Thermogenn

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Overview

Providing off-grid coolers to expand smallholder farmers’ marketplace dairty products

 

Overview

Headquarters: Wakiso District, Uganda
Established: 1999
Impact Areas: Uganda
Type: Hybrid
Energy Sectors:
Business Model Types:
Staff Size: 3 and 2 volunteers
Annual Budget: $90,000
Major Funders: World Bank Development Marketplace, Environmental Protection Agency
Awards: 2009: World Bank Development Marketplace Award2011: EPA 3P Sustainability Design Award

2011: Santa Clara Global Social Benefit Incubator

ABOUT

Thermogenn provides coolers to rural and peri-urban smallholder dairy farmers with no access to grid electricity so they can preserve and sell their evening milk the following day, as opposed to wasting it or converting it to low-value products like ghee.

 

Energy Products/Services

  • Thermogenn evaporative milk cooler

Target Market

  • Thermogenn’s initial target market is Uganda, where there are an estimated 2.9M smallholder dairy farmers, who own an average of 4 cows each, producing an average of 60 liters of milk per day.
  • About half of this milk is produced in the evening and needs cold storage until the next day when it can be transported and sold.

 

Thermogenn

Revenue Streams

  • Sale of milk coolers

Value Proposition

  • Thermogenn designs, manufactures, and provides evaporative coolers to small-acreage dairy farmers who have no access to grid electricity.
  • These coolers allow farmers to store their evening milk which allows them to negotiate a better price for their milk, increasing their income by $4/day.
  • Thermogenn’s rent-to-own model accelerates adoption by eliminating high up-front costs to farmers.

Problem Addressed

  • Smallholder dairy farmers in Uganda cannot store their milk overnight without it spoiling, which forces them to sell it at a lower price or otherwise reduce its value by processing it into ghee.  This reduces the value of around 30 liters of milk per farmer per day, almost 90 million daily liters countrywide.

Where They Are Now

Impact to Date

  • Pilot study successfully completed with smallholder farmers

Milestones

  • 2009: obtained $200,000 funding to pilot the cooler
  • 2010: obtained $10,000 funding to improve cooler design
  • 2011: Started construction of training, demonstration, and production facility
  • 2011: obtained $75,000 grant to improve cooler design efficiency

Growth Plan

  • 2012: Sell and install 4,000 units for smallholder farmers
  • 2013: Sell and install 8,000 units for smallholder farmers
  • 2014: Sell and install 16,000 units for smallholder farmers

How They Deliver

Product Sourcing

  • The Thermogenn cooler was designed as a retrofit of a German-designed beer cooler, and is manufactured in Uganda.

How it works

  • A milk canister is placed inside a cylinder filled with water, and an external vacuum sucks the water out, vaporizing it and reducing the canister’s temperature through a process called evaporative cooling.
  • The vacuum is created by a highly absorptive mineral called zeolite, which allows the cooler to operate without power.
  • The one part of the cooler that requires external energy is heating up the zeolite to dry it out so it can absorb more water.
  • Thermogenn sees propane as the most viable heating solution, since there is already a supply chain set up, but has been encouraged by the World Bank and potential investors to experiment with biogas digesters, as these have positive climate change benefits and can generate carbon credits.
  • However, digesters are expensive to put in place, and would  only be worth it if there was a large potential market for the excess biogas they produce to be sold as cooking fuel.  In Uganda, wood fuel is still plentiful and easy to collect, so it is difficult to convince people to switch to paying for biogas fuel.

Cooler Capacity

  • Thermogenn’s original cooler was designed to be small and affordable enough for small farmers (15 L capacity), but then Thermogenn discovered that smaller farmers didn’t want the cooler unless the bigger ones were already using it.
  • Therefore the cooler was redesigned with a larger, 70L capacity to target these larger scale farmers, who are also often better-educated and therefore more open to new technology.

Marketing

  • Thermogenn is currently still in its pilot distribution phase, but to drive adoption of the cooler among less-educated farmers, they are planning to center their marketing around community groups, such as churches and women’s networks.  This both allows them to use the group leaders to convince their constituents of the device’s value, and to use the group peer pressure to encourage payback of loans and rental fees.
  • Thermogenn is currently building a demonstration and training center outside of Kampala where they will manufacture and store coolers, have a working model to show people, and experiment with technologies such as biogas digesters.

Financing

  • Thermogenn sees the price of the cooler as the biggest challenge they currently face.
  • They are trying to get production cost to below $100.  While Thermogenn estimates that farmers will make over $1,000 per year from selling the extra milk the cooler will allow them to preserve, but famers still see the risk as too high to pay the higher price.

Collection models

  • Farmers generally either let buyers come to their farms or transport the milk to collection facilities themselves.  Farmers transporting the milk to collection facilities generally receive higher prices, since they have more control of who they sell to.
  • However, Thermogenn has a hard time convincing the transporting farmers to use the device, even though they can more easily afford it, because the cooler is too heavy to easily transport on a bicycle.
  • Thermogenn tried collecting the milk themselves and transporting it with a truck but fuel costs made this model too expensive.  They are therefore targeting areas closer to the capital where the price of milk is higher, and therefore the collection model matters less.

Financing

  • Thermogenn is considering a number of financing models to make market entry easier, including a rental model, using mobile phone payments or centralized payment locations, or partnering with microfinance institutions who will let the farmers buy the machines on credit.

 

Organization Financing

  • Thermogenn has thus far financed itself from grants from the World Bank and EPA, as well as personal resources, but is currently facing some financing challenges.
  • There is potential for financing from large milk buyers, but they want to see the device proven and in the market before they commit.

Social Impact

  • Thermogenn measures its social impact using a number of metrics, including:
    • Average liters of milk saved by farmers due to chiller use
    • Amount of  milk entering the cold chain,
    • Increased income of users
    • Employment of parts suppliers and manufacturers
    • Potentially once Thermogenn scales up they will measure increased milk availability and consumption in the Ugandan market, and should they increase their use of biogas digesters will measure carbon credits.

More Resources

Online Resources

Contact Information

Thermogenn
USA:
169 Whippoorwill Circle
Athens, GA 30605
USA

Uganda:
Plot No. 1238
Nakatema
Nsangi Trading Center
Masaka Road
P.O. Box 30385
Kampala
Uganda

( Uganda: +256 773 187 078
USA: (706) 247 0556
*williamk@engr.uga.edu