Opportunity in Tamarind Processing in India

India is the world’s largest producer of Tamarind, with a production of over 2 lakh tonnes[i]. Tamarind is cultivated in Karnataka, Tamil Nadu, Chhattisgarh, Kerala, Andhra Pradesh, Maharashtra and Telangana(See Figure 1)

How big is the market for Tamarind?

Majority of Tamarind production in India (1.5 lakh tonnes) is consumed in domestic market as dried Tamarind, Tamarind paste and pulp. Not just the fruit, even, Tamarind seed powder is extensively used in industries such as Textile, Paper, Confectionary, Cosmetics and Pharmaceuticals.

Domestic Market

In domestic market, Tamarind is mostly sold loose/ as a commodity, whereby shopkeeper weighs the required quantity and gives it to the customer.  The value added products such as Tamarind pulp and Tamarind powder are also sold in small quantities.

Tamarind prices in domestic market vary, depending on the crops output. The chart provided below depicts the average price of seedless Tamarind in the mandis across the country. Prices are lowest in the season (Feb to May) and then increase towards the second half of the year due to lower availability.

 

Source: : Spice board

Export Market

Around 50,000 tonnes of Tamarind is exported in various forms including fresh fruit, deseeded dry tamarind and Tamarind powder.  Product wise exports break up for Tamarind based products is provided in figure 2.

Source:  Director General Of foreign Trade

The majority of Indian Tamarind and related products are typically exported to Saudi Arabia, United Arab Emirates and Egypt.Many Indian manufacturers also do contract manufacring for Middle East based Tamarind brands such as SARAS Tamarind, AAHAA Tamarind, and HARITHAM Tamarind.

What is the investment required to set up a Tamarind processing unit?

Tamarind is a seasonal crop, harvested in January and February and has to be stored in ambient conditions to maintain its color. Therefore, Tamarind based businesses requires ample storage space and cold storage facilities. The budget requirements for various Tamarind based products is available in Table 1.

Table 1: Budget for Tamarind processing plant
ProductUsage / MarketMachinery Total budget
Seedless TamarindMostly used in food preparationsDehulling, seed removing machines, pressing  and packaging machinesThe budget including machinery for a capacity of 2 tonnes per day, working capital and civil constructionwould be over Rs. 1 crore.
Tamarind PulpMostly used in food preparations and beveragesTamarind pulping machine, heating and packaging machinesThe overall budget including the working capital would be around Rs. 50 lakhs.
Tamarind Seed PowderUsed for its sizing properties in different industries such as Textile, Paper, Cosmetics, Pharmaceuticals etc.Three types of machines: Tamarind roasting and skin removing machine, grinding machine and machines to process Tamarind powder into starch.For an integrated plant (with all three machines), the budget would exceed Rs. 1 crore.

How can we help 

We can help you start “Tamarind Processing industry” through a number services including business viability assessment, market landscaping, technical consultation andexecution support

Reach Us

Write to us: bchhatre@finetrain.com, admin@finetrain.com

Call us: 800 888 4932

[1] Source: NHB, production figures are for 2014 -15.

Share This:

Business Opportunity: Animal Feed Manufacturing

India’s animal feed industry, currently valued at around $ 15 billion[1] is expected to double in the next five years.  The feed consumption is estimated to be 21.5 million tonnes, of which cattle feed accounts for 7.5 million tonnes, aqua feed 1 million tonne and poultry feed around 13 Million tonnes.

The state of Telangana and AP contribute to a large chunk of Indian feed consumption, as can be seen in the table below. Given the large size of the industry and its growth, it presents an attractive opportunity for small and medium enterprises.

Animal feed industry in AP and Telangana

Capture

Competitive landscape of the Industry

The industry is competitive, with international, national and regional companies vying for the market share.  The table below provides information on important players in AP and Telangana.

Animal feed companies in AP and Telangana

Capture7

Manufacturing process and budget

The feed manufacturing operations comprise four steps; raw material preparation, mixing and grinding the feed, palletisation and packaging. The plant capacity typically starts from 2-3 tonnes per hour to 15 tonnes per hour.

Animal feed manufacturing process

Capture8

An automated plant with a capacity of 3- 5 tonnes per hour can cost up to Rs. 40 lakhs. Considering the machines and raw material inventory and infrastructure required to store the raw material, the budget requirement for the unit could be up to Rs. 1 crore.

