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Difference between revisions of "Local Production: Conditions and Success Factors"
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| − | + | = Overview = | |
| − | + | In contrast to [[Import of Energy Products|imports]], local manufacturing of energy products can constitute a reasonable cost-efficient alternative that supports local value creation. | |
| − | < | + | <br/> |
| − | + | = Key Factors for Successful Local Production / Manufacturing<ref name="Outcome of a discussion during the GTZ mini-hydro power working group meeting in Nairobi, May 2009.">Outcome of a discussion during the GTZ mini-hydro power working group meeting in Nairobi, May 2009.</ref> = | |
| − | + | #'''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. | |
| + | #'''Time factor:''' Establishing local production of hydro power components 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. | ||
| + | #'''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. | ||
| + | #'''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.<br/> | ||
| − | + | <br/> | |
| − | <span style="font-size: | + | = <span lang="EN-GB" style="font-size: 14pt; font-family: 'arial','sans-serif'">Further Information</span> = |
| + | *[[Example: Mini & micro hydro power turbine manufacturing in Indonesia|Example: Mini & micro hydro power turbine manufacturing in Indonesia]] | ||
| + | *[[Local manufacturing of solar systems|Example: Local manufacturing of solar systems]] | ||
| + | *Local Production Systems of Wood Stoves: [[Enhancing_Production_of_Improved_Cookstoves_(ICS)|Enhancing production of ICS]] | ||
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| − | + | = References = | |
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| − | [[Category: | + | <references /> |
| + | |||
| + | [[Category:Production / Manufacturing]] | ||
Revision as of 13:33, 12 June 2014
Overview
In contrast to imports, local manufacturing of energy products can constitute a reasonable cost-efficient alternative that supports local value creation.
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.
- Time factor: Establishing local production of hydro power components 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.
- 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.
- 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.
Further Information
- Example: Mini & micro hydro power turbine manufacturing in Indonesia
- Example: Local manufacturing of solar systems
- Local Production Systems of Wood Stoves: Enhancing production of ICS
References
- ↑ Outcome of a discussion during the GTZ mini-hydro power working group meeting in Nairobi, May 2009.
