A longer-lasting briquette
Talamanca, an Italian industrial engineer who had been in Cambodia on a sabbatical, fine-tuned KGC’s production process, using proprietary technologies to produce longer lasting char-briquettes.
As a result, these char-briquettes are slightly more expensive but ultimately more cost-effective than traditional charcoal. They save time too, as wooden briquettes need to be broken up into smaller pieces before they can be used.
Production starts in Phnom Penh’s food markets when suppliers collect discarded coconut shells and bring them to KGC’s factory.
Coconut shells are easy to find in Cambodia, and burn longer than other often-used forms of biomass, such as bamboo, tree roots or durian skin.
These shells are crushed into small pieces and then carbonized in specially designed kilns. The resulting bio-charcoal is bound with canvas and compressed in extruder machines to become compact briquettes.
These briquettes are then dried using heat from the kilns, deploying a proprietary process that brings drying time to under 24 hours. More traditional methods that rely on heat from the sun can take up to four to five days.
“The level of organization and customized design that went into Carlo’s production facility is far ahead of their potential competitors, so their advantage can be sustained in the coming years,” notes Charles Navarro, investment associate at ADB Ventures, the venture capital investment arm of the Asian Development Bank.
ADB Ventures has given Otago US$100,000 in grant support, including an option for an equity investment to help fund future expansion.
Sales dipped during the pandemic, but the company developed a digital ordering, fulfillment and payment system to offset this, further differentiating it from the competition.
“The organization and customized design is far ahead of their potential competitors.”
“It is also worth mentioning that during the height of Covid last year, it was Otago’s most expensive product that carried them through,” Navarro notes.
“Their customers were willing to pay two to three times the price of traditional charcoal because the amount of value they extract over the lifecycle of Otago’s char-briquette, such as heating value and structural integrity, outweighs the cost.”
The company, which is based in one of Phnom Penh’s poorest areas, is also mindful of its wider social impact, employing former trash-pickers, who used to work in dump sites for scant pay, to produce and distribute its products.
“We hire our employees through a local NGO that tries to help children from disadvantaged local areas with vocational training,” Talamanca says. “We hire their parents, providing a stable job, good salary, annual leave and all of those benefits, with the condition that they are obliged to send their children to school.”
After the pandemic hit, the company also continued to pay worker salaries during the lean months, which isn’t always the norm in Cambodia, while discounting its briquettes from $0.40/kg to $0.35/kg to help customers keep them in stock.
The company had a difficult start however, and was close to shutting down when Talamanca first joined. Building a customer base proved to be a formidable challenge, as many people were more comfortable with traditional charcoal and reluctant to change.
“We hire our employees through a local NGO that helps children from disadvantaged local areas.”
“Some customers didn’t want to try our briquettes, even if we gave them away for free,” recalls project manager Phalla Seang.
But the company soon benefited from good word-of-mouth to build up its market share to meet around 1.5% of Phnom Penh’s charcoal demand today.
Lin Hay, a restaurant owner in the capital, points out that Otago’s char-briquettes produce “no smoke and no sparks,” allowing her to work safely in her small kitchen. What’s more, she thinks her food tastes better than ever.