How international manufacturers benefit from regional market development.
Bich Tan Nguyen is the owner of SolarServe, a company manufacturing cookstoves on the outskirts of the city Da Nang in Northern Vietnam. Located between warehouses and factory buildings, Bich’s small production facility houses half a dozen workers. Using hand-tools and simple machinery they cut, drill and roll sheet metal into what will become the body of a super-clean gasifier cookstove. Another worker packs finished cookstoves into cardboard boxes covered with Vietnamese and English writing that announce the benefits of the stoves: “Saves Energy – Protects Environment – Saves Fuel Costs”.
An old hand in the cookstoves business, Bich’s sales have, however, been limited to his home town of Da Nang and the surrounding areas. This changed in 2015 when EnDev introduced a project to increase the availability of clean cooking devices in the Mekong region – Vietnam, Laos and Cambodia. With a virtually untapped demand for advanced biomass cookstoves in Cambodia, and a lack of local suppliers to meet demand, EnDev offered support for regional and international stove producers to expand their business in this emerging market. Aware that his product from Vietnam was more advanced than those available in Cambodia – where more than 90% of households still use traditional wood- and charcoal stoves – Bich was keen to test his product in the Cambodian market.
Between 2015 and 2018, EnDev provided technical and financial support to manufacturers of higher-tier cookstoves from all over the world with the purpose to let their market expand to Cambodia. Results Based Finance, providing a cash incentive upon sales, supported business to become active in Cambodia, thereby introducing technological innovation and establishing a local industry for better stove products. The project created a trading platform: international stove producers could meet and form business relationships with local Cambodian companies that could buy the stoves and sell them to households in rural areas.
Together with other international manufacturers, Bich seized upon this opportunity and began shipping his stoves to Cambodia. These were taken up by sixteen local distributors that participated in EnDev’s trading platform. Doing business in a foreign country for the first time, and being new to cross-border trade, Bich faced no shortage of hurdles. In the end, all of this work has been more than worthwhile. In Bich’s words: “It is a very good project for me to test the market in Cambodia. I really see market potential there and I actually learned a lot through this project – how to deal with exports, customs, transport. It helped to make us a stronger, more mature company. We are now a truly international company ‐ and we want to export to Myanmar and other countries ‐ because now we know how to expand.” And it’s not only Bich who benefitted: more than 40,000 higher-tier cookstoves, with high fuel efficiency and low smoke emissions, had been sold in the Mekong region, giving local communities access to a new generation of cleaner cooking devices.
But most importantly, with several market actors working to set-up local production of the new stoves, the project has enabled a new industry to develop in Cambodia. This has remained, after the project ended, continuing to provide families with access to clean cooking.
We are now a truly international company ‐ and we want to export to Myanmar and other countries ‐ because now we know how to expand.Bich Tan Nguyen
Did you know…?
Want to know more about Clean Cooking activities within EnDev? Click here.