Day 15: Today LIME bought animals from the PPCs. Unfortunately of the 1000 animals requested only 280 were supplied furthermore the average weight was 178 kg instead of the economical average weight of 200 kg. According to the budget LIME is to make a profit of 60,000 KShs if everything goes according to plan. This was only possible because the trekker agreed to take a little hit in order to establish a good working relationship.
So the day started very early we were at the holding ground at 7:45 there the animal were tested for diseases, vaccinated, branded, tagged and weigh. The whole process was very informative and it will certainly help us in our analysis. Buying animal is at the core of LIME business therefore seen it in person was very interesting. We were lucky because this activity only happens 4 times a year. Now the animal bought by LIME will be trekked 450 km to Mombasa were they will be sold to a butcher. The prices were agreed one month ago on a forward contract basis.
The supply of animal was very disappointing LIME will actually loose money or barely breakeven if everything goes according to plan. There some fixed costs that can only be covered by a certain number of animals, for instance trekking is only economical if a minimum of 500 animals are trekked to Mombasa. Furthermore the breakeven analysis assumes that the animals will gain weight on the way. This might be a fair assumption but in the past during the draught the animals lost an average of 20 kg.
It is clear that within CARE there some issues on the scope of LIME when I asked to Lynette if not buying animal for this consignment, since it did not make economical sense due to low supply from the PCC, she replied that this was not an option. Then again we are asked to evaluate LIME as an enterprise. I guess that as well as looking at the financial we will have to closely asses the leadership of CARE this might be a change management issue more than anything else.
While at the holding ground we had lunch with the pastoralists. There were some women who improvised a restaurant and were cooking beef-stew rice and chapatti. They were using wood fire to cook and the chapatti was prepare on the spot a pretty impressive organization and the food wasn’t too bad the main thing was not to look to closely on how they handle the food, obviously hygiene was not high on the agenda!