Imagine you and your family had a peanut farm. What would you do with the peanuts? Peanuts can be roasted and eaten, used to make oil, butter or flour or even used in industrial products like paint, oil, soap or cellulose for paper. Would you sell the products raw? At the local market? To an industrial manufacturer? Would you invest in machinery to refine them yourselves? One thing you probably do know, is if you wanted advice on how to make this decision, would you seek out a sanitary engineer? Probably not. Following this module, you will find out how you could answer those type of questions for the products from fecal sludge management. At the end of the module, you'll be able to explain how to implement market driven approach and understand how this kind of tool fits into an integrated engineering design approach. We want to know more about markets for products that could be made from treated fecal sludge. Realizing that we're engineers, we consulted experts in emerging markets, financial models and business development to develop a method for the quantitative evaluation of potential products resulting from the treatment of fecal sludge. This method is called the market driven approach. And the developed manual and calculation tool can be downloaded from our website. The manual contains all supporting info for the implementation of this method. In the absence of clear legal frameworks for fecal sludge treatment products, identifying the greatest market attractiveness provides a method to help select products of treatment. Once treatment products are identified, then treatment performance goals can be defined for safe end use to ensure protection of public and environmental health. In addition to greatest potential to generate revenue, this can also help ensure the design of adequate treatment, and promote sustainable operation as plant managers have to meet customer demand. In a market driven approach, market attractiveness takes into account both the current market volume and a future for potential market growth. Market volume is defined as the sum of the value of all available products in a given market. For example, for animal feed that would be the price and number of units sold in a defined geographical area. Market growth is defined as the growth of the type of product over a specified period. As this cannot yet be determined, the historical growth of a product can be extrapolated to estimate future growth. A major difficulty with determining market attractiveness of fecal sludge treatment products is that due to the general lack of fecal sludge treatment products don't yet exist. And, hence, the markets for them also do not exist. To deal with this, we use proxies, they can help us to estimate market variables. To do this, we're no longer thinking as engineers, and we're not thinking about what type of treatment technologies we would use. First, we focus on the type of resource recovery that can be achieved. Energy, food, material nutrients, or water. Then we think about what type of products could fill that resource need. For example, solid fuels vs liquid fuels. Or soil conditioners vs fertilizers. Then we think of the form that treatment products could take to fill that need. For example, animal feed could be produced by black soldier fly larvae, fish from aquaculture, or plants from drying beds. Maybe that all sounds a bit abstract. So, let's look at a real life example from Kampala, Uganda to understand a bit more how this method can be implemented. The first step is to review the list of fecal sludge treatment products. From this list we want to decide what treatment products are actually relevant for our city. In Kampala, all these products could potentially be produced from treatment of fecal sludge. The second step is defining the product application. Ask yourself, where can these products be used? In which industry? Or is it used on a household level? Then list each application. For example, In Kampala, the product solid fuel is used for cooking in households and is also used to feed in the brick factories. The third step is defining products that are currently used. Because faecal sludge treatment products do not exist yet, we cannot identify their market volume directly. So, for example, as a solid fuel in Kampala, currently charcoal, firewood, coffee husks are used. These are substitute products that could be replaced by dried faecal sludge. In the forth step we calculate the current market volume for each substitute product. To do this, we review literature and conduct interviews. So, to calculate the market volume, you could have the average price per product times the number of product sold in a city. Alternatively, you could have the average price per products times the number of products sold by suppliers times the number of suppliers in the city. In Kampala the market volume for charcoal was found to be approximately 73 million. You typically cannot calculate in exact number, but this method can give you a reasonable estimation with the aim to be as accurate as possible with further crosschecking. The fifth step is assessing the market growth for each substitute product. In some cases, there are trend forecasts available. In others, it's estimated by extrapolation from previous years together with interviews. At the time of our implementation the estimated marked growth of charcoal in Kampala was 9 %. In the final steps we compare the market volume and the market growth for each product. By combining market volume and market growth we can make a judgement as to which product has the highest market potential or market attractiveness. Each substitute product identified in step 3 is plotted here. The higher the combined market growth and market volume, the greater the market attractiveness is. In Kampala, the market for solid fuel is very large and growing rapidly compared to other treatment products. So, you could conclude, that faecal sludge as a solid fuel has the greatest market attractiveness. in this case, charcoal release stands out. This indicates that charcoal as a treatment and product would be a suitable choice. So, now that you know how to evaluate market attractiveness of faecal sludge treatment products, how can you use that information? Just like your peanut farm, what is important to remember is that this information cannot be used in isolation. It needs to be incorporated into a comprehensive design approach for selection of treatment technologies to help make intelligent design decisions. With the number 1 goal always of protecting public health. The engineering design approach is not only about resource recovery. So, you have to take this information from the financial perspective of a resource recovery. As just one tool in a whole process. Consider it with other factors. Such as local laws and regulations availability of financial resources, human capacity, land area available for treatment technologies and the faecal sludge quantities and characteristics that will be coming into treatment facilities. All of these are discussed in more detail in other modules. The social and cultural acceptance of treatment products is already incorporated as part of the methodology. To further understand the market driven approach we recommend that you download it from our website and review it. So, in summary, in this module you learned about the market driven approach. How it was developed from economic perspective. And how it fits into an integrated design approach. Thank you for joining! See you next time.
