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

Sun Dec 16 03:24:20 CST 2018

Dear all,
glad to see some discussiosn and different opinions.

@ Paul, thanks for the compliments about OTAGO and I confirm that the TLUD
technology is working very well for us. We have uploaded also some
technical drawing of our TLUD powered kilns/dryers on our website:
http://otago-global.com/activities/
In 2019 we intend to build a new bigger factory and I am sending you in the
attachment a 3D design of what it will look like (production capacity of up
to 20 tons/day). Besides the 3D external design of the factory, which looks
"pretty", we have also done a full 3D simulation of the entire production
process, calculating and measuring machine performances, stock and buffer
sizes, and HR requirements (short video of the simulation showing part of
the factory also in the attachment). You are welcome to come visit next
time you pass by in the area (South East Asia).

Likewise, everybody else is welcome to visit our factory. We give regular
factory tours to whoever requests one, usually schools/universities and
NGOs/international organizations, but in some cases also to private sector.
What Paul mentions about being useful to see some data from Inyenyeri, I
completely agree! I have always had very open attitude with my business
(for example factory visits) and at each and every PPT presentation I
include a graph showing our sales increasing from 48 tons/year in 2011 to
1,180 tons/year in 2017. In this sense, I have written and published a full
handbook (including a management excel tool) about char-briquettes
production, which can also be downloaded directly from our website.
http://otago-global.com/making-char-briquettes/

@ Crispin: carbon credits are an option, but you need that people use the
stoves, and that you actually produce and distribute the fuel.

@ Nikhil: I don't understand why you bring now the GACC in the discussion
and I would prefer to remain focused on the topic. I also think that there
is no need to remind us about the potential market represented by the clean
cooking sector and its problems (3 billion potential customers and 4
million deaths). We are also working in this sector and are very well aware
of the situation.
The new articles that you have shared in the links don't provide many
answer to my questions and actually they generated some new ones:

   - The Mimi Moto stove costs actually 80 USD (and not 60 USD as I
   thought) making the entire business model financially even more difficult.
   Is that right?
   - *"In August, the IKEA Foundation made a 3m euro grant to Inyenyeri, as
   part of its global commitment to protect the health of children. That
   support is critical as Inyenyeri moves towards its goal of providing
   cookstoves to 150,000 homes in Rwanda by 2020."* From 2,000 customers to
   150,000 households within 3 years? How convincing must that grant proposal
   have been?
   - 600,000 up to 1 million carbon credits generated by 2023, which the
   World Bank and Ci-Dev are ready to buy? How many tons of pellets is that?
   If that calculation was made for my char-briquettes here in Cambodia that
   would be 36,000 tons to 60,000 tons of fuel. Is that actually feasible to
   do by 2023, considering what we have seen so far? What are today's actual
   production and sales rates? What is needed to reach the necessary scale
   (investment, equipment, market)? Since, as you mention, proper due
   diligence must have been carried out, it would be great if some of the math
   was made public to understand how such business models can actually scale
   up so quickly. This is a "development sector" and I believe that
   organizations like World Bank and Ci-Dev wouldn't have any problems
   disclosing such information so that eventually other could benefit from it
   and more could be done to help 3 billion people.
   - *"Inyenyeri came up with a barter system under which rural household
   provide the company with wood, the raw material for its pellets. In return,
   they get stoves and pellets. These cashless customers only have to collect
   about half as much wood as they used to because the stove-pellet
   combination is so much more efficient than open fires, according to
   Reynolds."* What I heard is that Inyeyeri is exchanging 8 kg of wood for
   1 kg of pellets, is that right? In that case would it really be more
   convenient for the people to exchange wood for pellets, considering that
   they also have to bring it all the way out to the factory and back to their
   homes?
   - *"First, Inyenyeri is using Mimi Moto stoves, which are, by most
   accounts, the cleanest biomass stoves in the world." *Is it also the
   preferred stove by users and best selling stove? Here in Cambodia there has
   been a "result based financed stove auction" (
   http://www.thestoveauction.org/) where also the Mimi Moto stove
   participated and talking to stove sellers, they told me that it wasn't one
   of their best selling stoves at all. Any different data and results in
   other countries?
   - Congratulations to Eric for Marmot, but I thought that here we were
   discussing about Inyenyeri's business model...

Looking forward to more interesting and engaging discussions.

Best regards,
Carlo

On Sun, Dec 16, 2018 at 6:44 AM Nikhil Desai <pienergy2008 at gmail.com> wrote:

> Crispin, Carlo:
>
> See https://www.ci-dev.org/Inyenyeri and
> https://nonprofitchronicles.com/2017/10/17/inyenyeri-a-bold-plan-for-clean-cookstoves/
> .
>
> The latter piece is by Marc Gunther, who is not entirely credible given
> his tone and assertions.
>
> Still,
>
> “We’re still scrambling,” Reynolds tells me. “There’s still a lot of
> uncertainty involved.”
>
> But the potential is enormous. Maybe I should have started this post by
> reminding readers that about 3 billion — yes, 3 billion! — people cook and
> heat their homes using open fires or crude biomass stoves. The WHO
> estimates that more than 4 million people die prematurely from illnesses
> attributed to household air pollution caused by cooking."
>
>
> Louis Boorstin is an ex-IFC man not given to losing money, though I think
> the Osprey Foundation lost money on the GACC adventure to lend to stove
> companies. It shut down after two loans, losing Dutch money and wasting
> Deutsche Bank staff time. We had a discussion about a GACC webinar on this
> subject on this list a few months ago.
>
> Everything touched by GACC smells of something or the other. Here the
> carbon credit buyer is the World Bank Ci-Dev, so I assume proper due
> diligence was done and toxic smoke left for NYTimes to inhale and blow on
> its readers.
>
> Nikhil
>
> PS: For Mr. Reynolds' first adventure, eventually successful, see
> https://www.inc.com/magazine/19950801/2367.html
>
>
> On Sat, Dec 15, 2018 at 11:58 AM Crispin Pemberton-Pigott <
> crispinpigott at outlook.com> wrote:
>
>> “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
>>
>> E: carlo at sgfe-cambodia.com <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>
>>
>>
>>
>>
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