This week Yvette Torres-Rahman, Parterships Director at Business Fights Poverty, interviews Dulce Alejandre, Inclusive Business Manager for CEMEX.
Hear how CEMEX’s Integral Program of Assisted Auto Construction (PIAC) is helping poor families build their homes and how the Self-Employment Productive Centers which are profit making micro-businesses are helping make the initiative self-sustaining.
Dulce explains how PIAC is changing whole communities by empowering people both in a financial sense, creating assets they can leverage and in a psicological sense by increasing people’s self esteem.
CEMEX is keen to promote this close involvement with these end users as it helps them better understand how to innovate and improve their products for lower income groups. One such innovation, brought to market thanks to a partnership with lodal entrepreneurs and an NGO, is an efficient cookstove.
Hear the original interview in Spanish by clicking on the image above or read the full transcript of the interview translated into English below.
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YVETTE TORRES-RAHMAN: Today I’d like to welcome Dulce Alejandre, CEMEX’s Inclusive Business Manager. Good morning Dulce, how are you?
DULCE ALEJANDRE: Hello Yvette, how are you?
YTR: I am doing very well, thank you. Here, at Business Fights Poverty, it has come to our attention CEMEX’s Integral Program of Assisted Auto Construction (PIAC). I understand that CEMEX helps low-income families by providing them access to housing to help improve their quality of life. Dulce, tell me what other challenges PIAC is trying to address and what makes PIAC unique?
DA: Yvette, I am very happy to have this opportunity to talk with you this morning. The truth is that – for us – PIAC is a social business model that, as you have very well introduced, targets families with housing needs. Having started to work within the community, with social groups that have this problem, makes us understand not only what the reality of these people is but also to view it from a more holistic view point, their families, and [helps us understand] who these urban population groups are.
One of our most relevant challenges is how we can – starting from an initiative that influences the housing aspect – generate a transformation of a whole community or of a specific urban group. We require more integral interventions.
Obviously, for us, as a business, part of PIAC’s achievements is to articulate an ecosystem made up of different entrepreneurs, government institutions and universities that also are very active in the development area.
Particularly, PIAC has transformed itself into a tool that describes an ecosystem [and can be used] to intervene in these urban population groups.
It has been very interesting how starting from an initiative directly targeting the housing aspect, we have been able to implement new education schemes, new power and energy schemes, new water collection systems, all around the idea of empowering and transforming the community.
The challenges of this model are very big, since, in Mexico, more than 11 million families live in extreme poverty. Also, their geographic locations represent difficulties. We have families where we would like to intervine, but they are located in high risk areas. These areas are very vulnerable to natural disastres and, precisely, PIAC’s mission to bring together these ecosystems has enabled us to work with an integral approach towards the community.
In such cases, we have been able to relocate the families to safe areas, providing them with legal documents stating ownership of assets.
What has happened once we have had the families in a process whereby they have already improved their housing situation? We run into families that feel really empowered and, obviously, counting on these assets they get included into the financial system. Nevertheless, one of the most relevent topics for us, at PIAC, is the aggregation of actors, with different expertise, that makes it possible to turn the intervention in these groups into an integral reality.
What is one of the challenges? Obviously, one of our challenges is to translate these alliances into convincing actions or community transformation actions, making our way of interacting with the communities more strategic and this has also enabled us to build meaningful alliances with the organization. Why? Because we take all these collaborative issues to specific development actions.
YTR: Dulce, you have mentioned that PIAC empowers people. I also believe you have created Self-Employment Productive Centers (SEPCs) that, as far as I understand, help on the empowerment front. But how have you managed to make these centers self-sustaining?
DA: Exactly, the Self-Employment Productive Centers are key to the integral support models we implement in the community. SEPC allows you to start working with the communities. What we do is, through an alliance with the community we will work in, we open a center to give access to technology and training so people can start organizing themsleves and learn how to assist in the production of basic [construction] materials to implement improvements in their houses or in public areas of their community.
What has been key in this self-employment model? The collaborative work. I believe most of the achievements we obtain are about citizen participation. The SEPCs incentivise people to organize themsleves in groups of 10 to 20 families that get together to organize the production [of their materials]. And above all, this has enabled people – regardeless of their education level – to easily (supported with technical and psychosocial assistance provided by us) see the results of their work by implementing a practical education system.
