market study

MARKET STUDY
Biomass Advanced Cookstove in Vietnam
Nguyen Hong Hanh, Steven Von Eije
February 2016
1
Abbreviations
ADB
ALRI
CARE
COPD
DARD
GACC
GDP
GIZ
Asian Development Bank
Acute Lower Respiratory Infection
Cooperative for American Remittances to Europe Vietnam
Chronic Obstructive Pulmonary Disease
Department of Agriculture and Rural Development
Global Alliance Clean Cookstove
Gross Domestic Product
Deutsche Gesellschaft für Internationale Zusammenarbeit, GmbH
(German: German Society for InternationalCooperation)
HHs
Households
ICS
Improved Cookstove
IE
Institute of Energy
LCASP Low Carbon Support Agriculture Project
LEAF
Lowering Emission in Asia’s Forest
LIFSAP Livestock Foodstuffs Safety Project
LPG
Liquified Petrolium Gas
MARD Ministry of Agriculture and Rural Development
MOIT Ministry of Industry and Trade
NGO
Non Governmental Organization
PCIA
Partnership for Clean Indoor Air
PED
Population, Environment and Development Center
QSEAP Livestock Foodstuffs Safety Project
RBF
Result Based Finance
RENMI Renewable Energy and New Materials Institute
SHEER School of Heat Engineering and Refrigeration
SNV
SNV The Netherlands Development Organization
VFD
Vietnam Forest and Delta project (SNV Vietnam)
VNGO Vietnamese Non Goverment Organization
VWU
Vietnamese Women’s Union
WWF World Widelife Fund
2
Table of Contents
I.
Introduction ............................................................................................................................................... 4
A.
Objective .........................................................................................................................4
B.
Methodology ...................................................................................................................4
II.
Summary ..................................................................................................................................................... 4
III.
Overview ..................................................................................................................................................... 5
IV.
Market size and trends........................................................................................................................... 6
V.
Market potential and opportunity ..................................................................................................... 7
VI.
A.
Target customer profile ...................................................................................................7
B.
Target market areas.........................................................................................................9
Characteristics by fuel users ................................................................................................................ 9
Firewood user ....................................................................................................................... 10
Agriculture residue user ........................................................................................................ 11
Wood pellet and briquette users ........................................................................................... 11
LPG user ............................................................................................................................... 11
VII.
Cookstove market ................................................................................................................................. 11
VIII.
Policy relating to cookstove .............................................................................................................. 21
IX.
Companies and product in the market .......................................................................................... 21
Stove companies and their products in Vietnam .................................................................... 21
Quality control ..................................................................................................................... 24
Manufacturing capacity ........................................................................................................ 27
Transportation capacity ........................................................................................................ 28
Retailer system ..................................................................................................................... 28
Main barriers to the market .................................................................................................. 29
Willingness to pay versus high quality of cookstoves ................................................................. 29
Behavior change barrier ............................................................................................................... 29
Limited business management capacity and financial constraint .............................................. 30
Willingness to participate in SNV ICS product ........................................................................ 30
X.
Conclusion ............................................................................................................................................... 30
Acknowledgements
This report would not have been possible without the interview participation of cookstove producers
and researchers. Special thanks to my talented colleagues in renewable energy team for their support.
We also thank Resy Vermeltfoort and Theo Shand for their help in text editing.
3
General Introduction
I.
Introduction
A. Objective
SNV is implementing the project: “Acceleration of sustainable market for advanced
cookstoves in Mekong Sub-region” in Vietnam. For the Vietnamese market this is the first longterm project (4 years) focused on the industry of Improved Cookstove (referred here after as
ICS). The project objective is to sustain the market by incentivizing companies to produce and
sell stoves that meet international standards and reduce the emissions from the combustion of
solid biomass fuels in order to reduce negative effects on human health. The overarching
development objective is contribute to socio-economic development of the local and global
environmental protection. This market study was performed to evaluate the current market for
cookstoves in Vietnam in order to be able to design a contextualized approach for Vietnam
while aligning with the regional project.
B. Methodology
- Initial desk review of existing reports from Global Alliance for Clean Cookstove (GACC) of
which SNV is a fouding member; GIZ, SNV Vietnam and other reference (specified later). The
GACC reports of Vietnam Sector Mapping and Intervention Options were made in 2012 in
close cooperation with the renewable energy team of SNV Vietnam. To date, they are the
most comprehensive reports on the cookstove industry in Vietnam, therefore they have
served as the basis for this report. SNV Vietnam has performed several cookstove projects
in which it executed studies related to cookstove usage and build up a considerable network
with several cookstove producers. This information has been analyzed and included in this
report.
- Phone based interviews:: 32 producers, 2 suppliers and 6 institute of energy were identified
and contacted by phone. 34 of them were able to provide information. Others were not
available at the time they were contacted. The list used to contact the stove companies and
retailers was crated based on an online research. Stove producers with whom SNV
previously had contact were also included in this list. A semi-structured questionnaire was
designed and used to guide the interview.
II.
Summary
The study was designed to address key questions listed below:
- What is the potential of the Vietnamese market for using Advanced Clean Cookstoves
(ACCS)?
- What are the current cookstoves used in Vietnam and their market penetration?
- What is the available fuel in the market?
- How many stove manufactures are active in the market? Can their products meet customer
requirements? Are there barriers to market entry?
- What is the consumer profile? How much will potential clients pay for an ACCS?
4
III.
Overview
Vietnam is well on its way to becoming a middle-income country by 2020, having made
incredible economic strides across the board in the past decades with GDP increases of 18% per
year. In 2012, GACC carried out an assessment of the Vietnamese market that resulted in a
report which provided sector mapping and intervention options. According to the report, since
1980, migration to clean cooking has happened naturally as a result of economic growth
(accounting for 96%) and purposefully through dissemination by two major players: SNV and
Vietnam Women’s Union (accounting for 4% with the combination of other smaller funded
programs). Despite these significant gains, 46.4% of people still rely on solid fuel for cooking,
causing 10,600 deaths per year. (1)
There have been many programs to promote ICS, however they are all small in scale and not
funded end-to-end by either Government or NGOs. Realizing the importance of cookstove
components to the renewable energy, deforestation and food security/cropland salinization
sectors, many researchers have been involved in biomass energy production, biochar
production and sustainable forest initiatives but the challenge of creating a self-sustaining ACCS
market in Vietnam remains. (2)
This survey pointed out the positive development that the number of private sector parties
involved has been increasing dramatically since 2012. The survey identified that 95% of
producers established from late 2011 to present. Though some of them are small in scale, they
are all private entrerprises and they provide ACCS models that aim to save fuel, reduce smoke
and be affordable for rural households.
The map provided below illustrates the location of producers and their market penetration
across the country. The Northern part of Vietnam is covered by company branches providing
improved cookstoves (ICS) in 20 provinces, while 8 provinces are reached in the Center and 6
provinces in the South. Two companies exported their stoves to Lao PDR and Cambodia with
consideration to transfer technology to local artisans.. . One company exports ICS to Korea
which is also the main market for the wood pellets they also produce.
Map 1: Mapping of stove companies’ market penetration in Vietnam
(Blue represents producer companies’ main workshop, Green represents companies’ branches
areas – source: interview stove companies)
5
This map visually shows the potential market of ICS in Vietnam as private enterprises have
presented in 34/63 provinces. However, it also indicates the limitation of stove companies as
just provinces around the workshop areas are targeted in order to keep the price low and the
products affordable to the target group, while graph of solid fuel use by regions (Which is
showed in point B, part V below) points out the potential market is also in the remaining
provinces. If SNV Vietnam succeeds with this project, stove companies will have extra financial
resources to expand their businessamong other by expanding into more distant markets with
high demand of ACCS.
