product range. Overcoming issues such as shortage in important ingredients, such as coconut butter, can be achieved by researching, at the on-set of processing operation, alternative and available ingredients (such as avocado oil and mango nut butter).

12.1.11 Market development The structuring and development of a strategic marketing programme will need to accord with the phased growth of the raw aloe materials and the processed aloe products. Once the market trails have been conducted, selection of the most successful aloe products can be made, export avenues explored and a revised business plan can then be drafted to show the comparative advantage and cost benefit of each market channel (i.e local, national, regional and international).

Market development is on-going, and a continuous process of defining and redefining the product and market pitch, increasing the promotion of the products and branding, using media, website marketing, trade fairs and promotional offers etc. This will need to be complimented with marketing information; developing an up-date data-base of the market trends, potential buyers, regulation and standards, and on going market trials of the newly formulated and retail packed product range.

12.1.12 Trading structure The shareholding involvement of a stakeholder organisation/NGO such as LWF and an ethical investment company, such as Share Interest/Triodos/Rabobank, ethical trading partners can provide this role. Overseeing the conservation/ ecological perspectives of the bio-enterprises is also an important role and one that can be governed through a management board comprising the right mix of parties with conservation and ethical trade agendas from the pool of shareholders and advisors.

12.1.13 Commercial partnerships Investigate the potential of engaging national commercial partners and evaluate their existing capacity and their potential interest and terms of engagement with the project/producers/co-operatives. Develop a pilot phase MOA – potentially as a tripartite between the programme, the producer groups and the commercial partners.

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12.1.14 Legislation and standards Any business needs to comply with legislation and standards applicable to it in order to stay in operation. Some of the laws where compliance needs to be ensured (apart from those all business must comply with) include: • The National Environmental Management Act • The Water Law • Agriculture & Land Use laws • Kenya Bureau of Standards (SABS) requirements

To provide more detailed recommendations regarding the regulation and protection of the emergence of an aloe industry in Kenya please see the next section.

12.2 Regulating the industry

12.2.1 Harnessing national statutory requirements As base line information on species, mapping (GPS) and zoning is a requirement under the Wildlife Conservation and Management Act (Section 67 Cap376) for achieving a licence for aloe commercialisation, LWF can develop a mapping and monitoring system with SNV, followings its formative work in the recent (2007) Sustainable Utilisation of Commercial Aloe Resources in the Drylands Study. This activity can also provide the baseline for developing sustainable wildharvest protocols for organic certification, but also provides information for monitoring and marketing the climate change mitigation impact this initiative has on the Laikipia environment.

The commercial nurseries and plantations will also require licensing, which will involve information on land ownership, species being propagated, when the operation was established, land size involved, source and quantities of parental stock, evidence of the source. LWF can provide assistance with the application and compliance to these licensing requirements.

There is a growing database (resource map) indicating the extent of indigenous Aloe in some areas of Kenya, including Laikipia (mostly due to the SNV initiative), and potential production levels. Sustainable Aloe production and marketing is knowledge intensive and requires use of appropriate technologies, impact assessment and Audits have been carried out and submitted to NEMA in some cases.

12.2.2 Developing sustainable harvest levels and protocols for the aloe species

Species selection The more common and robust species is Aloe Secundiflora which is the species most commonly commercially utilised across Kenya. The other species of Aloe Lateritia (gramanicola) and other higher gel containing sub-species will need careful management and it may be necessary to only accept materials from plantation supply.

Domestication Protocols Environmentally supportive domestication of the selected aloe sub-species can be embraced by a set of domestication protocols. These can be incorporating in the cultivation strategy to meet organic certification requirements and for the statutory licensing.

Sustainable Wild Harvest Protocols As for 12.2.1. In terms of organic certification, wild harvested products are sourced from areas that have not been treated with artificial fertilizer or chemicals in the three years prior to harvest. Plants treated with pest control agents may not be planted during the last three years. The harvest/gathering of the product shall not have a negative impact on the environment or endanger the existence of any species of plant or animal. All places of purchase shall have personnel who are well versed in these protocols and any specific certification standards according to those set by the certification body.

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Specific protocols will need to be developed for each situation and zones, for example; the harvesting should be undertaken during or just after the rainy season between March and May and again during the short rains. The pastoralist collectors should carry out 'enrichment planting' in x areas, etc…

12.2.3 Quality protocols and marketing standards Quality protocols should be developed by commercial; partners and technical advisors for the harvesting, handling and processing of aloe and its extracts. This can follow the HACCP approach (or link with HACCP). Working with the aloe stakeholders, KWS and KEFRI, LWF could promote and provide the advisory input to bring about an equivalent body and certification mark as that developed by the International Aloe Science Council (IASC).

12.3 Increasing empowerment of stakeholders

12.3.1 Laikipia communities Bio-enterprise failure due to lack investment in raising the capacity of the producer groups in terms of production and processing skills, ability to manage the business operation and to develop secure markets for their products is common and widespread in Africa. Lack of trade finance and capital hold back most groups from developing the business and sustaining product supply.

To encourage high community participation in bio-enterprise in Laikipia and to harness the potential of driving forwards sustainable utilisation of the natural resources whilst creating tangible livelihoods within these communities, adequate investment will be required to initiate and maintain the development of these enterprises. In this context it is recommended that a phase approach is taken to the aloe scale-up to assist village based enterprise, i.e simple processing for local markets, to expand whilst the larger investment into depot centres, central processing facilities, commercial partnerships, expansion of the plantation and sustainable harvesting of Aloe Secundiflora is where this second phase is then feasible and viable to begin commercially.

To achieve sufficient returns from the aloe commercialisation, even at the village enterprise level, producers will need to be trained in the harvesting and processing of the aloe plant to harness the juice as well as the sap, to source the additional ingredients and to formulate well to achieve attractive range of health and bodycare products for the local market. Assistance with trade finance, product licensing and improved hand operated processing equipment and infrastructure can also integrate with the longer term strategy to develop the wide commercialisation initiative.

The design and formation of a shareholder trading entity will encourage the ownership and driving of the commercialisation of aloe in Laikipia by the resident communities, including (some of) the land-owners, and enable the integration and sharing of the investment and overheads etc with the other proposed bio- enterprises. The ownership structure and foundation should be clear for long term governance of the enterprises this will increase the effectiveness of the partnership and reduces conflicts;

A programme of training is required to enable the producers to operate efficiently, sustainably and viably to achieve market entry and sustain the business, and for replicable models to emerge within the programme term. The piloting phase will enable the programme to more closely support the set up of the operations, and then later assist the producer groups in seeking affordable loans for the expansion of these pilots into fully commercial enterprises. Strategic grants and loans can be also provided to the producers groups of existing enterprise as a participatory activity carried out in conjunction with the commercial partner.

To introduce the opportunities and potential of this initiative, and to develop ownership and responsibility for the driving of the aloe scale up initiative, a seminar or meetings should take place at the earliest stage, involving development agents and partners, area leaders, landowners, tourist operators, institutes, government representatives, research and other relevant stakeholders.

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It is important to establish proper community system, as a platform of partnership. Systems recognized under law are appropriate, either as co-operative or trusteeship. Trusteeship encouraged for community based groups, with defined ownership strategies developed at the onset.

12.3.2 Maximising benefits to women at each stage of the value chains The opportunity of high women involvement in aloe production and value addition activities will need to be proactively promoted and encouraged at the community level as well as being endorsed as part of the commercial business approach. Traditional reservation in may hold back women from some tribal groups and it would be appropriate to for the LWF to have an introduction made to the council of elders of a bio- enterprise initiative that would involve producer groups from their communities.

Promotion of women mainstreaming in commercial business can be reinforced through developing the constitution and bylaws of the producer groups working with the bio-enterprises to stipulate the involvement of women in income generating activities.

To enable effective and efficient value addition the producers need to be trained in improved techniques to achieve the quality expected in target markets. This should be developed as a programmed approach to ensure that skills are effectively and consistently developed. This facility will need to be arranged at the on-set of a future bio-enterprise development initiative, either through ensuring commitment of partner NGOs (bound by Memorandum of Understanding, MOU), or by securing sufficient funding to develop a training and extension facility within the initiative. In order to ensure that the women retain their incomes for their efforts, they can be encouraged to open small bank accounts and sale returns can be placed directly into the accounts of the women producers; possibility facilitate through linkages/involvement of national mico-banking companies such as K-Rep and EquityBank or international ethical finance banks such as Triodos, Rabobank etc..

12,3,3 Accessing finance Extract from The Coastal Aloe Business Report, DANIDA-ARD In addition to development grants and ethical trade finance, there are other opportunities to access finance. The South African Venture Capital and Private Equity Association (SAVCA) can be contacted for details of venture capitalists that can be approached. Another route worth considering is The Johannesburg Stock Exchange’s Emerging Enterprise Zone (EEZ) which is a subscription-based system that matches those needing funds (a minimum of R200 000 must be required) to fund providers. Further details of the opportunities in this programme including contact details can be found in Appendix 15. Finally, a source worth considering if you are previously disadvantaged is Southern African Enterprise Development Fund.

In the initial stages micro- financing services should be made available throughout the supply chain to ensure that the procurement of equipment and technical services are available at the start up process. This would be to buy the tools needed to harvest and process the raw material from the plants. There may also be a need for financial services to support the transportation of the pre-processed materials to the central processing units because of the remoteness of the area.

12.3.4 Market development Core activities include the following: Conduct a detailed business plan of the introduced species for the national and the international markets, once the basic information has been gained from the pilot phase. Develop commercial partnerships, as previously discussed. Develop the management and trading entity and secure investment capital and trade finance. Develop a marketing and promotion website facility, and product branding. This could include products from bio-enterprises in Laikipia and the Northern Rangeland Trust conservancies.

Applications can be made to trade support schemes during this first operational year for the existing commercial enterprise. Example; PPP scheme, GTZ and the PSOM scheme, Netherlands Embassy, CDE commercial sector development scheme and ProInvest. There are many other grant making opportunities through the various embassies and their programmes, from charities (such as, Ford Foundation, Rockefeller, Comic Relief) and private sector funders (Shell, BP, Toyota, Nippon, Bill Gates, etc).

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12.4 LWF potential role in the scaling up/development of new aloe based businesses (As for the Laikipia Bio-enterprise Report)

As the sustainable management through commercialization of indigenous species has now been confirmed as a legitimate part of the LWF remit, its role in such initiatives can now be considered more deeply. The initial area in support of the commercialisation of the indigenous aloe species of Laikipia is in spearheading this assessment report and the presentation to the members and residents of Laikipia in a stakeholders meeting. The next strategic step for LWF from this position will be to consider its long-term role. To this affect, the responses from the stakeholders meeting will provide a chance to receive the collective options of the LWF board and members, and an indication of what is required the assist the various existing private, public and development partners to develop sustainable and successful aloe businesses in Laikipia. It will also provide a platform for LWF to assert its position in overseeing these developments and to openly discuss the appropriateness and methodology for developing a service providing facility to the Bio-enterprise development in Laikipia, within the Forum.

The following provides a few options to consider in the future role of LWF in support of the commercialisation of the indigenous aloe sps and other bio-enterprises in Laikipia:

Approach 1. One approach that the LWF can consider which will involve the Forum in the least risk or need to extend the organisation’s existing remit and management capacity would be to take the role of funding applicant and manager. This would involve the devising of the programme, securing of the funding, management and administration of the programme. Using this approach, the actual implementation of the activities will conducted through the engagement of local/national NGO and CBO, as separate projects, governed under MOU’s and to the agreed terms of reference.

Approach 2. In an extension of the above, LWF could take the role of implementing the programme, with the assistance partners. If this is selected as the most appropriate approach, LWF may need to develop its own internal capacity for undertaking this market-lead highly business orientated programme. By working with public and private sector partners the implementation can still be achieved using specialist input and existing extension services.

Approach 3. The third approach would involve some (small >) level of investment, commitment and higher responsibility and risk bearing, but would be more rewarding and provide LWF with a pivotal role in the development of bio-enterprise on Laikipia in the long term (i.e past a programme term and the scope of a donor funded programme). In this role LWF would be joint (with other interested parties) instigator and shareholder of the management and commercial entity, proposed as the Trust with the management and trading company component. It would be involved in seeking commercial and public sector partnerships and sourcing funding, as above. It would also be in a position to make commercial decisions, to guide internally the direction and development of the Trust, and, if able, to receive a share of the financial returns from sales (as a shareholder).

There are other approaches that can be taken, or any combination of the above. This aspect will require in-depth consideration and evaluation by the LWF team and committee itself.

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Annex Section

Annex 1. The International Aloe Science Council

Background: The International Aloe Science Council is a non-profit trade organization for the Aloe Vera Industry world-wide. Its membership includes Aloe growers, processors, finished goods manufacturers, marketing companies, insurance companies, equipment suppliers, printers, sales organizations, physicians, scientists and researchers. The common bond between this diverse group of individuals and companies is an interest in promoting Aloe Vera and its use in skin care products, beverages, pharmaceuticals, and a wide variety of other products. We serve as a liaison and information source for research, development and promotion of Aloe Vera and associated products. As a member, associate member or subscriber with IASC, you have access to a wide variety of information, support, advice and certification programs. Here is a sampling of what we offer our membership

Code of Ethics Code of Ethics for members of the International Aloe Science Council, Inc. was adopted by the Board of Directors on May 15, 1998 to promote and maintain the highest standards of Service and Personal conduct among its members.

In adherence to this code, members will: • Promote and encourage through action and spoken word the highest level of ethics within the Aloe industry. • Maintain loyalty to the Council and pursue the objectives of the Council that are consistent with the public interest. • Use only legal and ethical means in all our business activities. • Recognize and discharge our responsibilities as members to uphold all laws and regulations relating to the manufacture and distribution of Aloe products. • Operate our businesses utilizing ingredients and packaging consistent with the goal of preserving and protecting the environment and the goal of providing a quality product. • Not countenance discrimination on the basis of race, sex, age, religion, national origin, sexual orientation or disability. • Use every opportunity to improve public understanding of the role IASC plays in representing the needs and concerns of the entrepreneur in the Aloe industry.

Certification: The International Aloe Science Council Certification Program was born of necessity in the early 1980's. Due to abuse in the representation of the true amount of aloe in aloe products, either raw materials or in consumer products, the IASC began to formulate a plan similar to the Good Housekeeping Seal of Approval or the National Sanitation Foundation certification programs. Building on a testing concept designed by member companies, the IASC developed the certification program to allow aloe growers, processors and manufacturers to submit their facilities and products to a series of rigorous tests and audit program, which, if they passed, would allow for the certification of aloe and aloe products and the display of the IASC authorized Seal of Certification on all product and literature.

The IASC developed a program that would allow aloe growers, aloe processors, aloe manufacturers, and aloe marketing companies to have their products certified by the Council. Companies who use the IASC Seal of Certification on their products and in their literature are assuring their customers: That the Company represents truth in labeling. That the Company represents the quantity in aloe content. That the Company represents the quality of aloe meets with IASC current standards.

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That the Company represents that the aloe used in the products comes from a certified source. The certification process is very easily accomplished. A company must complete all of the following steps:

Contact the IASC for an application. Fill out and return the application. Invoice will be sent to applicant and payment must be received prior to scheduling. Schedule with IASC an inspection date. Meet the inspection criteria.

Once an application is accepted, the inspection and audit team will visit the facility to begin a review of all the parameters to be checked and perform an aloe inventory. Formulas, inventories and labels will be checked and line samples will be taken during the run for assay purposes. Once the evaluation is complete, a recommendation is made to the Certification Board on whether to certify the applicant or not. Notification in writing is then made to the applicant as to whether they have been certified. If a failure to certify is made, an explanation is sent to the applicant. Depending on the reason for the failure, a retest provision may be initiated. The test procedures used in the certification process are those specified by the IASC Science and Technical Committee and approved by the Directors.

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Annex 2. Aloe products retailed in Kenya

1. Aloe Pura – ksh 785 99.9% Organic Aloe Vera Gel. Ingredients: organically grown aloe baradensis, acrylates, phenoxyethanol, methylparaben, propylparaben. Manufactured by Optima, Wales, UK

2. Optima – Ksh660 AloeDent mouthwash. Ingredients: Ab, sorbitol polysorbate, citrus paradise (grapefruit seed extract), menthe piperita, sodium laucyi, sarcosinate, menthol, tea tree oil, vit K, escin (horse chestnut), centella asiatica, xylitol, sodium hydroxymethyiglycanate, citric acid, cl75810. Manufactured by Optima, Wales, UK

3. Aloe Ferox – Ksh 460. Baby shampoo 100ml ksh 460. Ingredients Aloe Ferox (cape aloe), deionised water, sodium lauryl, ether sulphate, polysorbate, sodium lauryl sulfoacetate, penaerythrityl tetrastearate, fragrance, preservative; imidazolidinyl urea 0.2% Manufactured by Aloe Ferox, South Africa.

