Samridhi Agri

Products Pvt. Ltd.

Lokesh Kumar Singh

Executive Summary

About • Samridhi runs a dairy venture that creates livelihood solutions for

Ultra Poor Families (< $1.25 / day)

• Outreach: 226 Members in 12 villages in Barabanki District, Lucknow

• Incorporated as a Pvt. Ltd. since 2010

USP • Unique concept and delivery

• Providing cattle to those who can not afford it

• Use of local resources and skill development of villagers

• Holistic approach to livelihood enhancement

Funding Requirement • ~INR 3 crores over next 2 years

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Funding Requirement • ~INR 3 crores over next 2 years

Use of Funds • ~ INR 30 lakhs required to set up operations in 1 cluster (18 villages)

• Target 12 clusters over next 2 years:

• INR 1 cr for infrastructure + INR 2 cr for livestock

Funds Raised Till Date • Total of INR 64.62 lakhs have been infused

• INR 28.62 lakhs promoters’ equity, INR 31 lakhs FDI, INR 12 lakhs loan

Management Team • Extensive experience of over 70 years with target clientele through

Agri, Dairy, IT, Microfinance, rural Retail backgrounds

• Extensive experience in U.P.

• Distinguished Board of Directors with diverse backgrounds

Exit Possibilities • Further rounds of investment from VC / PE

• M&A with another rural supply chain company or large dairy producer

• Buy back after organic growth of 3-5 years

Inception: Objective was to provide business

solutions in rural supply chain. Along with UPAYA

(Ex-UNITUS team) conceptualized idea of micro-

leasing to Ultra Poor families in which family pay

through its labor

Mission: To increase the productive capacity of

About Samridhi

Mission: To increase the productive capacity of

the rural producers by providing sustainable

small scale business solutions in a socially

responsible manner

Vision: To create livelihood solutions for

1,00,000 families across over 1000 villages and

creating 20,000 direct jobs by the year 2017

Market Opportunity

District Rural

Population

Marginal

Farmers

Agri

Laborers

Sitapur 3,944,454 2,040,347 1,073,867

Barabanki 2,927,736 1,485,640 781,915

Lucknow 1,550,737 189,279 58,384

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Total 3,715,266 1,914,166

Target Segment Economic Indicators

and Gaps to be filled

Proposed Solution

• Landless laborers

• Marginal farmers

with low land

activity

• Almost no livestock

• No skills

• No productive assets

• PPI™ of less than 18

• Land size less than 1 acre

• No forward linkages

• No access to farm equipment

• Milk production and livestock

ownership as a livelihood option

• Agriculture credit with

moratorium on payments

Pain Points and Intervention Required

Pain Points in Service Samridhi’s Approach

• Low milk production

• Low milk rates

• No access to assets for milk production

• Holistic approach:• Infusion of patient capital

• Access to assets on micro-leasing

• Skills

• Information dissemination on best practices

• Inputs

• Marketing of produce

• Localized solution:

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• Localized solution:• Use of local resources

• Skill development of villagers

• Long term relationship with villagers

• Livestock healthcare services:• De-worming and vaccination

• Artificial insemination

• Cattle feed at the doorstep

• Para vet services

• Pricing:• Regularity of payment for milk

• Arrangement for fair price discovery of final produce

Irregular incomes

Borrowing at high cost

High cash Outflow

Lower Surplus

Low resources

Business Model: Unique Concept and Delivery

Client

Non-member

(already cattle

owners)

Member

identification Livestock distribution

Milk collection• 1 cow or 3 goats give on an avg

4.84 lt / day

• Members pledge 900 lt / year

• Additional purchased from

members and non-members

Milk Sale• Milk chilled in

BMCs to increase

shelf life

• Sold to Swadesh

Dairy for

distribution in UP

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Member (to

whom Samridhi

gives cattle)

identification • Legal contract

• Member selection

crucial to success

of business model

in long term

Livestock distribution• 1 cow or 3 goats

• Ownership of original

cattle granted after 3

years

Livestock rearing• Goats bought from Goat Trust

• Cows bought from cattle fair

• Reared at Samridhi’s farm for 2 weeks

• De-wormed and vaccinated

• Productivity checked to meet the min

yield requirement

Offspring handed back to

Samridhi• Goats: 1 female kid per goat per

year handed back

• Cows: 2 she-calves handed back

after 3 years

Information

Household Surveys conducted:

Chosen families need

dairy as a means of livelihood

Three standard

Training:

Shortlisted Clients brought to the farm to undergo cattle rearing training

Security Amount collected, and cattle handed over

Client Member Selection Process

Information Dissemination:

Chosen villages are targeted, village meetings conducted

Interested parties register their names

Three standard indices measured: PPI, HHI and Asset Index – chosen clients have combined HHI and AI of <10, and PPI <20

Families also evaluated on the basis of willingness and ability of taking care of cattle

Progress Out of Poverty Index

(PPI)

• Measures the overall capacity of a household to emerge out of poverty including family size, basic assets, family occupation, etc.

