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Routes for commercialization of rural stoves


Table of Contents

Boiling Point
Front cover of Boiling Point issue 39
Issue 39 (1997) Using biomass residues for energy
ArticleRoutes for commercialization of rural stoves
AuthorSmail Khennas


[top] [end]Introduction

Over the last three decades, stove production and dissemination have changed from being an almost fully subsidized to becoming commercial or semi-commercial activities. During the seventies, particularly after some African countries experienced severe drought, multilateral organizations provided substantial grants to stoves production and dissemination. This route led to almost complete failure for three main reasons.
  • The beneficiaries were not involved in the implementation of the projects.
  • The stoves were generally given for free.
  • There were no monetary incentives for those involved in the production and the distribution of the improved stoves.

Apart from exceptional cases, such as refugees camps, it is now acknowledged that the fully subsidized approach is not sustain-able in disseminating improved stoves or other renewable equipment such as photovoltaic systems.

[top] [end]Requirements for successful commercialization

It is important from the outset to consider different approaches for rural areas and urban stoves programmes. In urban areas, the impact of improved stoves can be discussed in terms of money (e.g. the daily savings). A market for improved stoves exists and commercialization is a well-understood concept.
Figure 1: Marketing the brand name for Anagi stoves. (ITDG/Neil Cooper)
Figure 1: Marketing the brand name for Anagi stoves. (ITDG/Neil Cooper)
However, in rural areas these ideas are not easily understood as the value of fuel for domestic use is not thought of in terms of money. In poor rural areas the challenge is to develop a new product and to promote it in the market. For a project to succeed:
  • It is essential to develop a reliable improved product affordable by rural people.

In many cases, the conditions needed to provide a quality product consistently have been overlooked, leading to a lack of confidence among customers. People with very little money need to know that what they are buying is reliable.

  • The availability of raw materials may be a major cause of failure.

Pottery clay is the main raw material used in mud stoves manufacturing. When the producers are not within walking distance of their sources of clay, the cost of transporting the clay may make the clay too expensive.

  • A market, once created, can be be damaged by low-cost and poor quality imitations.

This may have two major consequences:
  1. professional and long established producers may not be able to compete with cheap imitations;
  2. consumers may go back to traditional stoves because of the poor quality. It may take time to rebuild the consumer confidence. One solution is to certify and promote products which comply with certain quality criteria.

Case study 1: Ceramic liner for KCJ, West Kenya

In West Kenya, an artisan introduced a three months guarantee for the ceramic part of the Kenyan metal stove (KCJ: Kenya Ceramic Jiko). Currently, more than 10,000 improved stoves are produced each year. The bulk of the production is now controlled by the producers, retailers, salesmen. The normal market has taken over from 'commercialisation' carried out by the Ministry of Energy.

Case study 2: Anagi stove, Sri Lanka

A strategy was successfully implemented in Sri Lanka. Untrained producers started making cheap 'look-alike stoves' to imitate the 'Anagi' improved stove. The introduction of a label gave a quality assurance for customers who were keen to pay the full price. The results are remarkable since, according to a recent evaluation, in the last six years some 450,000 Anagi improved wood-burning stoves were sold and the producers were making increased profits.

[top] [end]Recognizing the social value of women's labour

The value of women's labour and time must be taken into consideration. Most fuel collection and cooking is done by women, so a reduction in fuel collection, less exposure to smoke emissions, and time saved in cooking, will mainly affect women. In some societies, these factors are not considered important and where income is extremely low, with little opportunity for employment, fuel collection by women may seem the preferred alternative to stove purchase. For projects to succeed, these problems caused by these attitudes must be addressed.

[top] [end]Factors affecting dissemination

Experiences in some West African countries and in Asia show clearly that there is much less dissemination where money is not regularly exchanged for goods.

Case study 3: Comparison of stove dissemination in China and Kenya

This correlation has been highlighted in a comparison of the stoves projects between India and China In the latter country, stoves programmes have been successful because they were implemented in areas where there is a substantial involvement of women in earning activities. Consequently there is a strong financial incentive in time saving for fuel collection and cooking by the purchase of improved stoves at a market price. In contrast, in rural areas in India, women are hardly involved in earning activities and therefore the time saved is not valued against short term and measurable criteria such the impact on the income of the household resulting from the adoption of improved stoves.

By contrast in west Kenya, the whole chain from the production to commercialisation is largely controlled and implemented by women's groups. This contributes to a large extent in creating a different perception of women's place in society, by the emergence of market values such as the income, profit, time costing.

Figure 2: A low interest loan can allow a women's group to buy an efficient kiln. (ITDG)
Figure 2: A low interest loan can allow a women's group to buy an efficient kiln. (ITDG)


[top] [end]Financial factors affecting stove production

Although it does not require much capital to produce and market mud stoves, the conditions applied to credit may affect the profitability of the stove business. The main equipment required to produce a mud stove is a mould and a kiln for firing the stoves.

The cost of a mould is recovered when between 50 and 100 stoves are sold. Some groups do not have enough money to buy a mould. A very low interest loan is often enough to solve this problem. Taking out a loan demonstrates the willingness of a group to carry on production.

Case study 4: Setting up mould manufacture in West Kenya

In West Kenya when a women's group capable of producing improved stoves is identified, the project provides the group with a mould on loan. The project then retrieves the mould within six months, during which period the group should have bought its own mould. Some groups have done better than others in the acquisition of moulds. Some groups have more than one mould and thus their production is not hampered by the lack of equipment.

Apart from the mould, the kiln is the other crucial piece of equipment required to manufacture good quality stoves; it is also the most important serious bottleneck for low income producers. Because of their different designs, kilns vary in cost.