How can we Help

  • We can help you assess viability of animal feed and related opportunities through a number of services including market research, detailed viability assessment and technical consultation.
  • 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

 

[1] As per Yes Bank report on The Indian Feed Industry – Revitalising Nutritional Security

Share This:

Flexible packaging: Opportunity for SMEs

The Indian flexible packaging market stands at $5 billion (Rs. 3.36 thousand Crores)[1] and is growing at little over 15 per cent per annum. Rapid development of personal care, pharmaceuticals, and food and beverages industries is contributing to this demand. Considering this growth opportunity, many international players are entering the Indian market through mergers and acquisitions route. In FY 2014, Finnish company Huhtamaki acquired India based Positive Packaging Ltd, in 2015 Australia based Amcor purchased  Packaging  India Private Limited (a subsidiary of Mumbai based Essel Propack Limited), and more recently in 2016,Essentra Plc, a UK based packaging  acquired pharmaceutical packaging business of India’s Kamsri Printing & Packaging Pvt. Ltd.

Flexible packaging is an interesting business opportunity for Small and medium enterprises (SME), as it allow them to do business with other SMEs.  Majority of flexible packaging demand is from food related industry, an industry largely made of small and medium enterprises. Since the clientele are small businesses requiring customized services, they often need a service provider that is also a small business and is willing to devote time and effort to meet their specific requirements.

Flexible packaging is far lighter and can therefore contain more material per pack, flexible packaging’s pack to product ratio is much lower (1:40 vis-à-vis 1:10 in case of PET packs)[2] as compared to that of rigid packaging. Flexible packaging also allowsmanufacturers to produce packs in functional and complex shapes facilitating user convenience such as squeeze ability and reclose ability. Advance technology in printing provides aesthetic features, thus making products attractive to the final consumers.

1. Market:

India’s annual manufacturing capacity is 30 Million Metric Tonnes[3].The overall flexible packaging end-user industry can be divided in Food and Non-food sector. The food sector comprises 48% of the packaging market at 14.4 MMT/annum; the rest goes to non-food such as Pharmaceuticals, Personal care, Tobacco and others.

1.1  Figure 1[4]:

Capture5

In the food sector, the highest share is with Milk and dairy segment. India is the largest producer of milk in the world, at an estimated 40 Crores liters per day and a market size of around Rs. 80,000 Crores[5]Given the large opportunity, many international players such as Nestle, Lactalis SA, Arla foods Savera, Danone, etc. have entered the Indian market. Since cold food supply chain is a challenge in India and dairy products are highly perishable, the demand for high quality packaging that extends the shelf life of the product is evident.

Other than dairy, food sector also comprises packaging needs of confectionery and chocolates, processed fruits and vegetables, etc.

The non-food sector is ruled by the Pharmaceuticals. Indian pharmaceutical industry (Valued at Rs. 9.07 thousand crores[6]) is growing at a CAGR 15%. India ranks third in terms volume and 14th in terms of value, in the world. Pharmaceuticals can further be sub-divided into; Bulk/ drug, Formulations and Devices. While  bulk drugs market is dominated by rigid packaging such as PET containers, glass bottles, metals containers and cans etc, It is formulations and devices that drive the demand for the flexible packaging. Packaging market for pharmaceuticals is difficult to crack due to its inherent challenges in Indian scenario. The two major challenges are:

  • Strict regulations: Pharmaceutical industry requires a superior level of safety to that of food packaging and therefore the packaging provider needs to meet stringent guidelines as per Drugs and Cosmetics Act 1940.
  • Counterfeiting threats: Due to lack of patent protection, manufacturers in pharmaceutical industry are reluctant to share the constituents of pharmaceuticals they produce. The knowledge of constituents is required in deciding the composite of the plastic types and grades to be used in the pack.

2. Flexible Consumer Industry in AP and Telangana:

The table below enlists typical consumer industries and major brands under these industries based in Andhra Pradesh and Telangana.

Capture2

3. Raw material requirements and technical specifications:

A flexible packaging material is a combination of many films that are laminated together. Most commonly used raw material includes; BoPP (Bi-axially oriented Polypropylene), Bo PET (Bi-axially oriented Polyethylene terephthalate), Nylon, Polyester, Poly propylene etc.

kl

kl1

4. Cost of project for starting a flexible packaging unit:

To start a flexible packaging unit producing a little over 200MT of laminates monthly, the minimum capital requirement would be upwards of Rs. 6 crores including machines, infrastructure and working capital. The budget would also depend on the market you would like to target and therefore the quality of machines.  The quality of printing machine is critical, as bad printing quality can lead of rejection of the material and adds to the cost.