Household Index (HHI)

• Measures the physical household status –materials used to construct the home as well as size w.r.t members in the household

Asset Index

• Measures the availability of all kinds of household assets and the monetary value attached to each

Highly Profitable for Client and Samridhi

Cattle Owner

Non-Member

Specifics Client’s Benefit Samridhi’s Benefit

Benefit due

to better

price of

milk

General rate given by the milkman is INR

15/lt. Samridhi pays INR 20/lt on the

basis of Fat and CNF

INR 3/Lt margin between purchase

price and sales price

Benefit

from cattle-

feed

Samridhi delivers feed at the client’s

doorstep at INR 10/bag less than the

market price

INR 20/bag as Samridhi buys bags in

bulk

Benefit

from vet

services

Clients pay a vet fee of INR

20/inspection: Specialist visits each

village in an organized Health Camp

Additional sales of cattle feed and

medicine

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Non-Member

Cattle Rearer –

Member (cattle

given by Samridhi)

services village in an organized Health Camp

Specifics Client’s Benefit Samridhi’s Benefit

Pledged

milk to

Samridhi

About 900 lt/year is pledged to Samridhi

for which Samridhi pays a fixed fee of INR

600/month

About INR 10,800/year

Milk over

the

pledged

quantity

Client gets paid on the basis of quality of

milk on weekly basis

(just like non-members)

INR 3/lt margin between purchase

prize and sale prize => INR

2,700/year margin as client livestock

produce around 1700 lt / year

Calves Clients get to keep the original animal and

half of the calves borne during the

contract period

INR 6,000 as terminal value of calves

Current Status of Operations

• First piloted the model in April 2010 at Deva Block of Barabanki District in U.P:

• Barabanki: Marked as ‘A’ category district with social and economic performance below

the National Average

• Deva: Rural block with agriculture and animal husbandry as main activity

• Currently operating in 12 villages in UP

• Livestock owned: 23 cows and 54 goats

• 41 members: 23 cow beneficiaries, 18 goat beneficiaries

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• 41 members: 23 cow beneficiaries, 18 goat beneficiaries

• 185 non-members from whom Samridhi collects milk

• Distribution tied up with Swadesh Dairy (Gopaljee Group) for distribution in UP

• Constantly measure and monitor impact created:

• Collects baseline indicators to capture social metrics including the PPI™

• Housing Index

• Nutritional Index

• Education Levels

• Cash Flow of households

• Repetitive surveys every quarter to assess impact on households

Sanchetna Financial Services Pvt. Ltd.

• Partnership since April 2010

• Provide financial products: Cattle Insurance, Cattle Loans

UPAYA Social Ventures

• Formal investor since October 2011

• Provide financial and advisory support

The Goat Trust

• Provides livestock procurement and para vet services

Holistic Development Enabled with Partnerships

• Provides livestock procurement and para vet services

• Purchased goats in two batches: December 2011 and March 2012

Swadesh Dairy

• Marketing Partner since March 2011

• Responsible for packaging and retailing of milk

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• Region sought to scale up to: Central UP

• Identify clusters of 12 to 15 villages with large number of small and marginal farmers /

labourers with no fixed source of income

• Unit model set up at the centre of village, thus ensuring centralised system of service

distribution and collection

• Each cluster / unit model comprises of:

• ~18 Village Collection Centers

• 100 families that will be given cattle (members)

Scalability Proposition and Milestones

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100 families that will be given cattle (members)

• 480 families that will be non-members

• 1 BMC + supporting infrastructure

• Actively add more partners for distribution - currently in conversation with 2 partners

• Plan to reach out to 12 clusters (288 villages) by March 2014

Jun’12 Sep’12 Dec’12 Mar’13 June’13 Sep’13 Dec’13 Mar’14

BMC 1 3 4 4 10 12 12 12

Villages 18 40 70 96 160 250 288 288

• Capital Requirement for one unit (catering to ~18 villages, ~580 families)

Unit Economics and Use of Funds

Item Unit Investment (INR)

