SABRAS SABRAS the second salt march... the second salt march...
an enterprise impacting the lives of
12,00012,000 small salt producers & 2,50,0002,50,000 workers of India
Rajesh ShahChairman & Managing Director
May 2010
Theory of ChangeTheory of Change
If the comparative strengths of aggregated small salt producers &
professional managers are combined, then small salt producers
will have access to markets, technologies & institutional credit,
thereby significantly increasing their livelihoods.
India: 3rd largest salt producer
Current Production: 200 lac MTs200 lac MTs Current Utilization
Domestic– Human use 40%– Industrial use 48%
Export 12%
Current Volume: Rs. 7500 CrRs. 7500 Cr
By 2020 Production: 400 Lac MTs 400 Lac MTs
Indian Salt Industry Overview Indian Salt Industry Overview
India’s Salt Producers• Total Total 13,00013,000• Small salt producers 11,700 11,700 • Production 36%36%• Market Value 2854 Cr 2854 Cr
Salt workers only get 3.35% 86 Cr 86 Cr
Salt workers in • Production 1.5 lac1.5 lac• Handling 1.0 lac1.0 lac
SALT PRODUCTION & ISSUESSALT PRODUCTION & ISSUES
Problems to be solved Problems to be solved
Health ProblemsHealth Problems• Due to constant exposures to
- High temperatures,
- Dusty winds, - Glare & Salty water in desert
• Salt producers - Suffer - High blood pressure,
- Eye & skin diseases
- lack of access to water, health,
education and community life.
when agarias are cremated their feet do not burn as they contain lots of salt.
Problems to be solved (cont’d) Problems to be solved (cont’d) Economic ProblemEconomic Problem• A salt producer annually Produces 10,000 - 12,000 MT• Cost of Production Rs. 70/MT• Borrows : Rs. 50,000 from local trader and locks the sale price• Sale price : Rs. 80/MT • Earns: Rs. 10,000 – Rs. 12,000 per year • Salt producer only get between 1% - 8% of the final market price
The value of the bag is more than the salt it contains
Salt Producers operate individually and do not have access to institutional credit, technology & markets
SABRAS OVERVIEWSABRAS OVERVIEW
8
Formation of the CompanyFebruary 2007
OperationsProcuring, processing, packaging and
marketing salt in Kutch, Gujarat
Ownership Structure 85% SAVE Ltd (Technical Service Organisation)
15% Salt Producers
Governance StructureThree Directors (One from SAVE and Two
from salt producers group)
ManagementProfessionals Managers
COMPANY OVERVIEWCOMPANY OVERVIEW
Management TeamManagement Team
Rajesh Shah CMD of the SABRAS is an architect by training and MD of SAVE Ltd, having 30 years of engagement
in social & commercial sector Umar Kureshi Manager Production, having 40 years of experience
in salt production in Little Rann of Kutch
Suresh Thakkar Manager Marketing, having 35 years of experience in Marketing of fruits & vegetables, spices & salt
Mukesh Thakar Asst. Manager, having 10 years of experience in salt production in Little Rann of Kutch
Vijay Solanki Field Supervisor
Chetan Mehta Accountant (part)
Rohit Dudhela Company Secretary (part)
SABRAS
BUSINESS MODELBUSINESS MODEL
Industry expertise
• Experience in production and distribution
•Market access
On-site support
• Regular field visits with salt producers
Strong relationships with salt producers
• Understand community
•Governance
Access to credit / asset ownership
• Govt. subsidies
• Guarantor to banks Loans / interest paid with salt sale proceeds
Salt supply chain & SABRASSalt supply chain & SABRAS
Present Future (Over next three years )
1. Sold 30,000 MTs of salt 2. Increased procurement
price from by from Rs. 80 MT to Rs. 125 MT
3. Trial of two solar pumps
1. Reduce transportation costs 2. Provide 250 Solar pumps3. Achieve annual sale target of 1,25,000 MTs 4. Explore production of by products5. Initiate Brand Development
Pass on surplus to salt producersPass on surplus to salt producers
Rs. 120 MT Rs. 7,200 MT
Start Year 2008
Current Year 2010
No of Suppliers 28 salt producers 39 salt producers
Quantity of salt 7,500 Tons 22,000 Tons
Product Bulk Bulk
Procurement Price Rs. 80 per Tons Rs. 125 Per Tons
Designed & tested equipments
for salt pan making & harvesting
solar energy driven pump
Set up Community Resource Center for salt
0 1
Provide Knowledge services 28 Salt Producers 100 salt producers
Achievements to date Achievements to date
GROWTH PLANGROWTH PLANTechnology, Volume, Technology, Volume,
By-products, BrandBy-products, Brand
SOLAR OPPORTUNITYSOLAR OPPORTUNITY
Data based on field trials supported by National Bank for Agriculture and Rural Development
(“NABARD”)
Pump Type
Life of Pump
Cost Annual Maintenance
Annual Fuel
costs
Savings over Life of pump
Diesel 10 years 25,000 10,000 60,000 -
Solar 15 years 2,00,000 15,000 - 8,25,000• Solar pumps save 4 metric tons of CO2 per salt producer
per annum• Producers can recoup capital costs within 3 years
Goal for the next 3 yearsGoal for the next 3 years
Particulars 2010 2013No of Suppliers 39 salt producers 250 salt producers
Quantity of salt 22,000 Tons 1,25,000 Tons
Product Bulk Bulk, Retail & By – products
Procurement Price Rs. 125 per Tons Rs. 140 per Ton
Costs reduction (use of solar pump)
Rs. 60 per Ton
Provide solar pumps 02 250
Provide Knowledge services 100 Salt Producers 4,500 Salt Producers
Growth Plans: Resources LinkagesGrowth Plans: Resources Linkages
• Scaling up Partner – Agaria Hitrakshak Sangh (AHS) with 4,500 members. A
representative is a member of board of directors of SABRAS
• Knowledge Resources– Tied up with Central Marine Chemical and Salt Research
Institute, (CMSCRI), Gujarat, India
• Financial – NABARD , local banks & Government have agreed to
provide credit linkage for salt production & purchase solar pumps.
FINANCIALSFINANCIALS
FY 2010-11 FY 2011-12 FY 2012-13
Solar pumps provided
50 100 150
Revenue 70,96,750 99,08,625 2,61,97,000
% growth 39% 164%
EBITDA 28,50,250 40,79,500 1,19,00,250
% margin 40% 41% 45%
Carbon emission reduction (metric tons)
200 400 600
FINANCIAL SUMMARY
TRI-PARTY FINANCIAL AGREEMENTTRI-PARTY FINANCIAL AGREEMENT
SABRAS
Bank 70% subsidized loan
Government30% cash subsidy
SABRAS• Links bank/govt./ pump supplier• Procures salt • Repays loan
Salt Producers• 5% margin money• Repayment 500 MT of salt for three years
The Ask: Rs 1.5 Crore revolving overdraft facility
THANK YOUTHANK YOUInvest in SABRAS for the second salt march Invest in SABRAS for the second salt march