5. Steps to consider before starting a flexible packaging unit:

First step would be to assess demand and supply of the packaging industry in your area, and identify the niche that you would like to serve. You may want to identify key clients that you would target and accordingly choose your marketing strategy.  You would also need to build a strong technical team that can meet client’s quality expectations, create innovative products and minimize wastage. As such, the following aspects need to be analysed before starting a flexible packaging industry

  • Market opportunity: Number and types of various flexible packaging consumer companies in the market such as FMCG, Personal care, Food and Beverages manufacturers, etc, their current vendors, requirements and pain points.
  • Competitive landscape: Number of players in the targeted market, their product profile, their clientele, number of years in business etc.
  • Production process: Raw material, man power & machinery required
  • Fixed and operational costs and profitability: Estimation on total initial capital required, working capital assessment, projected revenues, earnings and profitability.

Contact us:

Email: admin@finetrain.com

Website: www.finetrain.com

Number: 9032398367

[1] As per UflexLtd. investor presentation

[2]Source: FPA flexible packaging association

[3]Source: Business Standard article – January 15, 2016

[4]Source: www.consultmcg.com

[5]Source: Business today article  – June 5, 2016

[6]Source: Wiki, BDMAI, Ministry of Pharmaceuticals.

Share This:

Budget 2017-18: Incentives For Small and Medium Enterprises

A number of measures revolving around government’s key schemes of Mudra, Start-up India, Make in India and Digital India have been announced. These relate to increasing access to capital, promoting domestic manufacturing and increasing tax compliance of small businesses.  Details are enumerated below.

Increasing access to capital

  • A Dairy Processing and Infrastructure Development Fund would be set up with a corpus of Rs. 8,000 crores.
  • Lending target under Mudra scheme has been doubled to Rs. 2.44 lakh crores in 2017-18 from Rs. 1.77 lakh crores.

Clean India/digital India- Incentives for filing taxes

  • The corporate income tax rate for companies with a turnover of less than Rs. 50 crores has been brought down to 25% from 30 % earlier.
  • Corporate income tax rate for companies with a turnover of less than 2 crores: Such companies are not required to maintain books and currently 8% of their turnover is assumed to be their profit and is liable for taxes. The presumptive rate of 8% has been reduced to 6 %, for turnover received by non-cash means (Sales receipt received through bank account or other digital means).
  • Start-ups: These benefits are available to start ups registered between April 2016 to April 2019, under start-up India scheme
  • The time period for availing 3 year income tax holiday[1] by a start-up has been extended to 7 years as against 5 years earlier, thus providing start-ups a longer window to claim the benefit.
  • Also, condition of original promoter holding 51% shares of voting rights for start ups for claiming the tax deduction against carry forward losses has been relaxed. As per the new condition, original owner only needs to continue to hold a stake in the start-up.

Make in India – Incentives for manufacturing in India

  • Renewable energy: Customs duty on a number of components that go into making solar power panels /modules has been reduced.
  • LED: Excise duty on components/fixtures of LED lights has been reduced.
  • Water purifiers: Customs duty for parts of RO membrane for household filters has been brought down to facilitate domestic manufacturing of RO membrane. The custom duty on import of RO membrane has been increased.
  • Devices for cashless transactions: Customs duty concessions have been announced for import of POS reader, micro ATMS, finger print reader, Iris scanner.

For detailed information on the changes in excise and customs duty, please click here to refer the Budget Sheet 2017-18.

Conclusion

Budget incentivises small businesses to manufacture locally and to pay their taxes. These are good steps as such and would help the industry in the long run.

How can we help you?

FineTrain is an advisory firm for small businesses. We help our clients grow their businesses. We can help you analyse new business opportunities or generate leads for your existing business.

Contact us

bchhatre@finetrain.com

800 888 4932

 

[1] As per start-up India scheme, the start-ups are eligible to claim 100 per cent income tax deduction under section 80- IAC, however they are liable to pay MAT (minimum alternate tax ,paid on book profits), which can be set off in later years

Share This:

Rise of B2B E-commerce: Opportunity For Small and Medium Enterprises

The competition among B2B ecommerce portals has been heating up with the entry of several new players who are looking to expand their presence across products and geographies. These portals are wooing small and medium enterprises to transact on their platforms with offers to support them with marketing, logistics and even credit. The rise of B2B ecommerce presents an interesting opportunity to SMEs who can leverage it to enter new markets and gain more insights on their customers.