4. Organics – Ksh 480. Aloe and lavender deodorant. Vegetable glycerin, sodium state, sodium bicarbonate, organic aloe vera, organic lavender essential oil, witch hazel, juniper berry, Echinacea, rosemary, sodium chloride( sea salt), ethylhexylglycerin, cetyl alcohol, steric acid, grapefruit seed extract, yland ylang essential oil. Manufactured by Organics, Canada.

5. Olivera – Ksh 395. Olive oil and aloe soap. Saponified olive oil, aloe barbedensis, purified water, sodium chloride, citic acid, fragrance. Manufactured by Optima, Wales, UK.

6. Forever Bright. Ksh720. Forever Bright Aloe Vera Toth Gel. Manufactured by Forever Living Products, Arizone, USA

7. Aloe Joy – Ksh50. Aloe gramanicola extract, essential oils and fragrance (these are the only ones listed, but is a cream consistency so has other ingredients). Manufactured by Rumuruti Women Group.

1. Aloe Pura – ksh 785 99.9% Organic Aloe Vera Gel Ingredients: organically grown aloe baradensis, acrylates, phenoxyethanol, methylparaben, propylparaben. Manufactured by Optima, Wales, UK

2. Optima – Ksh660 AloeDent mouthwash. Ingredients: Ab, sorbitol polysorbate, citrus paradise (grapefruit seed extract), menthe piperita, sodium laucyi, sarcosinate, menthol, tea tree oil, vit K, escin (horse chestnut), centella asiatica, xylitol, sodium hydroxymethyiglycanate, citric acid, cl75810. Manufactured by Optima, Wales, UK

3. Aloe Ferox – Ksh 460. Baby shampoo 100ml ksh 460. Ingredients: Aloe Ferox (cape aloe), deionised water, sodium lauryl, ether sulphate, polysorbate, sodium lauryl sulfoacetate, penaerythrityl tetrastearate, fragrance, preservative; imidazolidinyl urea 0.2% Manufactured by Aloe Ferox, South Africa.

4. Organics – Ksh 480. Aloe and lavender deodorant. Vegetable glycerine, sodium state, sodium bicarbonate, organic aloe vera, organic lavender essential oil, witch hazel, juniper berry, Echinacea, rosemary, sodium chloride( sea salt), ethylhexylglycerin, cetyl alcohol, steric acid, grapefruit seed extract, yland ylang essential oil. Manufactured by Organics, Canada.

5. Olivera – Ksh 395. Olive oil and aloe soap. Saponified olive oil, aloe barbedensis (vera), purified water, sodium chloride, citric acid, fragrance. Manufactured by Optima, Wales, UK.

6. Forever Bright. Ksh720. Forever Bright Aloe Vera Toth Gel. Manufactured by Forever Living Products, Arizone, USA

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7. Herbal Force Aloe Vera Juice. Ingredients: Aloe Vera, Cat's Claw Extract, Chamomile Extract, Burdock Root Extract, Hawthorne Berry Extract, Astragalus Root Extract, Sheep Sorrel Extract, Pau d' Arco Bark Extract, Slippery Elm Bark Extract, Rhubarb Root Extract, Sodium Benzoate (0.1%), and Natural Fruit Extract.

8. Aloe Joy – Ksh50. Aloe gramanicola extract, essential oils and fragrance (these are the only ones listed, but is a cream consistency so has other ingredients). Manufactured by Rumuruti Women Group.

9. Aloe Vera Bath Bar (300gm) - Ksh350 Arran Apothecary, Scotland UK Ingredients: Sodium palmate, sodium cocoate, water, glycerine, fragrance, aloe vera extract, wheat flour, sodium chloride, butyphenyl methylpropional, tetrasodium etidronate, disodium EDTA, hydroxycitonella, benzyl salicylate, alpha-isomethyl ionone, hexyl cinnamyl, hydroxyisohexyl 3-cyclohexene carboxaidehyde, limonene and colourants.

10. Super Strength Aloe Vera Tablets. 30 tablets. Ksh755. Aloe Pure, Optima, UK. Ingredients: Micro-crystalline cellulose, dicalcium phosphate, aloe vera powder 200:1, magnesium stearate, silicon dioxide.

11. Early to Bed Shower gel, 473 ml. Ksh1030. Kiss my Face, USA. Ingredients: Water, sodium lauryl sulfate (from palm oil), cocamide (coconut oil derivative), olive oil, aloe vera, vit A and D2, Vit E, natural fragrances.

12. Women’s Certified Organic Aloe Vera Toothpaste 96gm. Ksh 695. Kiss my Face, USA. Ingredients: Glycerine, sorbitol, hydrated silica, aloe vera, water, sodium lauroyl, chitosan, peppermint, black cohesh, dong quai, red clover, sage, menthol, tea tree, sodium hydroxymethlglycinate, xyitol, citric acid, chlorophyllin-copper complex.

13. Natural roll-on Deodorant. 60ml. Ksh895. Desert Essence, Valencia, USA. Ingredients: Water, organic lavender extract, organic calcium starch, ocentylsuccinate,stearyl alcohol, cetearylalc alcohol, ethylhexyl palmitate, organic tea tree oil, corn starch, organic aloe vera leaf juice, green tea extract.

14. Naturade Joint Formula (health drink). Ingredients: Aloe Vera Gel from Concentrate, Fructose, Citric Acid, Natural Lemon-Lime Flavor, Sodium Benzoate, Potassium Sorbate.

15. Super Aloe Gel. Aloe Ferox Trust. South Africa. Rand 41 Ingredients: Aqua, Aloe ferox Leaf Extract, Glycerin, Sorbitol, Allantoin, Carbomer, Triethanolamine, Imidazolidinyl Urea, Methylparaben

16. Whole Leaf Aloe Juice. Aloe Ferox Trust. South Africa. Rand 39. Aloe Ferox Ingredients: Whole-leaf Pulp, Malic Acid, Potassium Sorbate, Sodium Benzoate

17. Baby Balm. Aloe Ferox Trust. South Africa. Rand 23. Ingredients: Aqua, Ceto Stearyl Alcohol, Paraffinum Liquidum, Lanolin Alcohol, Oleyl Alcohol, Glyceryl Stearate, PEG-100 Stearate, Almond Oil, Propylene Glycol, Isopropyl Palmitate, Glycerin, White Oil USP, Stearic Acid, Sorbitol, Dimethicone Copolyol - 100/200, Aloe Extract, Allantoin, Honey Bush Extract, Jojoba Oil, Tea Tree Oil, Comfrey, Menthol, Camphor, Beeswax, BHA, Imidazolidinyl Urea, Methylparaben, Propylparaben

18. Aloe Tea bags. Aloe Ferox Trust. South Africa. Rand 17. Dried Aloe ferox whole-leaf & Rooibos

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Annex 3. Formulation of Aloe-based Products Suitable for Rural Processing

3.1 Aloe based bodycare product types

Skin cream / lotion
Face packs and exfoliates
Herbal bath/shower gel
Soaps
Face tonic - Floral waters
Foot cream and exfoliates
Hand cream
Massage oil
Hair conditioner
Hair shampoo

3.2 Example formulations of natural aloe based bodycare products

Body or face lotion/cream By making a slight variation in the ratio of the basic ingredients indicated below will make the formula into a light lotion to a heavy cream (and various in-between): Formulation for face cream: LEXIMUL 561- vegetable emulsifier – 9% Coconut oil – 18% Vitamin E – 0.2% WATER(previous boiling to dissolve sodium benzoate) - 20.4% Aloe Vera Gel – 51% Sodium Benzoate – 0.8% Essential oils – 0.6%

1) Add Vitamin E+ leximul (di glycerides of fatty acids-sometimes called emulsifying wax) with coconut into a clean container/pot and melt in a baine-marie at about 70-80c 2) Add sodium benzoate to boiling water, leave to cool to 40-60c whilst emulsifier melts. 3) Add Aloe Vera gel to number 2 as 1 is almost melted or just melted. 4) Stir in aloe gel into water/sodium benzoate mix and stir occasionally until it is below 40c. 5) Then add essential oil mix just before pouring into containers. It is easier to pour at this stage before it thickens up,

This is a typical cream/lotion emulsion formula with a wide tolerance for changing levels of oils, water and emulsifier. More water-less oils & emulsifier = more runny lotion type product and vice versa for thickening. For Africa it is good to keep the emulsifier between 7-11% to stop sepration due to extremes of temperature. Try and avoid using essential oils over 1%, unless a Tea Tree cream e.t.c(then max around 3%)

Simple Shampoo Base Ammonium Lauryl Ethyl Sulphate @30% in water - 55% Salt(seperate into 2 halves) – 2% Sdium Benoate – 0.60% Water – 27% Vit E(can be left out) - - 0.1% Lauryl Betaine(can be left out) – 15% Mix Ales & Lauryl Betaine together asnd seperastely mix vit e and essential oils together Boil the water and pour off 1/5. Mix sodium benzoate and then add to main batch. Add salt and the rest of the water and dissolve. Notes: sodium benzoate mixes easliy into the boling water not so with cold Salt acts as a thickener so the last half should be poured in to watch viscosity

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3.3 Other formulations

Body butter – 120ml aloe gel, 20ml maize flour, 15ml water, 4 drops essential oil

Body lotion – 22g gel, 5ml lanolin, 5ml Vit E oil, 75ml coconut oil, 15g beeswax, 180ml almond/moringa oil, 7.5ml essential oil

Rich hand cream – 180ml almond/moringa oil, 45ml coconut oil/butter/mango nut butter, 5ml lanolin, 15g beeswax pellets, 150ml floral water, 2 drops geranium essential oil, 5 drops Vit E oil (add the beeswax to the melting stage with Vit E, Emulsifier and oils)

Foot balm – 30ml avocado/almond/moringa/mango nut butter, 15ml beeswax, 1.25ml aloe gel, essential oil (-3-4 drops) ocimum. Plus emulsifier

Exfoliating foot mask – 120gm maize meal, 85gm course sea salt, 120 ml almond/moringa oil/avocado/mango nut butter.

Flax hair gel – 120ml water, 15ml linseed, 45ml aloe gel, few drops essential oil. Use a thinkenerin list below

Moisturizing shampoo for dry hair – 60ml shampoo - see formation below, 60ml aloe gel, 5ml glycerin, 1.25ml avocado oil

Grapefruit shampoo boost for oily hair – 2.5ml aloe gel, 15ml grapefruit juice, shampoo (see formulaton below)

Aftersun relief 1 – 3 drops essential oil(suggest 1 drop lavender-1 drop roman chamomile + 1 drop Blue/german chamomile), green or chamomile tea(be better), 30ml aloe gel, sodium benoate.

Aftersun relief 2 - 30ml witch hazel, 5ml glycerin, 2.5ml kelp powder, 2 drop chamomile essential oil and 2 drop lavender essential oil.

Aftersun relief 3 - 30ml aloe gel, 60ml glycerin, 60ml rosewater, 4 drops essential oil

Aftersun burn spray – 15 drops lavender essential oil, 5 ml Vit E oil, 5ml vinegar, 120 ml aloe gel.

Aftersun gel – 100ml aloe gel, 20ml witch hazel, 5 drop chamomile essential oil, 5 drops lavender essential oil.

Aloe lip gloss – 5ml aloe gel, 2.5ml coconut oil/mango nut butter, 5ml beeswax, emulsifier

Acne face mask – 7.5ml cosmetic clay, 2.5ml dried tea tree leaf powder, 2.5ml aloe gel, 1.25 ml witch hazel, 3 drops of lavender or chamomile

Aloe dry skin treatment – 10-15 aloe gel. 15ml moringa/jojoba oil, 15ml sesame seed oil, 1.25ml vit e oil,

Skin ointment for scars – 7.5ml aloe gel, 10ml aqueous cream(use the formula above?), 10 Vit E drops

Aloe aftershave – 120ml aloe gel, 25ml distilled water, 1ml witch hazel, 10 drops frankincense essential oil- Geranium 2drops, 1 drop, Orange Oil.

Tropical deodorant – 12ml aloe gel, 10ml coconut oil, 10ml bicarbonate of soda, 10ml arrowroot flour/maize flour, 10 drop tea tree essential oil, 10 drop ocimum essential oil.

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Baby and hand wipes – 2 drop tea tree essential oil, 60ml aloe gel, 450ml distilled water, Ammonium Laurel Ethyl Sulfate-AMLES. (similar to Sodium Lauryl Ethyl Sulfate which is use in most shampoos) 50- 90ml of ALES or SLS and also add some sodium Benzoate, 4gs.

Anti-fungal wipes (suitable for older babies) – 15ml calendula oil, 2 drops lavender 2drop tea tree, 45ml liquid baby soap, 15ml distilled vinegar, 60ml aloe gel, 240ml distilled water.

Mozzie repellant – 10ml aloe gel, 30ml witch hazel, 10ml pure alcohol, 10ml distiller water, 10ml drops ocimum essential oil, 2 drops geranium essential oil.

Mozie repellant 2 – 25ml aloe gel, 75ml witch hazel, 25ml distilled water, 20 drops ocimum essential oil, 5 drops geranium essential oil.

Toning Massage oil – 15 drops lippia kituiensis. essential oil, 5ml olive oil, 120ml ale gel

Shower gel – 180 ml distilled water, 120ml unscented shampoo (see formulation below), 30ml aloe gel, 5 ml sea salt, 15 drops essential oil, 1 drop of food colouring.

3.4 Natural ingredients that can be sourced from other bio-enterprises in Kenya In addition to aloe extract, all of the ingredients mentioned below can be sourced from other small scale bio-enterprise in Kenya, and also can be sources from wholesale chemical and product ingredient suppliers in the industrial estate. These ingredients can be process at the rural level and are potential bio- enterprises for these and other producer groups in the region.

Ingredient Purpose

Moringa oil Moisturizer Mango nut butter Deep moisturizing and skin protection Avocado oil Lubricant, moisturizer Comfrey Healing agents mucilage and allantoin Nettle Essential oils Natural fragrance Floral water (from Astringent (stimulating, reduce oiliness and refine essential oil open pores and unevenly textured skin) distillation) Beeswax Emulsifier/thickening agent Shea Nut Butter Therapeutic, moisturising and regenerating very effective skin cream for all skin types. Fullers Earth Drawing skin pores and removing grime & residue oil Cocoa Butter Softening, deeply moisturizing, nourishing and soothing to dry and problem skin encouraging natural elasticity. Henna Colour enhancer for dark hair Chamomile Anti-inflammatory, antiseptic, carminative, antispasmodic and sedative

NOTE: Purifying bees wax: Melting and filtering the beeswax first through some Muslin or a fine mesh.

3.5 Ingredients that will require external sourcing All of the ingredients mentioned below are extracts from natural materials (i.e not synthetic) and are available in Kenya; there are several companies in the industrial estate that supply these products. They are relatively inexpensive to purchase wholesale

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Ingredient Purpose

Borax Emulsifier Cider vinegar Astringent Witch hazel Astringent Glycerin Emulsifier

Sodium Benzoate Preservative Alcohol Astringent

Citric acid pH stabaliser Vit E oil Naturally derived antioxidant, Lanolin Others, see list below For alternatives and for some bodycare products

3.6 Ingredients used in imported retailed aloe products The following ingredients are found in a cross section of the imported aloe products retailed in Kenya. The table below provides an indication of their purpose in product formulations and appropriate substitutes which are available in Kenya and is a direct extract from natural materials (i.e non synthetic).

