If the last update in March was the “Pre-Covid” edition, this one could be the “Mid-Covid” edition. I say ‘could’, with a mixture of trepidation and optimism. The number of cases in India are going up fast now, and health care systems are highly strained. If things miraculously take a turn for the better, this might be Mid-Covid… if not, then its hard to imagine when and where this will end.
Ladakh had previously reached a relatively stable situation, but with the relaxation of lockdowns, many Ladakhis who were out of the state returned, bringing with them the virus. Numbers have suddenly exploded to 500+ and lockdowns are back on for Ladakh.
If that wasn’t enough, China is acting aggressively at the border in eastern Ladakh, and soldier fatalities have occurred between the 2 nuclear powers for the first time in 45 years. Roads in and out of Ladakh are now closed, dedicated to military traffic as they build up defences in the region. We have paused a delivery of stock to Ladakh as a result.
With this in mind, I will focus on how we are progressing and what we are doing to keep the team safe whilst preparing to try and hit the ground running when the season starts.
I had anticipated that Modi would likely announce a sudden lockdown so had requested the team to return to their home villages in case that should happen. It was a good call. Modi did exactly what he is renown for (sudden, dramatic and sweeping gestures) and announced a strict country wide lockdown with almost immediate effect on 24th March. Our idea of launching a summer product was put on the back burner while the HRS team sheltered in place in their home villages.
In order to manage the sudden lack of income, we asked our team to take a pay reduction, and to their credit, all the seniors voluntarily dropped to half pay and the juniors (on basic salaries) also took pay reductions. We managed to keep all our staff on pay throughout this period and will reimburse all the pay reductions when we can afford to.
One of our team members, Ajay Sharma who headed the sales team, decided to leave HRS for to his own reasons and we were able to finalise his salary with HRS at the end of May. We are now interviewing candidates for a senior Operations Manager role that will encompass the Sale Manager position with additional responsibilities.
The senior team has meanwhile continued to work on various projects, including an investment deal with Social Alpha (a social enterprise incubator, funded in part by Tata Foundation). This is in the final stages of due diligence and should be wrapped up in the coming weeks. The deal includes a small investment of funds on top of what is known as “high-touch incubation”. This gives us access to some leading edge resources we would otherwise not be able to easily reach, including technical support.
We have also moved forward with a Carbon Credit trading scheme in conjunction with South Pole, one of the largest CC trading firms in the world. We are now in the process of finalising baseline surveys, having already signed off on an MOU outlining the arrangement with regards to CC benefits. The financial return on these credits will grow over the coming years and it is our objective to channel these towards reduced pricing on our products so as to make them more attainable to a wider cross section of the community.
Not being able to travel to India, my attention in Australia has remained primarily on product design and development, and I have been fortunate to have been able to continue working through this period. Some of this work I have written about in the previous update focussed on Rocket Man Designs, so I won’t go over this in detail. Suffice to say that we are continuing to roll out a low cost combustion heater called the “Eco Mini Rocket Stove” and we are in the process of fast-tracking the ‘Rapid Deployment Community Kitchen’ concept, due to the pressing need to set up kitchens in India and Nepal. The low-cost, high-efficiency Cremator concept is still in development, however I have pushed that back to get the community cookstoves to the market as soon as possible.
Our relationship with Smokeless Cookstove Foundation (www.smokelesscookstovefoundation.org) has taken a positive turn, with SCF pivoting its attentions in this period towards more of a consultancy based operation. This has proved to be ideal for HRS, and we have already employed their services for a number of projects, including a comprehensive market research report for Community Cookstoves and the previously mentioned baseline survey for South Pole. I have also commissioned a report on the crematorium sector, and we will also involve SCF in field trials for the various cookstoves we have been developing over the last year.
Being able to outsource these critical tasks to an independent third party organisation like SCF allows HRS to focus on the core aspects of our business and gives these reports an integrity we would not be able to if we had tried to generate them in house. I am planning to involve SCF in end of year non-financial bottom line reporting in the future. It has always been a key part of our mission to have a multi-bottom line approach, but the logistics of conducting comprehensive reporting on social and environmental impacts has proven challenging up to now.
It’s also an ideal pivot for SCF, as they are currently unable to run the cookstove trainings in the field, but have built up an excellent understanding of the complexity of issues around this sector over the last 3 years. Nitisha’s dedication to both SCF and HRS has been outstanding, and her efforts over these last few months has been crucial to keeping both these organisations operational.
SCF was fortunate to have received a grant from our wonderful benefactor in the US, The Dykes Family Charitable Trust prior to these recent changes, and Nitisha has been judiciously utilising small amounts of this grant to keep SCF alive while it pivots towards a new and meaningful direction that maximises the impact it can make in the smokeless cookstove field. HRS and SCF are planning to partner in the roll out a domestic cookstove as well as the community cookstove project, and I am currently working on a forced draft module to improve the efficiency of existing cookstove prototypes we have in field trials.
Our team is primed and ready to return to work, and in fact just this month we launched a discount sales offer in Ladakh and HP, and have had such a strong response to it in Ladakh, we have sold more this June than all the previous summer sales combined. Our sense is that the market is strongly aware of our products now, and are keenly awaiting anything new we release. We expect a strong response to the Eco Mini when we launch that in a few months, as we are aiming for a price point around 25% below the currently cheapest product (Eco1 Rocket Stove at INR 18,500/- or $250USD). Given all the economic impacts that the Himalayas will have with the complete collapse of tourism, we will focus on lower cost products, and only manufacture the higher cost Eco2 and Eco3 on a demand basis.
So, in conclusion, although this has been an incredibly challenging time around the world for obvious reasons, HRS and SCF have managed to support each other and to continue functioning with a great deal of efficacy. We are anticipating a strong season from September, as long as we can navigate the restrictions on production and transportation in a safe and functional way.