Transcript SABRAS Processing & Marketing Pvt. Ltd

SABRAS
the second salt march...
an enterprise impacting the lives of
12,000 small salt producers & 2,50,000 workers
of India
Rajesh Shah
Chairman & Managing Director
May 2010
Theory of Change
If the comparative strengths of
aggregated small salt producers &
professional managers are combined,
then small salt producers
will have access to
markets, technologies & institutional credit,
thereby
significantly increasing their livelihoods.
Indian Salt Industry Overview
India: 3rd largest salt producer
Current Production: 200 lac MTs
Current Utilization
Domestic
– Human use
40%
– Industrial use 48%
Export
12%
Current Volume: Rs. 7500 Cr
By 2020 Production: 400 Lac MTs
SALT PRODUCTION & ISSUES
India’s Salt Producers
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•
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Total
13,000
Small salt producers 11,700
Production
36%
Market Value
2854 Cr
Salt workers only get
3.35%
86 Cr
Salt workers in
• Production
• Handling
1.5 lac
1.0 lac
Problems to be solved
Health Problems
• Due to constant exposures to
- High temperatures,
- Dusty winds,
- Glare & Salty water in desert
• Salt producers - Suffer
- High blood pressure,
- Eye & skin diseases
- lack of access to water, health,
education and community life.
when agarias are cremated their feet do not burn as they contain lots
of salt.
Problems to be solved (cont’d)
Economic Problem
•
•
•
•
•
•
A salt producer annually Produces 10,000 - 12,000 MT
Cost of Production Rs. 70/MT
Borrows : Rs. 50,000 from local trader and locks the sale price
Sale price : Rs. 80/MT
Earns:
Rs. 10,000 – Rs. 12,000 per year
Salt producer only get between 1% - 8% of the final market price
The value of the bag is more than the salt it contains
Salt Producers operate individually and do not have
access to institutional credit, technology & markets
SABRAS OVERVIEW
COMPANY OVERVIEW
Formation of the Company
February 2007
Operations
Procuring, processing, packaging and
marketing salt in Kutch, Gujarat
Ownership Structure
85% SAVE Ltd (Technical Service Organisation)
15% Salt Producers
Governance Structure
Three Directors (One from SAVE and Two
from salt producers group)
Management
Professionals Managers
8
Management Team
Rajesh Shah
CMD of the SABRAS is an architect by training and
MD of SAVE Ltd, having 30 years of engagement
in social & commercial sector
Umar Kureshi
Manager Production, having 40 years of experience
in salt production in Little Rann of Kutch
Suresh Thakkar Manager Marketing, having 35 years of experience
in Marketing of fruits & vegetables, spices & salt
Mukesh Thakar
Asst. Manager, having 10 years of experience in salt
production in Little Rann of Kutch
Vijay Solanki
Field Supervisor
Chetan Mehta
Accountant (part)
Rohit Dudhela
Company Secretary (part)
BUSINESS MODEL
SABRAS
Industry
expertise
• Experience in
production and
distribution
•Market access
Strong
relationships
with salt
producers
• Understand
community
•Governance
On-site
support
Access to credit /
asset ownership
• Regular field
visits with salt
producers
• Govt. subsidies
• Guarantor to
banks Loans /
interest paid with
salt sale proceeds
Salt supply chain & SABRAS
Pass on surplus to salt producers
Industrial
User
Rs. 120 MT
Salt
Producer
Processor
Trader
Retailer
Transporter
Rs. 7,200 MT
Consumer
Wholesaler
Present
1. Sold 30,000 MTs of salt
2. Increased procurement
price from by from
Rs. 80 MT to Rs. 125 MT
3. Trial of two solar pumps
Future (Over next three years )
1.
2.
3.
4.
5.
Reduce transportation costs
Provide 250 Solar pumps
Achieve annual sale target of 1,25,000 MTs
Explore production of by products
Initiate Brand Development
Achievements to date
Start Year
2008
Current Year
2010
No of Suppliers
28 salt producers
39 salt producers
Quantity of salt
7,500 Tons
22,000 Tons
Product
Bulk
Bulk
Procurement Price
Rs. 80 per Tons
Rs. 125 Per Tons
Designed & tested equipments
for salt pan making
& harvesting
solar energy driven
pump
Set up
0
Community Resource Center for salt
1
Provide Knowledge services
100 salt producers
28 Salt Producers
GROWTH PLAN
Technology, Volume,
By-products, Brand
SOLAR OPPORTUNITY
Pump
Type
Life of
Pump
Cost
Annual
Maintenance
Annual Savings over
Fuel costs Life of pump
Diesel
10 years
25,000
10,000
60,000
-
Solar
15 years
2,00,000
15,000
-
8,25,000
• Solar pumps save 4 metric tons of CO2 per salt producer per annum
• Producers can recoup capital costs within 3 years
Data based on field trials supported by
National Bank for Agriculture and Rural Development (“NABARD”)
Goal for the next 3 years
Particulars
2010
2013
No of Suppliers
39 salt producers
250 salt producers
Quantity of salt
22,000 Tons
1,25,000 Tons
Product
Bulk
Bulk, Retail &
By – products
Procurement Price
Rs. 125 per Tons
Rs. 140 per Ton
Costs reduction
(use of solar pump)
Rs. 60 per Ton
Provide solar pumps
02
250
Provide Knowledge services
100 Salt Producers
4,500 Salt Producers
Growth Plans: Resources Linkages
• Scaling up Partner
– Agaria Hitrakshak Sangh (AHS) with 4,500 members. A
representative is a member of board of directors of
SABRAS
• Knowledge Resources
– Tied up with Central Marine Chemical and Salt Research
Institute, (CMSCRI), Gujarat, India
• Financial
– NABARD , local banks & Government have agreed to
provide credit linkage for salt production & purchase solar
pumps.
FINANCIALS
FINANCIAL SUMMARY
Solar pumps provided
Revenue
FY 2010-11
FY 2011-12
FY 2012-13
50
100
150
70,96,750
99,08,625
2,61,97,000
39%
164%
28,50,250
40,79,500
1,19,00,250
40%
41%
45%
200
400
600
% growth
EBITDA
% margin
Carbon emission
reduction (metric tons)
TRI-PARTY FINANCIAL AGREEMENT
SABRAS
SABRAS
• Links
bank/govt./
pump supplier
• Procures salt
• Repays loan
Salt Producers
• 5% margin
money
• Repayment 500
MT of salt for
three years
Government
30% cash
subsidy
Bank 70%
subsidized
loan
The Ask: Rs 1.5 Crore revolving overdraft facility
Invest in SABRAS for the second salt march
THANK YOU