Farmer’s Friend – Piyush Sohani from Sistema Bio
In this episode of Green Business Podcast, I talk with Piyush Sohani, who heads India operations of Sistema Bio, a global enterprise that is making it easier for farmers to produce energy from their cattle waste, through biogas technology.
In the beginning, we spend a bit of time delving into Piyush’s motivations to work in Biogas sector. He explains that he grew up in Khargone, a small village in Madhya Pradesh, where he saw rural families struggle with cooking on fire wood and dung cakes. He then thought of offering smoke free cooking solutions to the villagers. Upon completing his education in energy engineering, he started “Sustain Earth”, to offer modular biogas technology for farmers. Then in 2017, when Sistema Bio was trying to enter Indian market, Piyush decided join hands with them so that he could offer biogas solutions at scale.
Biogas technology and Sistema’s offerings:
I ask Piyush to explain biogas technology in simple terms, he explains
“biogas technology is a very simple concept. It is in an anaerobic reaction. Any kind of organic waste is decomposed into methane and carbon dioxide by methanogenic bacteria, which are generally present in animal manure.”
So basically, when an organic waste is decomposed in an oxygen less environment in the presence of a certain bacteria (that are found in animal waste), it converts into biogas and fertiliser. Historically, in India biogas technology is offered as a service, whereby a contractor constructs a domelike structure, where waste is collected and converted to biogas.
Piyush then talks about how Sistema is trying to make it easier for farmers to use biogas. He explains
- Sistema offers biogas technology through prefabricated modules, which are cheaper than the biogas digesters created onsite. Further unlike concrete structures that can develop cracks, Sistems modules are sturdy and come with 5-year warranty. Since these modules are pre-fabricated, they can be installed within a day.
- Sistema is promoting biogas systems as a consumer durable product, just like any other product which one can buy in the market, like washing machine or Television. Sistema offers similar service and warranty options on its biogas systems, so, the customer can trust the biogas technology.
Go to Market Strategy:
Then we discuss the reasons for Sistema’s success in being able to sell more than 12,000 biogas modules in just three years. Piyush elaborates
“So, from the very beginning, we have focused on reducing the cost of the products for the farmer. and so, we are taking very different strategies
So, the first was that we have invested in setting up manufacturing facility in Pune, India, so that means we are producing these systems locally. So, the cost of production could be low
Secondly, we have also partnered with winning many grassroot organizations such as farmer producer organisations (FPO), who have a big network. By doing this, we are able to promote and distribute our products directly to the farmers
And thirdly, we also provide extended credit extended credits to our customers. Therefore, they can pay in easy instalments in six to 12 months of time. This reduces the upfront cost burden for the farmers.
if you look at our product, so we guarantee product performance, the life of the product is more than 15 to 20 years, we give warranty for 10 years on the product material. And if you compare the cost, and if you see the unit economics, so our smallest product cost about 29,000 rupees including bio digester system, a double burner stove and installation charges. Now, this generates about 1.5 cylinders of cooking gas every month. produces about 4,000 litres of organic fertilizer agreement. If you look at cost benefit, the payback period of system is less than two years”
Piyush also adds that from next year, their product will be even cheaper as it will become eligible for the subsidy provided by GOI on biogas digester.
Innovation to cater to the needs of Indian Farmer:
We then talk about how Indian farmers are different from farmers in other parts of the world and if Sistema has made any product innovations to suit the needs of Indian farmer. Piyush explains
“We have done many innovations to suit the energy needs of our customers in India. For example, you may have seen in Maharashtra or any rural part of India, the electricity is not available all the time. say a farmer wants to milk his cows and wants to use milking machine in the morning 5am or in the evening 7pm, at the same time, electricity is not available. So farmers have to use diesel gensets to produce electricity and they have to incur the cost of diesel. We have innovated & have come up with a dual fuel kit, in which we convert existing diesel engine into biogas engine. So farmers can use their biogas to produce electricity, and they can run their farm machinery. We also come up with some special burners. For example, many farmers want to convert their milk into mava and they can use biogas to convert that and it will be like a free fuel to convert milk into other dairy products. We have come up with some bio slurry storage tanks. So farmers want to use bio slurry at different times of the week or different times in a month. They can store it into the storage tanks and can apply whenever they are fertilizing the field.”
Then we discuss competitiveness of biogas vis a vis other fuels such as LPG and Piyush explains that since biogas is made from farm waste, there is no additional cost to it, it is cheaper than LPG, whose prices keep fluctuating depending on the international prices of fuel.
Future of Biogas in India
In the end, we discuss about biogas’s future in India and possibility of biogas becoming a mainstream fuel. Piyush says that after pandemic, climate crisis is the single biggest challenge for the humanity and renewable energy offers the solution. He adds that just like solar, which became mainstream with the help of initial government support, biogas would also take a similar path and as the volumes grow, the sector will not need subsidy.
He then explains that out of 43 million farmers who could potentially use biogas, currently only 5 million are using it. We still have millions of farmers who can adopt biogas technology. Further biogas technology could also be very useful in cities where large amount of organic waste is getting collected every day. Therefore, market for biogas technology is large and the sector is poised to grow significantly.
you can listen to the audio of this podcast herehttps://www.buzzsprout.com/1673143/episodes/8545953
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Bharti is trying to help green businesses in raising capital. She is founder of Fine Train and her areas of expertise include transaction advisory, due diligence, financial research and market assessment.