The Phnom Penh Post: In providing a valuable service, toilet makers becoming flush

Read the article in The Phnom Penh Post.

Efforts to include the private sector in the expansion of sanitary practices in the Kingdom have helped to build a toilet industry that has seen the numbers of latrines in rural communities surge, but the industry still needs a push to increase the profitability for local businesses.

Sanitation coverage in Cambodia has improved by a third since 2000, according to a recent report by the international charity WaterAid. But the percentage of people without even basic sanitation remains as high as 51 percent, leaving approximately 8 million people without alternatives to open defecation.

However, Julia White, marketing and communications manager at local NGO WaterSHED, said the dynamics of the toilet industry have changed since local businesses started promoting products in rural communities with potentially lucrative incentives.

“The acceleration of sanitation in Cambodia has been extraordinary, partly because of creative marketing of toilets,” she said. “We’ve helped create a thriving market for sanitation by getting local businesses involved in promoting toilets and growing demand.”

White noted that the NGO has partnered with more than 300 businesses in eight provinces, and helped to develop a pour-flush toilet in 2010 that can be built by local construction workers with readily available materials, giving them the ability to install toilet-packages alongside other products and services.

“Before a market was created, the major methodology for sanitation was a subsidy model, so people would either get a free toilet or a highly subsidised toilet. But that wasn’t working,” she said. “You can’t just give people a product and expect them to change their lives.”

By partnering with the private sector, White said the toilet market has become not just sustainable, but profitable.

“The sanitation market is not just about providing toilets to customers, it is also about providing economic opportunities for families and small- and medium-size businesses,” she said. “Yes, local businesses are encouraged to make a profit.”

Toilets generally come in a range of prices, she added. The packaged latrine itself, which includes both underground basin and toilet seat, will usually be priced at about $50, with suppliers setting their own installation prices. The shelter surrounding the toilet is often the most expensive part of the building, and can cost anywhere from $200 to $700 depending on size and materials used.

Bun Thoeun, a toilet supplier and construction worker in Dambae district in Tbong Khmum province, began selling and installing toilet packages in 2014. While he tries to keep prices relatively low, he has been able to make considerable profits from toilet-installation services.

“While I charge a service fee [and make a profit], I install toilets to promote healthy living,” he said. “I provide a 1.3-metre latrine for $200 and a 2.2-metre latrine for $650.”

The toilet-selling businesses could expand further in a country that still sorely needs latrines. However, the industry will have difficulty growing unless businesses have the opportunity to receive funding, explained By Virak, a research and social performance coordinator for local microfinance lender Vision Fund.

He said Vision Fund has been providing water and sanitation loans to clients for years.

“It is very important to provide these loans. If you look at rural areas of Cambodia, people still have a low coverage rate of sanitation,” he said. “But only a few MFIs in the Kingdom provide these sorts of water and sanitation loans.”

Vision Fund provides individual loans from $50 to $500 at a monthly interest rate of 1.5 percent. For businesses, loans of $5,000 to $25,000 can be provided for toilet-building services, with low interest rates and a four-year repayment plan.

According to David Totten, director of Emerging Markets Consulting, the expansion of local businesses into the toilet-producing industry could be a profitable endeavour.

“I think masons can make good profits off of installing toilets,” he said. “The problem is that sometimes, masons think they can make more money doing other things. But I think [the toilet industry] could be profitable for them.”