The greatest identified challenge for producers is balancing between the quality of stove and
the willingness to pay by the end user. In general, users are willing to pay more for the better
quality stove. Many targeted customers however have a low income and use agriculture residue
or fuelwood as the main fuel, don’t prefer to switch to a more expensive stove model. Even in
the low cost segment, end-users still expect a stove to last for at least 2 years (SNV-VFD, 92015).
While the ICS industry in Vietnam is developing there are no regulations related to ICS, and
the process for achieving regulations and national standards is lengthy and challenging. While
regulation isl critical, it will not ensure people will actually comply with set standards. (2) All ICS
manufacturers’ claims that their stoves are highly efficient compared to traditional cooking
methods and are continuously re-designing their products to meet the customer’s expectation.
In reality, it was found that only a few stove models were assessed by an official testing center.
The concept of quality testing is still new to the market and will require significant capacity
development.
IV.
Market size and trends
Current size
The table below shows the method adopted to identify the number of potential target
customers.
Potential target customer groups where defined by 8 key distinctions:
 Urban or Rural.
 Animal Farming Household or Non-Animal Farming Household.
 Existing use of Traditional or Modern Fuels.
 Above or below the recognised poverty line for Vietnam (under 1.25$/person/day) (5).
The following assumptions where taken when breaking up the data:
 Animal farmers do not exist in the cities and all animal farmers are above the poverty
line; due to research indicating animal farmers are generally richer than their nonanimal farming rural neighbours. (SNV Biogas User Survey, 2012)
 A minimum of 2 cows or 5 pigs is required to create biogas; the poorest segments of
urbanites use traditional fuels.
6
Figure 1: Illustration of target market identification according to GACC, 2012.
In summary, there are four very different markets with very divergent needs: rural
animal farmers, inaccessible poor, rural leapfroggers and the lower-income urbanites. The
potential market for an ICS intervention in Vietnam is approximately 12.8 million households.
(GACC, 2012) Producers with gasification stoves which use agriculture residue and firewood fuel
should focus on 4.4 million HHs raising animals and 4.6 million HHs without animals in the rural
area. Producers who are developing the gasifier stove to use wood pellet, briquette or charcoal
should target the market of 1.1 million HHs in urban area. To 2.8 million HHs using traditional
fuel but classified as inaccessible disadvantaged, the approach of a market-based mechanism
may be not suitable.
Growth rate
There are no supporting figures at present to calculate or forecast the growth rate of demand
for ICS in Vietnam but with 12.8 million potential identified HHs the market can be considered as
a good opportunity for investors.
Trends
Fuel usage is highly correlated to income, with the population moving decidedly to LPG as
soon as they can afford it and solid fuel usage concentrated mainly in the bottom 50% of the
population. It is critical for ICS programs to reach the last mile and disadvantaged populations,
as this is where the biggest persistent need will be when the population continues to get richer.
However, the reason for households using cleaner fuels is to increase their cooking options as an
addition to rather than a replacement for, solid fuels and traditional stoves. Parallel use of
several fuels appears to be a common phenomenon to utilize the abundant fuel resources in
terms of wood fuel and agriculture residue in rural areas.
V.
Market potential and opportunity
A. Target customer profile
Figure 1 shows the market identification. All segments can in principle be targeted but
programs will need to address radically different needs across the segments. There are four
different groups, 3 rural and 1 urban, as illustrated below:
7
Rural area
Rural
leapfrogger
Characteristic Has access to
modern fuels
such as LPG
and electricity.
Has sufficient
animals to
justify bio
digester
investment.
Urban area
Rural animal
farmer
Inaccessible
disadvantaged
Lower-income
urbanite
Has access to
modern fuels
but might not
spend money
on them.
In favor of
portraying
wealth
through
purchase of
high cost
electronics,
etc
Has limited or
no access to
modern fuels.
Is not near
roads.
Primarily uses
biomass (wood
and
agricultural
residue)
Has access to
modern fuels
such as LPG and
electricity.
Increasing costs
has forced a
higher usage of
coal.
Uses LPG for
quick foods and
electricity for rice
cooker.
Size (million)
4.6
4.4
2.8
1.1
Profession
Farmers,
industry,
service &
salary workers
Above poverty
line
Animal
husbandry
and farming
Service and
industrial
workers.
Above
poverty line
Subsidence
farmers,
gatherers,
ethnic
Below poverty
line
Traditional
fixed stove
and portable
cookstove.
Fuel: wood,
crop residue.
Outdoors
during
summer
Indoors during
monsoon
season
Traditional
fixed stove,
gas stove
Fuel: wood,
LPG, biogas.
Traditional
fixed stove, 3stones fire
Fuel: wood,
crop residue.
Traditional rocket
stove
Fuel: beehive coal
Indoors in a
separate
building
Mostly indoors
for heat in
winter, maybe
go to a
separate
building or
outdoor in
summer
Outdoors during
warm season
Indoors during
winter (not
allowed due to
toxis SO fumes
emitted by coal
stove)
1-2 meals/day
2-3
meals/day
Med
1-2 meals/day
2-3 meals/day
High
Med
Income
Cooking
device and
fuel
Cooking
location
Cooking
frequency
IAP exposure
High
Below or near
poverty line
8
IAP
awareness
Environment
impact
Barriers to
switch
Low
Med
Low
High
High
High
(deforestation)
Affordability
Access to
finance
Awareness
Access to
modern fuel
Med
Willingness
to pay
Low-med
High (manure
disposal)
Lack of capital
Lack of
enough
animal
Lack of
construction
area
Medium –
hard to pay
out of pocket
Med – can pay if
fuel price
decreases
Purchase
drivers
Ease of use
Perception
Low, due to
displacement
costs from
flooding
Fuel cost
Ease of use
Affordability
Access to
finance
Awareness
Fuel saving
Ease of use
perception
Table 1: Target customers characteristic (GACC, 2012)
Affordability
(prefer LPG)
Fuel cost
Ease of use
The segment most in need of ICS are the highly inaccessible and largely ethnic groups in
the North. However, this segment is expensive to reach, relatively small and shrinking every
day. The true challenge is to reach the highly demanding 9 million rural households and
farmers that are leapfrogging to new living standards. These consumers need stoves to be
functional, affordable, and aspirational products that they are as proud to own as their new
satellite TV. End-user demand and product preference vary significantly across customer
segments. Although most consumer segments can be reached by market-based cooking
solutions, affordability remains a major barrier.
B. Target market areas
Solid fuel use by regions
80%
70%
70%
60%
50%
40%
53%
55%
49%
38%
30%
20%
10%
0%
15%
Based on the solid fuel use by region figure, the
area that depends most on solid fuel is North
Midland and Mountains with 70% dependency,
followed by Mekong River delta and North Central
with 55% and 53% respectively. As this fuel is
abundant in this area, it will be the main target for
ICS. The Central Highland also has high potential
with 49% of people relying on solid fuel. According
to Map 1 only one of these provinces is actually
reached. Compared to Map 1, producers are doing
business in the first and the third ranked areas and
the second and fourth ranked areas are still under
served.
