Appropriate technology as a business opportunity II

There are many opportunities to increase sales by improving the environmental impact of production processes and by taking action which helps local economies. Successful approaches have been to innovate and develop new products, and to view “wastes” as potentially saleable by-products. Improved processes can also make existing products more attractive to concerned customers. Recognition as a responsible producer (informally or through formal certification) can also open the door to some markets in developed countries.

Perion is a medium sized company based in Budapest, Hungary, which makes batteries. It has created a new business line reprocessing car batteries, based on its own patented technology which has significant environmental benefits compared with the traditional process. This market opportunity developed from the company’s efforts to improve its health, safety and environmental performance and avoid heavy fines for hazardous discharges and waste. Perion then saw the opportunity to collect used batteries through its store network. The business is sufficiently profitable to pay $1 for each used battery. It brings in an extra 30 million forints per annum ($110,000) for the company.

Hindustan Lever is the Indian subsidiary of the Unilever Group. In the early 1970s its dairy factory in the Etah district was operating at only 50% capacity and incurring significant losses because of inadequate milk supplies. In 1976 Hindustan Lever established an Integrated Rural Development Program. The program set out to help farmers increase milk production, by addressing a range of farming practices that could be improved. The company sponsored education and training in animal husbandry, the development of basic infrastructure and the establishment of village development committees. Beginning in six villages, the project area expanded to more than 400. Milk supplies to the factory increased significantly to meet its capacity and the dairy is now one of the company’s most profitable units.

Temasol (Total EDF Maroc Solaire), a joint venture between EDF, Tenesol and Total, specializes in solar electrification. Its innovative project in Morocco will provide solar power to more than 58,500 rural households across 24 provinces. In the first phase (2002 to 2005), Temasol supplied electricity to 16,000 customers across four provinces. In 2005, the company commenced a second phase to install solar power for 37,000 families in 20 regions. A further stage is planned to supply an additional 5,500 households.

Through this project, each house is fitted with a solar home system comprising a solar panel, a battery and a controller. The solar panel converts the sun’s rays into electricity then stored in a battery. Electricity is available night and day to run household appliances, up to four lamps, and a socket for a television, a radio or a mobile phone charger. An electronic controller regulates the battery, storing enough power to last up to five days, allowing the equipment to run year round, even when weather is bad.

The equipment cost was partially covered by a grant to ensure affordability. Some 66% of this project is financed directly through Morocco’s Office National d’Electricité (ONE) with support from bilateral aid agencies (German bank KfW, French development agency AFD and the Fonds Français pour l’Environnement Mondial). Temasol contributes 24% of the costs and the customer provides the remaining 10% of a total investment of $35.5 million. By subsidizing the significant upfront capital investment, this financing package enables the consortium to overcome the high installation and maintenance costs of solar systems. In addition, Moroccan consumers already connected to the grid pay a tax of 2% of their monthly bill to help remote regions get access to solar power. This is one of the few solar projects worldwide based on a sustainable model and being progressively scaled up.

This innovative program not only provides solar equipment but also ensures a sustainable local service. System maintenance costs (Temasol undertakes to maintain the panels for ten years after purchase) are built into the initial connection fees. This is particularly valuable, as a traditional aid program would often fail to incorporate post installation maintenance. Once the program is completed, some 58,000 households will have access to electricity affecting the lives of 370,000 people. Bringing electricity to rural populations improves local living conditions, with light available at night safety is enhanced and youngsters can do their homework in the evenings. It allows family members to use a mobile phone to keep in touch with relatives or run a small business. These improved conditions also encourage local farmers and livestock breeders to remain on their land, rather than moving to the small towns that are connected to the grid.

Without the use of appropriate technology in these cases, a number of beneficiaries do not have access to electricity, smokeless indoor cooking devices, better incomes or a safe workplace. These cases demonstrate the owner of the company as well as the users (and communities) received benefits from the use of appropriate technology.

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