Table 1: Leading Indian B2B e-commerce platformCapture

With the advent and increasing use of e commerce platforms, some of the issues faced by small businesses in selling online have eased, as these portals provide much needed marketing and logistics support. SMEs  can harness the power e-commerce opportunity through the following strategies.Small businesses find it difficult to sell online as the competitive landscape for selling goods online is very different from offline market place, where the sale is relationship based and competition is mostly local.  As such, to sell online, the product should be searchable, able to compete with local as well as national products and should be delivered in a timely and efficient manner.

 Key strategies for Small and Medium Enterprises

 Document the sale process

Since sale of industrial machinery part is a consultative process, a SME owner typically spends most of his/her time consulting with the clients to customise machinery to client’s requirements. For example, a ghee machine supplier needs to understand the manufacturing process (manual or automated), raw material (milk, cream or butter), and capacity and cold storage facilities of the client before designing the machine.

SMEs  need to document the sales consultation process in detail, which can then be used to design automated systems that can accommodate different buyer requirements and provide ballpark pricing.

Enable product comparison

In order to differentiate itself among a number of products available online, the SMEs need to provide detailed information on the product quality, raw material, manufacturing process and testing infrastructure available with the company. For example, the quality of a plastic product would depend the manufacturing process (injection moulding machine, extrusion machine or a hand layup process), polymer used and quality control measures adopted by the manufacturer.  Precise product description and comparison would also reduce product return, a major pain point for small businesses.

Segment your market

SMEs  must ensure that ecommerce doesn’t cannibalize their sales from existing sales channels (sales representatives and distributor channels). Therefore it’s important to segment the products into different categories depending on the business size, complexity of the product, buying cycle, discounts offered, geography, demography etc.  Thereafter, the portfolio could be clearly demarcated into segments that would be sold through both the e-commerce and traditional platforms/channels.

There is no better time to start selling industrial goods online. Small businesses should have a strategy in place to select the products to be sold through e commerce route, build capacity to meet the requirements of new customers and to choose the right ecommerce platform.

How can we help you?

FineTrain is a consulting firm for entrepreneurs, we help our clients grow their businesses. We can assist you in getting your business ready for e commerce and in planning your ecommerce strategy.

Contact us

bchhatre@finetrain.com

800 888 4932

Share This:

Business opportunity: Flexible Packaging

Flexible packaging refers to packaging that can take various shapes and forms. Most commonly used flexible packaging products include chips packets, milk packets, shampoo and medicine sachets and different types of pouches.

Flexible packaging is a large industry world over, with a size of over $ 200 bn[1]. The Indian market contributes over $ 5 bn and is growing in double digits. The key end user industries are food products, beverages, personal products and pharmaceuticals (see pic-1).

Picture 1: Indian Flexible Packaging Market

capture2

  1. * Others includes pharmaceuticals.
  2. Source: Investor presentation of Uflex

 What is the Technology?

The technology related innovations in flexible packaging industry have focused on increasing the shelf life and safety of the packaged product and protecting it from counterfeiting.

Flexible packaging is made of layers of polymers (LDPE, BOPP, BOPET, CPP), aluminium foil, paper and other material. The topmost layer (most commonly BOPP or BOPET) is printed. The printed layer is laminated along with other packaging material, and then slit into different sheets. These sheets are converted into different forms as per the client requirements. The choice of material depends on the end use; for example in food applications where the shelf life has to be extended, different types of polyethylene and poly propylene films are used.

The printing technology varies depending on the material to be printed, and has been explained in the figure below.

Picture 2: Printing technology

capture1

How is the Competitive Landscape?

The industry has two types of players, large players who manufacture packaging films as well as packaging products and SMES who mostly purchase the films and convert it into packaging products. Further, some of the SMEs are manufacturers of machinery or inks.

Table 1: Flexible packaging-competitive landscape

capture

What are the Prerequisites to start a Flexible Packaging Industry?

The must haves would include a strong technical team that can meet client’s quality expectations, create innovative products and minimize wastage.  Other requirements include land/area (minimum 5000 sqft for Rotogravure printing) and a budget of Rs. 5 crs upwards.

How can we help you?

We can help you start a flexible packaging business through a number of services including business viability assessment, market landscaping and expert consultation.

