Scaling up ATEC* commercial biodigesters to 50,000 units by 2025

ATEC produces, distributes and sells the world's first truly commercialised biodigester, providing biogas and fertilizer to BOP customers

Photo of Ben Jeffreys
10 23

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I confirm that I am fully aware of the eligibility criteria, and based on its description, I am eligible to apply to the CSV Prize 2017.

  • Yes, I'm eligible

Preferred language

  • English

Organization name

ATEC* Biodigesters International

Year founded

2016

Initiative stage

  • Established (the solution has passed the previous stages and demonstrated success)

Annual budget in 2017 (USD)

  • $250k - $500k

Number of beneficiaries impacted so far

  • 1,000 - 5,000

Organization type

  • Social enterprise

Secondary Focus Area

  • Nutrition

Headquarters location: Country

  • Cambodia

Headquarters location: City

Phnom Penh

Location(s) of impact

Cambodia: Across the country
Indonesia: Jogyakarta
Papua New Guinea: Lae, Rabaul
Myanmar: Shan, Mandalay

Website

http://www.atecbio.com

Facebook URL

https://www.facebook.com/atecbio/

Twitter URL

https://twitter.com/biodigesters

Problem: What problem is this initiative trying to address?

-Cooking with wood is estimated to kill more than 14,000 Cambodians each year, more than annual traffic accidents.
-An average Rural Cambodian family spends US$260 per year on fuel for cooking and fertilizer for farming. With some families spending in excess of $1,000 per year.
-Cambodia has the 3rd highest deforestation rate in the world, with illegal logging being the main source for cooking fuel.
-42% of Cambodia's arable land is now classified as degraded due to an overuse of chemical fertilizers.

Solution Summary: What is the proposed solution? What do you see as its most promising aspects for creating shared value?

- An ATEC* biodigester utilizes animal manure and kitchen waste to provides users with renewable gas for cooking (90% of daily total energy needs) as well as 20 tons of organic fertilizer for farming every year.
-For an average Cambodian family, this results in a saving of $260 per year - meaning they have more money to invest in their futures as well as removing the debilitating health effects of cooking with wood (majority effecting women).
- With its provisionally patented design, ATEC's unique production, distribution and value chain has been designed to be globally scalable while also remaining cost-competitive for Base of Pyramid (BOP) customers.
- Through this scalability, ATEC* will create the greatest global impact in rural development and nutrition as well as accelerating ATEC's path to financial viability (break-even 330 units per month).

Impact: What is the impact of the work to date? Specify both the social and the environmental impact of your work

Each ATEC* biodigester provides a rural household with clean gas for cooking and organic fertilizer for farming, addressing key indicators around rural development as well as improving nutrition both locally and through the farmer's agricultural supply chain.

452 units have been sold since July 2016, collectively they are providing the below benefit to 2,396 people on a yearly basis (baseline conducted by SNV and Shujog):
-173 million litres of renewable biogas
-8.9 million kgs of organic fertilizer
-1356 tons of greenhouse gas reductions
-98 tons of forest wood conserved
-$141,928 saved by families annually
-A payback of 11 times the cost of the product to households
-19 hours time saving per week (if previously cooking with wood)
-Removal of Kitchen Air Pollution

This is just the benefit of 452 systems in one year. Each unit is designed to last 25 years, once we reach our goals of 50,000 units by 2025 the cumulative social and environmental impact will be exponential

Financial sustainability plan: How is this initiative financially supported? How will you ensure its financial sustainability long-term?

- ATEC* is in it's second year of operation and is currently 68% earned income, with 32% then coming from grants.
- ATEC* is currently expanding Cambodia to beyond it's break-even point of 330 units per month (currently 50/month). ATEC's board and senior management is then seeking further partners to support replication into other high-potential countries across Asia-Pacific.
- ATEC* already has 9 other countries register interest for bringing our technology to their markets, with ATEC seeking local values-aligned partners with which to form joint ventures or licensing agreements with.

Breakdown of revenue streams
1. Gift: 0%
2. grants: 32%
3. corporate: 0%
4. Retail/wholesale of biodigester units (earned income): 68%
5. other: 0%

Unique value proposition: What makes your initiative innovative? How does your project differ from other organizations working in the same field?

-ATEC is the first globally to develop a factory produced, quality controlled, commercially scalable biodigester that can meet the estimated global market of over 50 million households. Not only this, it is also the world’s first system that can work in high groundwater and earthquake-prone areas.
-For the customer, it represents the highest quality system on the market which they can invest in. This is combined with an aspiring modern cooking setup of biogas rice cooker and twin gas stove.

Founding story: Share a story about the "Aha!" moment that sparked the beginning of this initiative.

