World Intellectual Property Organization

Overcoming Economic Isolation via IP Tools

Background


AKOMA has created sustained employment for hundreds of previously unemployed women in the village of Pusu-Namogo based mainly on the production and sale of shea butter (Photo: AKOMA)

Akoma Cooperative Multi-Purpose Society (AKOMA) is a farmers’ non-governmental organization (NGO) founded in 2006 in the village of Pusu-Namogo, in the Upper East region of the Republic of Ghana (Ghana). With an all-woman membership, AKOMA has created sustained employment for hundreds of previously unemployed residents in the village based mainly on the production and sale of shea butter – a by-product of vitellaria paradoxa, the African shea tree. 

By developing its members’ farming skill, investing in new farming facilities and processes, and developing the farmers’ access to the international market, the NGO has managed a remarkable transformation in the lives of the inhabitants of the remote village.

In part due to AKOMA’s many activities, the villagers have diversified and improved their farms, raised their average incomes and developed community based projects. As a result, residents of Pusu-Namago have seen their standard of living and health improved while their environment has been sustained. 

Traditional Knowledge 

Shea trees are indigenous to Africa and can be found across the West, Central and Eastern regions of the continent – including Ghana. For generations, many people across these regions relied on the tree and its health properties to provide products for food, medicines and cosmetics. 

The nuts of the shea tree in this part of the world are gathered and crushed in order to produce oil for cooking. Moreover, the yellow cream – shea butter – that can be derived from the crushing process is applied to the belly by some pregnant Ghanaian women (to ease the pains associated with childbirth) or used on some newborn infants as a moisturizer. 

The shea nut, furthermore, has been collected (between May and October) and processed for centuries by shea tree farmers in Ghana and exchanged as ceremonial gifts or sold as a commodity – sometimes called women’s gold – in local markets.

Such farmers’ earning potential was not fully realized, however, because they often worked in relative isolation of each other and with little direct access to the national and international market. In order to unite shea tree farmers in Pusu-Namogo, develop new commercialization opportunities for their products, and enhance their shea tree farming tradition, AKOMA was created. 


Shea trees are indigenous to Africa and can be found in the West, Central and Eastern parts of the continent, including Ghana (Photo: AKOMA)

Research and Development 

AKOMA – which means heart – was established by Angus Klufio, an entrepreneur of Ghanaian heritage who was born and raised in the United Kingdom (UK). Mr Klufio – who also founded Akoma International UK Limited (AIL), a cosmetics manufacturer and supplier based in Derby, UK – established the farmers’ NGO initially in order to create a steady supply of shea butter for his cosmetics company.  

As a graduate of Information Technology and Supply Chain Management who also has familial links to Ghana and extensive experience working in a major UK supermarket, the entrepreneur was well placed to connect marginalized farmers in the West African country to customers in Europe. To pursue his dreams, Mr. Klufio stopped working in the established supermarket sector and used his industry experience as a guide for organizing shea tree farmers in Pusu-Namogo. 

Indeed, prior to creating AIL and AKOMA, in 2004 Mr. Klufio developed a website – Akoma-Trade.com – where Ghanaian producers could be linked to international businesses. In the same year, AKOMA’s founder established Trade Akoma Ghana Limited (TAG) as an export company based in Ghana; it subsequently became a subsidiary of AIL. The entrepreneur would also rely on the experience and business infrastructure and networks created from these ventures to help him establish AKOMA.

To establish the farmers’ NGO, Mr. Klufio engaged in an extensive research and development (R&D) process which included a detailed analysis of market trends. In part based on these studies, he was able to develop a viable business plan to procure ingredients in Ghana for making cosmetics in the UK.   

Having established businesses in both countries, in 2006 the entrepreneur consulted with a church in Ghana in order to identify a community from which he could procure shea butter for export. Settling on Pusu-Namogo, an area with high unemployment and illiteracy rates but with a strong shea tree cultivating tradition, Mr. Klufio utilized AIL, TAG, and AKOMA in order to organize the women of the village. 

Via these three entities, the entrepreneur was able to train farmers in a number of key procedures including safe methods of picking, storing and processing nuts. Pusu-Namogo’s shea nut farmers, moreover, were trained in basic accounting practices and management methods including ways of coordinating work schedules. 

Key support in this process was provided by ProKarité – a quality assurance organization for the shea butter industry that is based in Bamako, the Republic of Mali. Having had their shea butter production processes accredited by ProKarité, AIL and TAG began procuring raw materials for the UK cosmetic market from AKOMA.  

In 2007 Mr. Klufio’s export and cosmetics companies enhanced the NGO’s production capacity by acquiring new land in the village in order to develop a new R&D processing facility. Completed in 2008 following an investment by the entrepreneur of US$80,000, the shea nut processing plant (which includes two warehouses that hold 12,000 bags of nuts) has been able to increase productivity while lightening the physical burden on farmers of processing the nuts. 


To produce quality materials, AKOMA has collaborated with international quality assurance organizations including FLO and SA (Photo: AKOMA)

Due to R&D improvements that have mechanized parts of the production process at the plant, for example, a large bucket of shelled shea nuts can be produced in approximately three or four minutes (the same process would have taken four hours using traditional methods). 