●
Figure 2: Solid fuel use by region (GACC, 2012)
VI. Characteristics by fuel users
9
Energy consumption and fuel type are strongly influenced by accessibility, affordability
and the convenience of the fuel. These criteria are closely related to each other and also depend
on household income. The decision making process is complex with economic and technical
aspects interlinked with social and cultural issues. Cooking with wood fuel, for instance, is so
deeply ingrained in many local cultures that other fuels have little appeal, even when the
potential health and environmental threats are recognized by users. Furthermore, the
prevalence of fuelwood in many developing countries can be explained by the fact that it is still
the most readily available, affordable or even cost-free cooking and heating fuel.
Table 2: Determinants of stove/fuel choice
Social/cultural
Economic
Technical
Family size
Sex of household head
Age of household head
Education level
Taste of food
Cooking habits/customs
Convenience of fuel
Food preferences
Household income
Stove price
Usage costs
Fuel costs
Fuel/ICS availability
Use as “back-up” stove
Efficiency
Safety
Emissions
Stove quality/durability
Functionality/Speed of
cooking
Convenience/portability
Aesthetic features
Source: (GIZ, 2014) (11)
The prospects for switching fuels within households as well as for effective government
interventions are markedly different for urban and rural areas. Given the fact that fuelwood will
continue to remain the primary practical option for rural households, the promotion of
improved stoves should be given greater attention. In urban settings, the availability of LPG,
higher education levels and correspondingly higher levels of household income provide the
momentum for switching to LPG. However, households do not simply substitute one fuel for
another all at once but first begin by using multiple fuels, also known as fuel stacking. Fuel
stacking provides a sense of energy security, since compete dependence on a single fuel or
technology would leave households vulnerable to price variations and unreliable service.
Firewood user
Based on the methodology to analyze potential customers for the ICS, there are around
12.8 million households still using traditional fuel of which firewood is the main source. Those
households are living next to mountainous areas where they have an abundance of fuelwood or
in remote area where other advanced types of fuel have not yet reached. Firewood is either
privately collected by households or is acquired at a firewood market. (On average the price per
20 kg of firewood is between 15,000 VND – 30,000 VND depending on the quality of wood)
(SNV, 2011 and field visit experience) (15)
Evidence from reports show that firewood is the dominating source of cooking fuel.
There are more poor HHs using firewood as a main source comparing to better off HHs. Almost
all ethnic minority HHs use firewood as a main fuel source for cooking as well as for heating. In
the winter season in the North (from October to March - 5 months), people keep the fire
burning almost all day to warm the house. This is an open fire, generally in house’s center and
used for cooking. The fire is often used by elderly and children to stay warm which can lead to
serious health issues. Therefore, it is necessary to have a dual function heating and cooking
stove for people in this region. The main point that will encourage firewood users to change
their behavior of cooking will be the negative effects on the health of women and children. It
was found that there is very limited awareness about the harmful effects of smoke to human
10
health such as Acute Lower Respiratory Infection (ALRI) among children under 5 years old,
Chronic Obstructive Pulmonary Disease (COPD) and Lung cancer.
Another group which consumes a large amount of fuel wood are HHs who raise animals
and have secondary business such as selling wine, tofu or run a small restaurant. Their key
concern is looking for another stove that helps them to save wood in order to increase profit
margins.
Agriculture residue user
Agriculture residue includes rice husk, rice straw, peanut shell, shaving, corn cob, etc.
The resource is used either as cooking fuel or supplement to animal feeding. In many village rice
mills nowadays, it is seldom to see rice husk strewn everywhere even though this was common
practice several years before. People now collect the rice husk because they know it can be
burnt or can be used to feed animal or at least they can sell it with the price of 10,000 VND/sack
(Field visit). While rice husk is utilised quite efficiently as a bio-supplement for animal raising,
cooking and producing briquettes, the rice straw is being left to decay or burned in the field
after harvesting. It is estimated that in Thanh Hoa province, about 1.5 million tons of residues,
including rice husk, straw, sawdust and shavings generated from agricultural and forestry
production are being mainly dumped or burned causing serious environment pollution and
wasting a valuable biomass energy sources. In the view of DARD officers, only about 20% of
residues from the bamboo processing industry are utilized and the rest is discharged into the
environment.
In Northern provinces such as Cao Bang, Ha Giang and Tuyen Quang, corn cobs are used
as a main source of fuel for 11 months of the year (Field visit). To utilize this kind of fuel, one
stove producer designed a model suitable to the needs of these areas. Most agricultural residue
using households have to combine fuel types in order to keep the residues burning.
Wood pellet and briquette users
Currently, not many wood pellet or briquette users have been found across the country
as the supply chain of these fuel is not fully developed. In the years before 2014, these products
were produced for export purpose to Korea at a rate of 120 USD/ton. When the overseas
market demand decreased in late 2014 many companies started focusing their efforts on the
local market, increasing demand and setting up supply retailers/branches across the country.
(Biomass magazine, 2015) (4)
LPG users
The number of LPG using households equals the firewood using households though they are
predominantly in urban or sub-urban areas. Over recent years Vietnam has seen a reduction in
the price of LPG and many lower cost LPG stoves were introduced to the market. As a result,
many rural households can now also afford such a stove prompting supply retailers to set up at
the village level. This stove is an aspirational stove that makes people feel they are moving
towards a modern life. A focus group discussion of 50 women who have LPG stove in Thanh Hoa
province (12/2015) provided the following results regarding usage:
 It is used only for quick cooking food such as stir-fried meal or boiling vegetable.
 Most of the women will use water heated by firewood stove to boil vegetables on LPG
stove.
 Total estimated time using LPG stove per day is 30 minutes while firewood stove will be
from 2-3 hours per day.
VII.
Cookstove market
Reports from SNV (Cookstove usage in Vietnam 2011 – 3 provinces in the North and
Centre), Biogas user survey (2012 for 17 provinces across the country and 2013 for 13 provinces
across the country), a review report of improved cook stove; GACC industry mapping report and
11
information from news on project of WWF shows that the consumers currently use different
types of cookstoves, including:
Iron bar stove (three legs or four legs):
This is a traditional stove that is widely used in the North and Center of Vietnam. The
advantage of this stove is its price, it can be used for cooking in many places with different types
of fuelwood (tree branches, straw, etc.). Iron bar stoves lasts for a long time, from 5 years to
over 20 years. The price is relatively low ranging from 50,000 VND to 100,000 VND depending on
the size and the amount of iron consumed to produce the stove. It is available in local markets
and iron-warehouse. Today, most people order them from welding workshops because they can
tailor one to any size that fits their needs. Even though many households will build a new stove
when their income increases, the iron bar stove will be kept in the house as a backup or to be
used for special dishes such as “banh chung” during New Year vacation or special occasions such
as weddings in rural areas. The disadvantage of this stove is that just like an open fire it creates a
lot of smoke/dust and often has to be tended continuously while cooking and it has a very low
efficiency.
Dual concrete rice husk stove:
This is the most promient stove in the Mekong delta regions (13 provinces: Long An,
Tien Giang, Ben Tre, Vinh Long, Tra Vinh, Hau Giang, Soc Trang, Dong Thap, An Giang, Kien
Giang, Bac Lieu, Ca Mau, Can Tho). Experts who are working in Agriculture sector from
universities in Ho Chi Minh city confirmed that this is the most popular stove in the region due
to the abundance of rice husk as it is a by-product of rice production and this is the largest rice
producing area of Vietnam. This type of stove can be made by local artisans (it is said that every
province has at least one producer). It is made from concrete using a mould. The price of this
stove is around 700,000 VND/stove with chimney and 600,000 VND/stove without chimney.
3 ong tao stove
This stove is similar to the Lao stove. It is made by fired clay and uses firewood as main
fuel. It is widely used in the Mekong delta and provinces near the Lao border. The advantage of
this type of stove is that it is compact and can be used with small wood branches and leaves for
cooking which is appropriate for cooking the food fast by households. The stove’s price is quite
low at around 50,000 VND/stove which is quite suitable for low income households.
Cement brick cookstove:
Depending on the design of this stove, you can cook with 1-3 pots at the same time. It
has iron bars on the bottom of the pot holder and fuel, such as firewood, agricultural residue or
coal, will be placed underneath. The fixed stove for one pot is widely used by households for
making animal feed or local wine while the multiple pot designs are used for household cooking.
Over the years this cook stove has been promoted by a number of development projects
(ActionAid in Thanh Hoa 2011, SNV in Nghe An 2007 and Forest Science Institute). However, this
stove normally lasts for only 1-3 years, because it cracks over time. The cost of this fixed stove
falls in the broad range of 300,000 VND to 800,000 VND, depending on the size and quality of
the stove and can be made in situ by local masons or even by the households themselves.
LPG cookstove:
The LPG stove is an aspirational stove, especially in rural areas. In 2015, the price of gas
decreased (From more than 500,000 VND/12kg in 2012 to 310,000 VND/12kg in 2015) (12), as
compared to previous years, allowing more and more people to financially access this type of
stove. However, as previously mentioned, people use it mainly for quick cooking, as many rural
households state that one 12kg bottle of LPG can last for 4 months (Field visit). In urban areas
there is a growing trend to replace LPG with electromagnetic stoves, because of a number of gas
explosion that have happened.
Biogas cook-stove:
12
It is a cooking system which consists of a gas generation tank, a pipe connecting the tank
and one or more cookstoves with valves to control gas emission and thus heat. Biogas is
particularly used by households raising a large number of pigs and/or cattle. There are several
biogas projects of which SNV/BP is the biggest with over 145,000 constructed digesters so far
(16); others including QSEAP from ADB with around 22,383 constructed digesters (18); LCASP
from MARD with 20,000 constructed digesters by now (19); LIFSAP of World Bank with 25,000
constructed digesters and others are under other programs or constructed purely commercial.
In total, about 220,000 household biogas plants have been constructed in Vietnam. (20)
Electric rice cooker:
This is a very popular stove for households and it is only used for cooking rice. It is
accessible to the poor with a price that ranges from 288,000 VND to a few million. (17)
Improved cookstove:
An Improved Cookstove is a device that is designed to consume less fuel and reduce
cooking time. The stove is convenient in the cooking process and creates a smokeless
environment in the kitchen or reduction in the volume of smoke produced during cooking, as
compared to the traditional stove. There are several projects from governmental agencies,
NGOs and the private sector that promote the ICS. Many types of ICS were researched and
developed in terms of fixed brick built, portable stove for direct burning and for gasification. The
price of ICS varies from 150,000 VND to >2,000,000 VND per stove. And as a result of the
different ICS projects more than 44,500 different types of stove were promoted to households
across the country. It is believed that, to date, the same number of ICS was sold by the private
sector. Table 3 below shows the classification of the different types of ICS that are available on
the current market.
Table 3: The current number of improved cookstoves on the market:
Type
Fixed brick
built stove
Photo
Main points
Technology
- Promoted by SNV - Developed
(2010), World
by
Vision (2011),
Population
Helvetas (2011),
Environment
VNEEP, Science
and
Forest Institute
Developmen
(2007)
t center
(PED)
- Price: 300,000 800,000
VND/stove
- Helvitas and
- Lasts for 1-3 years.
World Vision
models.
13
Portable
direct
combustion
using
biomass
Portable iron
cookstove
- Brand name: TK90
- Continuous
cooking
- Generally uses
firewood and
biomass
- For 23 years on
the market.
- Efficiency test in
1990
- Price: 140,000
VND/stove
Mr Hong in
Phu Tho
Brand
name: GF2
Using
firewood, corncob,
woodchip, bamboo
waste, etc.
Technology
was transferred to
a local workshop,
but then the
quality of the stove
was not controlled
Price:
80,000 VND/stove.
For 10
years on the
market
Design is a
combination of
metal and clay to
make a coneshaped stove
Uses
biomass fuel
Price:
140,000
VND/stove.
Many
counterfeit
products available
on the market.
CRD/GRET
project
Designed by
Truong Giang
Company
14
Gasification
stove
- Brand name: THX
stove
- 3 years on the
market
- Uses woodfuel,
biomass and corn
cob- Can produce
biochar
- Price: 150,000 450,000VND/stove
.
-Designed and
developed by
GreenGen
company
- Brand name: Tien
Manh stove
- Fuel: rice husk
- 3 years on the
market
- Price: 240,000 –
290,000
VND/stove.
30,000 VND/fan.
- Lasts for 1.5
years.
Produced by
Tien Manh
company
- Brand name:
TNM-Sieubep 304
- Innovative stove
which has a
surrounding
chamber working
as a kettle
- 1 year on the
market
- Price: 350,000 –
430,000
VND/stove
Produced by
TNM company
Many
producers
produce
similar types
of this stove
such as:
VINASILIC
stove, Rua
stove, Spin
Stove, Viet
Stove
15
Brand
name: Tre Xanh
Stove
4 years on
the market.
Price:
450,000 – 550,000
VND/stove
Produced by
CCBM
company
Produced by
Brand
name: Agrines
Agrines
stove, Lam An
company
stove and other
names with the
same design
1 year on
the market
Price:
400,000 VND/stove
Model is
used for collective
kitchens and has a
price of 980,000
VND/stove.
Brand
name: Infrared
gasifier Thao
Nguyen stove
Fuel:
utilizes all types of
available
agriculture and
forestry waste
Works
continuously for 23 hours
Price: 2.22.9 million/stove
Produced by
Thao Nguyen
company, Duc
Nhan
company,
Thuan Phat,
Vinafat, hitech
company with
the same
technology.
16
- Brand name:
Infrared gasifier
Duc Nhan stove.
Semi-gasifier
stove
- Brand name: PED
- Fuel use: Biomass
and fuel wood
- Price: 400,000
VND/stove.
Rocket stove
(continuousl
y cooking)
- Solar serve stove
- Fuel: firewood
and biomass
- Continuous
cooking
- Price: 450,000
VND/stove
- Warranty of 3
years.
Solar serve
company
- Brand name:
R14, R18, C22
- Fuel: firewood,
corn cob and
biomass
- Warranty: 6
months
- Price: 150,000
VND for R14 and
R18, 180,000
VND for C22.
GreenGen
company
PED
17
The biggest implemented ICS project in Vietnam was the Government program to
encourage households to use Improved Cook Stoves named: “Widespread implementation
programs of ICS using Agricultural and Forestry products at rural households”. This project was
implemented in some chosen provinces from 2007 to 2010 by MOIT. The Government
organizations that directly worked on the program, the Institute of Energy and the Vietnam
Women’s Union, provided approximately 29,300 improved cookstoves to households over the
three-year period. The Forest Science & Technology Application Centre and an Vietnamese NGO
named Population Environment and Development center also contributed long term; working
hard on other ICS projects. Through these activities many new models of ICS were established
and introduced to the market, though many were quite similar in design. The fixed stoves were
built of clay, cement and bricks, with/without a chimney, and the surfaces were designed to fit a
fixed sized pot. The portable stoves were also usually made of clay, cement and some other
additives and had a cylinder or truncated cone shape. Fixed stoves are built in many projects,
while portable stoves only recently appeared in new projects. Most results of ICS projects are
successful, but not sustainable on the long term. As can be seen with all subsidized projects,
households stopped buying stoves immediately after the project was finished and the funding
mechanism stopped.
