Swachh Bharat Abhiyan (Clean India Initiative) – Serious Business Opportunity?
Few weeks back, during our discussion on Politico/socio/economic situation of the Indian market with a Private Equity Investor, we digressed into a very interesting discussion…. “Swachh Bharat Abhiyan and related business opportunities”.
Launched with fanfare, on 2nd Oct 2014, the Swachh Bharat Abhiyan (SBA), remains most talked about/promoted campaigns of social cause by the new Indian Government. While lot is spoken / written about the initiative, there are some serious thoughts required on opportunities to be exploited.
For Modi Government, it would mean an investment worth hundreds of millions over next five years and this investment would need to be channelized from
- Increased taxes/ cess on products, services
- Reduced subsidies on certain products/services
- Selling out of non core assets
- Pooling of Corporate Social Responsibility (CSR) activities
- NGO’s and individuals coming forward and doing their bit for the initiative
Will this campaign be really successful, just because it is a social cause or a CSR activity? For a successful initiative, it’s important that this movement, grows from social initiative, to that has positive financial impact on the stakeholders.
Focus areas of the initiative are clean drinking water, solving the issue of open defecation, proper sanitation & drainage systems and clean surroundings to name a few. Each of these areas provides a great business opportunity for businesses.
At a micro level, each of the focus areas of the campaign provides tremendous business opportunity for enterprises across verticals, provided three things work together a) Improvement in financial conditions of the stakeholders (directly and Indirectly) b) Transparent and recorded time-bound outcomes c) Effective implementation and involvement of the stakeholders
There are various opportunities across:
- Startup Opportunities: “Swachhta Udyami Yojana” initiated by govt. to provide concessional loan to build community toilet projects and sanitation related vehicles to collect the garbage. (*Annexure)
- FDI Opportunities: taking clue from Singapore’s “Keep Singapore Clean” campaign to attract investments into areas of technology, Healthcare, Construction etc.
- Transportation: SCM development around transportation of clean drinking water, open defecation and waste management. (*Annexure)
- Water Filtration/Water Purifiers: Includes water pumping and containment, filtration, storage etc. Focus is on to look at new technological initiatives. (*Annexure)
- Pipeline: The policy document outlines, that by 2019, water pipelines will enable on demand tap connection for all households. Sewage lines deployment, also provides an opportunity for pipeline industry. (*Annexure)
- Open Defecation: About 113 mn households do not have access to toilets (census 2011) leading to open defecation. Government has reserved, INR 1,34,000 crore for building 11.11 crore toilets in rural India by 2019. Around INR 62,009 crore for eradicating open defecation and manual scavenging, managing solid waste in urban areas, etc.
- Resulting in opportunities for FMCG, Health and Hygiene companies, Ceramic Companies and Real Estate/Construction Industry. (*Annexure)
- Waste Management: CPCB estimates, that, Urban India generates about 47-mn tons solid waste every year, about 1.3 lakh tons every day with limited recycling effort. (Central Pollution Control Board -CPCB)
- Thailand and Netherland serve as two biggest examples for waste management Thailand recycles 22% and Netherlands 64% of its waste and generated wealth from waste, created jobs and addressed the rising climate change issues.
- Treatment of Solid Waste: Using treated biodegradable waste as organic fertilizers, reducing carbon footprint, recycling of plastic and metals can save forests and help maintaining the ecological balance. Emerging opportunities:
- Applications on waste management tracking
- Alternates sources of fuel production ( e.g. solar energy)
- Biodegradable Bags and Garbage Bins:
- Fertilizer generation
- Bottle crushing
- Waste Management Plants
- Solar energy
- Fuel production
Awareness Building: To increase awareness among public at large about being Swachh and keeping the surroundings clean, which can bring in business opportunities across verticals
- FMCG: Driving cleanliness, as a habit, for products like Handwash, Toilet Cleaners, Floor Cleaners, Wet Wipes, Sanitizers etc. (FMCG: Fast moving Consumer Goods)
- Technology – App development to spread the awareness, to connect the community socially towards the cause and also to post their achievements (of the initiative) via mobile phones.
- Advertising Industry: Spending on promotion/ communication of Swachh Bharat Abhiyan will increase as the government releases more ads, including television commercials, to promote sanitation and an end to open defecation.
- BFSI Vertical: Financing, mentoring and equity investments apart for insurance, SME loans and small loans for entrepreneurship across all these business opportunities.
- Travel and Tourism: Government has introduced, Swachh Bharat Swachh Smarak (Clean India, Clean Monuments) initiative. To clean up India’s monuments and heritage sites for a hassle free experience to tourists. Apart from Archaeological Survey of India (ASI), Tourism Ministry will invite state governments as part of this initiative.
- Technology – Surveillance devices: To monitor cleanliness, security and well being of tourists, social behaviour, tours and travels etc. all are opportunities for SMEs.
These are just few opportunities that “Swachh Bharat Abhyan” offers, however exploiting these opportunities will depend on
- Return on Investment and viability of business case
- Positive impact on Financial status of stakeholders
- Ease of adoption
- Ease of Financing and Government aid
Having said that, apart from large companies and companies with structured CSR programs, most businesses are fence sitter or exploring ways to join this initiative.
Currently, social business models being implemented are rigid and largely not scalable with limited impact on the financial outcome of the participants.
But what if your organization is not sure what is optimum route to social cause. Including any social cause into any organization’s framework requires good amount of thinking and a credible framework for an optimum outcome. Monk Consulting can help you incorporate this mission into your Company’s Vision/mission. The step-by-step approach to operationalizing this
- Define your Social roadmap
- List the set of areas close to your company’s existence
- Exploit your extended enterprise, partners, customers and involve them for a better outcome
- Financial benefit to the participants as outcome. Always think how this initiative can add financial benefit/ improve earnings of those involve and for this need to think long term.
Business Opportunities for enterprises across verticals:
- Government’s Scheme for entrepreneurs: National Safai Karamcharis Finance and Development Corporation (NSKFDC), (an Apex Corporation of the Ministry of Social Justice and Empowerment), launched “Swachhta Udyami Yojana” to offer concessional loan for viable community toilet projects and sanitation related vehicles to collect the garbage. Under the Scheme, entrepreneurs among safai karmacharis and identified manual scavengers can avail loan up to defined ceiling at concessional rate of interest @ 4% per annum. In case of women beneficiaries, there is a rebate of 1% in the rate of interest charged.
- Transportation of clean drinking water : Pune-based Jaldoot, delivering potable water at homes by using women-driven three-wheeler rickshaw fitted with a water filtration unit that purifies water from surface source like lake or rivers
- Opportunities in area of Open Defecation: The Delhi Urban Shelter Improvement Board (DUSIB) under ‘slum sanitation strategy’ is providing mobile toilet vans to slum areas and will invest INR 42 Crore for the same.
- Opportunities in area of Waste Management: Garbage picking from a certain locality and waste disposal. Good for individual transport entrepreneurs by hooking on to locality specific opportunities
- Water Purification: Community filtration plants/ locality specific filtration plant, or home installation
- Water Testing Technology: Increasing need for water testing devices that detect water contamination level. E.g. TernUp Research Labs, a Bangalore-based company-offering device to test water contamination level called Caddisfly. The company had also raised funds from the Water and Sanitation Program (WSP) by the World Bank in 2012.
Pune-based Jaldoot, delivering potable water using women-driven three-wheeler rickshaw fitted with a water filtration unit that purifies water from surface source like lake or rivers using ultrafiltration membrane technology costing only 60 -70 paisa per liter.
- Water Dispensing machinery (ATMs) : Water ATMs are dispensers using pre-paid smart cards, allowing people to fill containers up to 20 liters for INR 5 – INR 8.
Water ATMs are installed in borewells, with very low levels of water considered unfit for drinking, Water passes through a treatment plant during which ultra-filtration, nano-filtration and ozonization happens. Thus making it safe for drinking. Once water starts flowing into the storage unit, people can collect it by swiping cards as per their requirements
Each ATM costs anywhere between INR 5-12 lakh depending on the brand, output, solar power, etc. Sarvajal organization that has built a franchised networks of its “water ATMs” serving 110,000 rural customers in India. These ATMs leverage the prepaid model of cellphones on the business side and use mobile technology to enable real-time monitoring with the ATMs’ sensors. That allows Sarvajal to track water quality, see what times people draw upon their water supply, and quickly fix any problems that come up.
- Open Defecation being one of the major issues, many corporates have undertaken construction of toilets in different areas as a part of their CSR activity. Out of the total money allocated for the campaign, INR 1,34,000 crore has been reserved by the government for building 11.11 crore toilets in rural India over the next five years. The rest INR 62,009 crore has been allocated towards eradicating open defecation and manual scavenging, managing solid waste in urban areas, etc. According to Census 2011, about 113 million households do not have access to toilets and members of these households, including women and girls, defecate in the open.
Hindustan Times studied public sector contractors to arrive at a cost of INR 15,000-20,000 for a basic, functional toilet. The cost includes the price of bricks, cement, sand, roof, door, sanitary ware, plumbing, septic tank and labor. At this price, it will cost between INR 1.65 lakh crore and INR 2.2 lakh crore to build toilets for all 113 million households.
Constructing bio toilets, mobile toilet vans, water drainage and sanitation companies, maintenance of toilets and their regular cleaning are some opportunities.
Business Opportunities in area of solving the problem of Open Defecation:
- Ceramic and Real Estate/Construction Industry:
- Bio Toilets: bio-digester-based disposal systems in some of its new toilet blocks and mobile toilet vans
- Subscription based Chemical Toilets: A partnership between OpenIDEO, Unilever and WSUP (Water and Sanitation for the Urban Poor) in Ghana. Clean Team provides a subscription-based chemical toilet service with no upfront charge for the toilet hardware. Instead, customers pay a weekly or monthly subscription to access the sanitation service. A chemical toilet is placed in their home and then serviced, emptied and cleaned. The entrepreneurs who run the service make money by servicing the toilets
Business Opportunities in area of Waste Management
- Treatment of Solid Waste: While solid biodegradable waste can be used for agriculture as organic fertilizers, thereby reducing carbon footprint, recycling of plastic and metals can save forests and help maintaining the ecological balance. Tn of waste produced by India each year provides opportunities for not only solid waste management companies but also for applications on waste management tracking, alternate sources of fuel production like solar energy etc.
- Biodegradable Bags and Garbage Bins: Bangalore has mandated residential garbage to be segregated as biodegradable and non-biodegradable and be disposed of in separate disposable bags.
- Fertilizer generation: An interesting idea that the Gates Foundation is exploring is the Urban Sanitation Markets, where they are aiming to provide a platform for private sector providers to profit from the byproducts of sanitation such as energy and fertilizer generation from fecal matter.
- Bottle crushing: Petronet LNG Limited has installed PET water bottle crushing machine at Platform 12, Ahmedabad Railway Station. This machine crushes used PET bottles which will be further recycled as recycling PET bottles uses two thirds less energy than making PET bottles from oil.
- Waste Management Plants: Hyderabad based Ramky facilities treat biomedical, hazardous and municipal waste. It won INR 897 Crore integrated solid waste management project for Hyderabad under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). In June 2014, company raised INR 200 Crore in private equity investment led by IL&FS Investment Managers Ltd (IIML) and others including Standard Chartered IL&FS Asia Infrastructure Growth Fund (Singapore), Tara India Holding A Ltd (Mauritius), Tara India Fund III Domestic Trust (Mumbai) and Tara India Fund III Trust (Mumbai). The firm has already secured contracts for 4 mt per year
- Fuel production: Municipality of Alappuzha, Kerala has set up biogas plants, pipe compost units in households and aerobic composting units in public places
Business Opportunities in area of increasing awareness
- FMCG sector: If we look at Health and hygiene companies like Reckitt Benckiser, Dabur, Future Group and HUL have the opportunity of driving cleanliness as a habit through products like Handwash, Toilet Cleaners, Floor Cleaners, Wet Wipes, Sanitizers etc.
An example of FMCG companies tapping the opportunity is Hindustan Unilever; it has taken a piece of land on lease to construct hygiene centers which would have toilets, bathrooms, facilities for laundry and water recycling facilities. Users will have to pay. Once successful, HUL would be able to roll it out to many other slum areas. Major advantage of HUL here is that all the brands that would be used in the centers would be HUL brands and the exercise would help increase the brand loyalty of users towards HUL
- Application Developers: An example of this is, Delhi-based startup, SocialCops has released an Android Application “ICleanIndia – Swachh Bharat Mission” to enable citizens to participate in the Swachh Bharat Movement. The application allows its users to share pictures of unclean spots in an area, spot it on the map and invite friends/relatives/co-workers for a cleanliness drive. In line with devoting 100 hours a year to clean India, the ‘I Clean India’ app will also allow individuals to keep a track of their hours, compete for badges and share their work across Social Media platforms
- Ecommerce Companies, websites like Snapdeal have their “Swachh Bharat Stores” online and using it as a promotional tool for cleanliness related products like dustbins, mops, floor cleaners, vacuum cleaners’ etc. through the national campaign. Flipkart and Snapdeal have also introduced a whole new range of sanitary items across a range of INR 50 to INR 50,000.
- Technology – Surveillance devices: to keep a check on keeping the city clean. In Alappuzha, Kerala, the ministry has set up surveillance cameras across the city, linked to the police control room, to catch those littering public places.
Press Information Bureau
Times of India