Engineering Solutions (U) Ltd. Private Sector Experience

1. Regional workshop to share experiences of
sustainable agricultural mechanization hire service
provision practices in Sub-Saharan African countries.
What opportunities for investments?
Engineering Solutions (U) Ltd.
(ENGSOL)
December 9-12, 2019, Grand Imperial Hotel
Kampala, Uganda
Prepared by Ian Walker
Presented by MED MWIRI

2. Context
• ENGSOL was established in February 2001 & is a
company limited by shares
• ENGSOL Head office is located at 7 Spring Close
off 5th Street, Bugolobi, Kampala, Uganda.
• 76 permanent staff, 100% Ugandan
• Agricultural mechanization is our core business
– TAFE & Massey Ferguson tractor distributor;
distributor of Baldan, Agromaster, Fimaks,
Falcon & Sezers implements
• Fabricate trailers, implements & steel products
• Provider of contract tractors service (by default)

3. Context
• Our vision is to transform the quality of life of
every farmer in Uganda by increasing their
overall production and generating higher,
sustainable household incomes.
• This will be achieved through agricultural
mechanization with the supply and support of
applicable, reliable, durable and value-for
money equipment and services

4. Services Provided
• Head office – Kampala
• Branch - Mbarara
• Dealers – Masindi, Nwoya, Hoima, Sironko
• Local mechanic program country-wide
• Offering contract tractor services in South
Western Uganda, central Uganda – primarily
cultivation, planting, harvesting, transport
• Provision of operator and mechanical
training; steel product fabrication; post
harvest equipment; genuine parts & after-
sales services

5. Capacity: machinery resources
Machinery resources for contract services:
Type of Equipment Performance
(Power, Width..
Date of Purchase New or Used
condition
10 tractors 36HP to 90HP 2014 - 2019 New
Disc ploughs,
harrows, planters,
chisel ploughs,
balers, forage
harvesters, trailers
Matching to
tractor HP
coupled with
2014 – 2019 New

6. Capacity: Human resources
Technical staff listed above; Total Human resources: 76 permanent staff
NAME TITLE QUALIFICATIONS
GENERAL SPECIFIC
Jim Middleton Technical Director Bach of Engineering - Agricultural Engineering 5 27
Jasper Opoipimungu After-Sales Manager Bach of Commerce; MBA 6 10
Godfrey Lagu Asst. Service Manager Diploma in Mechanical Engineering 14
Isaac Muhumuza Consultant Diploma in Agricultural Engineering 11
Ssewanonda Brian Mechanic Diploma in Mechanical Engineering 6
Kunihira Simon Mechanic Certificate in Agricultural Engineering 5 7
Kyomuhendo Mathius Mechanic Certificate in Agricultural Engineering 23
Muhindo Sylvester Mechanic Certificate in Mechanical Engineering 5
Mawanda Emmanuel Mechanic Certificate in Motor vehicle mechanics 13
Kakaire Abdul Mechanic Certificate in Motor vehicle mechanics 1 6
Muhumuza John Mary Mechanic Certificate in Agricultural Engineering 13
Mukalazi Paul Mechanic Certificate in Motor vehicle mechanics 9
Ssemambo Joseph Mechanic Certificate in Motor vehicle mechanics 3 4
Musinguzi Moses Mechanic Diploma in Mechanical Engineering 3 1
Mutibwa Joshua Mechanic Certificate in Motor vehicle mechanics 3
Mwonge David Mechanic Bach of Engineering - Automotive & Power 3 1
Abaho Walusimbi Mechanic Certificate in Agricultural Engineering 2
Kalyango Daniel Auto Mobile Technician Certificate in Auto-Electrical Works 0 7
Omunyin Johnpaul Auto Mobile Technician Diploma in Mechanical Engineering 3 2
Nabagesera Norah Auto Mobile Technician Bachelors in Automobile and Power Engineering 0 0.5
Ssebutinde Arnold Mechanic Bachelors in Automobile and Power Engineering 2 4
Baruga Brian Mechanic Bachelors in Automobile and Power Engineering 0 2.5
Byamukama Pius Auto Technician Diploma in Auto Mobile Engineering 0 3
WORK EXPERIENCE

