[Stoves] FW: New York Times: Toxic Smoke Is Africa’s Quiet Killer. An Entrepreneur Says His Fix Can Make a Fortune

Sat Dec 15 10:13:40 CST 2018

Carlo,

So nice to know that you read the Stoves Listserv.  You comments are appreciated.  I have been to your factory when the GACC met in Cambodia (was that in 2011?).   OTAGO is certainly a success story, and it is with the largest and most industrialized production of charcoal using TLUD principles.
http://otago-global.com/making-char-briquettes/

Congratulations on your international expansion!!

Your questions about the Inyenyeri operations are insightful.

I hope that some readers of these messages have been to the Inyenyeri factory and have seen the operational aspects (fuel collection, pellet making, sales and distribution, etc.) in Rwanda.   Any first-hand comments (pro or con) would be appreciated.

I suspect that Inyenyeri has considerable data about amounts of pellets used per stove per day, and factory production, etc.   The info would be needed when seeking financial loans or grants, and could be widely shared.   That would help “get the word out”.

Paul

Doc / Dr TLUD / Paul S. Anderson, PhD
Exec. Dir. of Juntos Energy Solutions NFP
Email:  psanders at ilstu.edu<mailto:psanders at ilstu.edu>       Skype:   paultlud
Phone:  Office: 309-452-7072    Mobile: 309-531-4434
Website:   www.drtlud.com<http://www.drtlud.com>

From: Stoves <stoves-bounces at lists.bioenergylists.org> On Behalf Of Carlo Figà Talamanca
Sent: Friday, December 14, 2018 10:17 PM
To: stoves at lists.bioenergylists.org
Subject: Re: [Stoves] FW: New York Times: Toxic Smoke Is Africa’s Quiet Killer. An Entrepreneur Says His Fix Can Make a Fortune

Dear all,
this is the first time I intervene on this mailing list. I have been following for years with very much interest the technical discussions on stoves, where I am not an expert, but I have a pretty good experience and knowledge about fuel production and distribution, through my char-briquettes company in Cambodia - SGFE. We are so successful in Cambodia that now we have decided to "franchise" our model in other countries and we are doing that through a new company called OTAGO www.otago-global.com<http://www.otago-global.com>

Regarding Inyenyeri's business model, I have to say that I have more than a doubt:

1. If inyenyeri has 5,000 customers, that means that they are producing at least 5 tons of pellets per day (1 kg/stove/day). Judging from the pictures of the production facility, I would hardly say it produces even just 1 ton/day. Where is the raw material? Where are the safety stocks? Where is the equipment? Are they moving 5 tons of material around the factory every day with a wheelbarrow as it can be seen in one of the pictures? My factory has an average output of 3-4 tons/day and it has a main building of 1,200 sqm, 30 production workers and a raw material stock of 200 tons and a finished product stock of 70-80 tons (not considering the buffers of material which is being processed).
Why are the production workers in Inyeyeri wearing helmets? The building is not really high, there don't seem to be any overhead stored material or overhead movement of material (like with cranes). In my experience with processing biomass fuel, you keep everything on the floor, since there is lots of material and it is really heavy. Unless there is the risk that the roof falls on their head, the helmets seem completely useless and worn just as a statement of (useless) safety measures being implemented.

2. According to Inyenyeri's business model, they receive the biomass from the people that collect it and bring it to the factory. To produce 5 tons/day you need at least 5 tons of wood per day (more if you consider the moisture content). If everybody brought 50kg (I imagine these people are low income, might not have a car or even a motorbike and therefore bring everything on foot, as shown in a picture) that would mean 100 people line up every day in front of the factory. How much time does it take to weigh the wood one by one and pay them? Do they weigh 5 tons of wood every day with that small hanging scale that can be seen in one of the pictures? At SGFE we have trucks delivering the raw material at the factory and just the unloading of the trucks is already a really hard job.

3. How does Inyenyeri distribute the pellets? With bicycles, as it can be seen in the picture and in the video? They distribute 5 tons of pellets in a HILLY COUNTRY with bicycles? How many bicycles do they have/need? The riders have probably a training ready  to participate to the Tour the France.... In Cambodia we use 2-3 Tuk Tuks driving around the city 10 hours a day (from 8am to 6 pm), fully loaded to deliver 3-4 tons/day. And Phnom Penh is completely flat!

4. According to Inyenyeri's business model they distribute Mimimotos stoves for free and they earn the money by selling the fuel. If Inyenyeri makes 30% profit margin on the fuel (which is massive, because fuel businesses are usually "low margins high volumes" business models), selling the pellets at 0.24 USD/kg, it would take 2 years and 3 months only to pay back the 60 USD stove. How are they making any money? What if some of the customers decide they don't want to buy the pellets anymore, which would add effective losses?

5. Inyenyeri's business model is already pretty hard to believe with the alleged 5,000 customers, how do they intend to scale up to serve 100,000 households? Do they have any idea of what it means to produce 100 tons of pellets per day? (Size of the building and land, necessary raw material storage, equipment, trucks, etc...). How many hundreds/thousands of people will line up in front of the factory every day to supply the wood/raw material? Is it even manageable and is it actually feasible to secure the required feedstock with such a business model? Are they going to deliver 100 tons per month on bicycles?