Ingredient Purpose

Phenoxyethanol, Efficient antioxidant, Methylparaben, especially for liquid preservative formulation Propylparaben. Steric acid, anti-caking agents ??? Magnesium stearate sodium lauryl, sodium bicarbonate Sodium hydroxymethyiglycanate, Thickening agents, specially designed for thickening surfactant tetrasodium etidronate systems. disodium EDTA, Carbomer (a.k.a. Carbopol) and TEA (Thiethanolamine), Xanthan ether sulphate Anti-caking agent, preservative or thicken agents?? penaerythrityl tetrastearate ether sulphate butyphenyl alpha-isomethyl ionone hexyl cinnamyl hydroxyisohexyl 3-cyclohexene carboxaidehyde dicalcium phosphate Ocentylsuccinate Preservative Potassium Sorbate Polysorbate Aminomethyl Propanol, Emulsifier and buffering agent Methylpropional Cyclopentasiloxane: Acts as a spreading and wetting agent to assist skin penetration Dimethicone, Protective layer which helps prevent transdermal water loss. silicon dioxide. Silicone gums provide instant shine to hair. Silicones act to help seal moisture into the hair, preventing damage Methyl Gluceth-20 water-soluble liquid moisturizer and emollient, used in many up- scale lotions and moisturizers Xylitol Binder and stabilizer

NOTE: Pre thicken the aloe gel: Add the carbomer by stirring it in with low heat

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Annex 4. Relevant Commercial Harvesting & Processing Techniques

4.1 Small to Medium Scale Enterprise: The outer, lower leaves of mature (2-3 years old for aloe vera, 3-4 years for most indigenous species) plants are removed. The broader leaves of a four or five year old plant typically contain larger amounts of the desired extracts and are also easier to handle. Depending upon the particular use or products that are desired, the leaves can be processed immediately after cutting them from the plant or they can be stored under appropriate conditions for varying time periods before they are processed. The leaves should be pulled or cut from near the base of the plant, preferably without breaking or damaging any part of the leaf prior to processing. One preferably uses a small knife of less than 6 inches, e.g., a pocket knife and cuts the leaf at the base immediately above the stalk and peel away cleanly to prevent leakage of the clear gel or contamination of the gel with the yellow sap. Any breakage or bruising of the leaf can result degradation of the whole batch. The leaves are then cleaned by washing them with a mild scrubbing action or spraying with a suitable detergent solution. After cleaning, the leaves are rinsed thoroughly in clean water to remove any detergent solution. The bottom white or light colour portion of each leaf and the tip-most portion are removed by cutting carefully with a small sharp knife. These portions contain mostly yellow sap and can be separately processed. The remaining portion of each aloe leaf is then crosscut into short segments, preferably one-half inch in length, and each segment is placed upright in preferably de-ionized water resulting in the yellow sap draining from the segments.

Alternatively, if the collection is for the yellow sap another preparations is required: The segments are placed upright in a dry collection container, preferably of stainless steel with a stainless steel wire mesh bottom to allow drainage and for water contact to dialyze the leaves. The segments drain for twenty to thirty minutes. The cut segments will eventually form a seal and stop draining. The yellow sap that is collected, after a period of standing, will separate into two sub-portions; sediment and supernatant. After completion of the procedures which remove the yellow sap from the cut leaf segments, the segments are then pared to form fillets utilizing a wire slicer or paring knife to remove the outer rind or skin of the leaf segments. The remaining internal gel portion (fillet) is inspected and hand cleaned to remove any adhering skin or discolored portions and any residual yellow sap. Use a mild water spray, or submerge the gel portion under flowing clean water to remove any of the yellow sap residue. The fillet (internal gel) is drained for approx one hour. During this draining procedure, a slimy coating usually forms on the surfaces of the gel, this coating, known as the mucilage, is collected by gravity or centrifugation.

The remainder of the gel, in the form of gel strips, may then be ground, shredded or blended to break up the interstitial fibers, or the gel strips are forced through a wire mesh or filter screen to achieve liquefaction. (Alternatively, the gel strips may be frozen and thawed and then mixed to produce a liquid substance with fibers).This substance can then be filtered. This homogenized extract should have a pH of 4 to 5 (preferably nearer to pH4).

The finely homogenized aloe gel fillet solution is filtered through nylon mesh cloth filters (the gel is pumped through the filter for several minutes before opening the exit port so that a sufficient amount of fibers could build up to serve as the filter media).1000 litres of the filtered aloe gel fillet solution is pumped into a 5,000 litre tank and 4,000 litres of 190 proof undenatured ethanol is added to the aloe gel fillet solution. The solution is stirred for 20 to 30 minutes using a propeller agitator. The alcohol-gel solution is then immediately transferred to stainless steel settling pans for approximately four hours.

4.2 Equipment suitable for rural based processing in Laikipia All steps in the process described are performed at room temperature. Processing equipment include stainless steel troughs, grinder, centrifuge, racks and filters.

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4.3 Larger Scale Commercial Factory Scale Processing For Aloe Gel

Equipment: 1. Previously cleaned tanks, mixers sanitized with 50% isopropyl alcohol (IPA) solution a rinsed free of IPA with hot deionized water. 2. Pumps and attached hoses were drained with 5% "HTH" chlorine swimming pool solutions, then flushed with water. 3. The pumps and attached hoses were sanitized with 50% isopropyl alcohol solution. Pumps and attached hoses were flushed with hot deionized water until free of isopropyl alcohol. 4. A homogenizer and attached hoses and pumps were sanitized with 50% isopropyl alcohol solution. The homogenizer and attached hoses were flushed with hot deionized water until free of isopropyl alcohol.

Factory technique used for Aloe Vera: Aloe leaves are transferred in a refrigerated truck at 40 to 45°F within eight hours after harvest and stored under refrigeration at 40 to 45°F until processed t o reduce degradation. The stored leaves (10-15kgs) are placed in a pre-wash bath of an aqueous solution of calcium hypochlorite at room temperature substantially to remove surface dirt and kill bacteria on the leaves. The aqueous solution of calcium hypochlorite is added (approximately 0.125 grams of 98% calcium hypochlorite to one liter of water) to produce a solution (containing 50 ppm of free chlorine). The leaves remained in the pre-wash bath for a period of approximately five minutes.

The cleaned leaved are placed on a conveyor belt and through an automated washer, which washed the leaves with room temperature water to remove the residue calcium hypochlorite from the leaves. The leaves are visually inspected and hand scrubbed where necessary to remove any surface dirt remaining on the leaves. Such leaves were then rinsed with room temperature water.

Draining: The tip and butt portion is removed from each leaf and the leaves are placed in stainless steel basket containers, placed together on top of a funnel shaped stainless steel collector with mesh bottom. The yellow sap is allowed to drain from the leaves for approximately 30 minutes through the mesh bottom of the stainless steel basket into the collector. The stainless steel basket containing the aloe leaves is then removed from the collector and submerged in a room temperature water bath of continuously flowing water for 30 minutes to one hour to remove any remaining yellow sap from the leaves. The leaves then soak for another 30 minutes. The rind is then removed from each leaf with a sharp knife or wire to produce an aloe gel fillet. The aloe gel fillets are visually inspected and any contaminated parts are rejected (usually characterized by yellowish discoloration).

Grinding; The uncontaminated aloe gel fillets are placed in a stainless steel garbage grinding unit (same as used for industrial garbage). The coarse ground fillets then passed to a 5,000 litre stainless steel vat. The course ground aloe gel fillet solution is then pumped to a homogenizer (typically used in dairy processes for the homogenization of milk). The coarse ground aloe gel fillet solution was finely homogenized under a pressure of about 1,500 psi. The finely homogenized aloe gel fillet solution is then pumped to a stainless steel storage tank. The total mass of the homogenized aloe gel fillet solution is 20 to 60 % of the starting leaf mass. If necessary, the homogenized product is dialyzed using ultrafiltration.

Filtering out the aloin and emodin: The second phase of processing consists of passing the Aloe liquid through a series of filters that remove the aloe emodin (bitter-tasting, harsh laxatives) as well as any microscopic traces of leaves, sand or other particles. A Press Filter is used during this phase. First, the Press Filter is attached to the storage tank containing the pre-filtered Aloe liquid. The Press Filter's carbon-coated plates absorb the aloin and aloe emodin that is a by-product of grinding the whole leaf. The Aloe vera liquid is continually passed through the Filter Press until 99% of the aloin and aloe emodin are removed. This filtered product is then placed in a second holding tank. At this point, a Press Filter containing five (5) micron filter paper is attached to this holding tank. The Aloe liquid is passed through this filter medium until it shows no signs of residue. Cold filtration processing is then done as final purification procedure before the Aloe liquid is ready for stabilization.

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Stabilisation: The clear Whole Leaf Aloe Vera juice liquid is transferred to another clean and sterilized stainless steel container. The preservative (sodium benzoate, 1%) and pH stabilizing agents (ascorbic and citric acid) are thoroughly mixed into the batch. When creating Whole Leaf Aloe Vera concentrate(by vacuum-removing some water), potassium sorbate is added because of the increased nutrients and sugars to prevent mould and fungus growth.

Quality control: The Aloe vera juice liquid is filled into 55 gallon drums and quarantined pending release by the laboratory. The laboratory removes samples from the processed batch of Aloe liquid used for aloe juice; several samples are placed into long-term storage and retained for future inspections for up to three (3) years after processing. Some of the samples are placed on a seven (7) day Quality Control (QC) test to confirm the absence of any microbial contamination. The QC tests for:

Gram Negative Bacteria Staphylococcus Gram Positive Bacteria Yeast Salmonella Mould

The pH value is checked and the appearance - turbidity, clarity, and color - is evaluated. If all aspects of the test meet the standards established for a quality product free from contamination, the Aloe liquid is released by the Quality Control Department for shipment to the manufacturer. Whole leaf Aloe Vera juice is again placed in quarantine and samples are taken from each drum for a five (5) day Quality Control test to confirm freedom from the following organisms:

Gram Negative Bacteria Staphylococcus Gram Positive Bacteria Yeast Salmonella Mould

If there is no growth, the product is approved and placed into inventory for the manufacture of drinks or cosmetics. If the product does contain any micro-organisms, it is rejected and returned to the processor for replacement. Approved Aloe is placed into a cleaned and sanitized mixing tank. State-of-the-art handling and transferring techniques are employed to ensure the Aloe liquid does not become contaminated during this stage. A sample is removed from the tank and the laboratory checks the following characteristics:

Clarity Colour Odour Turbidity pH Value Appearance Taste

If all the test parameters meet with established standards, additional ingredients are added to create the drink or cosmetic finished product.

4.4 Equipment used for large scale factory processing As described above. See below.

4.5 Equipment Suppliers: Mark McMillan Email: [email protected] Administrative Offices , 4455 Carter Creek Pkwy. Bryan, TX 77802. Phone: 979-268-7447

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Annex 5. Aloe Vera, the Health Branded Aloe

5.1 Active components of the Aloe Vera plant

The Aloe-Vera gel consists of 96 % water. But the curative properties lies in its natural nutrients and vital substances. The nutritious ingredients of Aloe Vera can be divided into the following groups:

Vitamins: It is rich in most vitamins like Vitamin D, A (the antioxidant beta-carotene), C and E and even traces of B12, one of the very few plant sources of this vitamin.

Minerals: Aloe Vera contains more than 20 minerals, like Calcium, Sodium, Potassium, Manganese, Magnesium, Copper, Zinc, Chromium and the anti-oxidant Selenium. Even though minerals and trace elements are only needed in very small quantities, they are essential for the proper functioning of various enzyme systems in different metabolic pathways.

Salicylic acid: It is anti-inflammatory and anti-bacterial properties.

Sugars: Known as mucopolysaccharides, they enhance the immune system and help to detoxify. In topical preparations, the sugars are also the main moisturisers.

Anthraquinones: There are twelve Phenolic compounds which are found exclusive in the plant sap.

Lignin: It provides a penetrative environment so the other ingredients are absorbed into the skin.

Saponins: They have cleansing, and antiseptic properties, acting powerfully against bacteria, viruses, fungi and yeasts.

Fatty Acids: Cholesterol, Campesterol, ß.Sisosterol and Jupeol. These four plant steroids found in Aloe Vera are important anti-inflammatory agents.

Amino acids: The body needs 22 amino acids - our Aloe Vera gel provides 20 of these. More importantly, it provides 7 out of the 8 essential amino acids which the body itself cannot synthesise.

The stabilised excerpt contains a multiplicity of rich trace elements and the vitamins A, C and E from raw Aloe Vera gel. 11 of the 20 admitted amino acids, and 7 of 8 vital amino acids, was proven in samples of the stabilised gel.

In the USA the "Aloe Vera Research Institute" in Cypress, California has made for some years it's duty to investigate this nature plant scientifically. We know thus in the meantime the chemical composition of the Aloe Vera plant. In alphabetical order the following vital amino acid is contained in the Aloe Vera plant:

- Alanin - Arginin - Asparaginacid - Glutaminacid - Glyzin - Histidin - Lysin - Methionin - Prolin - Serin - Tyrosin

In addition, the mineral composition is also important:

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- Iron - Calcium - Calcium Carbonate - Magnesium - Manganese - Sodim - Zinc

5.2 Applications

The important therapeutic uses of Aloe Vera include • The long chain mannan polysaccharides in it helps activate and boost the Immune System. • The magnesium lactate and salicylates in it effectively avert Allergies, Sinusitis and Bronchitis. • The molecules in it act as anti-inflammatory agent, a cure for arthritis, and promote good circulation for the heart and nervous system. • The polysaccharides in it bring down the bodies serum lipids, and thus lower triglyceride and LDL level (bad cholesterol) and increase of HDL (good cholesterol). • As an antioxidant, it guards against damage by free radicals and unwarranted toxins in the body. It also regulates blood pressure, and acts in rheumatism, arthritis, and infections of the kidney, the urinary tract and the prostate. • By the combined and synergic effect of the various ingredients in it, it aids in treatment of peptic ulcers, stomach disorders, acidity, indigestion, gastritis and ulcers, colitis and haemorrhoids, cirrhosis, hepatitis and diabetes.

The list of different illnesses and conditions, aided by the use of Aloe Vera is indeed impressive, covering everything from burns and slight infections to very serious conditions.

A. Acne, aching joints & muscles, asthama, athletes foot, abscesses, arthritis, allergy rashes, age spots, acid indigestion. B. Brown skin spots, burns, boils, blood pressure, bruising, bad breath, bleeding, bowel problems / conditions, blisters, bronchitis. C. Cancer treatment (i.e. helps case the radiation effects), cuts & wounds, colon cleansing, constipation, calcium, chapping, cataracts, craddle cap, cystitis, candida, circulation, colitis, colic. D. Digestive problems, diarrhoea, dermatitis, dandruff, diabetes, detoxification, duodenal ulcer, diaper (nappy) rash, denture sores, depression. E. Eye and ear problems (inflammation, infection), eczema, energy loss. F. G. Gum disease, bleeding gums. H. Hair and scalp, heat rash haemorrhoids, headache. I. Infection, inflammation, itching, irritable bowel syndrome, indigestion, insomnia, influenza, inset bite. J. Jaundice K. Kidney ailments L. Liver ailments, laryngitis. M. Moisturizes, mouth ulcers, muscle cramps. N. Nasal congestion, nutrition, cracked nipples, nausea. O. Operation recovery. P. Psoriasis, prickly heat, pimple, peptic ulcer, pain relief. Q. Radiation burns, razor burn, rheumatism, rashes. R. Sear removal, scalp problems, sinusitis, sore throat, scalding, stomach dusorders, sciatica, strains, sprains, skin problems, stress shingles, stings, styles, sunburns. S. Tonsillitis, thrush, teething, tennis elbow. T. Ulcers (all kinds) U. Varicose veins, veterinary treatments, venereal sores. V. Warts, wind chapping.

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Aloe gel may help to:

• Speed healing of first-degree burns, including sunburns. The gel is excellent for easing first- degree burns (including sunburns) and certain minor second-degree burns. If applied after the burn has cooled, it will relieve pain and inflammation and accelerate healing. In one study of 27 people with moderately severe burns, those who used aloe vera healed in about 12 days on average, whereas the control group, who covered the affected areas with a regular gauze dressing, took 18 days to heal. • Soothe and hasten healing of cuts, scrapes, and other minor wounds and skin irritations. The gel contains a number of active ingredients, including substances known to help relieve pain, reduce swelling, quell itching, and increase blood flow to an injured area. Some research even indicates that the gel has antifungal, antibacterial, and antiviral properties. Conversely, aloe vera gel may not help treat deeper, infected wounds, or those incurred during surgery. In one study at a Los Angeles hospital, 21 women were given either aloe vera gel or a placebo for wounds resulting from a caesarean section or surgery to the abdominal wall. When the gel was used, it took 83 days for the wounds to heal; when the placebo was applied, it took 53 days. (Both groups also received standard anti-infective treatments.) • Lessen painful effects of shingles. Applied gently to the painful lesions that characterize this condition, aloe vera gel acts promptly to soothe these sores and provide relief from itching. It also works to decrease the chances that the blisters will become infected. • Reduce symptoms of psoriasis. The ability of aloe vera gel to promote healing and quell itching and pain may offer some relief to those who suffer from this troubling condition. In a recent study of 60 people with chronic psoriasis, 83% of those who applied aloe to lesions three times a day for eight months experienced substantial improvement. Only 6% of those using a placebo benefited from its effects. • Ease heartburn, ulcers, diverticular disorders, and other types of digestive upset. A juice made from the aloe gel acts as an anti-inflammatory and can be taken internally as a remedy for certain digestive complaints. European folk medicine calls for using aloe vera juice to relieve heartburn and ulcers. While there is very little substantive evidence to support these internal uses, preliminary research has shown promising results. In one Japanese study, 17 of 18 patients who took aloe vera juice found some relief for their peptic ulcers. However, none of the participants was given a placebo, so comparisons of its effectiveness could not be made. Other clinical trials in Japan indicate that certain compounds in aloe vera reduce the secretion of stomach juices and the formation of lesions.

