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Delivering clean biomass cook stoves to low-income people in Vietnam
Vietnam-based cookstove manufacturer Green Generation (GreenGen) has joined the Business Call to Action (BctA) with a pledge to provide 100,000 low-income households with access to clean-burning biomass cook stoves, improving the lives of 400,000 rural people by 2020.
Seventy percent of Vietnam’s 90 million inhabitants live in rural areas. Despite the country’s recent economic growth, rural communities still subsist on small-scale agriculture and use wood for cooking. These simple stoves not only consume scarce wood resources, but produce unhealthy smoke. At the same time, millions of tons of residual biomass from agriculture are burned each year, causing additional environmental and health problems.
Vietnam’s Government recognizes the importance of biomass as a renewable energy source and encourages the adoption of clean-burning biomass cookstoves. However, businesses serving rural communities have been limited by distribution challenges caused by lack of infrastructure: any products that reached remote village markets were prohibitively expensive.
Green Generation (GreenGen) has tackled this challenge with an inclusive business model focused on engaging low-income people all along its value chain, from suppliers to employees, sales agents and end users. Established in 2012, the company was selected for start-up funding through the Vietnam Business Challenge Fund, which enabled the company to sell nearly 30,000 clean-burning stoves within the first three years.
This successful endeavor created jobs for local people as assemblers, distributors, sales agents and end users who could expand their own livelihoods with GreenGen stoves.
A key to GreenGen’s remarkable growth has been its partnership with the Women’s Union, the largest community-based organization in Vietnam. The majority of GreenGen’s sales agents are low-income Women’s Union members. In addition, GreenGen has been able to raise awareness among members of the dangers of open burning. Through these efforts, GreenGen aims to decrease CO2 emissions by 150,000 tons per year by 2020.
In order achieve its BCtA commitment, the company is strengthening its distribution network to provide additional incomes for 800 micro-retailers. This network was specifically designed with rural people in mind. In remote areas, people cannot travel far to buy new stoves, so local retailers and coordinators are critical. In partnership with Vietnam Post Office, the company has also set up a streamlined logistics system that enables its stoves to reach remote areas at low cost, ensuring their affordability for rural customers.
Having successfully built a sales network covering 17 provinces in northern Vietnam, GreenGen is now looking to the central, highland and Mekong Delta regions as well as neighboring countries. In its scale up, the company is evolving its inclusive business model and exploring new stove designs that suit the needs of people in different areas with diverse cooking habits and forms of biomass.