Reach us:

bchhatre@finetrain.com

Phone:800 888 4932

 

[1] Source for international and domestic market size is Uflex investor presentation -November 2016

Share This:

Stand up India Scheme- Boosting Entrepreneurship Among Women

The ‘Stand up India Scheme’, launched in April 2016, facilitates bank loans to Scheduled Caste/Scheduled Tribe and Women Entrepreneurs for  starting new ventures in manufacturing, services or trading sectors. The scheme mandates all branches of scheduled commercial banks[1] in India to lend to at least one woman and one SC/ST entrepreneur.

Key features:CaptureHow FineTrain Can Help:

If you are thinking about a new venture, now is the time to start. FineTrain can assist you in identifying locally available opportunities that can be converted into viable businesses. We can help you with:

  • Comprehensive, real-time information on local opportunities
  • Assessing viability of specific opportunity
  • Facilitating connections to sector experts and/or professionals who can help you in implementing your plans

Contact:

Write to us: bchhatre@finetrain.com

Call us: 800 888 4932

Visit us: www.finetrain.com

[1] Scheduled commercial banks are those banks which are included in the 2nd schedule of the RBI Act, 1934, these include both public sector and private sector banks. Currently there are 71 scheduled commercial banks. You can get a list of these banks on //www.bcsbi.org.in/LOM_ScheduledCommercial.html

[2] MCLR is the base rate of bank for a particular tenor of loan, for example In July 2016, SBI’s MCLR for one month tenor loan and 3 year tenor loan was 9 per cent and 9.30 per cent respectively.

Share This:

Business opportunities in Telangana

The State of Telangana is the 12th largest economy with a GSDP of around Rs. 4.68 lakh crores[1] and a growth rate of 9.2% during 2015-16. Telangana includes 10 districts, with its capital in Hyderabad. Telangana is land locked with its neighbouring States of AP, Maharashtra and Madhya Pradesh.

Telangana is home to large industries in IT/ITES, pharma, engineering goods and defence. The industrial activity is currently concentrated in Hyderabad, Ranga Reddy and Medak Districts, these three districts contribute to almost 50 per cent of the State GDP. Medak and Ranga Reddy are also the fastest growing districts.

The opportunities in Telangana can be broadly divided into a few sectors; agro based industries, textiles, chemicals, engineering, and pharmaceuticals. The district wise opportunities are described below.

Business profile of districts of Telangana

 Capture14

 19

Upcoming opportunities

Small enterprises can become a part of the vendor network /ancillary to the large industries that are planned in and around Telangana. The figure below describes the projects across various industries that are currently being planned. These include a number of bulk drugs intermediate and API (Active Pharmaceutical Ingredient) units,   food park by ITC, an LED bulb unit by Syska labs, Soft drink bottling plant by Hindustan Coca-Cola Beverages Pvt Ltd, and Mobile handset manufacturing facility by Micromax informatics Ltd.   A detailed list of upcoming projects is available upon request.

Capture18

Source : Projects Today

How can we help

  • FineTrain enables entrepreneurs to assess and understand new business opportunities. Our services include market research, business feasibility studies and assistance in obtaining project funding.
  • We can help you assess your market, identify technology and raw material providers, estimate the capital requirements, time to break even and recommend ways to expand your business.

Reach us:

Call us @ 800 888 4932,

Write to us- bchhatre@finetrain.com

[1] Source: GSDP at constant prices, Socio Economic Outlook, Telagana, 2016

Share This:

How to decide if you should stay put in your business

You have built a successful business and are looking for growth opportunities.  You can either invest in your existing business or consider new ventures. The following five parameters may help you decide if your business is attractive enough for you to put in additional resources.

 Capture4

Market size:  If you want to grow fast, the market has to be big enough for you to sell your goods to large volume of customers.  Sometimes, you may discover that your market is too small to be worth pursuing.

Say you are providing an online platform to hire domestic help in a particular city. The city has 10 lakh households, of which 10% or 1 lakh households are your target customers. If you can convert 10% of that eventually, you can get 10,000 customers.  Assuming you earn a commission of Rs. 1000 per customer, your revenue could be at best Rs.1 crore and profit perhaps 10 lakh.  That may be too small, but if you are able to replicate the same model in other cities, the business may be worth pursuing.

Customer acquisition cost and customer life time value: Customer acquisition cost refers to costs incurred in obtaining new clients. These include salaries of marketing staff, advertising spend and discounts offered.

Say, to attract 1000 customers, you spend Rs. 50,000 in advertising, deploy one sales manager at a monthly salary of Rs. 30,000 and offer discounts worth Rs. 10,000. Your customer acquisition expense then is 90,000 or Rs. 900 per customer.  Your revenue per customer should be at least 4-5 times the acquisition cost for your business to be profitable. However, revenue can be spread over 5-10 years of your engagement with the customers and need not be from just one transaction. So, the more repeat customers you have, the customer life time value would be higher and so would be your profitability.

