Setting up local stove production in a refugee setting: the case of Usafi Green Energy
Usafi Green Energy, supported through the EnDev Market Based Energy Access project, established a local cookstove production unit in Kakuma refugee camp, employing host and refugee community members and serving the market with improved cookstoves.
Kakuma town, Kakuma refugee camp and Kalobeyei Integrated Settlement in Northern Kenya are home to over 280,000 people (55,000 households), including refugees and the host Turkana community. Firewood and charcoal are the primary resources used for cooking in their households, small (food) businesses and even social institutions such as schools and health clinics. Open fire cooking with low-efficient firewood or charcoal stoves leads to high fuel expenses, environmental degradation, and health issues. In addition, people who can’t afford to purchase fuel collect firewood in the bushes – posing risks to women and girls collecting the fuel and leading to conflicts between the refugee and host communities.
Entering the market in Kakuma
Usafi Green Energy (Usafi) is an energy company specialising in producing and distributing cookstoves and charcoal briquettes. They also offer consultancy and training services in briquettes production and installation of large institutional stoves. The company entered the Kakuma refugee camp at the beginning of 2021, supported by the EnDev Market Based Energy Access II project. The company developed distribution channels by recruiting local sales staff, identifying and training local stove vendors, and carrying out marketing activities, including cooking demonstrations with support of the project.
Setting up local stove production in a refugee setting
Initially, Usafi’s product portfolio for the Kakuma market included mainly industrially manufactured stoves. Upon interaction with the market, they quickly realised a significant market opportunity for affordable, improved artisanal manufactured stoves that Usafi was already producing and selling in Central Kenya. As a result, Usafi added artisanal cookstoves to their product portfolio to complement their stove product offering and saw an immediate high uptake of the stoves among the host and refugee communities in Kakuma.
However, high transport costs from the production location in Central Kenya to Kakuma resulted in higher retail prices, which eventually affected Usafi’s long-term sales objectives. As a mitigation measure, the company decided to establish a local stove production unit (SPU) and manufacture their artisanal stoves locally in Kakuma. They identified a suitable space to accommodate local production and storage and immediately began building the necessary structures and recruiting artisans from the host and refugee communities to support the production. The following steps included sourcing raw materials from the area and streamlining the liner production. Currently, the stove metal cladding is produced in Thika as it requires specialised machinery and is transported to their SPU in Kakuma and the stoves assembled at the SPU in Kakuma.
Usafi’s stoves portfolio offers different sizes, small to medium stoves for domestic use and larger ones for commercial use. The stoves are sold and transported to vendors in Kakuma town, Kakuma refugee camp, and Kalobeyei settlement, who sell the stoves to end-users, both households and eateries. The vendors, currently approximately 70 in total, pay an instalment on delivery and pay the remaining amount in weekly instalments as per the agreement with Usafi Green Energy.
Since starting production, the company has been working on expanding and professionalising its production and distribution activities. The liner production went into full swing in the last few months of 2021, soon leading to the assembly of 300 stoves a month on average in Kakuma. Supported by a targeted behavioural change communication campaign to promote improved cooking led by SNV, the company engaged in targeted marketing of their stoves and saw a significant spike in sales numbers.
With the increase in production, the company also faced new challenges in inventory management. So far, all stove sales to vendors were manually recorded and updated by Usafi’s sales supervisors. Payments were collected manually through visits, SMS reminders and received in cash and mobile money payments. With as many as 600 stoves being assembled and sold per month, the manual collection of sales data and payments became too resource-intensive and prone to mistakes or incomplete recording.
The company, therefore, decided to invest in a comprehensive bookkeeping and sales management platform with support from partners. Usafi is also planning to label the stoves with serial numbers. The digital platform will enable Usafi to register its inventory, record new sales and customers (vendors), send automatic payment reminders, and generate sales reports to keep track of business development, vendor sales performance and stakeholder reporting. Usafi’s core team is rolling out the system and training their sales team and stove vendors on platform usage. Now, Usafi has a team of 17 people working in Kakuma, all locally recruited from both the host and refugee community, of which 14 people work directly in stove production and three people manage the sales to the 70 local vendors.
Over the next few months, Usafi is working towards achieving full production of the locally produced stoves in Kakuma through mechanising the SPU to enable local production of cladding and building the capacity of the team to operate the mechanised operations. In parallel, Usafi is continuously working to improve the quality of its stove in terms of efficiency and durability. With higher levels of efficiency, the stove sales might qualify for carbon credits, allowing Usafi to further invest in growing the business and serving more remote communities with improved cookstoves in Northern Kenya and beyond.
Usafi Green Energy is a partner of the EnDev Market Based Energy Access project implemented by SNV, which works to develop the market for clean energy products in Kakuma refugee camp, Kalobeyei Integrated Settlement and Kakuma town.
For more information on this project, contact Karlijn Groen, Project Advisor Energy, SNV Kenya - firstname.lastname@example.org