At the BioFach in Nuremberg I met Martin A. Spaeth, founder and CEO of the company biomega from Austria. He imports natural plant materials, including fruit powder, leaves, oil and fibers of baobabs from Senegal and Burkina Faso. Several hundred tons of fruit are collected and processed locally into fruit powder and certified as organic by Austrian standards. The products are mainly sold on the European market, but expansion is sought to the US and worldwide.
Together with fruit collectors Späth built up production sites and established structures in Westafrica. He is committed to distribute baobab products internationally and wants to help local people in rural areas to create access to markets and thus income. The raw materials form the baobabs are processed locally. Therefore part of the value chain remains in the coutries of origin. According to Späth biomega is involved in the entire production process and cooperates with more than 100 villages.
Import regulations and standards
Trading raw materials of baobabs was not easy in the beginning. Baobab powder, for example, was relatively unknown on the European marked and not approved for import by the European Union. Importers had to undergo a lengthy and bureaucratic process. Since 2009 baobab imports into the EU are legitimized. The distributors know about the value of baobab products. The consumer market has yet to be developed – this takes time, says Späth.
Biomega follows self-imposed production standards. The aim is to ensure the consistent high quality of the products. In order to meet hygienic requirements, the fruit shells have to be undamaged and clean when collected, for example. Biomega expresses that they monitor the quality of the manufacturing process right from the beginning. One of the major reasons being that according to Späth the importer is liable for the quality of the products imported. If someone in Europe were to fall sick due to poor goods, Biomega could be held liable.
Economic Cooperation and Fairness
“We have nothing to give away – neither do they,” said Späth. He has chosen the path of economic cooperation and describes the trade relations with the partners as follows: As is common practice in Westafrica, market prices for the fruit are bargained. They are discussed directly with the collectors. Since baobab fruits are wild collections, the collectors are usually not organized in cooperatives to jointly enforce their interests – as is known from coffee production. The world market prices for this product are determined by auctions and the stock exchange.
As baobab fruit prices are negotiated locally, this interaction between producer and buyer has a positive effect on the confidence of the collectors, says Späth. In his opinion this reflects appreciation for the work. He does not think highly of donation of funds or development aid and is rather critical of subsidies. Although they are mostly well-intentioned, he says, they lead to a distortion of competition and a competitive advantage for those who can access funds. Biomega has observed consequences thereof: The market behavior becomes haphazard and prices are made arbitrarily since they cannot develop freely on the market. In these circumstances, sustainable activities are not possible according to Späth. Those who cannot access subsidies will not be able to compete on the long run.
Fairness in pricing, long-term partnerships and acting responsibly with respect to people and nature are further topics covered. For biomega fairness starts, where the sellers of baobab fruit decide to whom they sell their fruit, when, where and at what price. Späth believes in economic relations and trade that takes place on an equal footing with the producers and collectors. Local people today are not forced to sell to him. Baobab fruit has been traded for centuries on local markets and faces increasing demand from abroad. Customers for the fruit shoot up like mushrooms and biomega faces growing competition. Therefore, Späth emphasises the importance to invest in long-term business relationships and to maintain them.
A win-win for all involved
Not only the framework for producers and collectors is of interest but environmental sustainability for plants used as wild collections as well. Rising demand for the fruit increases the pressure to collect more and more. Too little is known about the reproduction of the baobab. In Senegal, the state intervenes by charging money for each truck load with baobab fruit, which is removed from a baobab area. The money is supposed to be used for nature protection and reforestation. Whether the government actually implements this plan cannot be answered sufficiently during the conversation.
Späth does not totally object projects to promote education or to ensure sustainability. This year biomega starts a two-year economic cooperation with the Austrian Development Agency (ADA). The additional funds provided by biomega will finance planting projects and the implementation of training. In turn biomega will get 50% reimbursement of costs incurred for their extra effort. Späth stresses that this is not development aid but rather an investment into a win-win situation: he can establish stable supply chains for the company to meet the increasing demand of the customers while the rural population in Senegal maintains reliable sources of income.