Example Prescriptions:

For burns, cuts, scrapes, shingles, and other skin problems: Apply aloe gel to affected area two or three times a day. For sunburns, you can also add 1 or 2 cups of aloe vera juice to a tub of lukewarm water and soak. For heartburn: Drink 2 ounces of juice four times a day. For ulcers and diverticular disorders : Drink 1/2 cup of aloe vera juice twice a day for one month. If you are also taking psyllium for a diverticular disorder, allow at least two hours to elapse before having aloe vera juice. For warts: Dab a small amount of fresh or prepared aloe vera gel on a compress made of cotton gauze or flannel, and place over the wart. Change the dressing and apply new aloe vera daily. Improvement should be evident in three to four days.

General Interaction: Be aware that the long-term use of any laxative, including aloe vera latex, can cause you to lose an excessive amount of the mineral potassium. The low blood levels of potassium can be further worsened if you are also taking a potassium-draining diuretic ("water-pill") like hydrochlorothiazide or furosemide.

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• Dangerous heart rhythm abnormalities can develop if you take a digitalis heart medication (like digoxin or Lanoxin) along with a potassium-losing diuretic and the aloe vera latex. Consult your doctor for guidance. • If you are on oral corticosteroids, such as beclomethasone, methylprednisolone, or prednisone, it is important not to overuse or misuse aloe vera juice. A potassium deficiency can develop, and you may experience toxic effects from the medication. • If you are on the oral corticosteroid fludorocortisone (Florinef), it is important not to overuse or misuse aloe vera latex. A potassium deficiency can develop, and you may experience toxic effects from the medication. • As a topical treatment, aloe vera is quite safe. Occasionally, some people develop a mild allergic reaction marked by itching or a rash. If this occurs, discontinue use. • Due to improper processing, aloe vera juice sometimes contains small quantities of the laxative compound in aloe latex. Should you begin to have cramps, diarrhea, or loose stools, do not ingest any more of the juice and replace it with a new supply.

Cautions

• Don't take an aloe vera latex laxative if you are pregnant or breast-feeding; it may trigger uterine contractions. Also avoid using it during a menstrual period. • Children and the elderly should not consume an aloe vera latex laxative internally. In addition, laxatives of any kind should never be used by anyone with an intestinal obstruction, an acutely inflammatory intestinal disease (such as Crohn's disease or ulcerative colitis), appendicitis, or abdominal pain of unknown cause.

5.3 Example of Commercial Aloe Products

Aloe Joint Formula: A single 1 oz. serving daily delivers the full 1,500 milligram dosage of glucosamine shown in clinical tests to help lubricate nourish cartilage, increase the range of motion and flexibility and help maintain joint comfort. Ingredients: Aloe Vera Gel from Concentrate, Fructose, Citric Acid, Natural Lemon-Lime Flavor, Sodium Benzoate, Potassium Sorbate.

Herbal Force Aloe Vera Juice: Although the use of aloe vera gel on the skin is well-known to relieve burns and sunburn, little attention has been given to the amazing effects of drinking properly prepared aloe vera juice. In fact aloe vera has an amazing number of healthful effects when ingested orally. Aloe Vera Juice restores and maintains: Ingredients: Aloe Vera, Cat's Claw Extract, Chamomile Extract, Burdock Root Extract, Hawthorne Berry Extract, Astragalus Root Extract, Sheep Sorrel Extract, Pau d' Arco Bark Extract, Slippery Elm Bark Extract, Rhubarb Root Extract, Sodium Benzoate (0.1%), and Natural Fruit Extract.

Pure Aloe Vera Juice: A recent study presented at the 2002 International Aloe Science Council Conference showed that effectiveness of vitamins increased 3 fold when taken with aloe. The study was done with both vitamin C (water soluble) and vitamin E (fat soluble). Taken with aloe, each vitamin was found to be 3 times more present and to last longer in the blood stream than when taken with water. Aloe supports the healthy functioning of the kidneys, liver, colon and skin system and supports healthy elimination of toxins.

Herbal Force Aloe Vera Gel: Use aloe vera on the skin to relieve burns and to keep skin looking clean, clear, smooth, toned, hydrated and glowing with health. Ingredients: Aloe Vera with Cat's Claw Herb, "Essiac" Herbs (Sheep Sorrel, Burdock Root, Slippery Elm Bark Extract, Rhubarb Root Extract), Chamomile, Astragalus, Hawthorne Berry, Pau d' Arco, Green Tea, Ionized Colliodal Silver, Hyaluronic Acid, Glycereth-26, Sodium Benzoate and Carbomer.

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5.4 Explanation of Commercial Aloe Products Ingredients

PRODUCT EXAMPLE

Deionized water (Aqua) Aloe Barbadensis Leaf Extract (Aloe Vera) Cyclopentasiloxane Dimethicone Methyl Gluceth-20 Tocopheryl Acetate (Vitamin E) Arnica Montana Flower Extract (Arnica) Symphytum Officinale Leaf Extract (Comfrey) Chamomilla Recutita (Matricaria) Extract (Chamomile) Achillea Millefolium Extract (Yarrow) Acrylates/C10-30 Alkyl Acrylate Crosspolymer 1,2 Hexanediol Caprylyl Glycol Butylene Glycol Aminomethyl Propanol Phenoxyethanol

Deionized Deionized water: (purified water/demineralized water): (Aqua) Deionized water is water that lacks ions, such as cations (positive charged ions) from sodium, calcium, iron, copper and anions (negatively charged ions) such as chloride and bromide. This means it has been purified from most ions. This type of water is produced using an ion exchange process.

Deionized water is similar to distilled water, in that it is useful for where the presence of impurities may be undesirable. The lack of ions causes the water's resistivity (resistivity to an electrical flow) to increase. Ultra-pure deionized water can have a theoretical maximum resistivity up to 1000 times greater than common tap water. This means that pure deionized water is theoretically up to 1000 times more soluble than common tap water.

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Aloe Barbadensis Topically, aloe vera benefits dry and Leaf Extract: cracked skin, burns, blisters, frostbite, insect bites, and allergic reactions. Topical aloe vera application also helps to assure that when applying aloe products, you will get the highest concentrations of the natural healing agent delivered directly to your skin. It has traditionally been used to treat various skin conditions, including psoriasis, eczema, inflammations, burns and wounds. It is also a great skin moisturizer that helps to keep skin supple by bringing oxygen to the cells, and therefore increasing the synthesis and strength of skin tissue. Studies show that aloe vera improves the skin's ability to hydrate itself, aids in the removal of dead skin cells and has an effective penetrating ability that helps transport healthy substances through the skin.

Cyclopentasiloxane: A colorless, odorless, transparent, more info on nongreasy silicone fluid. It has a low Cyclopentasiloxane viscosity and surface tension and a relatively high vapor pressure which allows the majority of the silicone portion to evaporate from the surface to which it is applied. It is used primarily in cosmetic products as a spreading or wetting agent and can provide light lubrication to hair and skin.

Dimethicone: Unmodified silicones stay on or near the surface of the skin. Not only are the molecules too big to physically enter past the upper living cells — they associate with the upper layer of drying skin — but they also cannot penetrate cell membranes due to their large size.

They also dislike both the water and proteins inside cells. They evaporate quickly after helping to carry oils into the top layer of epidermis. From there, they may be absorbed by the skin. They form a barrier layer on the skin which must be renewed as the skin sloughs off*.

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Silicones form a protective layer which helps prevent transdermal water loss — a very useful characteristic for many products. Silicone gums provide instant shine to hair. Silicones act to help seal moisture into the hair, which helps prevent many kinds of damage. *Skin MD Natural™ uses a proprietary blend, consisting of several different dimethicones, that offer a very high degree of protection to the skin.

Methyl Gluceth-20: It is a water-soluble liquid moisturizer and emollient. As an ingredient in cosmetic formulations it imparts a smooth and gentle skin feel. Due to its exceptional water retention properties it is found in many upscale lotions and creams.

Tocopheryl Acetate: Vitamin E is an antioxidant* that protects (Vitamin E) cell membranes and other fat-soluble parts of the body. * Antioxidants work in several ways: they may reduce the energy of the free radical**, stop the free radical from forming in the first place, or interrupt an oxidizing chain reaction to minimize the damage caused by free radicals.

** Free radicals are highly reactive compounds that are created in the body during normal metabolic functions or introduced from the environment. Free radicals are inherently unstable, since they contain "extra" energy. To reduce their energy load, free radicals react with certain chemicals in the body, and in the process, interfere with the cells' ability to function normally. In fact, free radicals are believed to play a role in more than sixty different health conditions, including the aging process.

Arnica Montana Arnica Montana is used externally to heal Flower Extract: wounds, bruises, sprains, aches, and (Arnica) pulled tendons. Helps with sore, tired

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muscles and carpal tunnel syndrome.

A tea from the flowers can be used as a compress on the abdomen to relieve pain. Arnica can be toxic if taken internally.

Arnica is an antibiotic, anti-inflammatory, and pain reliever. Minimizes the effect of tissue trauma and aids in the healing process.

Symphytum Officinale The 1997 Commission E on Phytotherapy Leaf Extract and Herbal Substances of the German (Comfrey) Federal Institute for Drugs recommends Comfrey herb for External: Bruises, sprains.

"Dosage: Ointments and other preparations for external application with 5 - 20 percent dried drug; equivalent preparations. Mode of Administration: Comminuted herb and other galenical preparations for external use."

Comfrey has an ancient reputation as a wound-healer. Comfrey abounds in the healing agents mucilage and allantoin.

Achillea Millefolium Externally, yarrow is styptic (stops Extract: bleeding), astringent (makes tissue (Yarrow) contract), antiseptic (inhibits bacterial growth), vulnerary (helps tissue heal), anti-inflammatory, and possibly anesthetic.

For external use, generally either the fresh or dried plant material is used as a poultice, or a tea made from the plant is used in compresses or as a wash. It's also sometimes used in ointments.

Chamomilla Recutita Over the centuries, chamomile has gained more info on Chamomile Extract: a reputation as an herb of many uses. (Chamomile) It is said to have been one of the herbs of choice of Asclepiades, a physician who

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lived in Bithynia around 90 B.C. Pliny the Elder, one of the most famous of Roman naturalists who wrote extensively on herb use, is said to have given over his medical care to Asclepiades, because he was so skillful in prescribing herbs.

In modern terms, the uses of chamomile differ little from ancient authors. Its use is not a throw-back to Medieval times. Chamomile flowers are still an official drug (recognized by government authority) in the pharmacopoeia of 26 countries. Its medicinal value is due to the constituents of its essential oil.

Antiinflammatory, antiseptic, carminative, antispasmodic and sedative activity are attributed to Chamomile flowers in addition to promoting wound healing.

Acrylates/C10-30 Alkyl Acrylate This thickener is specially designed for Crosspolymer: thickening surfactant systems. An "easy- to-disperse" cross-linked polyacrylic acid. It delivers excellent thickening efficiency and suspending capability and long viscous flow.

It is specifically designed to make dispersions in water less susceptible to lumping and easier to pump and handle due to its low dispersion viscosity before neutralization.

1,2 Hexanediol: Skin MD Natural™ contains a proprietary formulation, consisting of 1,2 Hexanediol and Caprylyl Glycol, that is one of the most, if not the most, effective humectants * available today.

An efficient antioxidant, Alpha-Lipoic Acid at high dose levels has been shown to increase glucose uptake. Alpha-Lipoic Acid also protects against cholesterol oxidation.

Caprylyl Glycol: Skin MD Natural contains a proprietary more info on formulation, consisting of 1,2 Hexanediol Caprylyl Glycol and Caprylyl Glycol, that is one of the most, if not the most, effective

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humectants * available today.

It is a liquid preservative formulation which consists of phenoxyethanol and an emollient base. Protects against antimicrobical growth from bacteria and yeast while giving the finished product exceptional feel.

Butylene Glycol: A butylene glycol extract of the whole root of the Kava Kava plant. Because it is not concentrated, alcohol is not used in the extraction process. The Kavalactone profile is equivalent to the natural root. Therefore, it may be used as the traditional Kava-Kava extract infusion in personal care products.

Aminomethyl Propanol: Is used as an emulsifier and a buffering agent (keeps the pH of a mixture neutral). It controls the water solubility of the resin film in hair sprays, and makes the finished film more resistant to humidity.

Phenoxyethanol: Phenoxyethanol is an organic chemical compound often used in dermatological products such as skin creams. It is a bactericide , often used in place of sodium azide in biological buffers as 2- phenoxyethanol is less toxic and non- reactive with copper and lead .

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Annex 6. Commercial Proposal from AloeTrade America

PROPOSAL OF TECHNICAL ASSISTANCE SERVICES DEVELOPMENT OF A BUSINESS PLAN AND INVESTMENT PROJECT FOR AN ALOE PROCESSING UNIT IN LAIKIPIA AREA

PREPARED & DESIGNED BY ALOETRADE AMERICA LLC, MIAMI, FL, USA FOR LAIKIPIA WILDLIFE FORUM, NANYUKI, KENYA

INTRODUCTION This proposal has been prepared and designed by Aloetrade America LLC, located at Miami, Florida, USA and Aloetrade of Argentina (thereinafter ALOETRADE) to be presented for evaluation to the Laikipia Wildlife Forum (thereinafter LAIKIPIA).

The proposal has the objective to develop an investment project with its complete feasibility study, plus the technical assistance services to design an aloe processing plant (design layout, define the infrastructure required and equipment to be used) in Kenya and the know how process and technology to produce and stabilize the aloe juice, all of it to be provided by ALOETRADE to LAIKIPIA or the entity which LAIKIPIA nominates.

This technical assistance and transfer of the know how consists of an information package and know how in possession of ALOETRADE to be transferred to LAIKIPIA or the nominated recipients designed by LAIKIPIA, related to the aloe industrial process, from the reception of leaves until the obtention of either aloe juice or aloe gel as raw material, or aloe juice bottled ready to be marketed at wholesale, with the necessary adaptations of processes and products.

In the first stage, the project intends to process the aloe from actual wild population or commercial plantations in the Laikipia area, Kenya, in a location to be defined (preferably close to aloe populations or aloe plantations) to obtain aloe by-products, such as raw juice, bottled juice and other products.

Nevertheless, the plant shall be designed to produce in future new product developments aimed to fulfil potential demand from other market segments such as cosmetic industry, human nutrition and dietary supplements industry, pharmaceutical industries, agricultural sector, veterinary industry and animal nutrition industry, for the international markets.

The project includes

STAGE A - INVESTMENT PROJECT DEVELOPMENT. It implies to conduct and develop a feasibility study and the consequent investment project –the business plan- to establish an aloe industrial processing plant, to obtain aloe raw juice and aloe juices for final consumption to be marketed in regional, national and international markets. This technical information is offered as a written final document that constitutes the complete investment project or business plan, that will be used to justify and to define the final amount to be invested and the related operational costs when project be in operation at future.

STAGE B- TECHNICAL ASSISTANCE SERVICES AND KNOW HOW TRANSFER. It includes the technical assistance services and the transfer of know how, from ALOETRADE to LAIKIPIA, related to the aloe industrial process, from the reception of leaves at factory until the obtention and stabilization of either aloe juice or aloe gel as raw material, or aloe juice bottled ready to be marketed at wholesale, with the necessary adaptations of processes and products.

This technology transfer process includes information related to the layout of the plant, engineering related aspects, definition of equipments and devices, know how to manufacture the products –from the reception of aloe leaves to the final product to be manufactured, including product development phases.

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The technical information to be provided in this stage is offered both in written format (documents) and in location with our consultants. The information is for the industrial process above described, and do not cover other aspects such as marketing research, distribution channels, fiscal and financial aspects, human resources, organizational aspects, and legal issues.

STAGE C - COMMERCIAL ASSISTANCE SERVICES. This assistance implies the use of the business network established by Aloetrade America LLC, Aloetrade and its partners companies and web sites, in order to promote the international marketing and trade of the products to be manufactured by the Kenyan industrial plant at LAIKIPIA.

JUSTIFICATION OF THE PROJECT

THE INTERNATIONAL ENVIRONMENT

THE ALOE MARKETS The market for aloe is expanding at a good expansion and its level of growth stays with certain stability. At international level, some markets are growing at levels reaching figures near a 20% annual rate, although other markets show average values of between 8% to 18% of annual growth. The aloe industry at worldwide level has reported in recent years an annual average growth of 16%, with some peaks of 25%, measured at ex-works figures.

In some cases, the aloe market has had a growth of 5 or 6 fold the average of the national GDP of various countries, as it is the case of Spain and Italy in recent years. The worldwide market for raw aloe bulk products, aloe finished products and products using aloe in their composition, according to private estimations, has a total worldwide value estimated in USD 27 billion a year. The value in itself is high because of the incidence of the final value of cosmetic products that contain aloe in their formula, and by the high incidence that has the main 10 American corporations in this business, where some of them, operate under multilevel marketing systems, generating substantial increases in the value of goods sold.

