Internship2015
- 1. Field immersion Internship 2015 ( July-Sept.) 3 r d S e m e s t e rBy : Subhransu das Enrollment no.: T2014SE017 M.A. S.I.E-II (2014-16) Academic supervisor: Dr. Roopesh Kaushik Internship Supervisor: Vidhiya Saravanan (project associate, CSIE, IIT Madras)
- 2. Structure of the presentation Brief of the enterprises problem addressed Evolution, timelines & value chains social impact innovation scaling up strategies swot recommendations key learnings
- 3. AROGYAM ORGANICS FOODS PVT. LTD. SWADHA ENERGIES PVT. LTD. FIB-SOL LIFE TECHNOLOGIES PVT. LTD.
- 4. Snapshot view of the Enterprises Studied •Arogyam organics • Primary sector • 7 yrs. • RTBI incubated • Organic products •Swadha energies • Manufacturing sector • 8 months • RTBI incubated • Electronic products •Fibsol life technologies • Tertiary sector • 2 yrs. • Incubated at BIO INCUBATOR. • R&D intensive (bio- fertilizers)
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- 7. Arogyam Organics Foods Private Limited (AOFPL) 7 Founded by Mr. Arumugasamy Subbaiah in 2008 Started full time operations in February 2010 BOARD OF DIRECTORS Mrs. Jayalakshmi Umadikar (RTBI representative) Ms. N. Shanthi
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- 10. 10 History Incorporated on 25th November 2008. Incubated at RTBI, IIT Madras. Started full time operations in Feb. 2010. By the end of 2011, AOFPL had formed a network of 6 franchises, 24 retail outlets and 4 bulk traders (source: RTBI) AOFPL had created a storage facility with a capability to store 12,000 M.T. to handle heavy production requirements. Key Facts • Achieved Break even in the financial year 2013-14. • Initially Started business with the help of well wishers, friends and relatives. • Approached RTBI under the mentorship of Prof. Ashok Jhunjhunwala. • No. of Employees-7 & No. of skilled labor-10 (as on Jul.2015) • Distributors- 3 Shops- 147 (as on Jul.2015) • For the first time in India AOFPL has produced and marketed ADT-43 Paddy certified seeds with Organic certification. At present AOFPL has a database of around 400 farmers, who are registered on contract basis to provide their produce directly to AOFPL.
- 11. 11 Funding Seed Funding- 26 lakhs RTBI – Rs. 2.5 lakhs each pref. & equity Others- 21 lakhs (source: RTBI) EQUITY - Rs. 13 lakhs PREFERENCE - Rs. 8.5 lakhs LOAN FROM DIRECTORS - Rs. 70,000 LOAN FROM SHARE HOLDER - Rs. 50,000 (Loan taken Rs.5 Lakhs) SECURED LOAN (DST) - Rs. 15 lakhs SECURITY DEPOSIT - Rs. 7 lakhs (source: financial statements of AOFPL) Till date (19th May 2015) Arogyam has an investment of Rs.45 lakhs (approx.) in combination of shares, loans and deposits. Revenue FY’ 2012 ------43.61 lakhs FY’ 2013 ------69.30 lakhs FY’ 2014 -----140.37 lakhs (source: financial statements of AOFPL) YEAR PROFIT / LOSS (RS) 2012-2013 (16,965) 2013-2014 5 lakhs (approx.) 2014-2015 (UNAUDITED) 14 lakhs (approx.)
- 12. AOFPL Wholesalers/ traders/promoters Exclusive storesSupermarkets CUSTOMERS FARMERS (Direct procurement) Market Intermediary Model
- 13. 13 ISSUE OF PURCHASE ORDER PROCUREMENT OF FARM PRODUCE FROM FARMERS. PROCESSING, PACKING AND RETAILING SUPPLY TO SHOPS, DISTRIBUTORS, RETAILS CHAINS AND SMALL RETAIL SHOPS AND DIRECT CUSTOMERS
- 14. Selection of farmland or area for cultivation Selection of Farmer Sample collection by field officer Quality testing of sample Price Negotiation Issuing of purchase order Purchase of produce
- 15. Quality Testing & Certifications 15 IMO Control Private Limited (IMO India) is an independent, long established Certification body in India for organic agriculture and has been carrying out audits and certification since 1995. IMO India provides cost effective inspection and certification in organic agriculture, processing, exports, verification of inputs used in organic agriculture.
