Second Draft - April 28, 2008
First time draft – August 18, 2007
Project Details
The initial project was conceived to support Musturappa, a potter in the manufacture of mud stoves. However, in spite of a lot of persuasion Musturappa did not show the required commitment for extending the support. This being the case, the project is being modified where 5 new entrepreneurs will be trained in TIDE Sarala Ole.
Name of the Project: Training Entrepreneurs for Construction of Fuel-Efficient Smokeless Mud Stoves, Nayakanahatti, Chitradurga District (A75r)
Project Dates:
Training: 5th – 9th May, 2008
Project Details:
This project concept involves identifying and training six prospective entrepreneurs in Nayakanahatti in the construction of fuel-efficient, smokeless, wood-burning mud stoves. The entrepreneurs will be trained in the construction of the Sarala Ole stove, a design developed by the Centre for Sustainable Technologies, Indian Institute of Science, Bangalore. The Sarala stove is built using a mould (made of MS) and uses locally available materials like mud, bricks and an AC chimney pipe. The design is inexpensive, promotes fuel efficiency in the use of biomass, and reduces indoor air pollution, which responsible for much of the disease burden on women and children in rural India.
S3IDF, along with CRWCWS in Nayakanahatti, will arrange for the training of prospective entrepreneurs interested in running enterprises for the construction of Sarala stoves. The entrepreneurs will be from the Nayakanahatti area, and will be identified by CRWCWS. The training will be conducted in Nayakanahatti.
To conduct the training, S3IDF is contracting with TIDE (Technology Informatics Design Endeavor), a Bangalore-based NGO devoted to promoting sustainable development through technological interventions. TIDE has been engaged in training mostly rural women to build fuel efficient smokeless stoves for themselves and in their neighbourhoods and to create smoke free kitchens in rural Karnataka for the last 4-5 years. The five-day training process will consist of theory and practical sessions. Focus, however will be on hands-on training to the trainees. TIDE will provide trainers and detailed manuals and supervise each trainee in the construction of five stoves in local households.
Project Financials:
http://spreadsheets.google.com/pub?key=p
Project Size Details:
Training will be imparted to six local prospective entrepreneurs from the Nayakanahatti area.
Project Impact Details:
Six rural entrepreneurs will be trained in constructing the stoves, which they can in turn market in the region through microenterprises (either with or without further support from S3IDF). During the training itself, approximately 30 households in the Nayakanahatti area will receive the Sarala stove as part of the test exercises for the trainees.
Estimated Pre-investment Costs:
S3IDF costs
Personnel Costs – Rs. Total Costs- 32 hours(4 days times 8 hrs) of Naveen’s time @ 165 Rs./hr. A total cost of Rs. 5280.
Other costs – approx. Rs. 500 (Naveen travel to Tiptur to see stoves)
Total S3IDF costs – Rs. 6000 (approx)
Returns for S3IDF Revolving Fund:
NA
Project Indicators:
NA
Project Risks:
Project owner/operator risk
none
Market risk
Lack of availability of materials and lack of demand for the Sarala stove could both be risks in ensuring the trainees can leverage the skills training for the establishment of successful microenterprises. However, the Sarala stove has received good feedback with regard to consistency with household cooking preferences in rural areas, as well as ease of use, and has been in demand by rural households throughout Karnataka since it was originally developed. In addition, the materials for construction are all generally locally available, even in most rural areas, minimizing these risks.
Technology risk
See above regarding feedback on Sarala stove.
Portfolio risk
none
Mission risk
none
Partners:
TIDE, CRWCWS, and local entrepreneurs in Nayakanahatti
Project Photos
Musturaapp, the stove maker
A 2 vessel clay stove in use
Project Financial Details
http://spreadsheets.google.com/pub?key=pwRdPi0mYDcIRci0hbVUlXw
Project Details
Musturappa(age - around 40) and Nagendrama(age - around 30) live in Donehalli village which is on the road connecting Challakere town and Davengere city. Donehalli is around 20 km from Nayakanahatti. Musturappa and his wife (the couple) come from the potter community with a family history of doing clay items for over 400 years.