Usually, the price difference between ex-works prices and final consumer prices are 8 or 9 fold, as it happens for instance in the case of the largest corporation, Forever Living Products.

There is a high demand in the different product presentations. The aloe worldwide trade (mainly considering raw materials, ingredients and some finished products) is estimated in about 180 million dollars. The numbers are still vague, since the aloe does not have a proper tariff nomenclature (Harmonized System classification) and it is included into the HS classification next to other flavourings and plant extracts, not being able to determine in an accurate way their transaction values.

In addition, in the cases of cosmetics, the value of exports and imports of companies into this market, has a similar circumstance, because the aloe cosmetics do not have a tariff classification that identifies them as opposed to the rest of cosmetics. Therefore, the total value of this market becomes complex and vague.

The most attractive markets for aloe products are the United States, Spain, France, United Kingdom, Germany, Italy, Japan and Korea.

An important growth area in the aloe demand actually is the functional foods markets, where aloe is one of the ingredients most required.

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STAGE A. INVESTMENT PROJECT DEVELOPMENT The main objective of this stage is to develop a feasibility study and the consequent investment project to establish an aloe industrial processing plant in Kenya (in a location to be defined yet at Laikipia area), to obtain aloe raw juice, aloe juices for final consumption to be sold at local, national and international markets mainly, and aloe bitter sap and/or concentrated sap for international markets. This technical information is offered as a written final document that constitutes the complete business plan, that will be used to justify and to define the final amount to be invested and the related operational costs when the factory be in operation.

In one first stage, the investment project will be in operation to produce two lines of products: • Aloe bulk juice for its use in different industries, using raw material sourced from wild and commercial plantations located at Laikipia region, and finished aloe bottled juices ready for wholesale, using the aloe bulk juice produced firstly. • Aloe bitter sap, aloe bitter in block and concentrated aloe bitter with different aloin content. The aloe bottled juices will be manufactured for later sales into the national, African regional markets and international markets.

DESCRIPTION OF THE WORK ACTIVITIES TO BE PERFORMED BY ALOETRADE AMERICA LLC - ALOETRADE

Information Sources The data for this project will be obtained in various sources:

DOCUMENTARY RESEARCH Secondary information of different sources Sectoral statistics Balance of companies Publication extracts Sectoral notes Data bases Own ALOETRADE data bases Industrial information already verified by ALOETRADE Markets data obtained and available by ALOETRADE

ON FIELD RESEARCH IN KENYA Personal contacts with aloe competing companies Contacts with suppliers Contacts with distribution channels of aloe products Contacts with industries Contacts with referring people into the industry and organizations Contacts with civil employees of Kenya public agencies and organizations

II. Methodology The search of documentary information is made in United States and Argentina. Some interviews, are made on location or by telephone in Kenya and the USA. The final writing (which includes compilation, evaluation and conclusion) is made at our Miami and Buenos Aires offices.

The work understands the development of an investment project for an aloe industrial processing plant, in a location to be defined in Kenya. The items to be included in the final report are those described below.

A final presentation of the work is made before the funding NGO or donors which finance this project, in Nanyuki, Kenya.

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III. Execution Time The job can be completed between 90 to 120 days approximately. The execution time may have variations depending on the final contents to be included into the projects.

IV. Final Cost

Fees

The fees for the complete job amounts to USD 32,800.00

Travel and Accomodation

Travel to Kenya, Lodging and meals and incidental travel expenses for 2 journeys: total USD 6,600.00

Grand total: USD 39,400.00

PROJECT LEADER Aloetrade America LLC - Aloetrade. Project Participants

STAGE A 1 Project Director: Dr. Daniel Avaro 1 Industrial Engineer: Ing. Oscar Balumelli 1 Senior Economist: Dr Rodolfo Paez 1 Junior Economist: Lic. Lucas Inchaurbe 1 Market Analyst Senior: Dr. Natalia Liviero

STAGE B 1 Project Director: Dr. Daniel Avaro 1 Chemical Engineer: Ing. Javier Arriete 1 Industrial Engineer: Ing. Oscar Balumelli

FEASIBILITY STUDY - MAIN CONTENTS

1. PROJECT BACKGROUND a. ALOE BUSINESS IN KENYA b. KENYA PUBLIC POLICIES RELATED TO THE ALOE INVESTMENT PROJECT i. GENERAL ECONOMIC POLICY ii. AGRICULTURAL AND RURAL POLICY iii. INDUSTRIAL POLICY iv. FINANCIAL POLICY v. ENVIRNOMENTAL POLICY vi. TAX POLICY c. PROJECT BACKGROUND i. MAIN PARAMETERS (PRODUCT, PLANTATION, LOCATION, IMPLEMENTATION) ii. OPORTUNITY STUDIES iii. MAIN COMPETITIVE ADVANTAGES 2. ALOE MARKETS a. THE KENYAN MARKET i. SITUATION OF THE KENYAN MARKET ii. SWOT MATRIX OF THE ALOE BUSINESS iii. VOLUME AND VALUE OF THE ALOE BUSINESS IN KENYA iv. COMPETITIVE FORCES INTO THE MARKET 1. LOCAL AND FOREIGN COMPETITORS 2. SUPPLIERS 3. CLIENTS AND DISTRIBUTION CHANNELS 4. SUBSTITUTES

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5. NEW PLAYERS TO THE ALOE BUSINESS v. BARRIERS OF ENTRY TO THE ALOE BUSINESS vi. BARRIERS OF EXIT TO THE ALOE BUSINESS vii. KEY SUCCESS FACTORS IN THE ALOE BUSINESS viii. COMPETITIVE ACTIONS b. THE MAIN INTERNATIONAL MARKET i. MAIN ACTUAL AND POTENTIAL ALOE MARKETS. MAIN MARKET CHARACTERISTICS FOR THE PRODUCTS DEFINED INTO THE PROJECT ii. MARKET ATRACTIVENESS iii. MAIN PRODUCTS SOLD AND CHARACTERISTICS iv. DISTRIBUTION CHANNELS BY MARKET v. PRODUCT LIFE CYCLE BY MARKET vi. MAIN DEMANDING INDUSTRIES c. COMMERCIAL OBJETIVES i. SHORT TERM, MEDIUM AND LONG TERM SALES PROSPECTS ii. MARKETING MIX OF PROJECT MAIN PRODUCTS 1. PRODUCT STRATEGY 2. PRICE STRATEGY 3. DISTRIBUTION STRATEGY 4. COMMUNICATION, ADVERTISING AND PROMOTION STRATEGY d. SALES INCOME ESTIMATION i. AT NATIONAL LEVEL ii. AT INTERNATIONAL LEVEL 3. PRODUCTION PROGRAM IN THE ALOE INDUSTRIAL PROCESSING PLANT i. DEFINITION OF PLANT CAPACITY 1. MAXIMUM CAPACITY 2. MINIMUM ECONOMIC SIZE 3. AVERAGE IDLENESS LEVEL FOR THE INDUSTRY ii. DEFINITION OF THE PRODUCTION PROGRAM iii. ESTIMATION OF PRODUCTION VOLUME PER YEAR iv. PODUCTION TIMES (START UP, TRIAL TIME AND NORMAL PROCESS) v. DEFINITION OF RAW MATERIAL REQUIREMENTS 1. RAW MATERIAL SOURCING a. FROM OWN PLANTATIONS b. FROM OTHER LOCAL PRODUCERS 2. QUALITY AND QUANTITIES 3. AVAILABILITY SCHEDULES 4. UNITARY COSTS vi. OTHER RAW MATERIAL /INGREDIENT / PACKAGING MATERIALS REQUIREMENTS 1. SOURCING 2. QUALITY AND QUANTITIES 3. AVAILABILITY SCHEDULES 4. UNITARY COSTS vii. OTHER SUPPLIES AND TOOLS REQUIREMENTS 1. SOURCING 2. QUALITY AND QUANTITIES 3. AVAILABILITY SCHEDULES 4. UNITARY COSTS viii. SERVICES AND OTHER TECHNICAL REQUIREMENTS 1. SOURCING 2. QUALITY AND QUANTITIES 3. AVAILABILITY SCHEDULES 4. UNITARY COSTS 4. PROJECT ENGINEERING a. TECHNOLOGY i. BRIEF DESCRIPTION OF USUAL OFFERED TECHNOLOGIES AND PROCESSES IN THE ALOE BUSINESS ii. TECHNOLOGIES TO BE USED INTO THE PROJECT iii. SOURCES OF TECHNOLOGIES AND EQUIPMENT iv. ESTIMATION OF COSTS b. MACHINERY AND EQUIPMENT i. FOR THE INDUSTRIAL PROCESS

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ii. AUXILIARY EQUIPMENT AND DEVICES iii. ESTIMATION OF COSTS c. CIVIL ENGINEERING i. PLANT LAYOUT ii. ESTIMATION OF COSTS 5. HUMAN RESOURCES a. DIRECTION AND MANAGEMENT i. TASKS AND RESPONSABILITIES ii. AVAILABILITY iii. ESTIMATION OF SALARIES AND BENEFITS b. ADMINISTRATIVE PERSONNEL i. TASKS AND RESPONSABILITIES ii. AVAILABILITY iii. ESTIMATION OF SALARIES AND BENEFITS c. PLANT AND LABS / QUALITY CONTROL PERSONNEL i. TASKS AND RESPONSABILITIES ii. AVAILABILITY iii. ESTIMATION OF SALARIES AND BENEFITS 6. FINANCIAL PLAN a. INVESTMENT PLAN b. WORK CAPITAL REQUIREMENTS c. OPERATIONAL COSTS d. INVESTMENT TIME SCHEDULE e. SOURCES AND USES OF CASH INTO THE PROJECT f. PROJECT FINANCING i. OWN RESOURCES ii. LOANS iii. OTHERS g. PROJECTED CASH FLOW (INFLOW AND OUTFLOWS) h. NET INCOME STATEMENTS i. PROJECT PROFITABILITY 7. PROJECT FINAL CONCLUSIONS AND RECOMENDATIONS

STAGE B. TECHNICAL ASSISTANCE SERVICES AND KNOW HOW TRANSFER It includes the technical assistance services and the transfer of know how from ALOETRADE to LAIKIPIA, related to the aloe industrial process, from the reception of leaves until the obtention and stabilization of either aloe juice or aloe gel as raw material, or aloe juice bottled ready to be marketed at wholesale, with the necessary adaptations of processes and products.

This technology transfer process includes information related to the layout of the plant, engineering related aspects, definition of equipments and their installation, know how to manufacture the products – from the reception of aloe leaves to the final product to be manufactured, including product development phases. The technical information to be provided in this stage is offered both in written format (documents) and in location with our consultants. The information is for the industrial process above described, and do not cover other aspects such as marketing research, distribution channels, fiscal and financial aspects, human resources, organizational aspects, and legal issues.

DESCRIPTION OF THE WORK ACTIVITIES TO BE PERFORMED BY ALOETRADE AMERICA LLC – ALOETRADE

I. Methodology For the implementation of this proposal, it is necessary to perform the first stage as explained above, having an investment project or a complete business plan with the main characteristics for an aloe industrial processing plant. In this stage, the services to be provided by ALOETRADE to the LAIKIPIA include technical assistance and transfer of information and know how in the following fields: • Description of processing technology to be used in the aloe processing plant • Definition and selection of machinery and equipment, tools and devices to be used in the aloe processing plant

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• Design of the plant layout • Guidance (jointly to the suplier) to install the equipment and devices for the aloe processing plant and final adjustments • Know how transfer and technical assistance related to the aloe industrial processing, including stabilization, to obtain bulk raw aloe juices and aloe gel • Assistance in Product development. Aloetrade will help to develop the formulas and production process to obtain following products: a. Aloe raw juice b. Aloe juice bottled for human consumption c. Aloe dry extract for raw material to nutritional industry d. Aloe spray dried powder e. Aloe bitter sap f. Aloe concentrated sap g. Aloe powder with aloin content h. Aloe oil i. Aloe cosmetics i. Aloe gel ii. Aloe shampoo iii. Aloe conditioner iv. Aloe body cream v. Aloe facial cream

This technical information is offered throughout personal assistance on the Kenyan location where the plant shall be erected and in written documents. The final methodology steps and schedule for this technology transfer is to be defined yet.

II Execution Time The job can be completed between 90 to 120 days approximately. The execution time may have variations depending on the final contents to be included into the projects. The final execution time shall be defined in the final proposal.

PROPOSAL COSTS Fixed Fees For the complete assistance the fixed fees are of U$S 28,000.00

Variable Fees For Product development, final fees will be of U$S 2,200.00 per each product to be developed.

Royalties During a 8-year period since the first product sales, Aloetrade will receive a 5% of royalties on the FOB export value for international sales , for those products that have been developed under this Project, except in those cases where Aloetrade have been participating as buyer or importer. In such cases, the 5% of royalties, should not be paid to Aloetrade, but discounted from the FOB export price.

Traveling and Expenses

Estimated at USD 9,700.00

STAGE C – COMMERCIAL ASSISTANCE SERVICES. The objective is to offer commercial services. Such activities implies marketing and sales efforts to sell and/or distribute the products to be manufactured by the Kenyan aloe industrial processing unit owned by the LAIKIPIA.

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DESCRIPTION OF THE WORK ACTIVITIES TO BE PERFORMED BY ALOETRADE AMERICA LLC – ALOETRADE The services may be performed through the use of the business network established by Aloetrade America LLC, Aloetrade and its affiliates, either through the owned companies, subsidiaries and companies where Aloetrade has commercial joint venture agreements, as described below in our background, or through the various e-commerce sites fully owned by Aloetrade America.

COSTS OF THE SERVICE The marketing and/or sales costs are to be discussed in different ways depending if sales involves raw materials or finished products, and if sales are to be conducted in an off line concept or under on line methods (through e-commerce sites), be directly through Aloetrade or their affiliate companies.

Later, the values of commissions or price differentials will have to be negotiated between ALOETRADE and the LAIKIPIA.

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Aloetrade America LLC Background: Aloetrade America LLC it is a company formed under the laws of the state of Florida, the United States. Its main activities include the marketing and sales of aloe products and by-products and other succulent plants, the sale of products and services related to the aloe business, the franchising of aloe products and services for spa markets and the offer of technical assistance and technology transfer for the cultivation and industrial processing of aloe plants and products.

The business network of ALOETRADE AMERICA is the following:

USA HOODIA CALIFORNIA HOODIACALIFORNIA.COM is a fully owned e-commerce site aimed to sell Hoodia gordonii products, aloe vera products, chia products, noni juices and blueberry dietary supplements

HOODIA LATINA HOODIALATINA.COM is a fully owned e-commerce site aimed to sell Hoodia gordonii products, aloe vera products, chia products, noni juices and blueberry dietary supplements

INNOMARK INC is an american company which produces and manufactures noni juices and products. Aloetrade sell and distribute noni products manufactured by Innomark.

HOODIA FOR WEIGHT LOSS is a company who offer distribution services for Hoodia and aloe products. Aloetrade sell Hoodia gordonii and aloe products under agreement with this company, in the US, Brazil, Mexico, Chile and Argentina markets.

MEXICO ALOEMEX SPRL de CV, is a Mexican company engaged in the aloe vera cultivation and industrial business. ALOETRADE AMERICA and its partners has a share participation of 30% in its capital.

TIO LABS SPRL de CV, is a Mexican company envolved in the aloin production. ALOETRADE AMERICA has a commercial joint venture relationship with such company, supplying aloe sap from Venezuelan origin and selling aloin products.

VENEZUELA UCOPRINSA, is a Venezuelan cooperative who grows aloe vera and process at its own industrial plant. ALOETRADE has a distributorship agreement to distribute its products.

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VENEZUELAN TRADING, is a Venezuelan trading company engaged in the export of aloe products and raw materials. ALOETRADE AMERICA has a commercial joint venture agreement with this company to sell aloe products at international markets.

NAPOLEON PINEDA, is a large Venezuelan aloe producer. ALOETRADE AMERICA has a distributorship agreement to sell its products at international markets.

ECUADOR COLONCHELINE CORP, is an ecuadorean company involved in the aloe growing and industrialization of aloe products. ALOETRADE has an commercial joint venture to sell and distribute its aloe raw materials at worldwide markets.

ARGENTINA CAPYC, is an Argentinean cooperative who grows and manufacture aloe products, while ALOETRADE has an industrial and commercial joint venture to sell and distribute its products worldwide.

ITALPHARMA SRL, is an italian company based in Argentina who grows and manufacture aloe products, while ALOETRADE has an industrial and commercial joint venture to sell and distribute its products worldwide.

SPAIN ALOETRADE ESPAÑA, is a Spanish company in formation, to be established to sell and distribute ALOETRADE line of products and control the franchising business for aloe spa products.