6. Inyenyeri has risen 12 million USD in funding (private investments and grants). On what basis was that amount of money granted to Inyenyeri? For their business model or their technology or their market penetration? Is the business plan or any other data publicly available? What have they demonstrated in the past? And what have they done with that money so far?

I am an engineer and have been working in the fuel business for 8 years. I find it really hard to believe Inyenyeri's story and am wondering if anybody else has the same doubts or if anyone can eventually give me some answers.

Best regards,
Carlo
_________________________
Carlo Figà Talamanca - CEO
Sustainable Green Fuel Enterprise (SGFE)
Phlove Lom, Phoum Russey, Sangkat Stueng Meanchey, Khan Meanchey,
Phnom Penh, CAMBODIA
T: +855-(0)97-8159256<tel:%2B855-%280%2997-8159256>
E: carlo at sgfe-cambodia.com<mailto:carloft at gmail.com>
W: www.sgfe-cambodia.com<http://www.sgfe-cambodia.com/>
[https://docs.google.com/uc?export=download&id=1dM5gPVADSeQGJ2n2ZoRL3ZbvRfKpUnKC&revid=0BzOEbDw-ryg7MFlSMjljQURCdUUzSWVkanJlUjlLQUMyY2hzPQ]

On Fri, Dec 14, 2018 at 9:47 PM Anderson, Paul <psanders at ilstu.edu<mailto:psanders at ilstu.edu>> wrote:
Crispin,

Tom Price and others at Inyenyeri can answer better than I can.   Tom does read this Listserv (I think.).

Cooking with good TLUD stoves (Mimi Moto and others) saves fuel (fuel savings mean less cutting of wood, even if it is farm-grown or in the wild).

Additionality is that the households would not be doing this savings if they could not get the stoves, and the stoves are supplied by the project.

I see no objections to how this project functions.  My reservations are about the financing for reaching the many millions needing good stoves.   But we know that getting stove projects started takes much money.   Examples include some that are starting and others that have shifted into more stabilized production costs:

Burn in Kenya ---- Many millions at the start.  Now seems to be stabilized for production and business.  (not counting much money for the design and testing)

Inyenyeri -----   $12 million and now has 5000 TLUD stoves   (not counting the substantial investment to get the Mimi Moto stove designed, tested, and into production)

Rocket stoves -----  Years and much money at Aprovecho and the business efforts, including by SSM in china.

Champion TLUD  -----  Development work by Anderson and Servals, but with some millions by atmosfair to establish the carbon credit program (somewhere around 35,000 stoves).

Prime and Prof. M. Nurhuda  ---  Substantial, but I do not know the numbers

SNV in SE Asia  -----   LOTS of expenditures.

Solar cookers, alcohol stoves, and even LPG stoves are backed by substantial time and money.

Anyone can add to this list (or disagree with me).

But the BIG issue is financial sustainability with quality stoves.   And how much are the improved stoves actually helping the people is substantial ways (substantial is not defined here).  I will have more on this by the time of ETHOS in late January.

Paul

Doc / Dr TLUD / Paul S. Anderson, PhD
Exec. Dir. of Juntos Energy Solutions NFP
Email:  psanders at ilstu.edu<mailto:psanders at ilstu.edu>       Skype:   paultlud
Phone:  Office: 309-452-7072    Mobile: 309-531-4434
Website:   www.drtlud.com<http://www.drtlud.com>

From: Stoves <stoves-bounces at lists.bioenergylists.org<mailto:stoves-bounces at lists.bioenergylists.org>> On Behalf Of Crispin Pemberton-Pigott
Sent: Thursday, December 13, 2018 2:36 PM
To: Discussion of biomass cooking stoves <stoves at lists.bioenergylists.org<mailto:stoves at lists.bioenergylists.org>>
Subject: Re: [Stoves] FW: New York Times: Toxic Smoke Is Africa’s Quiet Killer. An Entrepreneur Says His Fix Can Make a Fortune

Dear Paul

I was discussing this with someone off list and they made the following observation, which seems relevant. They asked:

Is Inyenyeri solving a non existent problem?

The question is relevant because there are not forests left in Rwanda. The cutting of the remaining national forest has been stopped (securing the habitat of the mountain gorillas, mainly).  All wood comes from farmers that grow trees as a crop. This applies as well to the charcoal trade which is legal and sustainable.

Where is the wood coming from? As I understand the project when I reviewed it, the wood is brought to the pelleting house by people who trade it on a discounted mass basis for pellets. The rural community is therefore doing the foraging. They have to get wood somehow to cook, but when they do, they can take it to the processing centre and get bags of pellets in return – no money involved.

In town, the pellets are sold. The town pellets come from the discounted exchange in the rural area.

So…does the project still work this way?  If so, how is a carbon credit being calculated? There are no forests to “save” so the collection of wood is sustainable.  Isn’t some unsustainable fraction required for CDM credits to apply? Plus additionality (look it up).

I think it would be helpful if the project financing model were explained in a way that helped us to know how to replicate it.

Much appreciated.

Crispin

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