CASE  1:  ENVIROFIT  India  

Sandra  Romero  Ruiz    May  27th,  2014  -­‐  Phnom  Penh  

•  Development  of  quesAonnaires  (Value  Chain  Analysis)  ✓  

•  Individual  interviews  (program  managers,  business  units  of  the  value  chain)  ✓  

•  Visits  to  the  field  ✓  •  Focus  group  discussions  ✗  •  Desk  review  ✓  

•  Preliminary  findings  presentaAon  ✗  

Methodology  Used  

Where?    

ENVIROFIT  India  main  office  in  Pune,  and  Partners  in  Tamil  Nadu  state    When?    

Third  week  of  April  2014    What  kind  of  interviewees?    

Program  managers,  field  staff,  partners  (MFIs  &  NGOs),  users  

INTERVIEWS  &  FIELD  VISITS    

What  is  ENVIROFIT  India?    A  social  enterprise  established  in  2008  as  a  subsidiary  of  ENVIROFIT  InternaAonal.    

INTRODUCTION  &  HISTORY    

India

1.  OrganizaAonal  CharacterisAcs  2.  Business  Strategies  Employed  

a)   ENVIROFIT  India  Value  Chain  

3.       Financial  Model  

4.       Market  access  and  trends  

5.  Channel  Strategy  

STUDY  FINDINGS  

ORGANIZATIONAL  CHARACTERISTICS  

• Type  of  organizaCon:  Social  enterprise  established  in  2008  

•   Aims  to  develop  and  distribute  clean  technology  soluAons  that  improve  health,  livelihoods,  and  the  environment  while  enhancing  energy  efficiency  across  Asia.    • Design   is  done   in   collaboraAon  with  engineers  at  Colorado  State   University,   the   Clean   Cook   Stove   was   tested   in   their  labs  and  in  the  field  to  ensure  that  it  reduced  emissions.  

ORGANIZATIONAL  CHARACTERISTICS  

OWNERSHIP  OF  THE  MEMBERS  –  Business  Units    

•  ENVIROFIT   India   outsources   all   services   of   the   value   chain  from   different   partners.   All   partners   are   legally   registered  businesses   or   organizaAons,   and   ENVIROFIT   India   signs  MoUs  billaterally  with  all  of  them.  

•  They   are   specialized   in   their   field   of   work   (manufacturing,  logisAcs,  Microfinance,  Savings  Groups,  etc.)  

ORGANIZATIONAL  CHARACTERISTICS  

WHERE  THEY  WORK    

-­‐  Andhra  Pradesh    -­‐  Assam  -­‐  Bihar        -­‐  Gujarat  -­‐  Karnataka      -­‐  Kerala    -­‐  Maharashtra    -­‐  Manipur  -­‐  Orissa      -­‐  Rajasthan  -­‐  Tamil  Nadu    -­‐  Uear  Pradesh  -­‐  Uearakhand    -­‐  West  Bengal  

ORGANIZATIONAL  CHARACTERISTICS  

NGOs M

FIs CSR

End users India

•  Reliable organizations •  Market intelligence •  Embedded services •  Finance Facilities

International

ENVIROFIT  India  Value  Chain  

BUSINESS  STRATEGIES  EMPLOYED  

Production Distribution &  Commercialization Inputs     End User

PRODUCTION FLOW

FINANCIAL FLOW

INFORMATION FLOW

BUSINESS  STRATEGIES  EMPLOYED  

ENVIROFIT  formalizes  agreements  with  all  

business  units  of  the  V.C  

•  Copyright  •  Centralized  VALUE  CHAIN  

(1  industrial  manufacturer  &  1  distributor)High  quality  control  

•  400,000  ICSs  sold  from  January  2008  to  April  2014  

•  Channel  strategy:  solid  partnerships  with  reputable  NGOs,  MFIs  and  Private  Sector  (CSR),  retailers,  cooperaAves  of  producers  

End  Users  

NGO

s  (IVDP)  

MFIs  

(Fullerton)  

Industrial  Producer  

(x1)  

Distributor  (x1)  

CSR  CooperaA

ves  

VALUE CHAIN

BUSINESS  STRATEGIES  EMPLOYED  

VALUE CHAIN

Industrial  Producer  (x1)  

Distributor  (x1)  

End  Users  

Independent  RETAILERS  

•  ENVIROFIT INDIA has tested numerous forms of channeling their product

•  Internet Based sales (Amazon)

•  Working with retailers has been one of them, it is not currently the main channel, but it will be strengthen once the bu s i n e s s m o d e l i s mature