DIETA HOODIA DIETAHOODIA.COM is a fully owned e-commerce site aimed to sell Hoodia gordonii products, certified organic aloe vera products, chia products, noni juices and blueberry dietary supplements

GEMALOE SL, is a Spanish company, with an exclusive distributorship agreement for the ALOETRADE products, mainly aloe cosmetic and aloe juices.

SWEDEN BERTIL LINDELL, is a Sweden private company which imports and distribute in Sweden and Nordic countries various ALOETRADE aloe products.

SWITZERLAND Coloncheline Corp, is a swiss company which manufactures aloe cosmetic products and ALOETRADE distributes them into various European markets through direct sales and via the DIETAHOODIA.COM e- commerce site.

Main site for Aloetrade America is www.aloetradeamerica.com in English language.

Aloetrade Background Aloetrade is an Argentine company, dedicated to the aloe and succulents, whereas the main activities includes cultivation, industrialization and marketing of aloe raw materials and finished products.

Aloetrade offer various technical assistance services for aloe commercial cultivation and for aloe processing industries. Services are provided to customers located in Argentina, Brazil, Chile, Colombia, Dominican Republic, Ecuador, Mexico, Panama, Peru, Venezuela and Spain. Main office is in Buenos Aires, Argentina.

Main site for Aloetrade is www.aloetrade.com.ar in Spanish, English and Portuguese language.

E- Commerce sites owned by Aloetrade America

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Hoodia Latina Sales of hoodia gordonii, aloe vera, noni juices, blueberry pills and chia pills. Focused on the Hispanic population in USA and Brazil, Mexico, Chile and Argentina. www.hoodialatina.com

Hoodia California Sales of hoodia gordonii, aloe vera, noni juices, blueberry pills and chia pills. Focused on the US market. www.hoodiacalifornia.com

Dieta Hoodia Sales of hoodia gordonii, organic aloe vera products, noni juices and chia pills. Focused on the European markets. www.dietahoodia.com

Other Aloetrade Information Sites http://aloe-sabila.blogspot.com

News and content referred to aloe production business in latin America, Spain and Portugal.

http://aloe-sabila-clima.blogspot.com Information on the weather conditions for the main aloe production areas in latin America, Spain and Portugal. http://aloe-propiedades.blogpot.com Information on the aloe properties and uses. http://infohoodia.blogspot.com Information and news on hoodia gordonii.

Legal and Tax References

Aloetrade Aloetrade / Daniel Avaro y Asociados is a company authorized Ander argentine law. Fiscal registration Ander Argentina Tax Administration (AFIP) is under Number 20-13920293-8

Aloetrade America LLC Aloetrade America LLC is a company registered as Limited Liability Company Ander the law of the Florida state, USA Ander Nbr L05000112032 and the Employment Identification Number 20-3817270 at the Internal Revenue Service of the United States.

ALOETRADE AMERICA LLC 16005 NW 52 Ave. Miami, Fl 33014 USA www.aloetradeamerica.com [email protected] Tel 1-305-206-1635

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Annex 7. Baringo Aloe Development Programme

To promote sustainable harvesting, KEFRI and partners are implementing an aloe bioenterprise in Baringo, which was launched by Director KEFRI- on 18/11/2004, funded by European Union, Biodiversity Conservation Programme. The residents of Baringo District’s arid and semi arid lands (ASALS) typically depend on traditional livestock practice, now becoming increasingly unviable due to land pressure and loss of resources. It is for this reason KEFRI has taken an active role in promoting aloe cultivation for improved livelihood wealth generation and enhance biodiversity conservation.

Strength Aloe bio-enterprise development Baringo District although endowed with vast range of biodiversity is one of the poorest districts in Kenya with over 38% of the population living under the poverty line. Livestock production is the only source of livelihood for the community. The community is vulnerable to climate change and variability, a problem that is being compounded by the community’s eroding resilience and coping mechanism. Aloe occurs naturally in the district and thrives on some of the most difficult site – rocks and highly degraded areas. The community recognizes Aloe as an important plant species with medicinal properties and a pillar for honey production. The community has also used Aloe for soil erosion control. KEFRI has conducted successful research work in the area aimed at enhancing the conservation and management of Aloe species. The following are on the justification for the intended project;

 Informal Aloe production and marketing is being conducted in Baringo with the majority of the people in Baringo especially in the low lands relying on Aloe sap harvesting for their livelihood during severe droughts.  Development of Aloe products will provide alternative sources of income.  There are no formal marketing structures and therefore dealers are currently exploiting the Aloe harvesters. Aloe sap gatherers are paid between Ksh 50 to 60 for 5 litres. Collection of good amount of sap may involve many Aloes and sometimes several days.  Quality control is compromised as there are no quality assurance procedures from cultivation, harvesting and processing,  Little or no domestication has been taking place in heavily exploited areas,  The higher quality (higher aloin content than secundeflora) Aloe turkanensis mostly preferred by dealers is largely found in Baringo,  There are no resource maps, defining extend of distribution and quantities of available commercial Aloes in Baringo,  Areas around Koriema have conserved their Aloe secundflora and with proper training on sustainable harvesting, they will earn more and conserve the Aloe species,  Already Propagation protocols have been established by KEFRI even harvesting mechanisms and quality control procedures to differentiate between Aloe secundflora and Aloe turkanensis are in place  The dry leaves of Aloes are also livestock fodder,  Production of diversified Aloe products to be sold locally and internationally will boost Aloe value and enhance domestication – conservation,  Introduction of Aloe vera farming in suitable sites to be enhanced through irrigation and will have an added impact to proposed Aloe project. Aloe gels form Aloe vera is a multi billion industry worldwide, currently estimated at US$ 20 billion,  The involvement of a private investor (Land Mawe), Research Institute (KEFRI) and the producers (Communities), provide a good model for sustainable utilization of biodiversity as encouraged at many scientific gatherings. Its viewed that biodiversity should be seen from a business point of view and be approached through partnership for its management,

In light of the CITES, it is recommended that Parties and NGOs support the development of community propagation and cultivation schemes for the Aloe species to take the pressure off wild populations and support rural livelihoods; and further that cultivation and propagation guidelines for Aloe species with medicinal values are developed as proposed by KWS and certification schemes for sustainably wild

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harvest of cultivated plants are developed, supported and promoted as an incentive for CITES compliance

Baringo Aloe bioenterprise Baringo Aloe bioenterprise (BABE) development is among the Aloe initiatives taking place in the country. BABE is utilizing the lesser-developed high value Kenyan Aloe resources in Baringo, for improved utilization and equitable benefit distribution to all stakeholders. The main focus is the development and marketing of commercial and certified aloe products in Baringo and neighbouring districts. BABE is a partnership between government (KEFRI and KWS), private (Landmawe Ltd) and local communities (KOKISA CBO), that was funded by European Union, through biodiversity conservation programme (EU- BCP). The programme was developed based convention of biological diversity (CBD), which emphasizes, biodiversity utilization, to be conserved through sustainable utilization and equitable distribution of derived benefits to all beneficiaries stakeholders. The programme also takes into account synergies from other conventions, namely CITES, UNCCD and MDGs.

 The Koriema Aloe Processing project is funded by the European Commission (EC) through the Biodiversity Conservation Programme (BCP) for about $13 million in Kenya shillings (KShs, approximately $187,807 USD) The fund was aimed at alleviating poverty and promoting gender equality, which is in line with the Millennium Development Goals set by the United Nations. Apart from fighting poverty, the project would also promote bio-diversity conservation in the area.  The development and realization of this project, which is to support conservation, sustainable utilization, and equitable benefit sharing, is through a public-private partnership between the BCP, Kenya’s government (Kenya Forestry Research Institute, Kenya Wildlife Services), the local community (KOKISA Community Baringo), and a private investor (Land Mawe Ltd.).

Stakeholders

Stakeholder Role Community  Conserve wild Aloe species through biodiversity conservation and sustainable KOKISA utilization of local biodiversity for income generation and for checking soil Community degradation, provide fodder, bee forage and soil stabilization. Baringo  Communities will actively seek to promote the protection of Aloe species.  They will domesticate endangered species.  Comply with all District environment Team criteria (DET consists of Ministry of Agriculture, KWS, NEMA, District Officer). Kenya Forestry  Provide the technical expertise Research  Training of communities develop curricula, provide facilities and personnel Institute  Extension services: field trips, on ground assessment, continuous improvement.  Research propagation techniques, applications, best practice.  Research on value addition and product development.  Conduct the Resource Mapping to ascertain the status of Aloe and provide backstopping.  Identify the most threatened species  Facilitate domestication of threatened species.  Monitor the sustainability  Certify the source of Aloe. Land Mawe  Commercialization and develop the market Company  Provide the project with commercial expertise Limited  Set up collection centres in convenient locations  Pay spot cash for the products in conjunction with KEFRI  Set up processing plant  Develop export potential  Initiative value addition to products  Assist in extension services, quality assurance

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 Actively replicate project in other regions  Ensure sustainability of the project by ensuring commercial viability  Equitable remuneration for all stakeholders in the supply chain  Adhere to tenets of fair trade  Ensure that the products are marketed as certified from a sustainable source  Attempt to obtain a fair value for the products through value addition  Passing on the benefits of higher prices through to the communities  Develop other infrastructure as part of its Corporate Social Responsibility  Professionally account for and audit the budgets CDTF-BCP  Provide seed money to kick start commercialization (EU funded  Safeguard that Resource Map and the intellectual property remains in the public partner domain for posterity organization  Initiate a viable, sustainable, necessary income generation and biodiversity conservation project  Attain high impact results for relatively funding  Impact a large population of affected communities  Commence a self sustaining project with a significant long term impact

Main Focus of the initiative/s Specific Objectives/activities (a) To enhance community capacity in resource production, management and marketing. (i) Putting in place community structures for sustainable resource utilization. (ii) To train community extension staff, on aloe seed harvesting/storage, sap harvesting and post harvest handling. (iii) Undertake community education and awareness creation. (iv) Promote on-farm cultivation/domestication of selected commercial aloes through communities in Baringo. (Nursery establishment, strengthening existing ones and on-farm cultivation). (v) Put in place technologies for rangeland rehabilitation using aloes

(b) To develop high value marketable products from commercial aloes of Baringo. (i) Under commercial aloe resource quantification of both domesticated and those in the wild in Baringo and Koibatek districts. (ii) Establish an aloe sap processing plant, at Koriema in Baringo for production of aloe crystals. (iii) To undertake an environmental impact assessment of the bioenterprise. (c) To develop certification mechanism for enhanced sustainable exploitation of aloes in Baringo district. (i) Support KWS, put in place, regulatory mechanism for production and trade in Kenya. (ii) Put in place certification mechanisms, that’s establish aloe, management units in Baringo/Koibatek, for sustainable aloe utilization.

(d) To enhance community entrepreneurship skills towards aloe commercialization. (i) Establish market links for Baringo aloe products. (ii) Develop a website, logo, marketing strategies for Baringo aloe products. (iii) Purchase aloe sap from communities.

(e) Institutional support mechanisms. (i) Purchase equipment needed for the project e.g. vehicle for KEFRI, Tractor for community. (ii) Hire project staff to undertake these activities. (iii) Put in place project implementation committee.

Product development and marketing Commercial Aloe resource quantification been undertaken to determine off take from wild sources and also as a monitoring tool for sustainable Aloe harvesting. Previous experimental result has shown that a minimum of about 30 tons of sap can be produced per year. Usually, a single Aloes produces approximately 45 ml. Currently, a study by KEFRI indicates that the district exports about 50 tons, great

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part of it coming from Eastern part of Baringo district, which was not sampled due to insecurity. This shows that areas around the project site can export minimum of about 21 tons of Aloe annually.

Areas of critical mass as indicated in table below

Area (site) Species Quantity Altitude (metres) Lake Baringo A. turkanensis 20600 983 - A. turkanensis 30328 996 - A. turkanensis 17464 997 - A. turkanensis 4830 994 Kabloetigon A. turkanensis 13500 1040 Bartum A. secundflora 35700 1378 Koromoi Hill A. secundflora, A. tugenensis 94284 1363 - A. secundflora 87750 1344 - A. secundflora, A. tugenensis 87750 - Kimalel Centre A. Secundflora 55000 1357 Kimalel - Kinyach V. A. tugenensis, A. turkanensis 10000 1321 Ng'enyboware, Kapcheburet area A. tugenensis, A. turkanensis 10000 1337 Kapchumo (lagger is bnd for sabor/k A. secundflora, A. tugenensis 6160 1320 Koiboleng'na hill A. secundflora 7467 1350 Oge hill, Sabor A. secundflora, A. tugenensis 106624 1405 Oge hill, Sabor A. secundflora, A. tugenensis 143808 - Oge hill, Sabor A. secundflora, A. tugenensis 49392 1397 Oge hill, Sabor 259896 1374 Chepkoyo V A. turkanensis 9000 1035 Orokwo hill A. turkanensis, A. secundflora 2621 1301 Barsmoi A. secundflora, A. tugenensis 27040 1312 Near Bartum mkt A. secundflora, A. tugenensis 33867 1343 Kipsego V A. secundflora 4000 1382 Rorobai area A. secundflora, A. turkanensis 8000 1329 Cheporoswo V A. secundflora 11499 1280 Koitilyon A. secundflora, A. turkanensis 35447 1279 Kimondis A. secundflora, A. tugenensis 4460 1278 Kapsagat loc A. secundflora 100000 1391 Barkilenya A. turkanensis 6000 1032 A. secundflora 40000 1177 A. secundflora 7000 1160 A. secundflora 38000 1475 Total 1367487

Value addition for crude Aloe gum, like soaps, shampoos been developed. Markets been sourced oversees.

Capacity building o Various community trainings been undertaken o Three groups have received training on product development but need some further training in entrepreneurship skill.

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o The local community based group KOKISA self help, was upgraded to CBO, they formed a co-operative as income arm. Now they are in the process of registering as a trust. o SNV - Support on community capacity o Exchange programme for selection members of KOKIA to Coastal Aloe farmers. o SNV – Support KEFRI and Land Mawe visits to South Africa. o SNV - Supports MOU development at Cheptebo in Baringo. o IGAD – Exchange programme o Between communities in Kajiado and drylands group to learn on drylands livelihoods and biodiversity initiatives. Kajiado CBOs learned on Aloe conservation and KOKISA learned on Bee keeping work in Kajiado. o ITDG – Supported exchange programme of Turkana CBO, with KOKISA on Aloe activities. o Uganda Mission- President Museveni sent a mission team to come and explore possible uses of Aloe and gum arabic in respect to utilization to Karamoja groups of Uganda. The mission team visited KOKISA Aloe farmers and Baringo Aloe factory. o Laikipia Aloe group. LWF facilitated Aloe farmers to visit Baringo Aloe bioenterprise on a fact-finding mission to learn more on Aloe utilization, marketing and conservation. o The enterprise has listed many visitors. o Baringo Aloe bioenterprise got a support from British Council, for 250 beehives. Aloe is a good beeforage material.

Enhanced Aloe resource production o Aloe nurseries been established. o There is aggressive domestication/plantations of commercial indigenous Aloe to take off pressure from wild sources. o Promote on-farm cultivation/domestication of selected commercial aloes through communities in Baringo. (Nursery establishment, strengthening existing ones and on-farm cultivation).

o Seven nurseries were established among them, the three community nurseries at Koriema, Sabor, and Kimalel measuring 30 m x 30 m fence, with capacity of 30,00 seedlings, each have been established. o Sixty thousand seedlings have been potted in three nurseries Koriema, Sabor and Kimalel. o Most of the seedlings that have been potted are A. secundflora . o But emphasis is being put on A. turkanensis especially in areas around Lake Baringo to East Baringo, for it has good quality which may be preferable to international standards. o Farmers and communities have been trained on seeds harvesting preparation and storage. o KOKISA CBO have sold seedlings worthy Ksh 210,000. Drought, diseases and pests have been threatening seedling survival. Locusts, insect suckers, beetles and some fungal been noted major threats. o Currently various farmers have established various Aloe plantations, in most parts of Baringo and neighbouring districts. Planting of Aloe is being done through an integrated approach. o The approach includes integration with beehives. Since they are good bee forage material, rehabilitation of degraded rangelands, replacement of Prosopis cleared areas. o The main emphasis is on commercial indigenous Aloes, Aloe secundflora and Aloe secundflora found in Baringo. Also Aloe vera varieties are being introduced in the district. Put in place technologies for rangeland rehabilitation using aloes

Database and knowledge intensive technologies: There is adequate database (resource map) indicating the extent of Aloe growing in the wild, and potential production levels. Sustainable Aloe production and marketing is knowledge intensive and requires use of appropriate technologies. This has also resulted to discussion on issues of ABS. Environmental impact assessement and Audit has been done and submitted to Nema which has already certified the project

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Undertake community education and awareness creation. o This was done through Proposal development, serminars and other meetings . o The meeting involved the project partners, area leaders, invited interested relevant stakeholders.

