An Update from BSH on Protos. The Plant Oil Stove.

An Update from BSH on Protos. The Plant Oil Stove.
Samuel N. Shiroff, Director, BSH

For a brief update BSH is preparing a mass production capacity that should come on-line in late autumn of this year. Initial production will be ramped up through Q4 so we can expect to produce several thousand units in 2009. We are working with a local Indonesian partner - in an OEM process with 100% local content. This is part of our goal, but since BSH is not present in any meaningful way in our conventional business in that country, it is a very new activity for us. Thus, the time line may be subject to delay if quality or other issues arise. I would rather delay a few weeks than deliver a defective product.

The initial cost is going to be around US$40 - 42 Ex-works. This means it does not include transport or tolls if moving outside of Indonesia. Our total capacity for 2010 should be around 50,000 units - so this price will hopefully edge down. Naturally currency fluctuations will also play a role. BSH is running the project as a "social business". This means our goal is simply to cover costs and any additional profit will be put back into the project - for instance subsidizing costs in countries where there is viability, but not enough purchasing power for the capital costs. The mentioned price is the cost of production and local overhead. No more. Larger orders do not generate greater discounts. At first all orders will be filled out of Indonesia. New production capacity requires a minimum annual demand of 25,000 units and a viable infrastructure in the desired region. With perhaps the exception of the tank and some cleaning tools, it is simply not possible to establish small-scale local production that ensures consistent quality in an economically viable manner.

Minimum project size in Indonesia is 250 units; outside of Indonesia, 500 units. Projects smaller than this strains our management capacity dedicated to the project. I say this because we require due diligence on all suggested projects to ensure the viability of the market and sustainability of the plant oil supply chain. Naturally if we are convinced of a viable project, sample units can be made available - but not before this point and not before production in Indonesia begins. Please visit the BSH website www.plantoilcooker.org to download our "blue print" for a market introduction. My first question is always about plant oil supply. 1,000 protos units requires at least 100,000 liters plant oil per annum.

In order to maintain focus BSH supported projects will be limited to Indonesia and perhaps 1 in the Philippines. Once we have established proven viability and working systems for several thousand units expansion to other countries is possible. Naturally in partnership with others we can move to other countries immediately.

In terms of cost coverage, there is a Gold Standard VER methodology that is viable using protos and another is pending approval. My estimate is that this will require a minimum of 5000 units to break-even if one is replacing 150 - 200 liters of kerosene per cooker.

Protos functions with most types of plant oil and does wonderfully with Jatropha. Please note that although we can burn palm oil, aside from the environmental considerations, the physical properties of that oil often leave it in a solid state at relatively high temperatures. Protos does require that the fuel be able to flow at ambient temperature.

In projects in which there is a dynamic between farmers and towns, it might be most appropriate to consider supplying the farmers with stoves that burn the press cake and allow them to monetize the oil by selling it to protos-users in the town. We are not committed to any specific model, but it needs to bring added value to the local community and be socially and environmentally sustainable.

The wisdom and input of those on this group is much respected and appreciated. We remain open to working with any serious and capable partner as well as in conjunction with other cooking solutions.

Regards,
Sam

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Samuel N. Shiroff
Director
BSH Bosch and Siemens Hausgeräte GmbH
Carl-Wery-Strasse 34
81739 Munich
Germany
T: +49 89 4590-3039
F: +49 89 4590-5079
E: samuel.shiroff@bshg.com
www.bsh-group.com / www.plantoilcooker.org

Protos. The Plant Oil Stove.
An Initiative of Bosch and Siemens Home Appliances Group.