Prognosis
How a ‘Milkman Model’ Supplies African Hospitals With Cheaper Oxygen
A Kenyan entrepreneur’s small, localized plants have met a surge in demand during the pandemic—and now his business is ready to grow.
Unloading oxygen tanks after a delivery.
Photographer: Patrick Meinhardt/BloombergThis article is for subscribers only.
Like just about everyone, Bernard Olayo watched with dismay as the coronavirus began to sweep across the globe last year. But he also sensed an opportunity. In 2014 he’d founded a company called Hewatele (“abundant air” in Swahili) to supply African hospitals with oxygen, and when the pandemic sent demand soaring he was able to quickly boost production.
His strategy of building small oxygen plants near hospitals differs from that of larger producers, which typically favor big, centralized facilities. Olayo says this “milkman model” has allowed him to undercut his competitors’ prices in a market where oxygen costs 10 times what it does in the U.K.