18
Table 4: Results from ICS projects (Nguyen Thu Ha, 2014) (13)
No. Project/Plan
1
DANIDA – Xuan
Son National
Park
2
Implementer
Cooperation
Xuan Son
Denmark
Committee
Embassy
Time
Technology
Result
2007
PED’s design
>200 ICS
Centre of
Green Village
(Bac Giang)
Science and
Technology
Application of
DED –
German
1000 ICS
2003
1000 ICS –
no help
Bac Giang
3
4
Phu Tho
IE and villages
World Bank
2006
Reservation by
CRES
2006 -
community of
Mac Arthur
2008
committee
1500
Natural
Quang Tri
5
Economic EcoVillage (Lao
Cai)
6
Institute of
Ecology
World Bread
GEF project at
Binh Son,
GEF
Quang Ngai
7
Since
2006
2001 2003
63
N/A
Tam Dao
National Park
and Buffer
MARD, Tam
Zone
Dao NP…
DED, CIM
2003 -
1387
2006
1st phase
Management
Project (TDMP)
8
Govern
VWU in ten
provinces
VWU and
IE
(technology)
ment
progra
mme
29550
since
2007
19
9
Nghe An
10
Thanh Hoa
Project
FSTAC
Fixed ICS
PED
1000
EASE project
11
Thai Nguyen
Project
12
Nghe An
13
1000
2006 2007
PED
1400
PED
500
Pan Nature
Reservation
(People and
Area Hang Kia
Nature
– Pà Cò
Reconciliation
2009
Wood, core
of corn
32
)
14
Studying and
Forest science
choosing ICS
and
for households
technology
in different
application
zones
centre
15
Cao Bang
16
Quan Hoa,
Thanh Hoa
17
18
19
Government
Fauna and
forestry
Flora
agencies
International
CRD
GRET
Helvetas
Local
Thanh Hoa
authority
World Vision
Dinh Hoa, Thai
Nguyen
21
2008
Wood
agri-
2009-
Fixed cook
2010
stove
2007-
Fixed cook
2012
stove
500
> 1000
local
authorities
-
264
DK-T3M;
2011-
DK-T2M
2012
(PED’s
PED
EPRO and
Phu Tho
2007
PED
CARE
20
4000
2004
products
Ba thuoc,
Thanh Hoa
1994 -
Wood and
Cao Bang
Ba thuoc,
FAO
450
design)
ADB pilot
2013-
3 portable
project
2014
ICSs types
560
20
22
Nghe An
SNV/local WU
LEAF
20122013
Total number of ICS promoted via projects
Fixed stove
100
> 44,506
VIII.
Policy relating to cookstoves
On 25 November 2015, the Prime Minister has approved the Decision on Vietnam’s
Renewable Energy Development Strategy up to 2030 with an outlook to 2050. In the strategy
objectives, the cookstove industry is standing out for the first time: “replace biomass-based
conventional stoves and low-performing devices with advanced/high-performing items while
utilizing traditional biomass for residential and industrial cooking purposes. Increase the
percentage of households using advanced/high-performing stoves from a negligible level at
present to approx. 30% in 2020; about 60% in 2025; and from 2030, high-performing/sanitary
stoves shall be used by most of rural households”.
Since 2014, a total of 22 policies related to renewable energy were developed, as illustrated in
the graph below:
Figure 3: Renewable Energy Development in Vietnam (14)
Besides these policies, the ICS programs could strongly contribute to policies of mitigating the
emission of GHG to the atmosphere; diminishing the pressure on natural resources; energy
security and improving health and livelihood for people living in rural areas.
IX.
Companies and products on the market
Stove companies and their products in Vietnam
21
From intensive searching on
online resources as well as from
the acquainted stove companies a
Type of identified
Of which got
total of 40 agencies were
Identified
factors
information
contacted for sourcing market
Institute
6
6
information. The reason to
Stove producer
32
27
contact 6 institutes (from the
Supplier
2
1
provinces in the South) is the
Total
40
34
limited available information on
producers in the Mekong
provinces. Their information
Labels of reason
No of
shows that there are in fact no
with no information
reason
stove companies operating in
Don’t want to
these provinces. Only the Center
cooperate (provide
industrial level gasifier
of Applied Science and
stove)
2
Technology, in An Giang province,
implemented a project on gasifier
Not available
4
stoves in 2011. The project was a
Grand Total
6
pilot and had not been scaled up
after the end date. In Ca Mau
province, there is currently an
ongoing project by GreenID (VNGO) to support a model of the brick built fixed stove made
by local woman.
Out of 32 identified producers, 11 did not provide all the information on the
questionnaire, because they ceased conducting business in this sector. The main reason
these producers stopped their businesses was the declining market demand for gasifier
stoves as compared to previous years. Those producers were all small workshops. They
mentioned that the period when demand was highest was in 2011 and 2012. By then,
realizing the promising market, many producers got involved and started producing
competitive products with cheaper prices and cheaper quality, which was not durable. This
led to the market destruction by destroying the trust of customers. The cheap products
were called “counterfeit stoves” made by artisans. Many of these artisans are from villages
where they still supply metal materials to and process parts of stoves for other producers
for final assembly in their own workshop. Producers that stopped their business did not
foresee the potential market in this sector for at least five years, because of the market
destruction and the fact that people didn’t believe in the quality of gasification stoves and
didn’t want to pay for that. Another reason is the current cheaper price of LPG (Half of the
market price as compared to 2012).
Table 5: classification from the list of identification
22
In the final list, there was a total of 13
gasifier stove producers, 2 direct burning
stove producers, 2 Vietnamese NGOs and 1
retailer that provided full information in
response to the questionnaire.
38%
Of these producers, only 38% focused
62%
completely on disseminating gasifier
stoves, while 62% combined it with other
businesses, such as selling fuel (wood
pellet, husk firewood), selling drying
technologies for agriculture or promoting
solar technology. Within the 38%, half of
Gasifier stove only
With other business
them produce both micro and large
gasifiers for households as well as for industrial purposes, the other half focuses only on
micro gasifier stoves for household use.
Companies main business
As illustrated in Map 1, section 3 (visual of head office and branch locations of
producers), the region that has the highest number of producers is the North, while in the
Center and the South, there is only one producer in each region. Provinces around the head
workshop are targeted to keep the price affordable. In total, 34 of the 63 provinces are
targeted areas. Half of the companies is planning to reach the other 29 provinces in the next
year.
All producers are providing different types of stoves, which can be classified by fuel use,
application purpose, size or just the shape of the stove, as described in the following table:
Table 6: Different models of gasifier stoves
Models of gasifier stoves on the market
Fuel use
Using purpose
Wood pellet
Small size for 2-3
persons
Rice husk
Husk firewood
Cob corn
Biomass in
general
Medium size for
>4 persons
Type of
gasifier
Semi-gasifier
Characteristic
Air draft
Batch cooking
Micro-gasifier
Continuous
cooking
Natural draft
ICS
Large gasifier
Forced draft
ICS
Bigger size for a
collective
kitchen or
commercial
purpose
One stove company in particular, has a market presence in more than 20 provinces of
the North with 12 different models to meet the needs of each area, allowing easier product
marketing and generating sales quickly.
23
As a result of customer preferences all producers are often improving or designing new
stoves to keep up with market demands and applications; This creates difficulties with
ensuring consistent high quality control for finished products.