As of 2012, making shea butter at the AKOMA plant included a partly mechanized process of harvesting shea fruit; shelling and washing the nuts; sorting and drying them; crushing and roasting; cooling and milling; kneading and watering (to separate the fat from the oil); and boiling and filtering the fats and oils that are thereby produced. Thereafter, the oil undergoes stirring, cooling and solidifying into shea butter before packing and readying for export. 

In the same year, AKOMA created a streamlined supply-chain-management system (from harvesting to processing to exporting of shea butter) that produced 45 tons of shea butter annually. 

Branding and Commercialization

In order to support AKOMA’s entry into the international market for shea butter, Mr. Klufio has relied on the capacity of AIL and TAG and developed a strong branding and commercialization strategy. To this end, the entrepreneur focused on developing a diverse range of quality products with a strong ethical identity for the NGO and its affiliated companies.

As Mr. Klufio said, “At [AIL and TAG], we choose to do business in a way that benefits everyone involved from the ethical sourcing of raw ingredients to providing all natural skincare [products] that are of high quality and great value. And in doing so, we’re committed to having a positive impact on emerging economies in the developing world, particularly in Ghana.”

In order to produce quality raw materials for the cosmetics industry, AKOMA has collaborated with international quality assurance organizations including Fairtrade Labeling Organization International (FLO) – a global body that develops certification standards for producers in emerging markets.

Following a quality assessment by the FLO in 2009, AKOMA’s shea butter satisfied the certification body’s standards for fair trade practices (which include a commitment to transparency and accountability and payment of fair prices for goods).

In addition to implementing quality standards, the FLO certificate guarantees a Fairtrade Premium – this not only ensures that farmers receive a set price for their goods (which provides income stability); it also contains a separate monetary allocation – the Social Premium – for developing community programs (such as schools).  The NGO’s farms, moreover, received certification from the Soil Association (SA) – an organization based in Bristol, UK, that supports sustainable food, farming and land use processes.  

In addition to the steps taken by AKOMA to improve quality on its wild-harvest, AIL has implemented safety in its products by collaborating with the Campaign for Safe Cosmetics (CSC) – a coalition of public health consumer groups that advocate for safe products in the industry.

By signing CSC’s Compact for the Global Production of Safer Health and Beauty Products (in 2010; this is a pledge by companies in the industry not to use toxic chemicals, such as lead, in products), the cosmetics maker undertook a public commitment to ensure safety in its skincare goods.


Not only has the NGO's shea butter been strategically placed in the niche market of ethically procured and manufactured goods; it has also been promoted for its health enhancing attributes (Photo: AKOMA)

With certification marks for quality by the FLO and SA at the heart of its production processes and clearly displayed on its products (including public endorsement by the CSC), AKOMA and AIL have been able to distinguish their raw materials and product ingredients from those of others.

At the same time, AIL has positioned the cosmetic products sourced from the NGO in the niche market of certified and ethically procured goods and assured customers on product safety. Not only has AKOMA’s shea butter been strategically positioned in this manner; it has also been marketed by AIL as a healthy product.

Indeed, because of shea butter’s rich natural properties (such as Vitamin A and E), the ingredient has been promoted by the UK-based cosmetics company as a remedy for a number of conditions including skin dryness, cuts, burns, and dermatitis (a category of allergic reactions by the skin).

Other ailments that are remedied by the butter include eczema (a skin disorder that causes scaling and rushes) and psoriasis (a skin condition that causes redness and irritation).

In addition to being marketed as a healthy product, AKOMA’s raw shea butter has been manufactured by AIL into a wide range of cosmetics brands. The NGO’s affiliate has produced a number of FLO certified products including Akoma Raw Shea Butter (used for skin dryness and to assuage wounds and burns); Ghanaian Organic Black Soap (used for bathing); Handmade Luxury Soap; and moisturizing facemasks.

Furthermore, AIL has enhanced its commercial activities by diversifying its products portfolio to include four lines of skincare goods (as of 2012) based on coconut oil, bath salts, and cocoa pods and powders.

AKOMA and its manufacturing branch have also commercialized shea butter via agreements to supply a number of cosmetics companies in the UK such as Bulldog Natural Grooming (Bulldog) – a cosmetics maker that caters for men’s products from its base in the West of London.  

Bulldog’s Eco-System Moisturizer and Eco-System Shave Gel products, for instance, have included Fairtrade shea butter ingredients supplied by the farmers’ NGO.

Through a strategic process of quality improvements, niche market product placing, product development, and via collaboration with an international cosmetics maker, the NGO’s quality raw materials have entered the international market.

Trademarks

Having developed quality ingredients that are ethically procured and created attractive brands that have enhanced their reputation, the NGO and its business partners have benefitted by collaborating with cosmetics companies including Bulldog. Such companies, moreover, have enhanced their corporate image via association with the goodwill attached to AKOMA and its shea butter.


