A word from our Executive Chairman
5 May 2024
From rising interest rates and runaway inflation to geopolitical instability that seems torn from a previous era, 2023 has been one of the most challenging years in recent history. Even in this period of global upheaval, what strikes me most are the deepening inequalities that continue to separate those of us who are lucky enough to live in places of abundance from those of us who aren’t.
Last April, 106 representatives from Applied Value Group traveled to Kenya to visit the operations of Hand in Hand, one of our main charitable partners. There we met Jane Njenga, a 49-year-old mother of three living just outside Nairobi. Jane owns a successful baking business known as Jeannie’s Cookies. If you’re ever passing through Kiambu, do yourself a favor and try the Sweet Bites.
Low-income countries and their inhabitants have borne the brunt of considerable hardships in recent times, exacerbated by the concurrent global pandemic and a sequence of economic upheavals. These challenges include scarce financial resources, enduringly exorbitant food prices, and rising debt vulnerabilities. We are obliged to recognize the profound discrepancies in the burdens faced by diverse populations around the globe—and morally responsible for doing something about it. The resources, both monetarily and intellectually, are more than plentiful to address these disparities; what we lack is not market efficiency—we face a collective failure of the heart. Greed and self-centeredness are alive in the developed world like never before.
What struck me even more than Jane’s delicious baking, however, was her remarkable business model. Jane sells packs of six cookies for US$0.50, making an impressive profit of US$0.10–a 20 percent net profit margin. Very few of our businesses operate at that margin. During our visit to her home, which also serves as her production site, she described how prices for inputs including sugar, margarine and eggs have spiked, causing her to increase the prices of her products. She also told us how Hand in Hand has transformed her life, giving her the confidence—both as a businesswoman and a community member—to weather the storm, investing in marketing and introducing circular business and value addition to her venture.
Our experience during the visit to Kenya inspired us to make a collective pledge to support Hand in Hand’s Accelerator Program with a 5 percent EBITDA contribution during the year to come, this beyond our normal giving. More than that, it inspired us to continue on our social impact journey, more confident than ever we’re on the right path. I have witnessed Hand in Hand’s 20-year long journey, and to me they are world-class leaders in creating 1-3 employee micro-enterprises having supported the creation of 5.2 million enterprises and 9.3 million jobs. The time has come to grow these enterprises into 10-20 employee businesses, and I’m excited to deploy the business consulting and leadership expertise within our Group to help develop local supply chains, especially within the agro-sector.
2023 was a year when malign forces shook institutions and tested societies. It was also a year when Jane and untold millions of women just like her worked hard and sacrificed for their loved ones.
I know which side I’m backing to come out on top.
Bruce Grant
Executive Chairman
Applied Value Group