Quality control
Thermal efficiency and emitted emission quality control
All producers claim their stoves are the best ones on the current market in terms of fuel
efficiency, however there is no strict internal quality control process implemented and
regulated to verify this. Generally, it was found that when a producer tests a prototype for
efficiency it is measured by the time it takes to boil a set quantity of water (Liters). This is
then compared to competitor stoves on the market or even with their own previous
officially tested stoves. If the observed flame was blue or orange and the time to boil the
water was similar or shorter, the design was accepted by the company owners and moved
into mass production. The reason for this approach are the high costs of testing in the Lab
Centre. From the moment of mass production the quality of the stove is usually not
checked. Stove companies provide a warranty policy of changing to a new product if one is
found faulty (within 3-6 months). This is fine in the current situation where there is no
requirement from any government agency nor from the customers’ perspective. This is also
stated in the GACC report: “though there is a strong recognized need for standards, Vietnam
does currently not have regulated IAP standards and testing facilities have been dismantled
due to lack of use”.
SNV Vietnam, with a background in successfully implementing impact-oriented, large
scale, multi-stakeholder renewable energy technology, has invested in the ICS sector to
promote fixed stove models since 2007 and was actively involved in the international
process to recognise the standard of stoves. In 2012, GACC/PCIA financed a testing training
with the Water Boiling Test in Hanoi and a field Controlled Cooking Test in Thai Nguyen
province for SNV staff and local lab staff. In 2014, GACC funded a project on enhancing
capacity for Regional Knowledge and Testing Center, which took place in three countries:
Vietnam, Laos and Cambodia. After these actitivies, SNV supported a local lab, the Back
Khoa Biomass Energy Lab (now better known as SHEER), to build up the capacity of testing
stove performance regarding the thermal efficiency and emission. Related staff of SNV and
testing operators were equipped with knowledge and skills to conduct a stove testing
protocol.
Internationally, the innovation on the technological front, and therefore the quality
standard, will be mainly guided by the recent developments in ICS standardisation, namely
the “Lima Consensus” and the International Workshop Agreement on ISO standards for ICS.
This global initiative is leading to an international standardisation of ICS, with specific
parameters and performance indicatiors with 5 Tiers:
Parameters
Explanation
Indicative Performance Indicator
Fuel Use
Is the stove efficient?
Tiers being defined in terms of
 Thermal efficiency as
0≤15%; 1≤25%; 2≤35%;
3≤45% and 4≤55%
24

Emissions
How much pollution is emitted
by the stove?
Indoor Air Quality
Safety
And specific fuel wood
consumption
Tiers being defined in terms of
specific emission generation
measured in:
 Carbon monoxide
 Particulate Matter
Does the stove reduce indoor
pollutant concentrations with a
chimney or are the emissions
so low that IAQ goals are
achieved without a chimney?
Tiers being defined in terms of
specific emission generation
measured in:
 Carbon monoxide
 Particulate Matter
Does the stove reduce the risk
of burns, poisoning, and other
injuries?
Tiers being defined in terms of a
number of accidents and other
risks.
Table 7: Perfomance Parameters of ISO standards for ICS
The 5 Tiers are defined in the table as follows:
Remarks
Tiers
Explanation
Tier 0
No improvement over Open
Fire/Baseline
Tier 1
Measureable improvement over
Baseline
Vietnam’s existing portable and
fixed ICS falls under Tier 1
Tier 2
Substantial improvement over Baseline
The programme targets Tier 2 for
the standard criteria
Tier 3
Currently achievable technology for
Biomass Stoves
The programme targets Tier 3 for
premium criteria
Tier 4
This is an aspirational goal and
Goals for targeting ambitious health and
existing technology does not meet
environmental outcomes
it
Table 8: Tier Definitions of ISO Standards for ICS
Out of 15 producers, identified for both gasifier and direct burning stoves, 7 have had
their stoves tested in SHEER – Ha Noi University of Science and Technology testing lab
supported by SNV projects. The other producers are willing to send their stoves to be
tested, as long as the price is more affordable (currently it costs 800 USD per test). The SNV
ICS team had a meeting with the lab director in December 2015 to discuss reducing the
costs and it is believed that the potential testing in the new ICS project of SNV will be the
motivation for them to make a decision. Beside the SHEER lab, there was a testing facility in
the Institute of Energy. However, it ceased being operational a few years ago. In practice,
25
just one company and two VNGOs follow the water boiling test protocol by their own
initiative to see the thermal efficiency of their stoves, but they do not have the facilities to
carry out an accurate emissions and efficiency test. The remaining companies, whether they
are aware of the testing protocol or not, do not practice or follow the protocol, as it is not
necessary for them. Below is the stove testing result from the lab center (both in Laos and
Vietnam).
Table 9: Stove testing results
IWA
PERFOR
MANCE
METRIC
S
High Power
Thermal
Efficiency
Low Power
Specific Fuel
Consumption
High Power
CO
Low Power
CO
High Power
PM
Low Power
PM
Indoor CO
Emissions
Indoor PM
Emissions
units
Tested in
RENMI 17
Dec 2014
Center of
Creativity
and
Sustainabi
lity
Tested
in
SHEER
on Jan
2015
Teste
d in
SHEE
R on
13
Sep
2015
Tested in SHEER 20 May 2015
THX - GreenGen
company
Solar Serve
company
SPIN
THX
(Large)
THX R14
3G
(Medium
)
3G
(Small
)
Direct burning
stove - Mr Hong
(Phu Tho)
TK90
TK90
(Small (Mediu
)
m)
%
3
2
1
1
2
1
1
MJ/(min
∙L)
1
0
1
0
0
0
0
g/MJ
g/(min∙
L)
4
4
2
1
1
1
2
4
1
4
1
1
1
0
mg/MJ
mg/(mi
n∙L)
4
3
2
1
1
0
0
3
3
3
0
0
0
0
g/min
4
1
2
N/A
N/A
N/A
N/A
mg/min
3
3
2
N/A
N/A
N/A
N/A
N/A was the missing data from the tests that could not be assessed.
The table shows the testing results of stoves from Vietnamese companies. In general,
stoves that are available on the market, which belong to THX, Solar Serve and Mr. Hong
companies, have a lower tier level. While the stove of CCS (SPIN stove)as high tier level, it is
just in the R&D process. The CCS Centre (SPIN stove) has announced another successful
prototype that they are aiming to have in mass production of 100,000 stoves, with an
estimated shelf price of 9 USD/stove. However, there is a long way to go, because so far no
investor has taken an interest to bear the risk. This might bring us to the conclusion that the
ability and willingness to pay from customers will decide the quality of the stove.
The project of accelerating a sustainable market of advanced cookstoves in the Mekong
sub-region is seeing “gasifier” stoves, either natural fan or forced-air, defined by GACC as:
"Gasifier stoves force the gases and smoke that result from incomplete combustion of
biomass fuels back into the cookstove's flame, until almost complete combustion has
26
occurred, resulting in very few if any emissions. Gasifier stoves are also known as Top Lit
Updraft (TLUD) stoves, because some fuel is lit from the top of the stove, which forces
combustible gases to pass through the flame. Gasifier stoves can also include a fan, to
improve mixing of flame, gas, and smoke and to reduce emissions." The process for
producers to get their stove models eligible for the project is two stage. The first stage
requires them to submit independent lab reports, according to the WBT version 4.2.3 with
IWA Tier classification with safety rating. Expected result of the stove testing is tier 2 or
higher for thermal efficiency, tier 2 or higher for total emission and tier 3 or higher for
safety. To meet these criteria, producers need to send their stoves for official testing, but
due to the current high cost many producers are unwilling to do this. The solution provided
by the project is sending a technical advisor to work with the company to assess the quality
of the stove primarily and conduct the safety test. In addition, by analyzing the existing
results it can be identified if further improvements are required for the stove to meet the
criteria. Therefore, all producers were asked to work with the technical advisor in this
project. Those who are interested in this project like the idea of working with a technical
advisor as they can use the results to further promote their products.
