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"ONE S-5" One Stop Sustainable Scaleable Sanitation Solution

Bridge the gap of sanitation supply chain as Market Aggregator to achieve ONE S5 by integrating demand, finance & construction of toilets

Photo of Abhishek U
28 10

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I have been associated with sanitation related matters since 2008, when my family started a NGO  by name Ashwatham (trust).  In the meantime I had to pursue my post graduation and specialised in Manufacturing Systems and Management with an emphasis on supply chain, value chain, quality and lean management systems. Simultaneously, I also did a course with CII on supply chain management. Back at home, I decided to start a construction company exclusively focusing on water and sanitation.  Since 2013, my company Udaygeeth Constructions Pvt Ltd, has been in the space of toilet construction along with the NGO Ashwatham which is involved in demand creation.


The Real Gap:

After doing some research of the sanitation space in India, I realised that there was a huge demand for toilets in India but there were many hurdles in fulfilling them. If households were prepared to build toilets, the first hurdle was finance for toilet construction. In cases where households were able to bring in amounts for construction at any interest rates, the next problem was in getting quality building materials at affordable rates and the third hurdle is in getting good masons to construct quality toilets.

We had taken up some construction work and it was during that time that we realised that there was a need to scale up as the demand was huge and there was a need to have sustainable solutions by way of ensuring the quality of the toilets. We realised that there was a conspicuous absence of market aggregation at the grass root level that would result in reduction of costs. We then decided to act as market aggregators by negotiating affordable rates with cement, steel rod, cement ring, pan, door, and plumbing & electrical materials manufacturers.  

Work done:

A toilet under construction


Fortunately we struck a deal with a company for building 34 toilets through their CSR funds in four districts. We had a chance to build one government school toilet (6x1), one government aided- school toilet (6X1) and one community toilet complex (6x1) in the rural areas and the rest of the 16 were individual household toilets in four districts in Tamilnadu. We realised that when we take up such small orders we were not able to negotiate affordable rates with local cement and steel distributors/retailers.


An individual household toilet under construction

 

What we want to do:

Through Ashwatham we got involved in demand creation at the community level, companies, institutions, small entities, and individuals. In most of the cases, though the demand creation was done by us lack of finance both at the household levels as well at our level were the main hurdles in taking the work forward. We had approached many banks and financial institutions during the last three years but none of them were prepared to assist us. We could neither get a term loan nor a working capital loan. Despite the hurdles we went forward with our own resources and took orders for construction of toilets. 

Doors getting ready for the school toilet

 

In order to focus on scale, we have now decided to look at proposals from MFIs  in the five states of south India. Based on the popular CEMEX model, when we have economies of scale,  we  ourselves will take up wholesale marketing of cement and steel in such a way that we can make a local demand for cement ring manufacturers and pre-fab manufacturers as per our specifications, quality and need. By doing so, the cost  per toilet will come down and help in eventually  scaling up and as well as ensure sustainability.

Our school toilet project

 

We have also decided to approach banks directly to support our prospective customers by extending loans at affordable rates as sanitation has come under the Priority Sector List of the RBI. Since the demand is huge and there is a scope for many players like us we believe that  many more market aggregators will emerge in other areas too. Right now we may be a pioneer and a path breaker but eventually we want to be a competitor in the emerged market of market aggregators.  Though the present focus is on pit toilets, we are also open to looking at emerging markets for alternate methods of waste management.

Our team at the construction site

    


How would you describe the stage of development of your idea?

  • Scaling phase

How big or scalable is the potential of your idea?

The demand for individual toilets in India is more than 100 million. We are targeting primarily south Indian states of Tamilnadu, Andhra, Telengana, Karnataka and Kerala. Eventually we will be moving to the northern part.

Explain the sustainability aspect of your idea

We believe that sustainability is primarily about construction of quality toilets that will remain functional, user friendly, used by all in a family, neatly maintained by the family, and with regular water supply. We also believe that each family has its own specific need and we are prepared to provide them a menu of toilets that will meet their demand- a basic toilet; toilets built with brick and mortar, hollow blocks, pre-fabricated structures, roofs with RCC or GS sheets; and combo toilets with attached/ separated bath rooms.

What types of financing would be required for your idea to be successful?

This model of market aggregation is a social enterprise and it basically needs financing at two levels- one at the household level for meeting the construction cost of the individual household toilet and next at the aggregator’s level. Now- a- days we have the Government extending incentives for financing toilets at the household level and the family is free to take loans from microfinance institutions also for building them. It is at the market aggregator’s level that finance is needed. To ensure sustainability, a term loan is essential and to meet the running expenditure when projects are taken up, an over-draft/cash-credit facility from a bank will be quite helpful. A start-up fund in the lace of a term loan will be a shot in the arm for the company since it is a social enterprise.