- 16. Social Mission and Impact 16 Social EcologicalFinancial Triple bottom line impact Promotes the co-operatives and producer companies by procuring organically grown farm produce in bulk. 1. Soil & water conservation: As Arogyam promotes organic form of food production, it contributes to soil and water conservation. 2. Bio-diversity conservation: Parambaryam brand offers many of the traditional and native food grains which are in the verge of extinction. 1. Arogyam organics provided the economic progress and financial security to its employees through various employee benefit schemes. 2. Farmers were paid with premium as an incentive of growing the food organically. The increasing problem of lifestyle diseases is directly addressed by Parambaryam and Bhojanam products.
- 17. SWOT analysis 17 STRENGTH: KNOWLEDGE ON ORGANIC PRODUCTION, PROCESSING, MARKETING & CERTIFICATION. SAFE FOOD, HIGH QUALITY AND IMPROVED NUTRITION SUPPLY CHAIN MANAGEMENT. ENVIRONMENTAL SUSTAINABILITY PRESERVES TRADITIONAL VARIETIES WEAKNESS: PREMIUM PRICING LACK OF AWARENESS AMONG FARMERS LESS INCENTIVE FROM GOVERNMENT INTENSIVE IN NATURE AND HIGH LABOR COST PRODUCTIVITY GAPS OPPORTUNITIES: RISING MIDDLE CLASS RISING MODERN RETAIL RISING URBAN DRIFT SURGE IN DISPOSABLE INCOMES GROWING HEALTH AWARENESS CORPORATES AND EXPORTERS LOOKING FOR COMMITTED PRODUCTION GROUPS THREATS: SUBSTITUTES LACK OF CONSISTENT SUPPLY MAY PUT OFF CUSTOMERS COSTLY AND COMPLEX CERTIFICATION PROCESS LACK OF INFRASTRUCTURE & CERTIFICATION BODIES LOW AWARENESS ABOUT ORGANIC INPUTS INTRODUCTION OF GM CROPS.
- 18. 18 Set up a Model rural organic farm. Replicate the model. Promote Eco-tourism. Networking for exports. Collaborations with more and more retail chains.
- 20. 20 REFERENCES NOTES FROM PERSONAL INTERVIEWS WITH MRS. KANMANI & MR. ARUMUGASAMY AND TRANSCRIPTIONS OF THEIR AUDIO RECORDINGS. FINANCIAL STATEMENTS OF AROGYAM ORGANICS FOODS PVT. LTD RTBI ANNUAL REPORTS AND IMPACT REPORT MAY 2015. HTTP://WWW.RTBI.IN/INDEX.PHP/ABOUT-US/PUBLICATION/ANNUAL-REPORTS HTTP://WWW.RTBI.IN/ASSETS/UPLOADS/ANNUAL%20REPORTS/ANNUAL_REPORT_2011.PDF HTTP://WWW.RTBI.IN/ASSETS/UPLOADS/ANNUAL%20REPORTS/ANNUAL_REPORT_2012.PDF A STUDY ON THE STATUS OF ORGANIC FARMING IN KERALA. BALACHANDRAN V. DISCUSSION PAPER NO. 82. KERALA RESEARCH PROGRAMME ON LOCAL LEVEL DEVELOPMENT. LINK- HTTPS://WWW.GOOGLE.CO.IN/URL?SA=T&RCT=J&Q=&ESRC=S&SOURCE=WEB&CD=1&CAD=RJA&UACT=8&VED=0CB4QFJAAAHUKEWIA0- 380N_GAHWPCO4KHTT7DZI&URL=HTTP%3A%2F%2FWWW.CDS.AC.IN%2FKRPCDS%2FPUBLICATION%2FDOWNLOADS%2F82.PDF&EI=8QCNVZQSG4_LUQS 09REQCQ&USG=AFQJCNFONQLLV6SGKGYSRBID7Y8116SSOG&BVM=BV.97949915,D.C2E SPATIAL CLUSTERS IN ORGANIC FARMING–A CASE STUDY OF PULSES CULTIVATION IN KARNATAKA LINK HTTPS://WWW.GOOGLE.CO.IN/URL?SA=T&RCT=J&Q=&ESRC=S&SOURCE=WEB&CD=1&CAD=RJA&UACT=8&VED=0CCIQFJAAAHUKEWI3U7ZR0D_GAHUMA4 4KHVHUDPM&URL=HTTP%3A%2F%2FWWW.IIMB.ERNET.IN%2FRESEARCH%2FWORKING-PAPERS%2F16-SPATIAL-CLUSTERS-ORGANIC-FARMING-CASE- STUDY-PULSES-CULTIVATION- KARNATAKA&EI=2QGNVBFMGYYGUATRQLUYCQ&USG=AFQJCNGGKW9GN_T70VW2QU3UN2ABN9ENHW&BVM=BV.97949915,D.C2E NRAA (2009); “PERSPECTIVES AND PROBLEMS OF PRIMARY PRODUCERS COMPANIES - CASE STUDY OF INDIAN ORGANIC FARMERS PRODUCER COMPANY LIMITED, KOCHI, KERALA”; NATIONAL RAINFED AREA AUTHORITY, NEW DELHI, INDIA. LINK HTTPS://WWW.GOOGLE.CO.IN/URL?SA=T&RCT=J&Q=&ESRC=S&SOURCE=WEB&CD=1&CAD=RJA&UACT=8&VED=0CB0QFJAAAHUKEWJL- T_K0T_GAHWIJO4KHD5XD5E&URL=HTTP%3A%2F%2FNRAA.GOV.IN%2FPDF%2FPRODUCERCOMPANYCASESTUDYOFIOFPCLKERALA.PDF&EI=OQKNVCUHDO IDUGTE472ICQ&USG=AFQJCNE9N8UG_BEX39I7CZX1ACLJEOJCYA&BVM=BV.97949915,D.C2E ORGANIC SUPPLY CHAINS FOR SMALL FARMER INCOME GENERATION IN DEVELOPING COUNTRIES LINK HTTPS://WWW.GOOGLE.CO.IN/URL?SA=T&RCT=J&Q=&ESRC=S&SOURCE=WEB&CD=1&CAD=RJA&UACT=8&VED=0CB0QFJAAAHUKEWJI78ED09_GAHVHU4 4KHZUPDZM&URL=HTTP%3A%2F%2FWWW.FAO.ORG%2FDOCREP%2F017%2FI3122E%2FI3122E.PDF&EI=GAONVYJ_FSEMUQSV07SYCQ&USG=AFQJCNH3U QKC-ZOASF-5NSU5OPIMCOWO3W&BVM=BV.97949915,D.C2E
- 22. Incubated in the year 2012 under RTBI, founded by Ankit Poddar. Registered on Jan. 2015 Started with the concept of micro-turbines. Dropped the idea of micro-turbines as immediate commercial viability of the project was not feasible. Sustained its operations through ICSR funded projects.
- 23. Loop holes and poor efficiency systems in large centralized air conditioned buildings. Found that the amount of electricity consumption was far more than required given the theoretical calculations and real values. Started doing R & D on this aspect. Currently focused on heating ventilation air condition industry (HVAC).
- 24. Assembles control systems. Makes separate electronics and devices to supplement existing control systems. Provides after sales services i.e. maintenance, repairs, etc. They have products that can be installed in new systems as well as the old existing systems.
- 25. Got grant from MSME in 2015. Funded by RTBI in 2015. Got investment from individual investors.
- 26. They have addressed speed change mechanism in air conditioned systems. They thought of making decentralized air conditioning systems in a centralized air conditioning system. Modifications in monitor devices and control systems that can make the existing systems 25% more efficient, on an average.
- 27. PRODUCT DESIGNING IN COMPUTER. GET IT VALIDATED BASED ON THAT RAW MATERIALS ARE BOUGHT. GET IT MANUFACTURED LOCALLY (FABRICATION OF PRINTED CIRCUIT BOARDS, OUTSOURCING FOR SOLDERING). ASSEMBLE TO MAKE A FINISHED PRODUCT.
- 28. A dedicated team is working on solar product development. Expansion. SWADHA planning to have a dedicated sales & marketing team.
- 29. 1. Swadha lacks a dedicated marketing and sales team. 2. Brand driven approach still predominates the large HVAC market. Advertising and branding seems to play an important role in market perception of energy use, which may not be substantiated by actual performance. 3. Most manufacturers have a range of products with varying energy efficiency, but certain brands are automatically associated with high performance, even though a low efficiency system has been selected. 4. Good cooling capability seems to be the most important factor for system selection amongst end-users. Often, this translates to over sizing of equipment as well as a perceived down-side of energy efficiency in HVAC. The market perception is that energy efficiency in HVAC system may come at a cost to comfort.
- 30. 5. There is no clear understanding of cost benefit of energy efficiency in HVAC. Most of the end users rarely have the ability to do a life–cycle-cost analysis of different options. 6. The Indian Society of Heating, Refrigerating and Air Conditioning Engineers (ISHRAE) conducts conferences, seminars, workshops and catalogue shows throughout the country with both national and international participation on the latest in terms of technologies, systems and services. ISHRAE organizes ACREX, the largest international exposition in South Asia on the air conditioning, refrigeration, ventilation and building service industry. Held annually, ACREX is considered to be a major platform to display the latest technologies and innovations and to also find buyers for existing products and services. Swadha could be associated with ISHRAE to have technology transfers, new techniques or to showcase products.
- 32. The Team Dr. S.Kavitha alumnus IITM(2012) Mr. Anant Sham Raheja Research scholar F O U N D E R S Prof. T.S. Natarajan Prof. T.S. Chandra
- 33. Products & services Liquid bio fertilizers (LBF) N-SOL 20 Fertilizer carrying membrane N-FIB 20 S.No. Services Fib-Sol offer price (1000 INR=1k) Price in market for same (1000 INR=1k) 1. Soil & Compost analysis 10k-12k 25k-30k 2. Beverage analysis 15k-20k 35k-40k 3. Outsourced R&D Design Depends on projects. Normally charge 4k-5k on small projects. Normally small projects are not outsourced.
- 34. Problem addressed Shorter shelf life More chances of contamination Sensitivity to temperature Lack of instant visual effects on application Seasonal demand and production of biofertilizers
- 35. Business Model and Operations
- 36. Research & development The company is not business oriented at present rather exclusively focused on scientific experimentations Focus on giving a better carrier through proper carrier formulation by using nanotechnology. In-house validations and field trials are important aspects in product development. Field trials take up to 4-5 months. Large chunk of the grants received are invested in R&D.
- 37. Challenges
- 38. Timeline of FIB-SOL Time History Key Facts Funding Revenue 2013 Conceptualized in May. Incorporated on 31st Dec. 2013. 1. Prof. Chandra’s lab facility was used for product formulations at free of cost. Initial seed fund through Mr. Shri kumar suryanarayan Rs. 10 lakhs grant from Biotechnology Entrepreneurship Support Scheme Share capital- 1 lakh None 2014 Validation started for N- FIB 20. Connected with potential clients. 2. Started pilot study by supplying liquid fertilizers to validate field trials. 3. Prof. Kalyanasundaram, former dean, academic research is associated with RTBI and had his organic firm in Chengalpattu. He allowed field trials. 4. One permanent employee hired in September. 5. Also used prof. Natarajan’s lab. 0.5-0.6 lakhs from services alone.
- 39. Timeline of FIB-SOL Time History Key Facts Funding Revenue 2015 Incubated at bio- incubator IIT madras. N-FIB 20 validated in- house. 6. started using bio-incubator for research and office space. 7. Agreement in Jan. between IIT madras, Entrepreneurship support scheme and FIB-SOL that latter can use the Lab facility in Bio-incubator for initial three years. 8. Started monthly rent payment in march. 9. clients- 20 for services 3 plantations firms for product validation. 25 lakhs grant from BIRAC under the Small Business Innovation Research Initiative (SBIRI) scheme of the Department of Biotechnology. Expected 1-1.5 lakhs from services
- 40. Strength: •PRICE, VALUE TO THE CUSTOMERS AND QUALITATIVE PRODUCTS. •NEW AND GUIDANCE • EXPERTISE IN THETECHNOLOGY & INNOVATIVENESS IN PRODUCTION. •EXPERT MENTORSHIP SPECIFIC FIELD. Weakness: NO BRAND EQUITY AND IMAGE NO EXPERTISE IN BUSINESS OPERATIONS Opportunities: GOVERNMENT SUBSIDIES AND SECTOR SPECIFIC GRANTS FUTURISTIC MOVE. Threats: DEMAND IS TO GIVE QUICK RESULTS. BIO-FERTILIZERS ARE YET TO BE POPULAR AMONG FARMER COMMUNITIES.
- 41. Future prospects 1. Team expansion 2. Investments from outside sources or potential investors. 3. Pilot scaling 4. Buying major equipment for scaling operations. 5. Large scale manufacture after validation and certification of products.
- 42. Observations & recommendations Fib-sol should allocate some funds for market research and surveys. Fib-sol can also have talks with Arogyam organics foods private limited (AOFPL) to have its field trials as the latter is well established in the market and have tie-ups with various producer companies. Fib-sol may conduct Focus group discussions (FGD) to gain more insights and perceptions regarding bio-fertilizers. Fib-sol should have a dedicated marketing and sales team for supply and promotion of its products. They can give a thought to provide products and services to small scale farmers also and may even promote rural entrepreneurship. It may impart trainings, seminars and conferences to promote Organic Agriculture.
- 43. Technology can play a significant role for disseminating social Innovation. Small interventions can make significant impacts. Network building is a must as it may help reduce operational costs, win clients, attract investments and keep the entrepreneur updated. Rapport building is an art and that is possible through spending considerable time with stakeholders and by Identifying, understanding and working with professional standards. Social entrepreneur should be able to Work in cross-cultural and/or multicultural settings.
- 44. Thank you