-ATEC* started in floating villages in Cambodia, looking at how a biodigester can address access to energy in challenging environments.
-Once ATEC* had prototypes up and running though, we realised that we had created system not just for challenging environments, but a system that could be commercially scaled in any condition.
-Our "Aha!" was that we then saw that we had a product that could disrupt an entire global market which traditionally had trouble scaling with inefficient supply chains and high transaction costs.
-Further to this, we saw that if farmers could access a quality biodigester, not only would they improve their living standards, they would also increase productivity in their farming value chain.
-Globally we are only at the start of the waste-to-energy/resource revolution, and we want ATEC* to be a key leader in this growing sector into the future

Where did you hear about the Nestlé Creating Shared Value Prize?

  • Upon recommendation from others

Program Design Clarity: We are hungry to know more about what exactly your model consists of. Succinctly list a) what main activities are you doing with your beneficiaries, b) where you carry out the activities? c) how often? d) for how many hours? e) who delivers the services? and f) any other brief details

Below is a walkthrough of customer journey:

Phase 1: Customer identification:
-429 Group Meetings in villages, reaching 7,154 potential beneficiaries
-Average 4 follow-up meetings per 'hot lead' customer (6,864 total)
-Conversion rate of 31.5% of hot leads into customers
-Output: 540 secured customers, requiring average 10hrs of staff time per secured customer (4 per week)

Phase 2: Installation
-Deposit is reported to dealer and ATEC HQ
-Customer file generated, dealer technician dispatched within 24hrs to conduct site assessment
-Finance secured either through dealer or MFI partner within 5 working days
-Installation within 7 working days (biodigester manufactured in Cambodia, stove and rice cooker sourced from China)
-Average 11.25 installs per week, requiring 4 full time technicians nationally

Phase 3: After Sales
-Install technician sends data report back to ATEC HQ
-ATEC HQ After-sales team calls the customer at 1, 7, 21 and 90 days post install. Original salesperson also visits the customer after 30 days for service check, uses visit to also generate referrals. If at any time a significant technical issue, trained technician is dispatched.
-Total 5 contact points per customer (2,700 nationally)

Phase 4: Customer outcomes
Please see 'impact' question above. Additionally a recent report by World Bank found that cooking with biogas also leads to a saving of 20hrs per week, equivalent to 26 working weeks per year added to the household.

Focus area

  • Rural Development

We are interested in learning more about your initiative's broad impact on sustainable development. Please reply ONLY to the question(s) related to your above focus area.

1. Access to market
-An ATEC biodigester improves farm economics by increasing crop yield from 10% (rice) to 30% (vegetables, fruit) through effectively utilising waste (manure, green, kitchen) as a high quality organic fertilizer. Cambodia imports 60% of it's fruit and vegetables, through our after-sales training and the higher marginal increase with vegetables and fruit, customers are now diversifying into these crops for sale.
-Secondly ATEC's wholesale model works with local distributors to provide access to ATEC's product in a sustainable manner.

2. economic development
-A biodigester has a double benefit for a rural family - through reducing expenditure on cooking fuels and fertilizer, while also increasing crop yield. On average a family will save $260 per year plus free up around 24 working weeks of time if previously cooking with wood.

3. gender equality
-Cooking with wood is one of leading causes of premature death for women in Cambodia, globally it kills more people than malaria. A biodigester removes this health issue, as well as freeing an average 19hrs per week usually spent collecting and preparing wood

4. water management
-Nothing direct, however improved soil leads to better water retention.

5. nutrition
-Higher quality local produce improving household nutrition
-Wood smoke exposure leads to digestive tract under-development and malnutrition in small children that continues to adulthood

6. health and wellbeing
-see above 3&5

Creating shared value: How does your initiative create value for different stakeholders?

-Value to households: The various impact outcomes listed above under 'impact' that are improving farm economics.
-Value to supply chain: Increased quality and consistency of produce for ag distributors
-Value to local business development: Creation of local dealerships, 10 day intensive training provided by ATEC.
-Value to shareholders: Internal Rate of Return of 19% over 5 years, social and environmental outcomes
-Value to the environment: 75 tons of greenhouse gases abated and 6,500kg of forest wood conserved per product over lifetime. In the future, the diversification of the ATEC Technology into developed country and urban markets to utilise food waste for gas and fertilizer.
-Value to government: Reduced health issues, increased community resilience, higher household income
-Value to communities: Improved air quality, nutrition and economic development. Currently 56 jobs created in supply chain.

How is your initiative funded, now and over the next 5 years?

