Drawn by superior combustion and competitive pricing, the Kingdom’s ‘charcoal connoisseurs’ are starting to take to a more environmentally friendly fuel source
After an uphill struggle to convince Cambodia’s “charcoal connoisseurs” to change their habits, Cambodia’s first “green charcoal” business is on track to have its first profitable year, according to its chief executive officer.
“This year, hopefully we will make a profit. We lead the way because we want to show that you can do business even by respecting the environment,” said Carlo Figà Talamanca, chief executive of Sustainable Green Fuel Enterprise (SGFE).
The company, started in 2008 by environmental NGO Groupe Energies Renouvelables, Environnement et Solidarités (GERES) and youth welfare NGO Pour un Sourire d’Enfant (PSE), makes its product from recycled traditional charcoal remnants and discarded coconut shells, with tapioca used as a binder.
The result, Talamanca believes, is a product that cuts back on forest degradation while providing customers more heat for their riel. With a single kilo of traditional charcoal requiring 6.5 kilos of wood, a single tonne of SGFE’s charcoal saves about 10 trees.
But despite SGFE’s environmental track record, which won the company an award from the London-based Ashden charity in May, Talamanca said that conservation doesn’t come into the marketing strategy.
“In Cambodia, the people are charcoal connoisseurs. If the charbriquettes are environmentally friendly, they don’t care. It has to be good,” he said.
Getting locals to switch from time-tested traditional charcoal to his new product has proved an uphill struggle, he said.
“In the beginning, they were looking at it like it was something out of space. We were giving it away for free and people weren’t trying it, or even if they were trying it, they decided they didn’t like it,” Talamanca said.
But between aggressive distribution of free samples and the products’ superior combustion, SGFE began to catch on.
Production increased from just 50 tonnes in 2010 and 2011 to 265 tonnes in 2013, the first year the factory broke even. This year, Talamanca said, the factory is expected to have a total output of 500 tonnes.
Cambodians consume about 350,000 tonnes of charcoal annually, according to GERES biomass project manager Romain Joya. Most of it is burned in urban areas and, as Phnom Penh expands, demand is expected to increase, he added.
“[Charcoal is] easier to burn, because when you use firewood in the cities, it’s not very convenient because it’s smoky,” Joya said.
Although an increasing number of Cambodians can afford to buy pricier cooking gas, Talamanca said that many of his customers are wealthy urbanites who prefer the old ways.
“Many people will tell you the food tastes better [with charcoal],” he said, adding he has a large customer base in the wealthy Tuol Kork district.
And with an ever-dwindling supply of trees to satisfy the market, prices have risen dramatically in recent years.
The high end “diamond” charcoal, which is made entirely from recycled coconut shells, sells for 2,800 riel per kilo and burns for around five hours. The “premium” product, which is a blend of recycled traditional charcoal residue and coconut shells, sells for between 1,000 and 1,200 riel per kilo depending on the order size and whether the client opts for delivery, and burns for around an hour and a half to two hours. In contrast, traditional charcoal generally burns for just one hour. Green Fuel Enterprise’s clients include five wholesalers, 60 retailers and 40 restaurants and street stalls.
“In 2010, the price was around 800 a kilo – it has increased almost 100 riel per year,” said Talamanca, adding that 1,200 riel per kilo is now typical in Phnom Penh, though it can fetch as much as 1,500 riel in the city centre.
But SGFE’s prices have remained steady – Talamanca actually lowered the price when he took over in 2010 to make it more competitive on the market.
SGFE shows no signs of slowing down, with a new plant scheduled to be completed by the end of the month. By the end of 2015, Talamanca said he hopes to produce 1,200 tonnes annually.
“If I was not optimistic, I wouldn’t build this [new plant] and wouldn’t be working here and spending my time,” Talamanca said.
“It’s not that in Cambodia you can only do business by exploiting natural resources or human resources, but actually we can contribute to the entire economic development, environmental protection and social development with what we do,” he added.