Bulldog and the farmers' NGO have been able to enjoy enhanced brand equity supported by the IP System; the company's trademark (pictured) was registered in the UK and EU (Image: UKIPO)

To secure its enhanced position and corporate identity further, Bulldog, meanwhile, has relied on the intellectual property (IP) system. A key partner for AKOMA, Bulldog was registered as a trademark (in 2006 and 2007) in the UK (both the cosmetic maker’s and the NGO’s most lucrative market), via the country’s Intellectual Property Office (UKIPO).

The trademark, furthermore, was registered as a word and a figurative (in 2008) in the European Union (EU), another key market for AKOMA and Bulldog, via the Office for Harmonization in the Internal Market. With IP supported assets, Bulldog has been keen to differentiate its products in the market from those of competitors’ while enhancing its reputation – and, by extension, that of its Ghanaian suppliers – with customers.

Moreover, through Bulldog’s promotional materials – which include explicit references to AKOMA on the company’s corporate website – Bulldog and the farmers’ NGO have enjoyed mutually enhanced brand equity.

Environment and Public Health

Although Pusu-Namogo has had a rich farming heritage (including shea tree farming, 70% of the community are farmers according to AKOMA in 2012), the village has also been affected by environmental and socio-economic concerns, including disease and a poor economy.

Residents of the village have had to fight off a number of illnesses including malaria, kwashiorkor (a childhood condition caused by acute deficiency of nutrients, such as proteins, in a child’s diet) and beriberi (an ailment of the nervous system caused by vitamin deficiency in the diet). These concerns have been compounded by high illiteracy and unemployment rates in the village.

In order to tackle such challenges, AKOMA and its affiliated companies and partners have developed Pusu-Namogo’s capacity via strong policies on the environment, education and public health. Due to its collaboration with FLO, CSC, SF and ProKarité, the NGO has ensured that its farmers engage in organic and environmentally friendly farming practices which include a reduction in the use of harmful chemical pesticides.

Not only do these eco-friendly strategies provide for healthy products; they also reduce the risk to the environment, including groundwater and soil pollution. The risk to human and animal health, moreover, is also reduced.

In addition, AKOMA’s farmers have been trained to harvest shea nuts in an environmentally conscious manner. As Mr. Klufio said, “The workers harvest, gather and prepare the raw ingredients in a way that does not disturb the local ecosystem.” AKOMA’s collaboration with the FLO, furthermore, has permitted the NGO to invest in building the human resources capacity of the village.


By 2012, AKOMA's farmers were processing cocoa butter, extracting oils from the Baobab tree (pictured), and training to become artisans (Photo: Rob Danton)

Because of the certification body’s standards, AKOMA has been able to receive higher premiums for its shea butter – FLO’s Fairtrade Premium Price guarantee was 185 Euros (€) per ton of shea butter in 2012.

These extra incomes have been invested in community initiatives via the Social Premium – including a five-year plan in the village to make improvements (such as the provision of school uniforms for students; the establishment of a library; purchasing of new school equipment; and, creation of recreational facilities) for Pusu-Namogo Primary School.

Other community programs that have been financed through the Fairtrade Premiums Price allocation include training schemes for the women in the cooperative; provision of public health seminars and insurance policies for them and their families; and general information dissemination initiatives (such as explanations of government departments and the services they provide for communities).

Such initiatives have not only stemmed the tide of poverty, environmental degradation and disease in Pusu-Namogo; they have also allowed the villagers to enter the international market with quality, value-added products.

In the process, shea farmers in Pusu-Namogo have enhanced their capacity by diversifying their income streams. Indeed, by 2012, AKOMA’s farmers were processing cocoa butter, extracting oils from the Baobab tree and training to become artisans (such as dressmakers).

As the NGO’s founder said, “[The NGO] will not solely depend on shea butter. As a multi-purpose society, they can explore and diversify into other crafts and learn new skills.” Furthermore, products made from this diversification process have been successfully commercialized in Ghana.

Business Results

Since it was established, AKOMA has managed a remarkable transformation in the lives and livelihoods of its members. Because of its collaboration with FLO and other organizations, the NGO could command €2,640 a ton for its shea butter – which is higher than the going rate in the industry. 

According to the farmers’ organization, the better than average earnings means farmers of Pusu-Namago viallage earned four times more than they did before AKOMA was created.  The NGO, moreover, has ensured that its farmers have the capacity to supply an ever increasing demand for its ingredients on the international market.

As of 2012, AKOMA supplied shea butter to a number of cosmetics manufacturers in several countries and regions including the Commonwealth of Australia, the EU and Japan.  In the same year, the organization had expanded its membership from 45 (when it was founded) to over 300 women farmers. 

More than skin deep

Starting off with a wealth of industry experience and big dreams, AKOMA’s founder identified a community of talented farmers with an illustrious farming tradition but without ready access to the international market. By organizing them into a cooperative and developing their capacity, Mr. Klufio began a process that would change their lives for the better.

Based on an enhanced reputation for producing quality raw ingredients, the NGO was able to enter commercialization agreements and enjoy the benefits of collaborating with partners with secure IP assets. 

Women shea nut famers in a Ghanaian village have showed how a remote community can bring itself out of economic and social marginalization and realize a better life with enhanced future prospects for themselves and their families.

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