Clearly, the producers' groups cannot afford expensive type of kilns, which are more suitable for industrial use. Also, communities may not be able to maintain complicated designs. In the case of the sophisticated kiln described in Case study 5, the women made very high contributions in order to cover kiln maintenance costs. This discouraged the women, whose main aim was to increase their incomes.

Case study 5: Cost of kilns in West Kenya

In West Kenya all the groups have one type of kiln or another. Some producers have a simple ITDG designed kiln the "Bonfire", costing between £20 and £100 according to size (£1= $0.61 US). Another group have a more complicated, but still simple-to-operate kiln designed by GTZ, costing about £40. Another group have a highly technical kiln designed by an UN-consultancy and funded by UNIFEM, costing in the region of £ 4,000.

Kiln research carried out by IT in conjunction with the Ministry of Energy and GTZ has paid dividends, as now the IT Bonfire kiln is popular among women groups. The fuelwood needed by the kilns per stove does not vary much with the size of the kiln. It appears that there is no economy of scale, consequently in many cases the smaller kiln option is the best choice in order both to meet a small market and to reduce the upfront investment.

[top] [end]Adapting the product to user needs: actual and potential market

Despite the potential for commercialization, the market for a particular stove design may not have been well assessed. Some indicators, such as income, cash crops, relationship between salesmen and consumers may support the assumption that a market could expand in the forthcoming years. Assessing the market demands a comprehensive approach, looking at customer needs and evaluating the potential for a particular market.

Case study 6: Assessing the potential market

In West Kenya, the traditional stove is always fixed, but recently some rural households have shown a preference for a portable wood stove. Several factors have brought this about. Many rural homes have now got cemented floors and a fixed mud stove does not match the new kitchens.

In many cases, the buyers of the stove are not necessarily going to use it themselves; they may be buying for their rural relatives, far away from those who know how to install fixed stoves. Therefore, the market for portable wood stoves is going to grow.

A preliminary market survey shows that the new portable stoves are " clear evidence of a response of consumer needs" This need was taken into consideration by the introduction of two types of portable stoves: the Upesi metal/ceramic and the Upesi Lira.

[top] [end]Channels for commercialization

Very often distribution is a bottleneck as the population is spread over a wide area and the needs of different communities vary a great deal. Because of this, especially in rural areas, promotion requires a great deal of investment. Promotion is always crucial to attract new customers, especially when they are not used to paying for equipment. The promoter's function is to carry out demonstrations in public places (markets, churches, schools) and to visit households in the communities around the potential customers.

Some salesmen prefer to commercialize several types of stoves (Upesi, Upesi portable, KCJ) in order to increase their total profit. Besides acting as a link between producers and customers, there are other functions in which salesmen may be involved. The examples below are particularly interesting and highlight the dynamism and the innovative methods of commercialisation.

Case study 7: A salesman involved in the production process

In this case the mud stoves production takes place in rural areas and the output is sold to a salesman in the town. At the same time the salesman has his own workshop where he manufactures and sells metal ceramic stoves. The relationship established between the producers and the salesman led him to subcontract the manufacturing of the ceramic component of his own production to rural producers.

This formula is quite interesting. The KCJ producer has access to a cheap source of parts (ceramic) and saves on the costs of transport by combining the purchase and the transport of the mudstoves and the ceramic parts. The producers are benefiting from an additional income at a very low marginal cost.

Case study 8: A saleswoman installer

A woman who runs a grocery started to sell stoves at the at the end of 1994. The sales have steadily increased and it is estimated that some 200 stoves are now sold annually. The stoves are bought at £0.85 and sold at £1.25. If they are installed, the saleswoman charges £0.5 for their installation. About 50% of the customers have installed the stoves themselves. Improved stoves are increasingly becoming a usual product.

[top] [end]Discussion

The examples above show that the selling of stoves can be a profitable business if measures are taken to ensure that the production of good quality stoves is maintained.

The shorter the link between the producer and the final customers, the lower the prices. However, a shop-owner will rarely buy from a manufacturer but from a salesman or stockist who generally has a higher income to buy in bulk from the producer and sell to the retailer. Of course the introduction of another person will increase the final price of the product.

All the promoters or salesmen are personally motivated to disseminate stoves. The women who sold stoves gained their experience in their own kitchen that households can benefit from improved stoves. Then they promoted the stoves in church and elsewhere for awareness raising, because they were convinced that the stove can alleviate women's drudgery.

The main lesson is that although dissemination strategies may vary, the normal mechanisms of the market should prevail. Income generation for all the players is essential for expansion of the market and in making stoves commercialisation viable. It should be emphasised however that the whole process before the commercialisation phase is reached may span several years.

[top] [end]Contents: Boiling Point 39: Using biomass residues for energy

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Using biomass residues for energy - Briquetting agricultural residues - Briquetting of biomass residues in India using a Beehive Pyrolyser and briquetting machine - Briquettes in Sudan - An introduction to the reality of household fuel needs in Bangladesh - Sawdust utilization - experiences in Mutare, Zimbabwe - Biomass resources use in tea plantations in Sri Lanka - Development of cooking-cum-heating stoves in the upland of North Vietnam - Fuelwood as a source of urban household energy in Ethiopia - A supply perspective - Community-managed micro-hydro projects in Northern Pakistan - The low wattage cooker - the Nepal experience - Routes for commercialization of rural stoves - Thermally efficient improved wood-burning metal cooking stove - The Women and Energy Project for stove dissemination in Kenya - crossing the sustainability bridge

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Page created: 03 August 2007; Last edited: 06 August 2007; Version: 1
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