Situation
90% of East Africa’s population cooks with charcoal or firewood using inefficient cook stoves which leads to severe regional deforestation and negative health impacts caused by indoor air pollution. Providing households’ access to clean burning energy efficient cook stoves is the goal of the Paradigm Project, a social enterprise working to create sustainable social, economic and environmental value within developing world communities. Karisimbi Partners was engaged by Paradigm to determine the feasibility of launching a new line of fuel-efficient cook stoves into the regional market that would primarily serve the rural poor.
Karisimbi Partners approach
One hundred and sixty households were surveyed in multiple districts, representing urban, peri-urban and rural populations, in order to better understand fuel usage and cooking habits. The majority of those surveyed were low-income farmers, with almost half of the households earning less than 1.25 USD per day and only one-quarter earning above 67 USD per month. A competitive market analysis was carried out as well as interviews of senior government decision-makers regarding forestry and carbon credit policies. Leading potential manufacturers were evaluated to determine capacity to mass produce the client’s cook stoves. Karisimbi Partners developed price and sales volume sensitivity analyses and finally evaluated different distributors to determine viable models.
Results
Based on market conditions and the competitive environment, Karisimbi Partners recommended that the Paradigm Project take a conservative approach and further test the market with a formal pilot project to evaluate true price sensitivities. KBP concluded that partnering with the governments in the region would be critical, and that ultimate success of the product would depend on the distribution strategy. The client has moved forward based on these recommendations and is currently investing in local staffing and further due diligence in the market.
