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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
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
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.)
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
21.
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.
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
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.
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.