Material of stove quality control
For a producer to register their brand and protect it with a Copy Right, the names of the
stoves must be sent to the Quality Assurance and Testing Center under the Directorate for
Standard Metrology and Quality. From the date of testing, it can take anywhere from 6
months to 1 year to obtain this certificate. There are three types of stainless steel material
that are commonly used for production: INOX 201, INOX 430 and INOX 304. Of which, INOX
304 is the highest quality material. However, if one stove is totally made of INOX 304 it will
make the stove unaffordable for the desired target market (from 600,000 VND/stove or
higher depending on size). Also, if the stove is entirely made of INOX 304 it would be too
heavy for transportation or use. All producers stated they can easily manufacture with
higher quality material as long as the customer is prepared to pay for it. The compromise
adopted is to produce the inner chamber with the higher quality material and the outer with
lower quality material, as the inner chamber is the area subjected to the highest
temperatures it deteriorates the quickest. If designed correctly it can also be replaced easily,
if it is damaged over time, but some still claim this solution surpasses the end-users’
willingness to pay.
Manufacturing capacity
Producing ICS requires many types of machinery: rolling, welding, stamping etc. Many
producers tend to be artisanal or semi-industrial and opt not to buy these machines and
instead order parts from the Rua village. The Rua village is located in the Hanoi suburb
Thanh Thuy, Thanh Oai and has an established reputation for manufacturing everything
from nuts and bolts to automotive parts.
Outsourcing of parts helps to reduce the bottom line of the stove and raises the output
capacity for workshops, as only final assembly and small/simple components are done in
house. The maximum output with this method by one identified producer is 7,000
stoves/month.
27
The maximum number of workers in one workshop is 10 full time operatives, while the
minimum is three. It is said that the production and assembly of an ICS requires many
human tasks, therefore 1 or 2 people would struggle greatly to effectively operate a
workshop. Workshops visited also double as the storage warehouse with areas ranging from
100 to 500m2.
By keeping the final assembly in-house, it also assists the producers to limit the ease of
copycat products going to market, which is especially damaging if they are of an inferior
quality.
Table 10: Capacity of companies’ workshops
Capacity of the workshop
Min
Max
Average
Human resources Size of the
Capacity per month
(person)
workshop (m2)
(stoves)
3
100
300
10
500
7000
5.5
330
3300
Transportation capacity
There are a number of adopted methods for transport and distribution of stoves by
companies. Generally, it is found that for orders of 50 stoves or more a personal or rented
car is used with the producer bearing the costs. For orders of 50 or less, or orders from a
20km radius outside the workshop, an agreement is reached between the producer and
retailer to share the costs (information sourced from existing producers that were
contacted).
Besides in-house transport services, the post office is quite a convenient alternative for
both producers and retailers. Contracts with the post office to pick up stoves at the
workshop for transfer to remote areas and highland provinces can be easily put in place
with costs of around 30,000 VND/stove.
Another popular method of transport in Vietnam is sending the product by bus, which is
quicker, but costs more than other services (prices generally start at 40,000 VND per unit,
but can be higher depending on the distance). When using the service of the bus, products
must be personally delivered to the station, along with the contact details of the recipients
for collection on arrival. End-users of this method will usually, depending on the producerretailer agreement, transfer the payment for the stoves via a bank account before shipping
and pay the shipping costs on arrival.
Retailer system
100% of the producers in this survey have had to set up their own distribution network
of retailers. For producers of ICS products only, the common approach for sales teams was
to travel by truck along the national roads to access the Northern provinces to find suitable
retailers. Once established then they would consign a quantity of stoves to each retailer for
initial product promotion.
28
Some stove companies that have other businesses, typically selling fuel, adopted the
above approach and also promoted the stoves via their existing retailers as they are usually
complimentary to each other. Retailers are bound to one producer product line.
All interviewed producers work with private retailers, with the producer with the
highest number of retailers of 250 and the lowest of 30. It is the policy of nearly all
producers not to allow retailers to pay after selling, except in the case of consigned stoves.
Only one stove producer, who has previous experience of working with SNV, has
realized and acted upon the potential of having The Women’s Union as one of its retailers.
They are a “catalog retailer” of the producer and the producer helps them to collect the
order via distributed catalogues and sends the requested order to them. Women’s Union
members in this case benefit from this, as the price they pay to the producer can be up to
20% less than the fixed price of the end-user.
The Motorbike Seller was an approach tried by some companies. However, it was not
effective. The problems arose as they could not control the price given to the end-users and
risked damaging the image of the brand. By adopting to use only fixed private retailers, and
in one case a “catalog retailer’, producers are able to control the costs and also offer a
warranty policy to customers, generally of 3-6months for faulty products.
Main barriers to the market
Willingness to pay versus high quality of cookstoves
The end-user wants more versatility in the fuel usage, less time for cooking, greater fuel
economy, less smoke and affordable prices. Results from the report of the clean stove user’s
survey of the VFD project in September 2015, show that the price users are willing to pay for
ICS is one third of the actual price. Even if the producer improves the stove according to
customer preferences, the price that they are willing to pay is just two third of the actual
price. This shows the necessity of this project to narrow the gap between willingness to pay
and the actual price.
Feedback from the interviewed companies shows that the main barrier for them to
overcome the stove quality issue is willingness to pay. They claim that they can produce a
very high quality stove that lasts for more than 5 years if needed as long as they can sell it.
The lowest price of a gasifier stove presently on the market is 150,000 VND (small) and the
highest is 980,000 VND (large) and 2 million for infrared gasifier stoves. Interviews with
companies who were selling infrared gasifier stoves, and stopped their business in this
product, mentioned the reason that they did not sell because of the high retail cost. This is
very understandable, because, when compared to the price of an LGP stove, households
could buy an imported product for that price, which can make them as proud as having a
new satellite TV.
Behaviour change barrier
The rural people are not really concerned about cooking with fuels and deforestation,
mainly because of the abundance of fuel resources in their areas and/or lack of awareness
of the negative impact on personal health and the environment. There are three dimensions
affecting the adoption of new products or services to the low income bracket that should be
taken into account, namely motivation, affordability and engagement with producers. The
29
engagement with the product is showed by their preference of rocket or continuous cooking
stoves over gasification products. However, these stoves are unlikely to meet the strict
project criteria on efficiency and emissions.
Regarding the question “how can SNV support the company to increase stove efficiency”,
all of them showed interest in changing support to marketing of the stove and/or conduct a
communication campaign on the negative impact of smoke to the health of women and
children, which is a good entrance for them to sell the stove.
Limited business management capacity and financial constraint
Limitation on business management and financial constraints have been identified by
producers and is seen as another barrier. As they are all new into this sector, 90% of them
were established after late 2012, they share the concern of capacity of business
management, and 50% of them established the companies as start-ups by highly skilled
workers. They also lack financial resources to promote their stove to a broader range of
customers or investigate other potential regions. The main channels they are using to
promote their stove is their website, YouTube channel or social network, which are all free
of charge. Some of them were introduced on national television or in the newspaper, which
is said to be a very useful channel for them. In the field, they need to conduct road shows or
participate in village fairs.
