The Marketing and Commercial Approach to Disseminating Improved Stoves in Cambodia

The Marketing and Commercial Approach to Disseminating Improved Stoves in Cambodia

Minh Cuong LEQUAN, GERESBetter Air Quality 2006, Dec. 13-15th, JogjakartaMinh Cuong LEQUAN, GERESBetter Air Quality 2006, Dec. 13-15th, Jogjakarta

• French NGO created in 1976

• 150 collaborators

• Energy Environment and Poverty

• South East Asia, Himalayas,

West Africa, Maghreb and France

1976-2006 30 years Jubilee

Main partners in Cambodia

•In Cambodia since 1994

• 30 staffs

• Biomass energy: efficiency, sustainable supply, planning, policy

• Biofuel (jatropha curcas)

To improve the livelihoods of Cambodians with regard to energy and sustainable development

Broad dissemination of ICS and wood energy saving devices to critical and dense areas

R&D on ICS and wood energy saving

Set-up institutions to:

- promote the wood energy issue,-exchange technology with other countries and

- support the government of Cambodia towards a “national wood energy policy”

Cambodia Fuelwood Saving Project : 1997 - 2007

Coverage Area: 10 provinces beyond plan

Extension

Overwhelming success

Monthly sales of Improved Cook Stoves in Cambodia(May'03 - Sept'06) Model: New Lao Stove

1441

1528

2747

7151

13661

0

2000

4000

6000

8000

10000

12000

14000

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39

Monthly sales of Improved Cook Stoves in Cambodia(May'03 - Sept'06) Model: New Lao Stove

1441

1528

2747

7151

13661

0

2000

4000

6000

8000

10000

12000

14000

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39

Fuel wood: the main source of energy

No.Type of cooking

fuelCambodia

Phnom Penh

Other Urban Rural

1 Fuelwood 91.20 % 39.00 % 86.00 % 97.20 %

2 Charcoal 5.10 % 38.80 % 11.30 % 0.90 %

3 LPG 1.70 % 18.20 % 1.70 % 0.10 %

4 Kerosene 1.30 % 3.40 % 0.50 % 1.10 %

5 Public Electricity - 0.50 % -

6 Private Electricity 0.20 % 0.10 % 0.20 % 0.20 %

7 None - -

-

8 Other 0.50 % 0.20 % 0.30 % 0.60 % Source: Cambodia Socio-Economic Survey 1999, NIS, MOP

Siam stove

(ang) Lao Kg. Chhnang

Traditional cook stoves: already commercialized

(ang) Lao Stove

Improved cook stoves: easy to adopt

New Lao Stove

(ang) Lao Stove

(ang) Lao Kg. Chhnang

Neang Kongrey Stove

Fuel TypePrice of fuel

(Riels/kg)

Calorific Value

(MJ/kg)

Device Efficiency

(%)

Cost in Riels per useful energy

MJ/kg

Fuelwood 200 16.5 19 63.8

Charcoal400 26.0 25 61.5

2501) 26.0 25 38.4

Kerosene 1,880 43.5 45 96.0

LPG 2,5352) 45.3 57 99.9

(25)

(30)

(30)

(48.5)

(51.3)

(32.0)

1) Charcoal price in Battambang and Koh Kong

2) 14.2 kg of LPG costs US$ 9

Breaking the energy ladder

TraditionalCook Stove Producers

Siam StoveLao Kg. Chhnang Stove

Lao Bucket Stove

TraditionalCook Stove Distribution

The UsersCook Stove Wholesalers

Cook Stove Retailers

Cook Stove Mobile VendorOx-cart, Moto-remorque

Rural & UrbanHouseholds

Main Direction of CFSP Commercialization Strategy

Assistthe producers

to produceImproved Cook Stove

Awarenessprogram to

cook stove sellers

Marketingand advertising

campaign

The commercial channels

Based on existing sector No subsidy

Assistartisans

to produce NLS

Awarenessprogram to

cook stove sellers

Marketingand advertising

campaign

Commercial interventions

Technical training

Technical support

Quality Control

Micro credit

Networking meetings

Management training

Initial stocks assured of purchase

Ad-hoc troubleshooting

Promotional offers: sell 10 units get a promotional T-shirt freeNo cost consignments in shopsFree special racks for aisle end displayMatchmaking meetings

Presentation in fairs, cooking demos in markets, try-and-buy operations

TV ads (popular soap operas), billboards on main roads, T-shirts, banners

Radio and TV coverage (national news, educational shows)

Sponsoring of football teams, boat racers, cycle racers

178.800 units sold from May 2003 until September 2006,

The producers got a net profit of US$ 0.75/unit; totally US$ 134,100

or around US$ 300/month/producer

Middlemen got a net profit of US$ 0.5/unit; totally US$ 89,400

Retailers got a net profit of US$ 0.5/unit; totally US$ 89,400

Then the users………

The producers, middlemen & retailers got a consolidated net benefit of US$ 312,900 in 40 months

Economic Benefit (1/2): Supply side

Economic Benefit (2/2): User side

Average CHARCOAL consumption 2.118 kg/family/d

Real saving with NLS 21.76%

Price of charcoal 500 Riels/kg or 0.12 US$/kg

... and for the environment

Y1 Y2 Y3 TOTAL

Cash saved (US$) 182,754 740,009 1,530,493 2,453,256

fresh wood saved (T) 8,224 33,300 68,872 110,397

TCO2 saved 7,489 30,326 62,720 100,535

Challenges for long term sustainability

Copycats-Threat to quality- Price wars- But can help solve chronic under-supply

Quality

- Need to be rewarded and maintained in the long term

Fuel availability-charcoal prices may soar, making LPG more competitive

Market saturation

- expected in 4-5 years

Train and regulate- Vocational raining centre- Training of MIME staff, sub-decree on ICS standard- ICOPRODAC and labelingISO QMS/EMS- Quality Control System and-incentives from Carbon Finance

EE and RE- energy plantations- charcoal process improvements

Expand and transform- Export to push back market saturation- R&D (post-combustion stoves)

to know more:

www.geres.eu

or www.cfsp.org.kh

to compensate your CO2 emissions:

www.co2solidaire.org

Thank you for your attention