Himalayan Rocket Stove Update Nov 2018
As I fly back from India to Australia, I have a few moments to reflect on the journey so far with HRS. It’s been an intense 2 years since the prototyping came to the Himalayas in 2016, with more than a few obstacles along the way. There have been times when it would seem this project would not quite make it to viability, especially as we struggled with cash flow through the last Indian summer.
Which makes it all the more satisfying to see it finally shape up as a vibrant early stage company with incredible growth potential. We are on track to achieve a 4-5x growth in sales from our first season, and that has been limited by our capacity to produce, not by the market demand. If we had had the capital to pre-produce stock through last Indian summer, we might be looking at 10x growth based on the demand we are currently experiencing.
When the season hit in Ladakh this year, we were selling stoves at a rate of 7-10 per day while stocks lasted. We only managed to get 80 units up there before the roads closed for winter. If we had been able to get more stock up there, we would have sold 200 – 300 units in November alone. As it panned out, we managed to fly a few additional units to Leh using air cargo, adding about 15-20% to the price. These sold out so fast there were fights over the last remaining units in the shop.
Meanwhile, stoves in Himachal have been selling steadily since October. We sold out of all our available stock in the regions of Kinnaur and Kullu. These funds were channelled towards paying down outstanding bills (wages had not been paid for several months) and production costs for more stock.
I have to pause here for a moment to give a note of thanks to our team, who in spite of not being paid for months, kept on working for the HRS vision. Our engineer Abhishek, who has been holding the fort at the warehouse, sold his own car without telling me so as to be able to support himself through this period. I am very happy with the amazing team we have now working together on this project.
We produced 200 units in November, 100 each of Eco1 and Eco2, and the Eco1 stoves were sold before they were out the factory. The Eco2 Rocket Stoves which are in high demand in Leh are going to be flown up in small batches according to the capacity of our air cargo operator.
We are now in production of another 200 Eco1 units and 50 Eco3 units for December, with most of these expected to sell before we complete the month. Our goal now is to keep selling strongly through December and January with an expected tapering of demand through Feb and March.
Our overall target this season is 800 to 1000 units which is looking achievable, but depends on demand staying strong as we move through the winter season. One of the reasons I am confident of a persistent growth pattern is that the demand is driven by word of mouth response to the 200 units we sold last season. Customers who bought a unit last year on faith that we had something interesting and new to offer are now coming back to buy multiple units for the rest of their families.
The response has been significant, with consistent reports of at least 50% fuel savings, along with better quality of heat and no longer needing to clean out their flue pipes. This is a new benefit I had not previously considered, but is a side effect of the clean combustion process we have developed. What used to be a weekly dirty chore, cleaning out sooty flue pipes, is now not required at all.
Our focus now is getting through the winter, making and selling as many units as possible. The bottleneck is still cash flow, as we can only advance funds for production as fast as we make the sales. The next goal is to introduce a new product range which will keep our teams busy and sales going through the summer.
I am working on institutional biomass cooking, using the same technology we have developed in large scale cooking format. We have already identified a market for this, having received requests for such a product from the Bhutanese government as well as various monasteries in India. I will be prototyping in Australia over the next 2 months and sending designs to our production units in India for development, with a target of having a range of cooking solutions ready for sale by March / April. This will give us the cash flow needed to keep the company afloat through the summer.
In order to meet the demand we expect next season, we will be looking to raise funds for advance production of the Eco Rocket Stove range. At this stage our target is to have 3000 units ready before the next winter hits in September, with a goal of 5000 units by the end of next season (March). This level of growth is achievable based on our current market reach and ability to produce, as long as we have capacity to fund the pre-season production. We are looking to raise at least $600,000 AUD for this to occur.
Another option we are open to considering is social impact investment up to $5M AUD which will give us the ability to scale more rapidly. A plan has been developed with this in mind, building out our distribution networks across the Himalayan belt with more than 20 million homes, as well as reaching out to the global markets where we have started getting requests to establish production units.
At this stage, we have been approached to develop units in Mongolia, China (Tibet) and Chile. There are more regions we could reach out to if we have the capacity to scale to them. Being at such an early stage of growth for HRS, the focus is to get established in India and the local Himalayan countries of Nepal and Bhutan, before extending ourselves too far. Having said that, we now know we have a compelling product and wish to reach as many regions as we can, given the urgency of the problems it addresses.
If you are interested to know more about our growth strategy, and have interest / capacity to connect us to social impact funding, please get in contact.
Smokeless Cookstove Revolution Kits
Meanwhile, the parallel not-for-profit project, Smokeless Cookstove Foundation is also doing very well. In order to help scale this out to more regions, HRS is currently working together with SCF to make and distribute Smokeless Cookstove Revoluton Kits. These are moulds made by HRS at the factory, boxed up with instructions and distributed via the channels opened up by the amazing work being done by the Foundation team.
We have an offer at the moment to get as many of these sold before Christmas, with a certificate being sent to our donors in the name of your choice. This makes for a wonderful ethical gift with 100% of the funds going directly towards the impact work of SCF that has been proven to be highly effective.
Read more about that here: https://chuffed.org/project/smokeless-cookstove-revolution#/story