If you are proposing to partner with other organizations, please explain their role and reason for partnership.

During the last three years, my company has been in touch with NGOs, MFIs, banks, financial institutions, companies, institutions extending CSR facilities and needy families. We are prepared to work in partnership with MFIs by taking up construction in their areas of operation. We are also looking at possibilities to tie-up with companies which would like to use their CSR funds for construction of individual toilets in any given area. At a higher level we are also keen to work with institutions that are interested in developing suitable waste disposal designs for toilets in water laden areas for example in Kerala. We would be particularly interested in partnering with institutions that are working in the urban and semi-urban space.

In-country experience

  • Yes, for two or more years

If you have been operating in India, what has been your focus?

In 2013 when I registered my company it was the first full- fledged, exclusive toilet construction company in my country since I had made it clear in the Main Objectives of the Memorandum of the company. As we were prime movers in the new space of market aggregators-cum-construction it was difficult to convince partners, banks, NGOs, the government agencies etc. Despite these hurdles we invested our own resources to the run the company. We have taken up construction of school toilets, community toilets and individual household pit type toilets in four districts in Tamilnadu and this was mainly through a CSR funding project. With sufficient funds coming in we will be able to scale up and reach economies of scale soon in the five states in south India where we are planning to work.

Is your organization currently legally registered in India?

  • Yes

What states or districts will you target/are you targeting within India?

We are planning to work in all the five major states of south India- Tamilnadu, Kerala, Karnataka, AP, and Telengana. Based on the progress and experience gained we will move to north eventually. As mentioned earlier, we are prepared to tie-up with as many stakeholders as possible in these states.

Tell us a bit about yourself.

My ambition to become an entrepreneur set in when I was working in India’s leading coconut oil manufacturing company- Marico. My passion for entering the sanitation space was there since 2008 but it was in 2013 that I decided to go on my own by registering a private limited company exclusively for construction of toilets in India. My qualification as an engineer, post- graduation specialising in lean management and supply chain management, and a post- graduation in business management and diplomas in supply chain, German language all came in handy to choose my career as an entrepreneur. My profile is on LinkedIn for reference. I work as Director-Operations and my mother Ramalekshmy is the Managing Director and both are members of the Board. We have a team comprising of a civil engineer, two diploma holders working as supervisors, and masons & helpers.

Is this a new or recent idea for your organization? How does it differ from what you are already doing?

No. As mentioned earlier, this idea was there since Ashwatham (Trust) was started in 2008.
• From 2008-11, the ground work for knowledge exploration, awareness creation, studied pros & cons of the donor’s and the recipient, funds to kick-start our activities.
• Post 2011- realised the lacuna in the supply chain of sanitation. After my PG, I started the company to devote to the objectives of the company. At every step we took, there was an upgradation in the recent changes made in tech, govt’s perspective & approach, norms & funding position, & we arrived at the cost estimate for a toilet at each stage of time for various models.

There is no much of a change as sanitation is given the top priority from the beginning.
• Toilet Construction remains our first target.
• Future plans are in the area of FSM, bio-digestor’s research, it’s use at urban settlements.
• Plans to replace the pit toilets in Kerala that had contaminated the ground water, etc.
• R&D-in pipeline-to be patented

What are the two or three biggest risks for your idea and how will you manage the risks?

a) Confidentiality of my idea:
• Had applied to various VC/philanthropic competitions before.
• Chances of proliferation of my ideas & philosophy.
• I am confident that my idea is unique & only I can fulfil it.
b) Market Aggregation(MA):
• Huge impact created by the MAs like Uber & Ola taxies made the Local Players (LP) to adapt.
• When we enter as MA in toilet construction, where there is no market regulation, regulatory bodies, standards etc, there will be a small pinch in the profit of the LPs.
• Eventually, they may have to adapt to our standards to compete in the market.
• As a prime mover in the market we would face lot of hurdles/rifts/confrontations from LPs. When we reach economies of scale we foresee more competitors & we welcome healthy competitions.
c) Community/School Toilet Complex:
• We are ready to build the above complexes. Cumbersomeness of maintaining the complex should be taken care by the concerned authorities, else the entire effort will be in vain.

How would you propose to track or record the households or customers reached?

As we are the end product delivery agents for building toilets appointed by the financial institutions or any company, we will be in a position to give the number of toilet completed every quarter to these institutions. Once our product delivery (toilet) is made by us, those institutions will be able to retrieve the EMIs from their customers. Hence we can ensure the track record of toilets built directly/indirectly to the institution.

