Difference between revisions of "Local Production: Conditions and Success Factors"
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| − | '''<span lang="EN-GB" style="font-size: 14pt; font-family: 'arial','sans-serif' | + | '''<span lang="EN-GB" style="font-size: 14pt; font-family: 'arial','sans-serif'">Key factors for successful local production</span>''' / manufacturing |
| − | <span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif' | + | <span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'"><span>1)<span style="font: 7pt 'times new roman'; font-size-adjust: none; font-stretch: normal; -x-system-font: none"> </span></span></span>'''<span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'">Relevant market: </span>'''<span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'">The demand of the relevant market should match the minimum size of one production unit. If a specific '''niche''' is big enough, the probability of success is higher. In Indonesia the niche was turbines for mini- and micro-hydro power, which has a high national demand and is not the core business of incumbents like ''Voith Hydro'', ''Ossberger ''etc.</span> |
| − | <span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif' | + | <span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'"><span>2)<span style="font: 7pt 'times new roman'; font-size-adjust: none; font-stretch: normal; -x-system-font: none"> </span></span></span>'''<span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'">Time factor: </span>'''<span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'">Establishing local production takes time (5-10 years). This is the biggest obstacle for projects which are only funded by EnDev and do not have a longer sectoral mandate like a focal area.</span> |
| − | <span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif' | + | <span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'"><span>3)<span style="font: 7pt 'times new roman'; font-size-adjust: none; font-stretch: normal; -x-system-font: none"> </span></span></span>'''<span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'">Cluster: </span>'''<span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'">The production site / firm should be located within an industrial cluster, where it is easier to get qualified suppliers, employees etc. '''Multi-product firms''' are in a better position because they can compensate low demand with other product lines and transfer relevant knowledge to new technologies.</span> |
| − | <span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif' | + | <span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'"><span>4)<span style="font: 7pt 'times new roman'; font-size-adjust: none; font-stretch: normal; -x-system-font: none"> </span></span></span>'''<span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'">No grants to the manufacturers</span>'''<span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'">. Better use (soft) loans or even better create trust for long-term investments like the German Feed-in Law did.</span> |
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| − | <span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif' | + | <span lang="EN-GB" style="font-size: 10pt; font-family: 'arial','sans-serif'">Source: Outcome of a discussion during the GTZ mini-hydro power working group meeting in Nairobi, May 2009.</span> |
| − | <br> | + | <br> |
| − | <span lang="EN-GB" style="font-size: 14pt; font-family: 'arial','sans-serif' | + | <span lang="EN-GB" style="font-size: 14pt; font-family: 'arial','sans-serif'">'''Examples'''</span> |
*[[Example: Mini & micro hydro power turbine manufacturing in Indonesia|<u>Example</u>: Mini & micro '''hydro power '''turbine manufacturing in '''Indonesia''']] | *[[Example: Mini & micro hydro power turbine manufacturing in Indonesia|<u>Example</u>: Mini & micro '''hydro power '''turbine manufacturing in '''Indonesia''']] | ||
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*[[Example: Local manufacturing for solar lanterns (Bolivia)|<u>Example</u>: Local manufacturing for '''solar lanterns '''('''Bolivia''')]] | *[[Example: Local manufacturing for solar lanterns (Bolivia)|<u>Example</u>: Local manufacturing for '''solar lanterns '''('''Bolivia''')]] | ||
| − | [[Category: | + | [[Category:Hydro]] |
| + | [[Category:Solar]] | ||
| + | [[Category:Wind]] | ||
Revision as of 06:43, 2 June 2010
Key factors for successful local production / manufacturing
1) Relevant market: The demand of the relevant market should match the minimum size of one production unit. If a specific niche is big enough, the probability of success is higher. In Indonesia the niche was turbines for mini- and micro-hydro power, which has a high national demand and is not the core business of incumbents like Voith Hydro, Ossberger etc.
2) Time factor: Establishing local production takes time (5-10 years). This is the biggest obstacle for projects which are only funded by EnDev and do not have a longer sectoral mandate like a focal area.
3) Cluster: The production site / firm should be located within an industrial cluster, where it is easier to get qualified suppliers, employees etc. Multi-product firms are in a better position because they can compensate low demand with other product lines and transfer relevant knowledge to new technologies.
4) No grants to the manufacturers. Better use (soft) loans or even better create trust for long-term investments like the German Feed-in Law did.
Source: Outcome of a discussion during the GTZ mini-hydro power working group meeting in Nairobi, May 2009.
Examples