Willingness to participate in SNV’s ICS product
To meet project criteria, 13 gasifier stove producers were contacted and asked about
their views on the intended mechanism with the approach of Result Based Finance (RBF). 12
of them set up appointments to visit for further discussion about the possibility of
cooperation, of which 8 companies are very interested in the project and willing to join. One
of the reasons for not joining the project is that the infrared gasifier stove is a product with
no sales in 2015, others perceived that RBF is too risky for them.
X.
Conclusion
Nearly half of the population of Vietnam still relies on solid fuel for cooking. Therefore,
the ICS programs promise to bring great benefits to local people, particularly to women and
children. It will contribute to protect the global environment by reducing the burden on
forests, which will reduce environmental degradation and deforestation.
This market study has helped to provide an overview of the sector and answered critical
questions on factors that effect the market. This is a very good time for advanced cookstove
intervention because the market is prepared in terms of demand and manufacture capacity.
But the lessons from previous projects should be taken into account, for example regarding
the time for people to change their awareness and the market sustainability when users pay
fully for their stoves.
The Vietnam cookstove market has many potential stove manufacturers, R&D and
development centers that currently work in the sector. Meeting the project criteria in terms
of thermal efficiency and emitted emission is very promising with the support of this SNV
ICS project. The project came at the time when all the cheaper quality products broke down
and those available on the market have been affected by the negative impact of these cheap
stoves on the reputation of ICS in general. The Government has announced a renewable
energy development strategy with the outlook towards 2050, in which the number of
households that use a more advanced cookstove is specified.
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To encourage producers involved in this project, the analysis of their main barriers to
the market should be taken into consideration. The project implementer may consider to
work with a local lab to reduce the costs and/or compare the most effective way to test
stove quality with other labs in the region. Moreover, the project implementer may consider
to implement a campaign to raise awareness on the negative impact of smoke on human
health, which helps people to become aware and understand the danger associated with
this and how to protect their families’ health. At the same time it will provide a good
entrance for stove companies. The project may link with the Inclusive Business Accelerator,
a project of SNV that helps start-up companies to access potential investors. And the most
important point is finalizing the RBF incentive and working mechanisms to prepare stove
companies.
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1. Global Alliance for Clean Cookstove: Vietnam Market Assessment Sector mapping –
04/2012. http://cleancookstoves.org/resources/180.html
2. Global Alliance for Clean Cookstove: Vietnam Market Assessment Intervention Option –
04/2012 http://cleancookstoves.org/resources/179.html
3. SNV – VFD, 2015: Clean cookstove users’ survey report – Nguyen Thanh Quang.
4. http://www.biomassmagazine.com/articles/12542/southeast-asiaundefineds-low-costpellet-player
5. micro-gasification manual from GIZ
6. http://tietkiemnangluong.com.vn/tin-tuc/meo-tknl/t11583/an-giang-che-tao-thanh-congbep-dun-khi-hoa-trau.html
7. http://www.worldbank.org/content/dam/Worldbank/document/vn_PA2012Executive_sum
mary_EN.pdf
8. http://apps.who.int/iris/bitstream/10665/200009/1/9789241565110_eng.pdf?ua=1
9. http://www.renewableenergy.org.vn/index.php?page=library
10. SNV – A review report of improved cookstoves in Vietnam
11. https://www.giz.de/fachexpertise/downloads/giz2015-en-report-wood-energy.pdf
12. http://vietbao.vn/vn/gia-ca-thi-truong/mat-hang-Gas-petrolimex-binh-12kg-van-ngang/
13. Nguyễn Thu Hà, 2014: A review report of improved cookstove in Vietnam
14. Phan Thanh Tung, 2015 http://www.renewableenergy.org.vn/index.php?page=library
15. SNV, Cookstove usage survey in Northern region 2011
16. http://biogas.org.vn/english/Home.aspx
17. http://mediamart.vn/noi-com-dien/
18. http://www.iob-evaluatie.nl/sites/iob-evaluatie.nl/files/Indepth%20report%20on%20SNV's%20biogas%20programme%20in%20Vietnam.pdf
19. http://www.lcasp.org.vn/Tin-tuc/Su-kien-Hoi-thao/detail-740.html
20. http://www.slideshare.net/HaiAnhTran2/20150922household-biogas-digesters-53140848
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Questionnaire to ICS Producer/company
Introduction
Hello. I am Hanh from the Netherlands Development Organization (SNV). I am calling you in the framework of
SNV's improved cook stove project, which aims to accelerate the sustainable market of ICS in the Mekong subregion. This project gives us a consideration to offer an incentive for the stove producer and retailer. I would like
to know more about your company and your stove product, as this knowledge will help us a lot in the design phase
of the project - Would you mind to spend about 15 minutes for me?
Basic information
Name of the company:
Address:
Field of business:
Production location:
Product
Product in detail
What type of ICS are you producing (gasification or semi-gasification stove)? How many stove sizes?
What is the material of the stove ?
What kind of fuels does the stove use?
Do you sell fuel for cookstoves?
Do you produce other products?
Qualification control
Do you have an internal quality control procedure, if so, please explain.
Have your stoves undergone external testing regarding:
-
Quality
-
Efficiency
-
Emissions
-
Etc.
Which organisation performed the tests?
Can you share the testing result?
Ambitions
Are you aware of any available ICS standards? If yes, what are they?
Do you know the efficiency of your stove? What is that?
Do you consider to improve the efficiency of your stove? If so, why, if not, why not?
What barriers do you foresee in developing a ICS market?
What support do you need from SNV to increase your efficiency?
Manufacturing capacity
How many people do you employ to produce the cookstove?
How large is your company workshop?
What is your maximum capacity? (specific per month/year)
Is your input material source stable?
Business
Business information
When did you start selling/producing ICS?
Where is your ICS market? (area/region)
How many stoves have you sold up to now?
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How many stoves did you sell in 2015?
Which distribution channel did you use to sell your product?
How many % of ale in market based and % of sale under project/program?
Retail capacity
Do you have your own distribution network?
Do you sell your products to external retailers?
How do you transport the stoves to households/retail locations?
Do you use mobile selling? If so, are these your own retailers, arms-length contracts or third parties?
Do the retailers directly pay the full amount of the stove before or can they pay after selling?
Do you provide discounts if people purchase the stoves in bulk, if so, how much?
Guidance to user?
Warranty service?
Marketing
What difficulties are you facing when selling ICS products?
Do you conduct any marketing activities?
If you have marketing activities, what is your promotion channel?
What is your customer segment?
Why do you focus on this segment?
What do you think about the opportunity for a cookstove market?
What are the barriers for a cookstove market?
What are the most important aspects of a cookstove for your customers?
Plan
Do you plan scaling up your business?
What is your plan for the next year?
What is your plan for the next 5 years?
Have you received any support from a NGO or national support programme in the past?
Do you currently receive any support from a NGO or national support programme? if yes, which program and kind
of support?
Define your competitors
Who are your main competitors
What are your competitors' strengths?
What are your competitors' weaknesses?
Willingness to be involved
SNV RBF design
SNV is considering to offer an incentive to producers per produced stove , would that encourage you to increase
the efficiency of your cookstove?
SNV is considering to offer an incentive to retailers per stove that is sold to an end-user, would that encourage you
to increase the efficiency of your cookstove?
If SNV organised a stove auction and the incentive would be provided to the retailer, would you consider to
produce ICS and offer them on this auction?
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SNV Vietnam Office
Address: 3rd floor, Building D, La Thanh hotel,
218 Doi Can street, Ba Dinh, Ha Noi, Vietnam
Tel. 84 - 4 -8463 791, Fax. 84 - 4 -8463 794
Email: [email protected]
Website: www.snv.org
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