Challenges

1. Lack of sufficient raw materials (aloe leaves) for take over and sustaining the production to meet the available market demand. 2. Community attitudes in viewing the project as a business entity and another form of livelihood other than Pastoralist alone. Some even demand to be paid to cultivate aloe on their farms and are not patient enough to wait for 3 yrs to earn from aloe

3. Ownership problem causing suspicion among interested parties has stalled the project.

a. Local leaders and a private investor, brought on board by the Government to help solicit market for its products, are haggling over the control of the firm. b. The residents claim they are the rightful owners of the project, but government officials maintain that a third party has to be included to help play the role of marketing the business and the products c. The group refused to a sign a memorandum of understanding with the investor because they claim that he prepared it alone to suit his interests. 4. Lack of clear marketing and business management strategy which can help enable the enterprises compete effectively 5. Lack of enough capacity in term of entrepreneurship skills and product development

6. The product taken to the market can not compete on the market effectively with imported product from South Africa and therefore the market doesn’t trust. This is due to o Lack of capacity to supply and quantity and quality sap o Poor quality and pricing strategy o Lack of or slow chemical verification and certification of the products by KEBS o Lack of standard for analytical chemical verification

7. Land tenure: Most of the and in the district is held under a collective common property rights. With the erosion of traditional natural resources management systems, this property regime has lead to accelerated erosion. Declining sources and levels of income exacerbates this trend.

Lessons learned and recommendation Ownership • Development of sound partnership framework agreeable by all players is important towards realizing sound natural resource utilization. • The ownership structure and foundation should be clear for long term governance of the enterprises this will increase the effectiveness of the partnership and reduces conflicts; • Access and benefit sharing mechanisms should be developed which will elaborate how the surplus benefits will be distributed. All legal issues should be exploited each legal entities of the contractee and there negotiation capacity; • There should be clear exit strategies so that some partners should not over stay in the management of the NBEs for long without justified reasons; • Natural products markets fluctuate. It is important to invest in research and product development, in order to diversify and establish new market niche. Structuring

• Community systems are sometime amorphous and dynamic. It is good to establish proper community system, as a platform of partnership. Systems recognized under law are appropriate, either as co-operative or trusteeship. Trusteeship encouraged for community based groups.

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• In such partnership, it is good to defined ownership strategies early. These avoid resource conflict, which arise, specifically during benefit sharing.

Gearing • There is need to develop cottage industries where manufacturing of products at community level for local community market and large scale industry for national and international market; • Capacity building on communication strategy to easy disseminations

Marketing • Need to upscale the resources to have an impact on income and ultimate behavior of the communities; • Develop direct linkages between producers and the market; • There is need to use technologies that will increase or scale up production to increase distribution; • Additional business analysis and technical advice( applying of a value chain prospective, developing business plans, offering business management advice and quality management issues) are needed; • Cost and benefit analysis should be undertaken

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Annex 8. Commercial Aloe Species and varieties

Aloe abyssinica synonym of Aloe camperi Aloe affinis Aloe albopicta synonym of Aloe camperi Aloe ausana (Partridge Breast Aloe, Tiger Aloe) synonym of Aloe variegata Aloe barbadensis (Medicinal Aloe) synonym of Aloe vera Aloe barbadensis var. chinensis (Medicinal Aloe) synonym of Aloe vera Aloe camperi Aloe camperii synonym of Aloe camperi Aloe candelabrum (Tap Aloe, Bitter Aloe, Cape Aloe) synonym of Aloe ferox Aloe chinensis (Medicinal Aloe) synonym of Aloe vera Aloe cryptopoda Aloe disticha Miller (Soap Aloe, Zebra Aloe) synonym of Aloe maculata Aloe elongata (Medicinal Aloe) synonym of Aloe vera Aloe eru synonym of Aloe camperi Aloe eru fa. erecta synonym of Aloe camperi Aloe eru fa. glauca synonym of Aloe camperi Aloe eru fa. maculata synonym of Aloe camperi Aloe eru fa. parvipunctata synonym of Aloe camperi Aloe eru var. cornuta synonym of Aloe camperi Aloe fasciata synonym of Haworthia fasciata Aloe fasciata var. major synonym of Haworthia fasciata Aloe fasciata var. minor synonym of Haworthia fasciata Aloe ferox (Tap Aloe, Bitter Aloe, Cape Aloe) Aloe ferox var. erythrocarpa (Tap Aloe, Bitter Aloe, Cape Aloe) synonym of Aloe ferox Aloe ferox var. galpinii (Tap Aloe, Bitter Aloe, Cape Aloe) synonym of Aloe ferox Aloe ferox var. hanburyi (Tap Aloe, Bitter Aloe, Cape Aloe) synonym of Aloe ferox Aloe ferox var. incurva (Tap Aloe, Bitter Aloe, Cape Aloe) synonym of Aloe ferox Aloe ferox var. subferox (Tap Aloe, Bitter Aloe, Cape Aloe) synonym of Aloe ferox Aloe flava (Medicinal Aloe) synonym of Aloe vera Aloe galpinii (Tap Aloe, Bitter Aloe, Cape Aloe) synonym of Aloe ferox Aloe horrida (Tap Aloe, Bitter Aloe, Cape Aloe) synonym of Aloe ferox Aloe indica (Medicinal Aloe) synonym of Aloe vera Aloe lanzae (Medicinal Aloe) synonym of Aloe vera Aloe latifolia (Soap Aloe, Zebra Aloe) synonym of Aloe maculata Aloe leptophylla (Soap Aloe, Zebra Aloe) synonym of Aloe maculata Aloe leptophylla var. stenophylla (Soap Aloe, Zebra Aloe) synonym of Aloe maculata Aloe maculata (Soap Aloe, Zebra Aloe) Aloe maculata Medikus (Soap Aloe, Zebra Aloe) synonym of Aloe maculata Aloe maculosa (Soap Aloe, Zebra Aloe) synonym of Aloe maculata Aloe muricata (Tap Aloe, Bitter Aloe, Cape Aloe) synonym of Aloe ferox Aloe nobilis (Gold Tooth Aloe) Aloe perfoliata (Tap Aloe, Bitter Aloe, Cape Aloe) synonym of Aloe ferox Aloe perfoliata var. barbadensis (Medicinal Aloe) synonym of Aloe vera Aloe perfoliata var. epsilon (Tap Aloe, Bitter Aloe, Cape Aloe) synonym of Aloe ferox Aloe perfoliata var. ferox (Tap Aloe, Bitter Aloe, Cape Aloe) synonym of Aloe ferox Aloe perfoliata var. gamma (Tap Aloe, Bitter Aloe, Cape Aloe) synonym of Aloe ferox Aloe perfoliata var. lambda (Soap Aloe, Zebra Aloe) synonym of Aloe maculata Aloe perfoliata var. saponaria (Soap Aloe, Zebra Aloe) synonym of Aloe maculata Aloe perfoliata var. theta (Soap Aloe, Zebra Aloe) synonym of Aloe maculata Aloe perfoliata var. vera (Medicinal Aloe) synonym of Aloe vera Aloe perfoliata var. zeta (Tap Aloe, Bitter Aloe, Cape Aloe) synonym of Aloe ferox Aloe pienaarii synonym of Aloe cryptopoda Aloe pseudoferox (Tap Aloe, Bitter Aloe, Cape Aloe) synonym of Aloe ferox

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Aloe punctata (Partridge Breast Aloe, Tiger Aloe) synonym of Aloe variegata Aloe saponaria (Soap Aloe, Zebra Aloe) synonym of Aloe maculata Aloe saponaria var. brachyphylla (Soap Aloe, Zebra Aloe) synonym of Aloe maculata Aloe saponaria var. ficksburgensis (Soap Aloe, Zebra Aloe) synonym of Aloe maculata Aloe saponaria var. latifolia (Soap Aloe, Zebra Aloe) synonym of Aloe maculata Aloe saponaria var. saponaria (Soap Aloe, Zebra Aloe) synonym of Aloe maculata Aloe socotorina (Tap Aloe, Bitter Aloe, Cape Aloe) synonym of Aloe ferox Aloe spicata synonym of Aloe camperi Aloe subferox (Tap Aloe, Bitter Aloe, Cape Aloe) synonym of Aloe ferox Aloe supralaevis (Tap Aloe, Bitter Aloe, Cape Aloe) synonym of Aloe ferox Aloe umbellata (Soap Aloe, Zebra Aloe) synonym of Aloe maculata Aloe variegata (Partridge Breast Aloe, Tiger Aloe) Aloe variegata var. haworthii (Partridge Breast Aloe, Tiger Aloe) synonym of Aloe variegata Aloe vera (Medicinal Aloe) Aloe vera var. chinensis (Medicinal Aloe) synonym of Aloe vera Aloe vera var. lanzae (Medicinal Aloe) synonym of Aloe vera Aloe vera var. littoralis (Medicinal Aloe) synonym of Aloe vera Aloe vera var. wratislaviensis (Medicinal Aloe) synonym of Aloe vera Aloe vulgaris (Medicinal Aloe) synonym of Aloe vera Aloe wickensii synonym of Aloe cryptopoda Aloe wickensii var. lutea synonym of Aloe cryptopoda Aloe wickensii var. wickensii synonym of Aloe cryptopoda

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Annex 9. Appraisal of Aloe Domestication in Laikipia, Case Studies Conducted by Kenya Aloe Working Group Secretariat.

Rumuruti Women Aloe Group This group was established in 2004, and was duly registered in 2005 by the Ministry of Culture and Social Services. The group has 25 members all of whom are women, but they have two patrons who they work closely with. These patrons are Mr. Aden Mohammed and Maria Dodds. The two Mr. Aden, and Maria Dodds together with Laikipia Wildlife Forum, Ministry of Agriculture, Kenya Forestry Department and other line ministries help in promoting Aloe farming and production of aloe products in the area. The group has planted aloe in ½ acre plot donated to them by the Muslim Community of Rumuruti. The aloe is ready for harvesting. Other than the ½ acre plot the group has got another 2 acre plot donated to them by the Municipal Council of Rumuruti, The plot has as yet to be planted.

All of the group’s seedlings are from Laikipia Aloe Nursery, but they also occasionally plant from wild seedling which happen to do better in survival than the seedling from the nursery. This could be explained by the fact that the wild aloe seedlings have adapted to the climate of the region and are hardier. Another fact is that the group may lack skills to take care of the seedlings from the nursery in order for the seedlings to adapt well. The group has planted Aloe Secundiflora and Aloe Lateritia, but would want to plant more varieties in the future. The plantation is rain fed with the Aloes taking one year to mature when there is rain and one and a half years when there is no rain.

Even though the group harvests a little sap for the products they manufacture, harvesting of the whole plot is expected to be done only once per year during the dry season which is when they expect to get the largest quantities of sap. The harvesting is to be done by cutting the leaves at the base using knives and collecting the sap in basins. The sap is then sieved and put in plastic bottles of all sorts for sale or storage. The group expects to collect between 60 and 100 litres per every harvest season, however they have not done any sale of the aloe sap.

This group makes aloe products such as soap (50grams), Creams (50grams) and Lotions (100grames), but the group has plans for further value addition into better products such as medications, hair shampoos, detergents, and hair conditioners amongst others. The group was trained by Francis Keah, through the support of Laikipia Wildlife Forum (LWF) and Maria Dodds. They market their products locally and some occasional deliveries to Maria Dodds and to Mr. Grant of El Kariama ranch in Nanyuki.

The group is aware of medicinal values of Aloe which include treatment of Malaria, treatment of skin diseases, cuts, pimples, stomach upsets, nose bleeding, healing of eye diseases and its use as a sunscreen. Traditional uses of Aloe known to the group include; an ingredient in the brewing of traditional alcohol, treatment of domestic animals, poisoning of rats and other vermin rodents, live fencing and control of soil erosion by encouraging growth of grass in the range lands.

In the case where aloe seedlings dry up, the group needs capacity building on growing of aloe. Aloe that has dried up during dry seasons regenerates once there is rainfall. Also the group usually incur losses since most of the time the coconut oil gets spoilt and so the group may need a client who can supply quality coconut oil for production of the bathing soap. The marketing of the products is a great challenge but the group should take it upon themselves to educate the larger community what they know about aloe and its benefits. Likewise the group should be the first to use the products so that it can show the community by example. The group also needs to raise funds to help them in taking their products for approval by the Kenya Bureau of Standards,

Kieni Aloe Plantation Group (KAPG) KAPG group was established in 2003, has 300 members who are also the owners. There are other individual members of the plantation from elsewhere such as Mr. Macharia (One Acre), Mrs. Gatende (One Acre), and Mrs. Gaitho (Two acres) all of whom are from Nyeri, Grace Kariuki with three acres from Embu and Mrs. Kikungu (One Acre) from Nyahururu. These other mentioned individuals are supplied with seedlings by KAPG.

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The KAP Group plantation is 12 cares in size, but only 6 acres are planted with Aloe Vera and Aloe Secundiflora. The plantation is not yet fully paid for by the group and the group needs funds to clear the balance so as to fully own the plantation. This can be done by linking the group to micro finance institutions, which the secretariat can do at an appropriate time. The group plans to clear the bushes on the 6 remaining acres to plant more Aloe with 2 acres being dedicated to a nursery for propagation of seedlings. Only the neighbouring members take part in the activities of the group on a voluntary basis.

The group plants only Aloe Vera which produces a clear gel and is used to make beauty products and Aloe Secundiflora which produces sap Golden in colour, this is used in making of soaps, detergents and Shampoos. They also grow several other varieties in its nurseries with an aim to supply other willing members and farmers with seedlings. These are Aloe Laterita, Aloe Confusa, Aloe Turkanensis and Aloe Scabrifolia. The process of producing the seedlings involves collecting the seeds from mother plants, drying them in sun for about one week and then preparing the nursery bed. The seeds are then planted in the nursery and watered occasionally. The seedlings are then potted in plastic bags after one Month in the nursery and take around eight months to be ready for planting in the farms. The aloe in the farms is expected to mature after one and a half to two years. The seedlings are sold to any farmer at Ksh: 15/- for Aloe Vera and Ksh: 10/- for other seedling varieties. Harvesting is undertaken by cutting the leaves starting with the ones at the bottom and draining the bitter in basins. Leaves drain wholly after 30 Minutes, after which they put in new leaves in the basin continuously after which it is sieved and put in jerry-cans. The sap is then transported to the boiler, where it is boiled for about 6 hours until it forms a gum, which after cooling becomes crystal (Nicknamed Black Diamond). This is the bitter which is sold to local herbalists to make herbal medicines. The prices are negotiable depending on the buyer and the group’s immediate needs. They so far have not sold the Black Diamond to any foreigner.

The group has an operational pilot boiling factory for the sap established in February 2006, but got operational in 2007. The factory was funded by contributions from KAP members. The only other factory in Kenya known by the group is the Baringo aloe factory. The group plans to expand operations and build a processing factory bigger than Baringo Aloe factory. The group produces the following aloe products:

Aloe Herbal Tea - This is produced from the red flowers of Aloe Secundiflora which are harvested and then dried under shade until completely dry. They are then ground locally, packaged in 50gram packages and sold in local shops at Ksh:100/- per packet.

Toilet soap- This is produced from the Aloe Secundiflora sap. The soap is packaged in 50gms after being made in batches of 200 and sold to the local market.

Other Products produced by the group include; Aloe shampoo, aloe juice to boost immune systems and aloe herbal bath to eradicate tiredness and itchy skin infections. This is in liquid form and has to be used with hot water for faster penetration in the skin.

Tigithi Pilot Aloe Group This group which was registered in 2006 is owned by small scale peasant farmers. There are 80 1 members in the group but only 40 members have planted 500 seedlings each in plots measuring /8 an acre. Of the 80 members only 20 members are trained on types and uses of aloe and on making of aloe products to increase their value. The group planted seedlings donated to them by LWF. However, over 50 % of the seedlings dried up. The farmers attributed this to lack of skills to tender to the young plants, while others noted that the members in the old age bracket had their seedling drying up because they did not plant them in the correct way. The seedlings were also planted during the dry season and this also reduced their chances of survival. The variety planted is Aloe Secundiflora, is rain fed and takes one and half to two years to mature.

Some of the farmers are aware of how aloe sap is harvested. This will be done by cutting the leaves at the base using knives and collecting the sap in buckets. This will then be sieved and put in plastic bottles. The harvesting of planted aloe has not yet started, but the group collects sap from the wild. According to

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the chairperson of the group, they have been given a permit by KWS to collect sap from the wild aloe as they await theirs to mature. The sap collected is used to produce aloe products which include, soap (50grams), Creams (50grams) and Lotions (50grames) for sale locally. The members also know how to make aloe shampoos, hair conditioners and aloe detergents.

