Empowering Malawi: Building a Sustainable Sanitation Market

This case study examines the partnership between SATO, Water for People Malawi, and Phalombe Hardware and how they successfully established a sustainable, market-based sanitation ecosystem in Malawi, improving sanitation for over 100,000 people.

Context

A series of fortunate events brought SATO and Water for People (WFP) Malawi together, propelled by the fact SATO had begun manufacturing in neighboring Tanzania. This proximity enabled a seeding partnership in 2021, leveraging WFP’s on-the-ground presence to build a market for SATO’s sanitation products.

The partnership between SATO, Water for People (WFP) Malawi, and Phalombe Hardware began in 2021 and is ongoing. It was born from a culmination of fortunate events. In 2020, Justin Mbowe, SATO’s Business Leader for Tanzania and Malawi, first learned of WFP through SMART Centre Malawi, a local training centre. Simultaneously, a sanitation specialist from WFP Malawi had already encountered SATO products at a global conference and brought samples back to the country.

Discussions between SATO and WFP began, sparked by the exciting news that SATO had started manufacturing in neighboring Tanzania. This proximity, a mere 1000 km away, promised to significantly ease the transportation of goods to Malawi. In 2021, the partnership was formalised to leverage WFP’s strength in on-the-ground demand creation. It started with a small product donation by SATO, part of LIXIL, to open the market and evolved into a formal seeding model, with WFP becoming one of SATO’s first seeding partners.

Challenge

Prior to the partnership, Malawi’s sanitation market was quiet, with extremely low product demand and poor access to basic sanitation services for most of the population. This public health issue cost the country millions annually and was particularly severe in rural areas where open defecation was rife.

The sanitation market in Malawi faced several significant issues:

Low product demand: Prior to the partnership, Water for People implemented market-based sanitation looking at the whole sanitation value chain. However, the challenge was on containment where sanitation products were limited leading to customers/households having few or no options other than the ‘usual’ cement based slabs and drop-hole covers..
In addition to the lack of sanitation options, there was limited awareness of existing sanitation options – Phalombe Hardware, a leading retailer, had procured 1,000 SATO units that remained unsold for two years due to a lack of consumer demand.
Uneven safely managed sanitation services: Access to sanitation is inconsistent across the country, with 7% of households in rural areas practicing open defecation compared to just 1% in urban areas (UNICEF 2025).
Low Access to basic sanitation: Only 26% of the population had access to basic sanitation services. This public health crisis cost Malawi an estimated US$57 million each year in healthcare costs and lost productivity (UNICEF 2025).

Objectives

Initially, the partnership aimed to build a robust product supply chain, allowing WFP to focus on creating consumer demand and advocating for market-based approaches. Over time, this objective evolved to focus on penetrating rural markets and ensuring product affordability for these underserved communities.

The partnership’s goals have evolved over time.

Initially, the primary objective was to establish a robust product supply chain. The goal was to ensure the consistent stock and availability of SATO products in Malawi through Phalombe Hardware and its network. This would allow Water for People to concentrate its efforts on creating consumer demand and advocating for market-based sanitation (MBS) approaches as well as expanding the skills of masons in installation of SATO products

As the partnership matured, the overarching objective expanded. Currently, the partners are focused on penetrating rural markets. The key questions they aim to answer are: How can the partnership complement government efforts in rural areas with market-based solutions? And how can it ensure a strong supply chain and product affordability for rural communities?

Rollout

The partners implemented a sustainable, market-based strategy centred on a revolving fund mechanism, providing seed capital, i.e initial working capital, to local entrepreneurs rather than direct subsidies to households. This was supported by extensive demand-creation campaigns, mason training, and collaboration with local government to ensure long-term success.

The partnership adopted a sustainable, market-based approach, deliberately avoiding direct household subsidies to build a self-sustaining ecosystem. This was achieved through a layered strategy:

1.Building a viable financing model through an initial working capital and revolving funds mechanisms :

WFP along with local Savings and Credit Cooperative Organisations (SACCOs) established a financial model based on recycling capital, with initial investments being replenished and reinvested as funds are used and repaid by loan recipients. They identified, vetted, and trained local entrepreneurs in sales and marketing.
Using 10,600 SATO units received from LIXIL in 2022-2023 as seed capital through the importer Phalombe Hardware, WFP provided initial inventory to these entrepreneurs as a loan.
Entrepreneurs sold the products at an agreed-upon price that included a profit margin.
The principal funds from sales were remitted to SACCOs. This created a revolving fund, allowing entrepreneurs to access new loans to restock inventory and grow their businesses independently.

