SEPTIC TANKS - INDIA'S WAY: RURAL MARKETS THE WAY AHEAD, Business Plan Presented at National Innovation Foundation Convention, IIM Ahmedabad

India’s population diversity and demographics vary from rich to poor, urbanites to local slum dwellers. India has about 5683 slums covering 20 million people, of which only17% of them is covered by proper sewerage system. The rest use septic tanks, two pits and community latrines.

The health and sanitation consciousness of people on large especially in rural and suburban areas is on the decline. We the “DRISHTI & Co” aim at creating a health conscious society by generating awareness and catering to the need of clean and green India. We are into the business of constructing Septic tanks along with its accessory, the Baffle systems.


“The purpose of DRISHTI & Co is to construct the most innovative, qualitative and cost effective Septic tanks and baffles systems, being responsible for social up-liftment, eco-friendly and socially concerned organization.”

Urban areas: 52 thousand slums
Households: 08 Million (14% of the entire country)
68% of slums do not have latrine facility. 17% of notified slums are covered with Underground drainage facility.

City Muncipal Corporation, Bommanahalli

q Area: 43.7 sq km
q No of house holds: 60100
(In 2004 based on projected population as per 2001 census)
q Income level: BPL families are 40%
q Total population: 244871(2001 census report),
308346 (2004 projected)
q No of septic tanks and soak pits: 16132
q Population covered: 80661
q Community latrine system: 1000
q The ratio: 80661/16132 = 5.00
q Single septic tank: For 5 members
q The remaining population: 308346 – 80661 = 227685
q No of septic tanks required: 227685/5 = 45537
q Decadal growth: 120%

TARGETING

q Sub Urban areas
q Rural areas (where septic tank is nil)

MARKETING

Marketing in two channels:
- Government (Grass root Panchayats)
- Private channels (Hardware stores, Contractors and NGO)
q Developing community latrines
q Marketing STBS with the Septic tank

POSITIONING

Stench free, Clog less, Lower BOD levels, Eco friendly, Economical Septic tank

PRODUCTION FEASIBILITY


q Project Cost: 615250 Rs
q Manufacture: 1000 units
q Total product cost: 6000000 Rs
q Entrepreneurs: 3 Entrepreneurs and will hire a civil engineer. Daily wage labourers are hired for construction activity.
q Production facility: 30ft*20ft factory site.
q Construction: Septic tank online construction,
STBS will be fixed to this tank.
q Season production break up:

Apr – Jun – 600 units
July – Oct – 100 units
Nov – Mar – 300 units

FINANCIAL STATEMENTS


q Fixed cost: 6,87,500 Rs
q Variable cost: 6838 Rs per unit
q Break even: 591 units (3 months)
q Price volume ratio: 14.525%
q Break even sales: 47,29,770 Rs.
q Debt equity ratio: 1:1
q Long term loan: 9% p.a in 5 year installment
q Weighted average cost of capital: 9.75%
q Assumed Risk free return: 12%

FUTURE EXPANSION PLANS

We expand in clusters to neighboring districts of Bangalore and suburban markets and expand statewide. We dream to be a national player focusing on international markets targeting Afghanistan, Iraq, and African countries.

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