PROSPECTIONS FOR THE FUTURE :

FINANCIAL  MODEL  

ACCESS  TO  FINANCIAL  CAPITAL  

•  Carbon  finance  –  Carbon  Credits,   registered   in  2012  &  Carbon  Offsets  –  VERs,  CERs  &  Gold  Standard  

•  Profit  from  sales.  Stove  pricing  strategy  –  Price  fixed  along  the  Value  Chain  

•  Loan  from  IntelleGrow  (18  months  period)  •  End   User   microfinance   scheme   –   through   partnerships   with  

MFIs  (Fullerton),  through  Saving  &  Credit  schemes  •  Agreements   with   CooperaAves   of   Producers   –   Dairy   Industry  

and  Tea  PlantaAons  –  parAally  financed  for  the  End  User  with  a  CSR  model    

Origin  of  the  Capital  invested:  •  Profit  from  sales:  re-­‐invested  in  the  Value  Chain    •  Loan  

Mainly  in:  •  Monitoring,  reporAng  and  verificaAon  (Carbon  Credit)  •  ENVIROFIT   India   Officer   siing   in   the   Unit   of   ProducAon   -­‐  

Manufacturer  (quality  standards  and  quality  control)  •  Training   to   the   Officers   of   the   MFIs   and   NGOs   –   IncenAve  

mechanism,  they  become  promoAon  officers  •  ENVIROFIT   India   facilitates   the   supply   chain,   outsourcing   all  

services  

FINANCIAL  MODEL  

INVESTMENTS  

FINANCIAL  MODEL  RETURN  ON  INVESTMENTS  

•  Efficiently  made  throughout  the  Business  Units  in  the  Value  Chain  

•  Of  the  total  price  30,5  USD    •  15  –  20  %  covers  manufacturing  costs  •  55%  operaAons  cost  and  distribuAon  •  25%  channel  margin  

•  Turnover  revenues  mainly  spent  currently  covering  operaAonal  costs  –  the  VC  is  sustainable.  Soon  in  Business  scaling  

•  There  will  be  some  retailing  units  in  the  future  some  return  at  that  level  

•  Growing  sales  –  promising  naAonal  market  (middle  and  low  income  households  from  rural  areas)  

•  ENVIROFIT   enters   markets   where   there   are   already  other   industry   players   and   exists   certain   Market  Development  –  Not  Market  pioneer  

 •  Low   investment   in   markeAng   or   awareness.   Low  

visibility    •  IncenAve   mechanism   for   Field   Officers   of   partner  

organizaAons  who  promote  the  ENVIROFIT  ICS  

MARKET  ACCESS  &  TRENDS  

 •  Strategic   partnerships   with   reliable   and   popular   NGOS   and  

MFIs   with   high   reach   out   to   rural   communiAes,   corporates  and  government  –  high  number  of  partnerships  

•  ENVIROFIT  is  exploring  online  sales  (Amazon,  Evan's  Outdoor  Store  (hep://www.evansoutdoorstore.com)  

•  Retail   sales   –   will   be   re-­‐launched   when   the   business  model  reaches  maturity  

•  Centralized  channel  strategy,  copyrighted  product  

•  Amer  sales  support  &  2  years  warranty  

CHANNEL  STRATEGY  

SWOT  ANALYSIS  

STRENGHTS   WEAKNESSES  

OPPORTUNITIES   THREATS  

ENVIROFIT  Case  

 RECOMMENDATIONS  

 

RECOMMENDATIONS  

•  “Bring  addiAonal  financial  support  for  naAonal  awareness  and  visibility  of  the  industry”  

•  “AddiAonal  funds  should  be  invested  in  developing  quality  protocoles”  

•  “Financial   support   should   be  devoted  to  educate  the  end  user  on  those   protocoles   and   levels   of  quality”  

•  “No  subsidies”  •  “Boost   regional   opportuniAes   and  

cooperaAon,   enabling   environment  for  the  ICS  industry  in  the  region”  

RECOMMENDATIONS  

•  “  The  key  to  scalability  is  changing  the  habits  of  the  exisAng  user.  Just  giving  the  stove  does  not  help.  We  need  to  ensure  she  uses  the  stove  100%  and  not  intermieently  between  the  mud  stove/  tradiAonal  stove  and  ENVIROFIT  stove”  

•  “Stronger  role  of  coordinaAon  plaporms  -­‐  GACC  (awareness,  quality  validaAon,  etc.)  needed”