2.Targeted awareness-raising activities by WFP to build demand for sanitation:

WFP and health extension workers conducted door-to-door campaigns and product promotions.
Targeted communication campaigns were launched to correct the misconception that SATO products used excessive water and to highlight key benefits like water efficiency, odour elimination, and a modern aesthetic.
Local masons were trained in proper installation and maintenance to provide ongoing technical support.
The success of this model attracted UNICEF, which became a pivotal partner by providing resources for transportation, logistics, and promotional activities, helping to expand the programme’s reach.

The partnership adopted a sustainable, market-based approach, deliberately avoiding direct household subsidies to build a self-sustaining ecosystem. This was achieved through a layered strategy:

1.Building a viable financing model through an initial working capital and revolving funds mechanisms :

WFP along with local Savings and Credit Cooperative Organisations (SACCOs) established a financial model based on recycling capital, with initial investments being replenished and reinvested as funds are used and repaid by loan recipients. They identified, vetted, and trained local entrepreneurs in sales and marketing.
Using 10,600 SATO units received from LIXIL in 2022-2023 as seed capital through the importer Phalombe Hardware, WFP provided initial inventory to these entrepreneurs as a loan.
Entrepreneurs sold the products at an agreed-upon price that included a profit margin.
The principal funds from sales were remitted to SACCOs. This created a revolving fund, allowing entrepreneurs to access new loans to restock inventory and grow their businesses independently.

2.Targeted awareness-raising activities by WFP to build demand for sanitation:

WFP and health extension workers conducted door-to-door campaigns and product promotions.
Targeted communication campaigns were launched to correct the misconception that SATO products used excessive water and to highlight key benefits like water efficiency, odour elimination, and a modern aesthetic.
Local masons were trained in proper installation and maintenance to provide ongoing technical support.
The success of this model attracted UNICEF, which became a pivotal partner by providing resources for transportation, logistics, and promotional activities, helping to expand the programme’s reach.

Results

The initial investment of seeding capital generated nearly double the amount in re-orders, providing over 102,000 people with access to improved sanitation and transforming sanitation marketing from theory into a viable business environment. By introducing genuine consumer choice, the partnership spurred new economic opportunities for local entrepreneurs in the sanitation industry.

The partnership has had a significant and measurable impact on Malawi’s sanitation landscape.

Market growth: The initial seeding of 10,000 units has generated re-orders of 18,633 units from 2023 to now, transforming Malawi into a consistently growing market for SATO.
Human impact: An estimated 102,000 people have gained access to improved sanitation and hygiene services as a direct result of the partnership.
Transformation of the business environment: The collaboration turned the concept of sanitation marketing from a small-scale theory into a practical and viable business environment. It introduced genuine consumer choice by making SATO’s lightweight, affordable, and easy-to-transport products available as an alternative to traditional cement options.
Economic opportunity: The increased product availability and demonstrated market viability signaled new opportunities for growth and investment, encouraging entrepreneurs to enter the sanitation industry.

Learnings

The project’s success demonstrates the power of combining partners’ complementary strengths, with WFP offering community reach and contextual expertise, Phalombe engaging as the national importer and distributor and SATO providing working capital. Furthermore, it highlights that providing real market choices is a critical strategy for empowering and serving excluded populations in rural and low-income areas.

The success of the tripartite partnership in Malawi offers some key learnings:

Complementary strengths are crucial: The collaboration thrived because each partner brought unique and complementary strengths to the table. SATO provided technological expertise and experience in sanitation markets, while Water for People contributed its deep on-the-ground expertise and extensive reach to end-users.
Market choice empowers underserved populations: The initiative highlights the importance of providing real market choices to populations that are often excluded. By creating new, affordable, and accessible sanitation possibilities for individuals in rural areas, low-income communities, and unplanned settlements, the partnership opened up options they would not have had otherwise.

"Our partnership with SATO has had a significant and measurable impact on Malawi’s sanitation landscape"

Brian Mulenga, WASH Business Coordinator, Water for People