The group is aware of medicinal values of Aloe which include treatment of Malaria .Other known medicinal values of Aloe by the group include treatment of skin diseases, cuts, loss of appetite and healing of teeth and ear diseases. Traditional uses of Aloe known are as an ingredient in traditional brewing of alcohol, put in honey for medicinal purposes and used in treatment of domestic animals. Aloe species commonly known by the group include Aloe Secundiflora, Aloe Nyerienzis and Aloe Confucius. Aloe Confucius is the poisonous type which is used in dyes.

The group faces challenges as those people that were trained on aloe issues are old and there is need to incorporate younger people in the Aloe sector. Marketing their products is a problem as they only sell locally and they have not registered their products with Kenya Bureau of Standards for approval. Also the group usually incur losses since most of the time the coconut oil gets spoilt. The group needs a client who can supply quality coconut oil for production of the bathing soap. A major constraint is lack of funding to build or rent a small place to manufacture the products as well as have their products standardised. Other challenges the group need to tackle are to increase community awareness on uses and advantages of Aloe and its products. Aloe is promoted in the area by Laikipia Wildlife Forum and other individual members of Tigithi Aloe group.

Withare Aloe Growers Self Help Group This group was registered in 2005 and the individual Aloe plots established in 2006. It has 55 members but 5 have not started actual planting in their plots. Members plant aloe in their respective plots. The area under Aloe in these farms is plots measuring ¼ of an acre as the rest of the farm is dedicated to other crops. However, some farmers intercrop the Aloe with other crops. This is retrogressive to the Aloe as soil gets in to the Aloe during weeding causing the Aloe to dry. The total area under Aloe is estimated to be 12 acres. This group pays an annual subscription fee of Ksh: 5,000/- per year to LWF so as to be a member. They are also trained on production of aloe products by LWF. The group has in the past been given funds to go to Marigat to see the Baringo Aloe Factory.

All of the group’s seedlings are from Laikipia Aloe Nurseries. These seedlings are all Aloe Vera and are planted at the age of 6 months old and the farmers buy at Ksh: 10/- per seedling. The members are also informed by Maria on ways to plant and care for the seedlings. The group complained that the seedlings were too small (1 inch) such that some have died after planting and they are often trampled on by Elephants. The rain is also too much in this region for Aloe. The farmers acknowledged the support by Laikipia Wildlife Forum in providing seedlings. The first crop was planted in November 2006 and they expect the first harvest after a period of 3 years. The group needs more seedlings but they are confident these will be supplied by Maria.

Although KWS and KEFRI prevent wild harvesting of Aloe, this group got a permit from KWS in August 2006 to harvest wild Aloe. The harvesting is done by cutting the leaves at the base using knives and collecting the sap in basins, buckets and Sufurias. This is then put in bottles. There is no standard measure of sap collected as it is from the wild.

This group makes products such as soap (50grams sold @40/-), Creams (50grams sold@50/-) and Lotions (50grames sold@50/-) from Aloe. The packaging materials come from Nyeri town and the chemicals come from Nairobi. These products are sold locally to communities as there is a lot of local demand. The group has a marketing strategy of putting the products in local shops and collecting the money later from the shop keepers after the products have been sold. Other marketing strategies include local promotions and taking the products to forums and field days.

The group has further marketing strategies of selling the products to schools, Supermarkets, Hotels and Shops in big towns at wholesale price. They expect to have different packaging for the different markets if

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these markets demand so. Other known end products of aloe by the group include detergents, hair shampoo and hair conditioner.

The group is aware of medicinal values of Aloe which include treatment of Malaria, treatment of cuts, making the face smooth, reduction of intestinal worms, healing of intestinal wounds and increasing resistance to diseases. Traditional uses of Aloe known are as an ingredient in alcohol making and control of soil erosion by encouraging growth of grass in the wild. Likewise, sap from Aloe secundiflora harms a person with stomach problems by adding the pain while Aloe Turkanesis heals the same stomach problems. Aloes found in this region in the wild are Aloe Turkanesis, Aloe Secundiflora, Aloe Nyeriensis and Aloe Lateritia.

The group faces challenges in marketing as they have no money to scan for colour labels for their products. They are forced to photocopy with the end result that customers assume the products with white and black labels are substandard, therefore leading to fewer sales. The current status of business in Aloe in the area is promising according to the group.

Aloe is promoted in the area by LWF and Ol Pajeta Conservancy but nobody supports domestication other than the group. Ol Pajeta Conservancy supports the group by providing transport on field days and other events, providing fencing posts and providing environmental tours to surrounding schools. Up to 30 children and two teachers are given free entrance to the conservancy.

Key Informant (Mr. Aden Mohammed) Mr. Aden is a former processor and started involving himself in the aloe trade since the early eighties. He would harvest the lower leaves of the wild aloe once a year to get sap and then leave the plant for a year to rejuvenate. Later he started harvesting the aloe sap twice a year. He used to boil the sap for three hours using a large metallic basin and sell the resultant crystal stone to customers from Mombasa. The sale was by order. There was one very well known group then known as Latif Wood Works from Mombasa involved in the Aloe trade. The prices were very low as in 1982, 1kg of Aloe bitter was selling at 30/- Kenyan shillings. He also started selling the bitter in Nairobi which saw an increase in prices from 30 shillings to 55 shillings per kilo. The Aloe used to be exported to China, Pakistan and Dubai.

The benefits he got from selling Aloe sap were that it was a source of livelihood for his family. There were also medicinal benefits through treatment of diseases. This was by mixing the Aloe with Garlic to treat Malaria and ulcers.

The challenges he faced was that at times there was no market for the Aloe after delivery leading to losses. Another challenge is that the high temperatures in Mombasa cause the aloe gum to melt leading to further loses. Therefore, he decided that he would only supply the orders once the money has been paid upfront. The Government did not know much about Aloe and so did not bother with what was happening with the wild Aloe. He confirmed that now days people do not use the wild Aloe as it is banned by the Government. Likewise he no longer practices the Aloe trade because of the ban. However, the people have been getting help from LWF and Maria Dodds. He emphasised they would like more help in training and information dissemination from the secretariat and from ICIPE, KEFRI and ICRAF as these organizations have more knowledge and experience on aloe farming.

Since he no longer conducts aloe trade, but he is now a patron to the Rumuruti Women Aloe group. The group faces financial constraints to start a nursery and to put up a local factory for value addition to enable them sell the end products to both local and external markets. He was aware of value addition to the Aloe so as to get products such as medicine, lotion, soaps, detergents and chewing gum.

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Annex 10. The HACCP Seven Principles

Principle 1: Conduct a hazard analysis. Plants determine the food safety hazards and identify the preventive measures the plant can apply to control these hazards. A food safety hazard is any biological, chemical, or physical property that may cause a food to be unsafe for human consumption.

Principle 2: Identify critical control points. A Critical Control Point (CCP) is a point, step, or procedure in a food process at which control can be applied and, as a result, a food safety hazard can be prevented, eliminated, or reduced to an acceptable level.

Principle 3: Establish critical limits for each critical control point. A critical limit is the maximum or minimum value to which a physical, biological, or chemical hazard must be controlled at a critical control point to prevent, eliminate, or reduce to an acceptable level.

Principle 4: Establish critical control point monitoring requirements. Monitoring activities are necessary to ensure that the process is under control at each critical control point. In the United States, the FSIS is requiring that each monitoring procedure and its frequency be listed in the HACCP plan.

Principle 5: Establish corrective actions. These are actions to be taken when monitoring indicates a deviation from an established critical limit. The final rule requires a plant's HACCP plan to identify the corrective actions to be taken if a critical limit is not met. Corrective actions are intended to ensure that no product injurious to health or otherwise adulterated as a result of the deviation enters commerce.

Principle 6: Establish record keeping procedures. The HACCP regulation requires that all plants maintain certain documents, including its hazard analysis and written HACCP plan, and records documenting the monitoring of critical control points, critical limits, verification activities, and the handling of processing deviations.

Principle 7: Establish procedures for ensuring the HACCP system is working as intended. Validation ensures that the plants do what they were designed to do; that is, they are successful in ensuring the production of safe product. Plants will be required to validate their own HACCP plans. FSIS will not approve HACCP plans in advance, but will review them for conformance with the final rule.

Verification ensures the HACCP plan is adequate, that is, working as intended. Verification procedures may include such activities as review of HACCP plans, CCP records, critical limits and microbial sampling and analysis. FSIS is requiring that the HACCP plan include verification tasks to be performed by plant personnel. Verification tasks would also be performed by FSIS inspectors. Both FSIS and industry will undertake microbial testing as one of several verification activities.

The seven principles are included on international normes system ISO 22 000. This standard gives the pathway and all details about Total Quality Management in different activities (Production, services....).

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Annex 11. Sustainable Wild Harvest Protocols

1. Central Aspects of Sustainable Wild Harvesting of Plants Materials

1.1 Quality control Wild plants may vary considerable in quality depending on site, soil, weather and climatic conditions, time of harvest, genetic variations etc.

1.2 Correct identification of the species To prevent the harvesting of the wrong species it is important to develop simple pictorial guide sheets (laminated) and provide to the harvesters and the grading teams. Training in correct species identification should be carried out at the beginning of the initiative and re-enforced through on-going training in sustainable wild harvesting techniques, handling etc..

1.3 Contamination with other species Contamination with related or non-related species is a common problem where the required species are growing in mixed stands. The collectors should have basic training in plant identification, as part of the above, and identified as a component within the sustainable wild harvest protocols.

1.4 Land use history Current land use must be recorded as part of the mapping process, land history is also of importance when the area is to be certified under the international statutory standards requirements (i.e 5 year history). This should include any current or past fertilizer use in the areas where the species are to be harvested, and run off pollution from towns over the harvesting area and dump sites within the harvesting area. Harvesting should be carried out at least 30m from agricultural fields, roadsides and dumps, and at least 500m from urban settlements.

2. Pilot project phase The importance of beginning this initiative as a pilot phase is particularly high in this case where there are a number of parameters not fully researched and determined, such as the economic return to the harvesters from the selected species. It is also critical that before engaging in a full programme of commercial harvesting and processing that the training and extension component is well established and active, the wild harvesting groups are strong and well managed, the sustainability protocols agreed by all interested parties, systems developed and in place and the harvesters are well versed and able to comply with these protocols. Throughout the pilot phase impact monitoring must take place so that the protocols can be sharpened or adjusted according to the results. The areas will include: • Inventories and mapping of wild plant populations should be made so that sustainable harvesting levels can be established without negatively impacting the overall plant population in a given areas. • Use of transects to measure the impact of wild harvesting of the selected indigenous species in terms of the health and vigour of the plants • The optimum levels of harvesting to ensure the continuity of supply whilst avoiding over-harvesting • Impact of slight variations in the harvesting techniques on plant recovery and survival. • Socio-economic impact; the incomes achieved from the harvested plant materials and the ratio of women and disadvantaged engaging in economically rewarding activities stemming from this initiative (i.e incomes from harvesting, processing, grading, support activities such as training and extension etc).

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3. Protocol development for sustainable wild harvested of selected plants Practical guidelines for the sustainable harvesting of the selected indigenous plant products need to be developed which can be effectively used by the local/resident communities and the field staff and siupport agents involved with this initiative. The protocols also need to be suitable for use by the communities and for the purposes of organic certification, in the form of a report and as written information/ interpretation material.

3.1 Mapping and zoning The map is the first tool for developing sustainable wild harvest systems. The map should identify the main ecosystems and predominant botanical species. The species that is to be the subject of wild harvesting is then marked clearly in the regions where it is most abundant. The areas where wild harvesting would damage the health of the species /habitat/ natural diversity should be marked in red as non-intervention zones (blocked from collection). Contaminated areas, i.e close to industry, military shooting areas, timber processing etc is also marked on the map

This initial mapping stage has been assessed only in general terms during this assignment, and a detailed mapping will need to be carried out by local botanists familiar with the area, preferably using GPS plotting methodology. The plotted areas are then incorporated into operation maps, clearly marked as harvesting zones for each specific species. From this point a detailed botanical survey of the selected plant species growing in these zones should take place using transects, as described in this document, together with assessment of the overall plant stand. This information gives rise to the harvesting capacity and more exact harvesting thresholds of the selected species within the identified zones. From this position the rotation of harvesting across and within the zones over the entire mapped areas can be developed. This is the foundation for the sustainable wild harvesting protocols.

3.2 Harvesting methodology Once the mapping component is in place the harvesting methodology has to be developed. This is again a process of monitoring and evaluation, sharpened and adapted through the pilot phase. The economic aspects need to be included in the harvesting methodologies as well as ensuring the continued health of the plant, for example:

• Timing of harvest; • Harvesting levels • Yields.

3.3 Monitoring and evaluation information for measuring impact of wild harvesting The sustainability threshold of the selected plants means ensuring that the plant population is not depleted or damaged by over-harvesting. These thresholds can only be established empirically viz. by careful assessment followed by monitoring and evaluation of the health of the species over several years to ensure that harvesting is truly sustainable. The growth habits and life cycle of the plant need to be known to assess how much harvesting and disturbance can be tolerated without the plant’s population and ecology being significantly affected. After harvesting, regeneration should be monitored and compared with non-harvested control stands of the same plant in the same area. This will require permanent quadrats to be marked out where regrowth and annual biomass (above ground dry matter) is compared between harvested and non-harvested plots. Each quadrat (100 m 2) should assess the following parameters and recorded over three years on a data collection sheet. Three years is the minimum necessary to establish trends in changes in plant population following wild harvest. For example, if wild helichrysum is propagated by seed, wild harvest of the flower heads may have a negative effect of plant numbers.

QUADRAT YIELD: DATA COLLECTION SHEET

Date Location Target Species (e.g. Helichrysum)

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Quadrat No. Treatment: Harvested/ non-harvested No. of plants per quadrat No. of target species plants per quadrat Clipping yield (g DM) No. of clipping this year Annual yield (above ground plant) g DM

When these data is collated and analysed, the project will be able to determine the trends in plant populations between harvested and non-harvested plots and to adjust, if necessary, the wild harvesting protocols

3.4 Risk analysis and critical control points The risk analysis and critical control points are designed to prevent over-harvesting or poor harvesting practices that threaten survival of the plant. This aspect is a central component of the sustainability protocols and the monitoring methodology, and is set up as a verification and validation mechanism of these sustainability protocols. To this affect it refers to and is based on all of the components:

3.5 Verification system These risk based management system is a practical tool that attempts to address the conservation concerns, requirements of the ICS implementation, and those of external certification systems. Within this system the protocols must be constructed in a way that can be clearly interpreted by the communities involved. Using critical points along the production chain the quality of the final product can be improved if extension and management focus is directed at key critical points along the production chain, in what is referred as critical control production points.

At that point along the chain if corrective measures are not planned for in advance by the farmer or farmer group, then deterioration of quality can be observed, which directly affects the overall returns to the farmer. When harvesters understands the complete chain, he/she has the ability to plan in advance, possible eventualities or risks, establish certain standards that should be followed, thus has a better control of his/her production process and reward.

3.6 Developing the mapping and zoning of the harvesting areas

Definition and description of collection areas The definitions and description of the selected harvesting areas must accord with those officially recognized and established, and include the local names and references known by the resident population/harvesters.

Identification of emission sources and spraying Any areas that present a risk of contamination of the wild plant material must be plotted on the official maps and designated as non-harvesting areas. These areas should include 30 meters (i.e from fertilized fields) to 500 meter (from residential areas) buffer zones.

Designated harvesting areas and harvesters There must be a strong relation between the area size and the number of collectors to assure that sustainable harvesting levels can be established without negatively impacting the overall plant population in a given area. A continuity of supply must be assured while avoiding over-harvesting.

After the approved map is put on the wall at the registered collection centres, the collectors sign that each delivery is harvested within the approved areas.

In order not to disturb the overall ecology of the harvesting area, the harvesters should use certain identified route to reach the harvesting areas, and risk management protocols established to govern movement within these areas.

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3.7 Recording systems The process starts with harvesting and ends with the market. Working from the market perspective, quality attributes (in all dimensions) that consumers are interested in are identified before production starts. The records need to include information on the following:

• Harvester groups • Critical control points and sanctions • Internal inspectors audits • Harvest area and species lists • Wild harvest record sheets

Example: Collectors should use recording sheets whenever wild plants are harvested.

Recording sheet for Sustainable Wild Harvest

Botanical name

Common name

Location :

GPS coordinates Altitude:

Date: Time:

Weather:

Parts harvested

Daily yield (kg) DM yield (kg)

Distance from fields, settlements Handling methods

Cleaning method

Name of collector

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Annex 12. Status Report of Aloe Commercialisation in the Coastal Region

Please see the report separately attached, commission for this study by the consultant, S.Wren.

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