Table of Contents
Introduction
The current business case examines the capacity and shortcomings that come with the setting up a partnership between a Civil Society Organization and a private company. The study involves the partnership of the Dutch company that deals with production of bio diesel named Solarix and the Kenya Help Self Help Center (HSHC), the Kenyan nongovernmental organization that was started in 2007 (Agrawal & Agarwal, 2012).
Solarix has been operating as an innovative firm as well as an expert in production of both energy and biofuels. The company also installs equipment that is used in processing residual fats altogether with vegetable oils including soya beans, palm, and rapeseed and converting them into biodiesel. Over the years, various changes within the HSHC company has seen the company pioneer its initiatives towards becoming a civil society organization aimed at dealing with agribusiness, renewable energy technologies and nature based enterprises. HSHC came up with the Horizon Limited. This was a private company that was established to propel the interests of the business, such as the production of biodiesel and oilseed. Solarix Company was a part of the shareholders of the company (Sriduangkaew, Liu, & Lam, 2014). This case is a partnership analysis that came up as a strong business, but later saw a downfall. Both Solarix and HSHC were involved in rampant efforts in order to make a partnership work, but found out that successes in partnering are challenging to achieve. The funding partner of the company, HSHC, also came to learn more of the challenges that come with forming partnerships.
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Aims of the Partnership
HSCS is mainly focused on ensuring improvement of farm outputs, diversify capital, promoting growth of business and strengthen the capacity of local structures to facilitate market-led forces (Sriduangkaew, Liu, & Lam, 2014). In this case, the HSCH is an organization aimed at actively searching for the potentiality of partners to promote the existing business concepts. This helps to contribute to the improved quality of life of agriculture and forests in Kenya. This can be achieved through innovative economic opportunities to provide viable utilization of resources and a sustainable agricultural environment (Agrawal &Agarwal, 2012). On the other hand, Solarix is an expertise company in the production of bio fuels and energy. Solarix Company has taken an active role in facilitating installation of the necessary equipment required for the processing of residual fats and vegetable oils. Solarix Company prides itself in having both the theoretical and practical skills that are required in various departments such as agriculture, techniques in biodiesel and even general management skills. This ensures that clients receive efficient services and profitable solutions as far as the production of biodiesel made from large types of oils and fats.
HSHC came up with a private company, Horizon Limited. The company ensures that it fully harvests the business potential in the production of biodiesel and oilseed. This was aimed at paving way for the company to become the leading company that is involved in the commercial production of biodiesel from natural seeds in the year 1993. The year 2007 saw the establishment of the partnership between HSHC and Solarix Company. The partnership deal stipulated that 51% of the shares were directed to Solarix Company while HSHC received 30% of the shares. The rest of the shares were split among other three passive partners. The requite expertise of Solarix Company saw the partnership become a success (Appourchaux et al., 2014). The HSHC had more reasons that contributed to the establishment of the partnership. Solarix Company was mandated with the responsibility to provide technical expertise, facilitate solicit and injection of financial resources to buy seeds, raw materials and tools that would be required in the processing. The company would also ensure product quality control by offering beneficial advice.
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Background Information of the Partnership
HSHC and Solarix had already made preliminary talks aimed at coming up with the partnership. They were working towards a strategic partnership that meant to have a long-term structural cooperation. The failure to have an access to the funding from the Dutch government was the key failure factor to the attainment of the expectations that had been laid down from the formed partnership. There was also the lack of enough private financial incomes from both the HSHC and Solarix. In fact, Solarix had high expectations on securing and injecting a large amount of financial resources from the PSI and ploughs it into the partnership. The baseline for the engagement process became unfruitful when the PSI-financing proposal was rejected (Seitanidi, 2010). Both parties tend to assume that the formal shareholding evidence hinged upon the financial holdings by Solarix into the business. Other obstacles to the partnership and fundamental ones emerged due to lack of effective leadership skills and accountability capabilities from either partner. “The organization of the partnership was informal there was no agreement at all and we never had a serious discussion between the three partners involved. This was a clear indication of the loopholes that existed in the governance of the partnership” (Appourchaux et al., 2014). Horizon Limited was characterized by many challenges on financial handling, on production and also on entrepreneurship matters. These challenges were critically addressed during a partnership meeting that was aimed at ensuring that they are fully addressed to uphold a firm partnership. Moreover, that is a suggestion that there was informal progression towards Horizon by the partners.