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

Sat Dec 15 10:57:07 CST 2018

“How are they making any money?”

Carbon trading?
Crispin

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<https://nam03.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.otago-global.com&data=02%7C01%7C%7C34377fb169244371c15708d662a2e307%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C636804849060834173&sdata=J2XGQDdQHQXu0ROTN94Jzd0FwrJfnxlZRqwuo%2F1F7fQ%3D&reserved=0>

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<https://nam03.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.sgfe-cambodia.com%2F&data=02%7C01%7C%7C34377fb169244371c15708d662a2e307%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C636804849060834173&sdata=9%2F1j%2FFs9IYfr8NSlNZWULadKWOP8iCZbRRB4mDrDgoY%3D&reserved=0>
[https://docs.google.com/uc?export=download&id=1dM5gPVADSeQGJ2n2ZoRL3ZbvRfKpUnKC&revid=0BzOEbDw-ryg7MFlSMjljQURCdUUzSWVkanJlUjlLQUMyY2hzPQ]

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