If you had two years and $250,000 USD in funding, how many households or customers would you reach?

With the amount of $250000 we would be able to create an infrastructure within our non-profit to support the for-profit with building equipment, vehicles, warehouse for market aggregation, etc. We would be able to reach out to build 6000 to 8000 household toilets for two or more financial institution’s customers in a span of two years when given a chance.

How would you propose to invest $250,000 USD if you received philanthropic/grant funding support from Water.org?

a) If the amount is made available to the non-profit we would be able to create an infrastructure within our NGO (Ashwatham) to support the for-profit (Udaygeeth Constructions) with building equipment, vehicles, warehouse for market aggregation, etc.
b) If the amount is given directly to the for-profit Udaygeeth Constructions, we propose to use it as capex to create the same infrastructure within the for-profit. This would be a better proposition since the assets will be in the for-profit and will enhance the credibility of the company, with which I can convince a bank/financial institution to provide me the much needed Cash-credit (CC)/Over-draft (OD) facility. As a market aggregator the biggest need for me will be to be fluid with cash all the time and this can happen ONLY with a CC/OD facility from a bank.

What type of support beyond grant funding are you most interested in?

a) Grant funding will be a real boost to kick-start my activities, I will still look forward to venture capital, private equity investments, long term finance from banks, concessional finance for recurring expenditure (OD/CC) at reasonable interest rates, bank guarantees, referral, tax concessions, CSR funds etc.
b) A new cross-linked financial model designed by me, will be implemented given a chance & I will be the pioneer. The parties involved will be interdependent and benefitted too.

Does your organization have Foreign Contribution Regulation Act (FCRA) approval?

No. Our Ashwatham Trust the non-profit organisation does not have a FCRA.
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Team (7)

BWDA Water & Sanitation Program's profile
Joslin Thambi's profile
Joslin Thambi Chellaiah

Role added on team:

"I read with great interest the proposal ‘B Smart’ from one of the community members whom I understand is an MFI and I propose to tie-up with such like-minded institutions which have a good idea about the supply chain nuances. I am also planning to have a similar tie-up with other MFIs and banks which are willing to take up such bulk financing for toilet construction and want a market aggregator to build toilets for their customers too."

Abhishek U's profile
Sean's profile
Sean Kearney

Role added on team:

"#CommPlumbing: This model to teach Plumbing "Art" through students is a very inspiring model. Students now need not depend on a local plumber as he knows what to do when a small issue happens at his/her home. This again is a way to make India a "Skilled India". We would like to tie up with them to teach the boys/girls where we build a toilet such that those little students will get inspired to use as well as know how to manage/repair a toilet when it is facing a problem with ease."

Info's profile
Info BankaBio

Role added on team:

"We would like to tie-up with Banka Bio-Loo when ever we get an order to install Indian DRDO's Bio-Digesters or similar Bio-Toilets."

Midhu S.V's profile
Midhu S.V

Role added on team:

"We would like to have a tie-up with Eram, when we get a chance to build community toilets. We would also like to join hands, to make more innovative researches & solutions to make better toilet models."

Sikandar's profile
Sikandar Meeranayak

Role added on team:

"We can work collaboratively in the area of WASH."

This inspired (1)

#CommPlumbing

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Photo of Ravivarman Neelamegam
Team

A very good intiative Abhishek, wish you the very best in your efforts to provide sanitation facilities to the needed people. Nowadays it is very rare to see young people, who think about the develoment of fellow human beings. We need a lot of youngsters to work for the society's welfare, along with their own development. I really appreciate your thoughts and efforts, please feel free to get in touch with me through my mail id, nravivarman@gmail.com.. All the best, continue your good work, cheers.....

Photo of Abhishek U
Team

Thanks a lot buddy, we need like minded people like you to create lots of awareness on WASH practices. We need to make more videos in such a way that people realise their mistakes done so far and change. 
As I had mentioned earlier Indian Railways is the biggest Open Defecator, but it is also a facing lots of problems like plastic disposal mechanism " both inside the train as well as on both the sides of its track". Many WASH related issues emerge in each and every corner of our nation, for example companies dump toxic wastes like arsenic, mercury, etc and many other wastes. 
This video is about the agitation against Hindustan Unilever Limited company's mistake for mercury contamination at Kodaikanal. 

https://www.youtube.com/watch?v=nSal-ms0vcI

We too can make many such path breaking videos such that people change and we can live a peaceful clean environment. 
Thanks Mr.Ravivaram. Lets work and clean the mess... :-)

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