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Why is Selco Attractive-Developing Enterpreneurship-Lecture Slides, Slides of Entrepreneurship Development

Shri Jagdishprasad Jhabarmal Tibrewala University Entrepreneurship Development

Prof. Shriranga Shreeyash delivered this lecture for Developing Entrepreneurship course at Shri Jagdishprasad Jhabarmal Tibrewala University. Its main points are: Selco, Attractive, Product, Delivery, People, Network, Ultimate, Development, Market, Strategy, Customer

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2011/2012

Uploaded on 08/07/2012

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WHY IS SELCO ATTRACTIVE?

Market leader – first into new market with global strategy to serve

new customers

We have the right product to enable the development of the

market

We have extensive management team experience

We have proven market acceptance

We have a proven delivery system that has led to a branded

physical network serving an extensive customer base

Our product base is expanding from and due to our core offering

Our ultimate target market is huge and untapped –

two billion

people representing $50 billion annually

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WHY IS SELCO ATTRACTIVE?^ Market leader – first into new market with global strategy to servenew customers^ We have the right product to enable the development of themarket^ We have extensive management team experience^ We have proven market acceptance^ We have a proven delivery system that has led to a brandedphysical network serving an extensive customer base^ Our product base is expanding from and due to our core offering^ Our ultimate target market is huge and untapped –

two billion

people representing $50 billion annually

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SELCO BUSINESS DESCRIPTION^ Product distribution and service company that is developing the consumermarket in those regions of emerging market countries that are removed fromor not well served by the power grid^ Core business is selling and servicing packaged household lighting andelectricity systems^ SELCO believes that electricity is fundamental to economic developmentand consumer behavior^ Delivery system is a network of sales and service outlets selling to individualconsumers^ SELCO provides a superior source of lighting and electricity while costingless than available alternatives^ Core product is an enabling device leading to consumer desire for relatedapplications

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TRACK RECORD

SELCO SALES HISTORY AND 2001 RESULTS3,0002,5002,0001,5001,000 500 0 1998 Sales have grown at a CAGR of 155% from 1998 through 2000 Sales are expected to continue growing rapidly for the foreseeable future.

(in thousandsof US$)

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SELCO’S COMPETITIVE ADVANTAGE^ The only independent company targeting the off-grid lighting andelectricity market^ First to develop physical points-of-presence^ Proven strategy for bringing new products to this new market^ Direct access to the end consumer^ Brand recognition

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MARKET^ SELCO is targeting the $50 billion-dollar market consisting of consumers who lackaccess to grid electricity in the emerging economies^ Over 400 million households representing more than 2 billion people throughout theworld lack access to electricity^ Hundreds of millions of more households and businesses receive unreliable electricservice and severe power outages^ The typical target customer currently spends about $10 per month for inferior,expensive electricity and lighting sources such as kerosene and dry-cell batteries, andto recharge car batteries^ Demand^

for^ related

electrical^

appliances^

is^ growing

commensurate

with^ rising

incomes

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SELCO MARKET PENETRATION ANALYSIS^ TOTAL = 25 MILLION UNELECTRIFIED HOUSEHOLDS IN SELCO’S

CURRENT TARGET MARKETS

0 2

4 6

8 10

South IndiaVietnamWestern ChinaSri Lanka South Africa

COUNTRY BREAKDOWN Millions of households

CUSTOMERS’ ABILITY TO PAY

CashShort-termcreditLong-termfinancingAffordable with subsidies 5% - 1.25 millionhouseholds20% - 5 millionhouseholds25% - 6.25 millionhouseholds

50% - 12.5 millionhouseholds^ SELCO intends to sell one million solar home systems by 2010,for a 16% penetration of its targeted cash and credit markets

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SOLARELECTRIC POWER

: THE MOST ECONOMIC

ENERGY ALTERNATIVE IN OUR MARKETS^ COMPARATIVE POWER COSTS OVER SHS LIFETIME

Non-SHS Household

US$

Kerosene^

Dry cells^

Battery recharging

Battery replacement

1 TOTAL

SHS Household

US$

System price

Light replacement

Battery replacement

Maintenance

Financing costs

4 TOTAL

COST OF GRIDEXTENSION TOUTILITIES = US$ 3,000 per household

NET GAIN TO CUSTOMER: Over life-time of a SHS, customer SAVES $1,138^ 1 Based upon SELCO market research: believed conservative^ 2 Battery and lights replaced every five years^ 3 Downpayment = 25%; Term = 3 years; Interest Rate = 25%^ 4 Does not factor in benefits accrued through quality of life improvements and convenience

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SELCO SOLUTION SELCO’s uniquecombination of brandedproducts, on-site service andlocal presence allows theCompany to provide, inaddition to its packagedlighting systems, itscustomers with a wide-rangeof high quality electricappliances and relatedapplications Non-SHS revenue isexpected to reach 40% oftotal sales by 2008.

