Difference between revisions of "Local Production: Conditions and Success Factors"

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= Overview =
 
= 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.
 
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.
  
 
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= 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> =
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= Successful Local Production / Manufacturing =
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<u>Key Factors for Successful Local Production / Manufacturing:</u><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>
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#'''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.
 
#'''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.
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#'''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.
 
#'''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/>
 
#'''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/>
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= <span lang="EN-GB" style="font-size: 14pt; font-family: 'arial','sans-serif'">Further Information</span> =
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= Further Information =
  
*[[Example: Mini & micro hydro power turbine manufacturing in Indonesia|Example: Mini & micro hydro power turbine manufacturing in Indonesia]]
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*[[Mini / Micro Hydropower Turbine Manufacturing in Indonesia|Example: Mini & micro hydro power turbine manufacturing in Indonesia]]
*[[Local manufacturing of Solar Systems|Example: Local manufacturing of solar systems]]
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*[[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]]
 
*Local Production Systems of Wood Stoves: [[Enhancing Production of Improved Cookstoves (ICS)|Enhancing production of ICS]]
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= References =
 
= References =
 
 
<references />
 
<references />
  
[[Category:Production_/_Manufacturing]]
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[[Category:Hydro]]

Latest revision as of 09:41, 22 January 2016

Overview

In contrast to imports, local manufacturing of energy products can constitute a reasonable cost-efficient alternative that supports local value creation.



Successful Local Production / Manufacturing

Key Factors for Successful Local Production / Manufacturing:[1]


  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 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.
  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.



Further Information



References

  1. Outcome of a discussion during the GTZ mini-hydro power working group meeting in Nairobi, May 2009.