Mr Dinesh Tembhekar, managing director of Lean Energy Solutions. PHOTO | FILE
Dinesh Tembhekar is passionate about conserving energy. The managing director of Lean Solutions Group says his clients get 25 per cent guaranteed fuel savings when they replace their furnace oil boilers with briquette-fired boilers.
The group helps companies in the region diversify their energy sources – more so to green energy – through consultancy services in micro-hydro projects, solar panel systems and briquettes.
Lean Solutions also does audits for members of the Kenya Association of Manufacturers (KAM).
The mechanical engineering graduate started a consultancy firm in 2006, specialising in Kaizen, a Japanese philosophy that seeks to improve productivity through incremental changes.
“That is where the company derived its name. In the western world, Kaizen is referred to as lean manufacturing,” Mr Tembhekar told Enterprise.
While doing Kaizen, he realised there was a huge scope for doing energy audits.
“Our first client was Bidco Africa. The chief executive, Vimal Shah, was so pleased with the job we did that he introduced us to KAM and we started doing energy audits for its members,” he says.
That was in 2007 and in that year alone, Lean Solutions carried out 20 energy audits including one at Muhoroni Sugar Company that sparked the idea for Mr Tembhekar’s next project.
“The sugar company had a lot of bagasse lying around and yet they were using furnace oil for their boilers,” he says.
Bagasse is the fibrous matter that remains after sugarcane stalks are crushed to extract juice.
The bagasse is compacted to create flammable blocks or briquettes that, other than being cheaper, have a lower carbon footprint compared to diesel-fired boilers. The boilers then generate steam which is used in manufacturing.
“We pitched the idea of manufacturing briquettes using this waste product that was in plenty and in 2008, we set up a briquettes plant within the company’s grounds,” he says.
Lean Solutions initially manufactured the briquettes and supplied to companies like Kenya Tea Development Authority (KTDA), but soon realised that the business model was not viable and involved a lot of marketing.
That is when Mr Tembhekar came up with the build, own, operate and transfer (BOOT) model where they would buy briquette-fired boilers and install them in company premises. This model, he says, was well received by the market.
Lean Solutions Group signs an eight-year agreement with clients, stipulating that the company will retain ownership of the boilers during the contract period and runs them using its employees (normally eight workers per unit).
The company earns a commission over this period.
After the contract period lapses, clients have the option of purchasing the boilers or renewing the agreement for another eight years. The company currently has 10 boilers operating under the BOOT model.
Its clients include three Coca-Cola bottling plants in Kenya, two PepsiCo bottling plants (including in Tanzania) as well as Spinners and Spinners in Ruiru. SpinKnit Textile Company in Nakuru and the Meru Central Dairy Cooperative Union are also part of their clientele.
“A client who opts out of the agreement before the eight years are up is subject to a penalty clause that requires them to pay compensation based on their energy savings over the period they have used our boiler,” says Mr Tembhekar.
Lean Solutions is a family-owned business with Mr Tembhekar as financial director. The company has 200 employees, including 15 engineers. It has a branch in Tanzania and plans to open another branch in Uganda in 2018.
“Our success is because of the innovative business model that we have developed and for which we have won awards,” says Mr Tembhekar, citing the African Climate Good Practice Award in 2013 as an example.
Lean Solutions also emerged the overall winner of the Top 100 competition in 2013 and number five last year. Mr Tembhekar said the achievement has helped it record a 40 per cent year-on-year growth.
The company is betting on the law the Energy Regulatory Commission (ERC) set for companies to conduct energy audits to grow its business.
Factories and institutions whose energy consumption is more than Sh400,000 per month are expected to conduct an energy audit once every three years.
Currently, 80 per cent of the company’s revenue comes from boilers and the balance from energy audits.
“You need to be patient for at least 1,000 days. It takes a long time to get returns in the manufacturing industry, but if you are patient, you will eventually succeed,” he says.
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