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DISTRIBUTION CHANNEL^ Inexpensive protected means of acquiring millions of new customers eager topurchase consumer goods^ SSC costs $20,000 to establish^ Covers 50,000 households^ Expected annual sales of $200,000^ Payback generally of less than one year^ Once customers have electricity they consume more panels and applications^ Distributed model adapts easily to lowest cost method of serving market forelectricity (e.g. fuel cells in the future)

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MANAGEMENT Corporate Management^ Neville Williams, Chairman, has devoted 10 years to solarelectric wireless powerdevelopment in 11 countries^ Carter Hertzberg, Chief Financial Officer, has 8 years of strategic financial managementexperience in start-up energy and communications companies. Board of Directors )^ John Kuhns, Vice Chairman, is a leading financial expert in the renewable andindependent power sectors )^ Paul Maycock is the leading technology expert for the Photovoltaic Industry )^ Anthony Dixon, a senior officer for Salomon Smith Barney, is an expert in internationalasset-backed financing )^ Lars Zoellner, CEO, Gaia Kapital, Germany Subsidiary Management^ Dr. H. Harish Hande, Canh Tran and Susantha Pinto are the managing directors forIndia, Vietnam and Sri Lanka^ More than 25 years of combined experience in the renewable and power industries inaddition to extensive educational qualifications

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POSTSCRIPT: CARBON OFFSET BENEFITS^ Provides additional financing opportunities^ The^ world’s

first^ carbon

offset^ funding

agreement

for^ solar

rural

electrification was signed in August, 1999 between SELCO and the SolarEnergy trust, providing $500,000 - from PacifiCorp’s Klamath CogenerationProject in Oregon - for SELCO to use over a 30 year period to finance SHSin India, China and Sri Lanka^ A single 35Wp SHS will displace 7.2 tons of carbon dioxide emissionscaused by burning kerosene and recharging car batteries over 20 years^ The Klamath Falls project is for 1 million tons or $0.50 per ton CO

. As 2

the pressure mounts in the area of climate change mitigation and carbontrading, prices will escalate Carbon offsets enhance shareholder value with “free” equity

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Images of SELCO at Work

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TGB - Taykanahalli

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A SHOP USING A SELCO LIGHT

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Why is Selco Attractive-Developing Enterpreneurship-Lecture Slides, Slides of Entrepreneurship Development

Related documents

Partial preview of the text

Download Why is Selco Attractive-Developing Enterpreneurship-Lecture Slides and more Slides Entrepreneurship Development in PDF only on Docsity!

two billion

people representing $50 billion annually

TRACK RECORD

SELCO SALES HISTORY AND 2001 RESULTS3,0002,5002,0001,5001,000 500 0 1998 Sales have grown at a CAGR of 155% from 1998 through 2000 Sales are expected to continue growing rapidly for the foreseeable future.

SELCO’S COMPETITIVE ADVANTAGE^ The only independent company targeting the off-grid lighting andelectricity market^ First to develop physical points-of-presence^ Proven strategy for bringing new products to this new market^ Direct access to the end consumer^ Brand recognition

for^ related

electrical^

appliances^

is^ growing

commensurate

with^ rising

incomes

SELCO MARKET PENETRATION ANALYSIS^ TOTAL = 25 MILLION UNELECTRIFIED HOUSEHOLDS IN SELCO’S

CURRENT TARGET MARKETS

COUNTRY BREAKDOWN Millions of households

CUSTOMERS’ ABILITY TO PAY

50% - 12.5 millionhouseholds^ SELCO intends to sell one million solar home systems by 2010,for a 16% penetration of its targeted cash and credit markets

SOLARELECTRIC POWER

: THE MOST ECONOMIC

ENERGY ALTERNATIVE IN OUR MARKETS^ COMPARATIVE POWER COSTS OVER SHS LIFETIME

Non-SHS Household

US$

1 TOTAL

SHS Household

US$

4 TOTAL

COST OF GRIDEXTENSION TOUTILITIES = US$ 3,000 per household

POSTSCRIPT: CARBON OFFSET BENEFITS^ Provides additional financing opportunities^ The^ world’s

first^ carbon

offset^ funding

agreement

for^ solar

rural

. As 2

the pressure mounts in the area of climate change mitigation and carbontrading, prices will escalate Carbon offsets enhance shareholder value with “free” equity

Images of SELCO at Work