Once we provide them with building abilities and technical knowledge, people – in these centers – realize they have the ability and strength and also have other capabilities that were just “there”, that they simply had to dedicate time and discipline and work to see how their actions can be reflected in having a better house, a better community, a better park. So, these SEPCs, generally, help us in having them interacting among themselves, getting to know each other, setting their targets and wishes. For us, the SEPCs are the first means to start interacting with the community, to get to know them, their habits, their priorities. This allows us, CEMEX, to understand what the best dynamic is to set processes and productive cycles. But the most relevant benefit for us is to help us bring out innovation. Since there is a lot of union and contact with the community, we understand better how to innovate and improve our products and services for these groups.
Each center has different dynamics, as each group is completely different. This allows us to customize our actions to suit the specific needs the group has.
YTR: Tell me Dulce, are these SEPCs profitable?
DA: Yes, the SEPCs operate as a social business. Each SEPC generates a production of prefabricated materials; 50% of the production remains in the community and the other 50% is commercialized by CEMEX and its partners or through its distribution network. The 50% we sell allows us to reinvest in materials what we obtain, so to maintain the operation of the SEPC. This 50% that is commercialized allows this model to be sustainable and will continue as long as the community needs it. We have production centers that last between 1 and 5 years. We even have some centers that were initially set up, after agreement with local authorities, to last for 2 years, and after these 2 years the same community requested to keep the center as a community venture, as a sort of micro business. Given this reality, we have been evaluating setting up a micro franchise model so this SEPC remains to satisfy the demand, remaining as a source of employment in the community.
The fact that we have decided to work with initiatives that are focused on construction has made this model not only deliver a social profit but also value towards the business, since we operate the productive centers through alliances with other commercial sectors.
What does this mean? That through the productive centers we generate incremental sales, we strengthen our distribution network, we make them get closer to markets they had not explored, the low-income markets. Obviously, when we approach the distribution networks and introduce these new models, they get a better understanding of this segment so they can provide a better service towards them. They understand this segment might need different payment terms, credit and/or financial conditions based on the income these people have.
The fact that these Productive Centers are linked to our distribution network and that they are also linked to the main business of our corporation makes this an initiative that generates great value to our company, mainly for three reasons:
– Proximity to new markets
– Development of new markets
– Strategic relationships with interest groups, such as neighboring communities, governments, universities, architect and civil engineer centers, our distribuitors. To be able to interact with these interest groups through this initiative has been very important, because, in the end, it generates value for us, in terms of growth and reputation.
YTR: And based on this, what ideas have you come up with related to private-public partnerships?
DA: This has been something really interesting. We have innovated with new social business models. In fact, a year ago, we implemented a new business, we designed a concrete ecological cookstove, which targets a specific group of people, mainly rural groups, families that cook with firewood and face health problems caused by cooking with wood in their homes.
In order to be able to get this product to reach this specific rural group, we did it through an alliance with an NGO and different entrepreneurs that work in rural communities. This allowed us, from our Technology Center of Cement and Concrete, to innovate in econotecnology, in a more efficient cookstove so we could generate more impact, reducing CO2 emissions and making it more efficient, with lower consumption of wood.
We launched this new technology last year. Currently, the challenge we have is to reach more than 5,000 families with ecological cookstoves. We have a cookstove production plant in San Luis, Potosí, we have another plant in Guatemala and we continue innovating, since – along the way – we have run into new entrepreneurs working with technology for rainwater collection that also use our products. This has allowed us, a part from creating these innovation schemes that make us count on new ways to serve the community, to have a better understanding and get closer to our clients, our end conusmers.
This is relevant as it enables us to implement improvements related to services and competitivity. I believe the fact that CEMEX has opened this door and its coexistence and collective work channels – through the SEPCs and PIAC – brings us very close to people, to find out what our distribution network needs to be succesfull, enabling us – at the same time – to innnovate in our service processes.
With respect to the authorities, I believe that being in such a close relationship with them makes us see what challenges the government has, such us urban issues, inclusion issues and poverty issues. We understand that building working teams with universities and the private sector we can complement each other. It is much easier facing a challenge when you have three participating actors: alliances between government, private businesses and community are very powerfull.
YTR: We have also found that alliances among those three entities are very powerfull. Thank you Dulce for this interview. I wish you the best with PIAC and all these innovations you have talked to me about today.
DA: I thank you Yvette. It has been a pleasure to be able to share and to be part of the community that brings more alliances to work for these communities. To me, it would be very valuable that those who are listening to us reach out to us and help build a better world, to strengthen their initiatives, to strengthen what we are doing, but above all to help more families live in better conditions.
YTR: Thank you Dulce. I hope they hear what you have said and get in touch with you.
DA: Thank you Yvette.