7. Major mechanization hire-services:
Outputs
(hectares/year; farmers served; tons processed/year; revenue)
Description of the
activity
Agricultural
production
chain
Output (in
Ha/year, t/h,
km …)
Period over the year
Forage harvesting
& hay making
Dairy 592 acres 2.5 months Nov’17 – Jan ‘18
Forage harvesting
& hay making
Dairy 323 acres 2.5 months Nov’18 – Jan ‘19
Land preparation &
planting
Maize 112 acres 2 months 2018

8. Sources of financing for the acquisition
of equipment
• All ENGSOL equipment used for contract
tractor services has been self financed
• ENGSOL imports equipment deemed suitable
for activities and if the potential contracts are
financially viable, capitalizes the equipment
and utilizes it for the service contracts
• ENGSOL conducts all equipment service &
repairs necessary but does hire operators at
times to operate the equipment (eg. From
Sing With Me Happily)

9. Clients and Service Charges
• Market prospecting: has primarily been in the
south western dairy shed where ENGSOL
supplied a lot of cultivation equipment & in
central region near to ENGSOL head office
• Additional marketing has been conducted via
tender participation eg. OPM
• Initially customers in South Western dairy
shed were subsidised by SNV TIDE Project but
in last 12 months all customers are self
financing

10. Clients and Service Charges
• Payments are expected in advance of work
conducted & are usually paid via mobile money
• Service rates are based on costs including
amortisation of equipment costs, fuel, operator,
maintenance costs. Fields are inspected and
measured with a GPS prior to work.
• Market strategies: Liaison with farmer groups,
milk processors to coordinate farmers for
increased service efficiencies & reduced costs &
time; now walking away from small acreages
• Profitability of the entity: break even just!

11. Business management
• Using ENGSOL’s data base, service advisors
contact customer to determine interest for
contract services at least 4-6 weeks in advance
of contract service requirements
• All fields inspected prior to accepting bookings
• Job scheduling done as best possible to
minimise travel between farms, meet
customer requested dates and minimise costs
• Contract services teams allocated according to
work to be conducted

12. Business management
• Support team arranged to provide equipment
transportation, fuel deliveries, equipment
repairs
• Teams provided with airtime, fuel cards, out-
of-station allowances, additional incidental
funds & are expected to report into service
advisors on a daily basis
• Activity P&L done after season contract work
completed
• Tractor tracking systems just being installed to
assist work monitoring

13. Business Constraints/Challenges
• Farmers lack of knowledge (do not what & when
to plant or harvest; how to prepare the fields;
what seed & fertilizer to use & at what rate)
• Mostly small farms/acreages (1-3 acres)
• ENGSOL still learning contract service busines
• Farmers not organised & coordinated for
systematic approach to contract services
• Big distances between farms & bad roads
• Limited facilities for contract staff on farms or
nearby farms (accommodation, fuel, meals etc.)

14. Business Constraints/Challenges
• Fields not cleared properly (stumps, rocks, ant
hills etc.)
• Most harvesting has to be manually done &
maize, pasture, grass manually fed into forage
choppers, balers
• Plant populations extremely high
• Lack of understanding of need to get
everything right at the same time – land
preparation, correct planting & fertilizer rates;
good seed; weeding; harvesting at correct
time etc.

15. Business Constraints/Challenges
• Difficult weather conditions
• High cost of operations has to be passed onto
farmers
• Inconsistent market prices for farmers
preventing them from investing in good
practices
• Bank reluctance to finance farmers (they are
not bankable)
• Well meaning subsidies distort market rates &
disadvantage commercial service providers

16. The entity's future plans and
Investment Needs
• For ENGSOL to continue in contract service
provision, we need:
–Capacity building for the farmers to better
understand the entire value chain
–Land to be properly cleared & bigger farm
acreages closer to each other
–Farmer coordination & cooperation
–More training for ENGSOL staff and
contractors

17. The entity's future plans and
Investment Needs
• Cont.
–Collaboration between service providers,
input suppliers, support agencies &
Government to establish regional service
centres
–Cheaper finance and longer repayment
periods

18. Conclusions
• The majority of farmers are willing to access
contract services are small holders & the related
challenges do not make the business financially
attractive
• Promotion of farmers groups / clusters with
greatly increased & contiguous land is needed
• Government support in land clearing is vital
• Capacity building for farmers must be conducted
• Promotion of hub / service centres to provide
inputs, contract services, training & produce
bulking is essential

19. THANK YOU