Supply side issues: The couple does clay pots and various types of simple mud stoves, including three stone stoves, single and two vessel chulla stoves for households. In the exisiting supply chain, traders come from the larger towns of Chitradurga and Davengere and purchase stoves in wholesale and sell it in the large cities. The couple currently works for 20 days in a month and stop work during the rains as they are not able to burn the clay stoves due to the wet conditions. They augment their income by running a petty shop near the bus stand at Donehalli. They do not have a bank account. Simple investments such as an overhead covering where they burn the clay stoves and additional working capital could help them to increase their production.
Demand side issues: Informal surveys around villages about the stoves reveal that people are interested in installing the stoves, but there is no enterprise existing to do this. The main attraction to the villagers is the cost of the stove. The cost price of a single vessel stove is around Rs. 120 and is sold in the cities for around Rs. 180. The cost price of a two-vessel stove is around Rs. 180 and sold in the cities at around Rs. 300. Even at these prices there is demand for the stoves.
The project is about creating an enterprise, which will be able to deliver stoves to the surrounding villages at a price less by at least 30% of the existing price being sold in the cities by intervening both in the supply side and demand side. On the supply side, make investments to increase their production. On the demand side, provide transportation infrastructure to make the stoves available in the villages and provide product credit to the villagers to buy the stove.
Project Size Details
On the supply side, investment in a shed where the stoves are burnt, around Rs. 5000. Working capital support of another Rs. 10,000. This should be enough to increase production from the current 500 stoves a year to 1000 stoves a year. This intervention can come from the local bank.
On the demand side, investment is required in a transportation vehicle. The vehicle will used only as and when required to transport the stoves to the villages. So, this can be made available on hire. The poor customers might require credit support such that they pay for the price of the stove in about 3 months. On an average around 50 stoves to 75 stoves can be sold in a month. The working capital support on the selling side will be around Rs. 16000 in the first 3 months.
The first step in doing this project is on the supply. Build an enterprise which can do the selling of the stoves. Once this runs viably, make investments in the supply side to increase production. To understand the demand side issues, this project will be run for 3 months and the returns after 3 months will be observed.
Project Impact Details
The impact of this project will be significant. At an investment size of only Rs. 227 per stove, we will be touching one household and the requirement of this stove is universal. In total in three months time we should be selling this stove to around 180 households.
Estimated Pre-investment Costs
Total Costs – Rs. 22175
S3IDF costs
Personnel costs
Total time of 25 hrs. Cost of this will be Rs. 4175
Other costs
Other costs will be travel costs during implementation. This should be around Rs. 3000
Total S3IDF costs = Rs. 7175
Partner costs
Personnel costs
This should be around Rs. 10000 for 3 months
Other costs
This should be around Rs. 5000 for 3 months
Total Partner costs = Rs. 15000
Returns for S3IDF Revolving Fund
The Project returns will be over 14% for S3IDF RF
Project Indicators
Considering the project for the first 3 months
Investment indicators:
Investment size – Rs. 40791
Revolving fund – Rs. 16,000
RF to investment size – 39%
Cost Indicators
Total pre investment cost – Rs. 22175
Pre investment cost/Investment Ratio – 54% (the target for this is 10%, this is high as this is the first project)
Impact indicators
No. of direct beneficiaries - 180
Investment size /no. of beneficiaries – Rs. 227 (This is very low and is one of the biggest benefits of the project)
Project Risks
Project Owner/operator risk: On the supply side the risk is that the clay stove manufacturer does not make use of the support provided. The chances of this are remote as the manufacturer is there in business from a long time and has expressed his interest for financial support
On the demand side the selling will be done by CRWCWS, who has been a good partner and hence the chances of CRWCWS failing is less
Market risk: There is currently no competition and at this price range, any kind of competition is not expected
Technology risk: The location where the stove has been installed has been studied. The stove is smokeless and the customers are satisfied with the performance of the stove. There is little technology performance risk
Portfolio risk: No portfolio risk
Mission risk: No mission risk
Partners
CRWCWS, Musturappa(the stove maker), Pragathi Gramin Bank
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