Business opportunity: LED lights

Demand of LED (Light Emitting Diode) lights is increasing rapidly in India, driven by GOI initiatives to promote LED. As part of its  Unnat Jyoti by Affordable LEDs for All (UJALA) scheme, GOI has proposed to replace 77 crore incandescent bulbs across the country  with LED by 2019.

As can be seen from the table below, LED is far more efficient than Incandescent bulbs and CFL

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Manufacturing Process:

Most important parts of LED  lights are driver, LED diode and body of light. Diode is typically imported from China/Taiwan. However, drivers can be manufactured in India with required specifications and design of PCB.

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The LED unit can be started within a budget of Rs. 10 lakhs, including machinery, marketing and working capital and expenses incurred on quality/BIS certification.

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Market segments and key players

LED lights are used as House-Hold bulbs, Tube lights, Street lights, Solar powered street lights, Automobile, etc.  However, the house hold segment is difficult to enter as one has to compete with large established players such as Bajaj, Syska, Philips, Crompton, Havells, Osram and also with local players who sell imported product. Institutional segment largely comprises government procurement LED under “UJALA” scheme.

Currently, LED demand is driven by the government procurement and one may have to start by contract manufacturing for large companies who supply LED lights to the government bodies.

How can we help

  • FineTrain enables entrepreneurs to assess and understand new business opportunities. Our services include market research, business feasibility studies and business diagnostics.
  • We can help you understand the feasibility and viability of LED lightning and related opportunities We also offer support in executing your ideas by connecting you with sector experts and professionals.

 

Reach us

Call us @ 800 888 4932,

Write to us- bchhatre@finetrain.com

Visit us- www.finetrain.com

 

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Market sizing: Understanding new markets

Looking to diversify, upgrade your product to the next level or enter new markets…market sizing is a must.  Market sizing refers to estimating the potential addressable market for your product or service.  It helps you understand three important aspects of your new market (see figure 1).

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We are supporting a number of entrepreneurs in understanding new markets, as below

Organic fertiliser

Business challenge:

A manufacturer of waste management equipment wants to enter “premium organic fertiliser” market. He wanted to assess market attractiveness.

Our solution:

We are helping the entrepreneur understand

  1. Different segments in the organic fertiliser market, trends in consumption
  2. Drivers of consumption of organic fertilizers: government policy, organic cultivation
  3. Organic versus chemical fertilisers: cost benefit analysis for the farmer
  4. Key end users of organic fertiliser
  5. Unit economics of organic fertiliser
  6. Existing players, their product mix, distribution strategies
Impact :
  • Comprehensive analysis on attractiveness of new market
  • Guidance on market entry strategy

Dairy products

Business challenge:

A dairy shop owner who sells fresh milk is interested in manufacturing and selling ghee. He wanted to understand if forward integration into ghee manufacturing would improve his profitability

Our solution:

We provided comprehensive information on

  1. Ghee consumption trends in Telangana and Andhra Pradesh
  2. Retail and institutional customer segments
  3. Existing players and  their product profile
  4. Extent of backward integration among players, advantages enjoyed by large dairies
  5. By products (toned milk), market for toned milk
  6. Manufacturing process, input-output norms at different stages
  7. Government policies and  incentives
  8. Unit economics per kg of ghee, capital investment, breakeven time
Impact:

Insights on profitability of ghee business vis a vis selling fresh milk helped client decide his market entry strategy.

How can we help?

FineTrain enables entrepreneurs to assess and understand new business opportunities. Our services include market research, business feasibility studies and business diagnostics.

Call us @ 800 888 4932,

Write to us- bchhatre@finetrain.com

 

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Business Opportunity: Ghee manufacturing

The ghee market in Andhra Pradesh and Telangana is large with an annual consumption of around 125,000 tonnes[i] .The average growth rate in ghee consumption is over 5 per cent per annum. Given the large size and growth prospects, ghee manufacturing is an attractive opportunity, especially for entrepreneurs who are already running dairy farms, milk shops and have access to milk supplies.

Ghee market

Different varieties of ghee are available in the market, as can be seen from the table below.

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Ghee is sold in institutional as well as retail market. In retail market, it sold in different packages such as pouch, jar, tin, bottle, and carton with size starting from 15 gms to 1 kg. In institutional market, ghee is sold in 15kg tins to sweet shops, bakeries, hotels etc.

Some of the popular brands in Andhra Pradesh/Telangana include Durga, Heritage, Sangam and Jersey. Further, there are local manufacturer and dairy shops who either sell their products through their own shops or cater to bulk buyers.

Manufacturing Process

The manufacturing process comprises two steps: separation of cream from milk and extraction of ghee from the cream. The cream less milk can be sold as toned milk. One can set up a pasteurization plant to increase the shelf life of the milk and to separate cream through automated process.

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 Capital investment and profitability

Ghee manufacturing is a working capital intensive business. Working capital requirements are high for purchase of milk as farmers have to paid immediately/cash for the milk, whereas customers typically pay after 15 days to a month. Overall capital requirement for a 1000 Litres per day milk pasteurization and corresponding ghee manufacturing plant could be around Rs. 40 lakhs. Profitability would depend on the milk procurement price and ability to build a brand for your product.

Schemes

NABARD provides incentives to dairy farmers under its Dairy Entrepreneurship Development scheme. More information on the same is available on this link. Further, both GOAP and Go Telangana also offer incentives as part of their industrial policy.

http://www.indairyasso.org/DEDS2015_16.pdf

How can we help?

FineTrain enables entrepreneurs to assess and understand new business opportunities. Our services include market research, business feasibility studies and business diagnostics – we can help you in understanding the feasibility and viability of dairy and related opportunities and suitable government schemes. We also offer support in executing your ideas by connecting you with sector experts and professionals.

Call us @ 800 888 4932,

Write to us- bchhatre@finetrain.com

Visit us- www.finetrain.com

 

 

[i] Assuming that 25% of milk consumption is towards ghee,  milk annual consumption in combined Andhra Pradesh is around 13 million tonnes per annum, source National Dairy Development Board

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