Bulk Milk Cooler (2000 lt) 1 5 lakhs

Milk Testing Equipments 1 per village collection center 7.2 lakhs

Cows 50 10 lakhs

Goats 150 7.5 lakhs

Grand Total 29.7 lakhs

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• Equity Requirement and Impact Metrics

Mar’12 Mar’13 Mar’14

Number of Units 1 4 12

Equity Requirement (INR)

(Unit Requirement x Additional Units)

89.1 lakhs 2.37 crores

Direct Jobs Created 47 440 1320

Total Milk Producers Benefitted 185 1920 5760

Strong Experienced Team

Lokesh Singh

( Promoter/Director)

• Seven Years of experience in Micro Finance

• Sr. Regional Manager – SKS Microfinance

• Program Officer – Naandi Foundation

• MBA- IRMA, B Tech- HBTI, Kanpur

• Process Excellence Awards – Planet Finance

Sachita Shenoy

Director/ Advisor

• Over ten years of experience in developing social

enterprises

• Executive Director – UPAYA Social Ventures

• Director of Global Programs, UNITUS

• MBA – University of Chicago

Niraj Pareek

(Promoter/COO)

Christopher Turillo

Director/ Advisor

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• Six Years of experience in HR and Micro Finance

• Executive – HR Accenture India

• MBA- XLRI – Accenture Academy

• Co-Founder – Medha

• Over seven years in the development sector

• Manager Business Development - SKS

• MBA – University of Chicago

Surabhi Rana

(Promoter/ Advisor)

• IRMA Graduate with over 8 years of experiences

in rural sales and distribution

• Work experience of over 4 years with AMUL in

strategy department

• Post AMUL has been with Agri Input industry

Sanjay Dhaunta

(Promoter/ Advisor)

• IRMA Graduate with over 8 years of experience in

rural sales and distribution

• Has been with AMUL since last eight years

• Currently posted as Sr. Manager – Product for

North and East India

Organizational Structure: Current

Top Management

Lokesh Singh,NirajPareek

BMC In Charge

Field AssociatesVillage Collection

Centres

BD- Community Associate

Para Vet /

Pashu SakhiCattle Rearers

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Organizational Structure: Way Forward

C.E.O

C.O.O C.F.O

Manager-Sales

Manager-Procurement

Unit ManagerUnit Manager BMC In ChargeBMC In ChargeField

AssociatesField

Associates

Manager- HR/ Admin

Manager- HR/ Admin

Manager-Systems

Manager-Audit

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Attributes Local

Player

Private

Company

State

Player

NGO Samridhi

Asset Leasing

Credit on Input

Advisory Services

Competitive Advantage

Advisory Services

Fair and Transparent Pricing

Regularity of Payment

Experienced Management

Services at door step

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• Every non-member gives 4 LPD (Lt/day)

• Margin of INR 3/Lt for non-member

• In case of member only payment is fixed wages for the

pledged milk

• Each member gets to make about (INR 2.4*30*20 = INR 1440)

Assumptions for Financial Projections

• Each member gets to make about (INR 2.4*30*20 = INR 1440)

per month as variable pay

• Margin from cattle feed is INR 20/Bag and consumption is

about 1 bag/cattle/month

Revenue 2011-12 2012-13 2013-14 2014-15 2015-16

Milk Sold100.98 331.6 1022 2245.3 4890.0

Other Income1.82 3.8 11.7 27.98 55.97

Gross Income 102.8 335.4 1033.7 2473.28 4946.00

Expenses

Milk Bought 93.72 256.9 79.18 1894.5 3788.9

Financial Projections:

Social and Financial Profitability (INR lakhs)

Milk Bought 93.72 256.9 79.18 1894.5 3788.9

Salaries and Overheads 11.8 50.67 120.9 255.6 489.7

Op. Exp. 8.7 8.12 29.2 67.02 135.8

Interest 2.48 1.23 0 0 0

Depreciation 0.7 1.92 6 13.3 26.64

Total Expenses 117.4 318.8 947.99 2230.4 4441

Net Profit Before

Tax

-14.6 16.55 85.7 242.6 505

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Risk Factor Source Mitigation Strategy

Lack of

Standardization

Productivity of cattle

variable

Expected quantity is function of

cow productivity making sure that

the member is not penalized

Risks and Mitigants

Scalability Difficulty in procuring

cattle in large numbers

Partnership with The Goat Trust to

buy and maintain goats

Sourcing of cattle No formal market for

cattle

Purchase through Agent with buy

back guarantee

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Towards Prosperity...

Thank YouThank You

Samridhi Agri Products Pvt. Ltd.

5/82 Vipul Khand

Gomtinagar, Lucknow

0522- 4076350

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