-In August 2017 ATEC closed a $1m Series A Equity round to scale up Cambodia
-ATEC wholesales to regional distributors to keep costs low and achieve a lower break-even of 330 units per month.
-Current margin of 25% ($162.50/unit) with a target of 33% ($214.50/unit) within the next 2 years that will be achieved through economies of scale in production. Dealer then makes margin of 18% ($117/unit) plus incentives when targets are achieved.
-ATEC currently has 2 grant partners, 1 whose grant is linked to the Series A investment (EEP Mekong), the second which is a results-based payment by partner SNV for each unit installed.
-ATEC is currently 32% grant funded, we plan to phase this out by 2020 once we move beyond break-even for Cambodia

How do you plan to influence your field of work if you are a winner of this edition of the CSV Prize?

-As global citizens are we aware that 3.6 million people die per year from cooking with wood? That we will effectively run out of top soil in 60 years with current chemical fertilizer driven practices? Or that 1/3 of food produced globally is unsustainably wasted, costing an estimated $1 trillion per year?
-While ATEC needs to be in the business of producing, selling and distributing biodigesters - as embedded into our shareholders agreement ATEC also has a wider responsibility to create change in these pressing issues to our global future.
-ATEC wants to lead this by making biodigesters the next household solar, providing decentralised production of biogas and fertilizer to households globally.

How will you leverage an investment from Nestle to expand the impact of your work?

-ATEC's mission is to become the global leader in household biodigesters. While Cambodia represents a significant market at 1.3 million households, the global market is in the hundreds of millions globally.
-ATEC would leverage investment from Nestle in 2 ways - firstly any capital would be used to scope and setup ATEC in new countries (currently conducting a feasibility on Myanmar), likely through joint venture partnerships with established entities in the country. Secondly and more importantly, Nestle has a world-leading network in the agri-food sector. Being able to work with Nestle on mapping that network and how ATEC's value creation product can insert into existing smallholder supply chains would enable faster scaling (see below)

Spread Strategies: Moving forward, what are the main strategies for scaling impact? What’s the projected impact for the coming years? Are you planning to expand your programme into new locations? On what assumptions do you build your scale-up plans?

-As mentioned above, ATEC sees joint venture entities for international expansion, that brings together ATEC's expertise and a partner's local knowledge, as likely the most effective model moving forward. We are also investigating licensed production and franchising options.
-Through this established entity, ATEC will secure impact investment to cover initial startup and working capital costs to establish the business and take to break-even and beyond.
-To rapidly scale we will also want to tap into existing ag supply chains to maximise the return on the farmers investment in a biodigester as per above. For example we have recently exported 10 units to the Cocoa Board of PNG who want to use the biogas for decentralised drying facilities. If this can be achieved for it's 50,000 farmer members, farmers will achieve much higher grade cocoa which will lead to tens of millions of dollars in increased farmer income as well as supplying a higher quality product to buyers such as Nestle.

Team: What is the current composition of your team (types of roles, number of full-time vs. part-time staff, board members, etc.)? How will this team evolve as your initiative grows?

-Staff: ATEC has 26 full time staff, 25 of them Cambodian nationals. 5 senior managers (4 Cambodian), 5 degrees, 2 MBAs, 40+ years of commercial experience
-Board & Advisors: 8 board members, 50+ years experience in business, community development, legal, finance, governance and startups. 3 advisors, public company CEO, business analyst, biodigester leading expert.
-ATEC has recently put in place 2 Senior Cambodian managers to run Cambodian operations, a General Manager responsible for external relations and a Finance & Operations Director for internal operations. This new structure will allow us to scale up Cambodia, continue a focus on internal policies and processes, and free up capacity for ATEC's CEO to pursue new country development.

Awards: What awards or honors has the initiative received?

-2016 Sankalp Southeast Asian Social Enterprise of the Year award
-2017 Clean Technology Initiative PFAN (CTI PFAN) Global impact investment award winner
-DBS-BUS 60 Social Enterprises to Watch in Asia 2017
-Social Enablers Top 100 social entrepreneurs 2017

Organizational leadership: How are you influencing your field of work in the present?

-As we have now shown that biodigesters in Cambodia can be commercially viable, a further 3 companies are trying to enter the sector.
-We have shown to other markets globally that biodigesters can work in extreme conditions as well as be commercially viable
-More broadly we will continue to advocate for sector change to more decentralised, sustainable waste, energy and fertilizer practices to address pressing areas of need in our world.

Should you be successful, please confirm your availability to attend the Ashoka Impact Boot camp and Creating Shared Value Prize Live Pitch Event at the World Water Forum 13-16 March 2018

  • Yes, I am available to attend the events on 13-16 March 2018

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Photo of Zoé

Impressive! Do you think it could work in big urban settlements? Best luck to you!

Photo of Ben

thanks Zoe! Yes we're also prototyping green/kitchen waste units for urban and developed country markets, they're working really well so far!

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