Fixed versus variable costs: Businesses have two types of costs: fixed costs and variable costs. While fixed costs such as rents, salaries, and interest do not change with the increase or decrease in sales volumes, variable costs such as raw material, transport charges vary with the number of units produced or sold.

Higher fixed costs implies that it would take you a long time before you can start making profits, but profits would grow sharply once you achieve critical mass (breakeven point).

Get to know your fixed and variable costs and breakeven point. If you have already achieved the critical mass, it’s time to stay put and enjoy better profitability.

Operating profits: Refers to profits that remain after meeting all operating costs (i.e., all above mentioned costs except interest, depreciation). If your operating profitability is declining, you would need to conduct a thorough diagnostic assessment of your business.

Return on capital employed: Operating profit alone is not enough; return has to be analysed in the context of the capital that is deployed in your business.  For instance, if your average annual operating profit is around Rs. 25 lakh and the total capital deployed in the business is Rs. 5 crore, then your return on the capital is only 5%. This kind of return can also be generated by simply putting your money in a fixed deposit.

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 assess your market, determine customer acquisition and lifetime value costs, your operating profits and return on capital, and recommend ways to improve profitability or expand your business.

You Can Reach us:

Call us @ 800 888 4932,

Write to us- bchhatre@finetrain.com

Visit us- www.finetrain.com

Share This:

source: livemint.com

Business opportunity: Waste Management

Indian cities are crumbling under waste, India generates almost 130 million tonnes of waste per day of which only 12 % is being processed and treated[1].

Hence, lies the opportunity for entrants in waste management services, where the service provider can tie up with the waste generators to manage their waste by treating/processing it on site. This opportunity exists in number of sectors including food waste, poultry waste, agri waste, and dairy farm waste. This blog focuses on managing food waste.

What is the opportunity? 

The business opportunity is to offer waste management services to the large food waste generators, such as hotels, big institutions with canteen facility, hospitals, and engineering colleges by setting up a biogas plant in their premises. The kitchen waste can be converted to either biogas or electricity, which can be consumed by the user.

This service would also be useful to large apartment complexes (with 1000 flats or more) and schools that offer meal to their students.

As can be seen below, biogas plant is an attractive investment for its buyer, he can recover his investment in four years.
Further, the use is entitled to a subsidy[2] of Rs. 40,000 per KWH of power generated or 40% of the project cost. After accounting for subsidy, the payback period would only be three years.

Captureb

How does one start biogas plant manufacturing unit

In order to offer Biogas plant fabrication service, one needs to have detailed understanding of the processes involved in manufacturing, selling, installing and operating of the Bio-gas plant. There are Biogas Development & Training Centres set up by respective state governments, which impart training in operations of biogas plant.

Typically, most of the companies who are in the business have at least one member who is a micro-biologist/ bio-technologist with a bachelor’s or master’s degree.

The capital requirements are not large, as it is a skill intensive business. One does not need to set up a manufacturing unit, the plant is typically fabricated at the client site and client pays up to 50 per cent of the price in advance.  The cost of fabrication of a (up to 2 tonne per day) plant usually is less than15 lakhs. Assuming that one starts with one order, the capital required for setting up this business would be within 20 lakhs.

Challenges

  • Waste management is a new concept in India, and people are not used to paying to manage their waste. It can take several meetings/follow ups to convince a customer about utility of investing in waste management. However this issue will be eased with stricter environment laws going forward.

 

  • The waste for the plant needs to be homogeneous, requiring the waste to be segregated into organic and inorganic waste at source. The segregation of waste can be challenging for a housing apartment complex, where residents are not used to segregating their waste.

 

  • The biogas produced in the plant has to be used the very same day as transporting and bottling it is not viable. Hence, biogas as a cooking option is feasible only for institutions that have one large kitchen (hotel/ hospitals) and not apartment complexes.

 

 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 understand the market, competitive landscape, subsidies and government schemes available for waste management opportunities. 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

[1] Source: Status report (2001-13)Pollution control board.

[2] The subsidy is available only for plants which convert the gas into electricity and the calculation is based on the KWH of the electricity generated. The subsidy is calculated as Rs 40,000 / KWH (kilo watt hour) or the 40% of the total cost of plant construction whichever is less.

[3]Picture Source: Livemint.com

Share This: