EQ In Exclusive Conversation With Mr. Saikat Roy, Founder & Director – Sadbhav Futuretech
1.Please tell our readers about the journey of Sadbhav Futuretech and its progress?
Sadbhav Futuretech is the result of the efforts of four passionate entrepreneurs who were extremely successful in their own journeys coming together to forge a common dream. We were set up on 5th June 2020, right in the middle of the first coronavirus outbreak with the common interest of setting up a profitable organization with an underlying focus on Social Impact.
Since then, we have installed close to 4000 solar agricultural pumps across India, created a R&D centre for testing agricultural inputs, run 4 warehouses, employ close to 60 staff and have started onboarding farmers on our platform. We have also been able to raise debt from banks and are in discussions with various funds and family offices for raising equity.
2.What is the idea and vision of this company?
Sadbhav is a company incorporated to ease the pain points and plug the leakages across the industries of solar water pumps, farming and supply chain solutions.
Currently these all interactive yet distanced stakeholders work in silos with no common link, Sadbhav envisages to be that platform that brings them together.
At each touch point, Sadbhav will add incremental value to the stakeholders through our focus on collaborative models, mutually beneficial partnerships and impact creation all across the value chain
Our vision is to be the largest aggregator of solar pumps in the world and work with a hundred thousand farmers and a million retailers over the next 5 years
3.The company says it gives wings to the distributed renewable and the agriculture sector. Please tell us more about it.
Solar was supposed to be distributed during its initial years of inception and was to be used in villages to give them instant power and lower the burden on the government. Solar’s greatest strength is drawn from its omnipresent source and was thus to be saviour across the rural landscape and far flung regions.
It was supposed to be a product that revolutionized energy access at the bottom of the pyramid and generated a massive socio-economic impact. We, however, have the art of finding the easiest way out and hence the industry followed the principle of mass implementation of grid scale projects so that the numbers add up and more importantly show, effort is relatively less and funding is liberal.
This rural revolution became a story of climate impact and was spoken to in the biggest of forums, sustainable development goals were set around it and it was packaged to be the saviour. While all of it was not wrong but then this was definitely not the best solar option. Electricity was being provided to those who already had access and issues of grid instability, power losses continued to loom large.
At Sadbhav, we were reluctant to get into this game and after extensive study came to the conclusion that the solar pump is one product which is beneficial to all stakeholders, including the DISCOMS, Government both at the central and the state level, farmers as well as the industry.
Solar agricultural pumps industry faces two major challenges 1) execution of projects in far flung areas and 2) lack of access to finance as most players in the distributed renewable energy space were not equipped financially to take up large projects. We ironed out both issues by starting to finance projects by buying material on our books and then taking up the entire burden of implementation.
In our first six months of operation we have installed close to 4000 solar pumps across Haryana, Chattisgarh and Maharashtra. We do it under our “Solar as a Service” model and work across the industry with the most credible names. This year we intend to install close to 10,000 solar pumps.
At Sadbhav, we work with progressive farmers. These are farmers with growth ambitions and contribute to the setting up of their solar water pumps. Typically we work with the marginal farmers who have a land holding of less than 5 acres.
We provide all inputs and knowledge to the farmers to increase their yield and also motivate them to increase their incomes by converting them to horticulture products as opposed to conventional MSP based produce. We plan to convert these marginal farmers to “ Lakhpati Farmers” year on year. As the farmer income grows we will also introduce them to better farming practices and service their other needs as well. We will do it under our “ Farming as a Service” model.
4. How is Sadbhav Futuretech helping the industry through different interventions such as finance and implementation?
Typically a Solar Pump installation has close to 40 different components in its Bill of Material. Since we are one of the largest buyers of material in the industry we use our relationship with the manufacturers and buy material in bulk.
We buy material using our finances and then implementation of the whole project is done by our team. We do the warehousing, quality inspections, transportation, vendor finalization , surveys , installation and commissioning as well as local liasoning for our partners, including insurance till handover and then pass it to our partners for the maintenance of the systems.
Through our interventions the industry can focus on their core areas of manufacture, they do not have to focus on raising capital and do not have to create a team and increase fixed expenses. Projects are usually cyclical in nature and there are times when the team does not have work and hence it does not make sense for the bidders to keep the team idle. Since we work on a collaborative concept, hence we have work round the year across numerous distributed solar projects.
5. Please share details on the business model of the company.
We are the largest aggregators of Solar Pumps in India. There are various central and state schemes under which close to 35 lac solar pumps will be installed over the next 5 years. The PM-Kusum scheme is the largest scheme of its type in the world.
We intend to aggregate close to 1 lac solar pumps out of those over the next 5 years. We do not leave the farmer after the commissioning of the pump. We then take the relationship to the next level and buy him the best agricultural inputs based on our soil and water study. We then buy the produce from the farmer. The produce is pre cooled and then we sell it directly to our chain of retailer partners.
All the produce is transported through our own refrigerated vans. We earn better margins as we eliminate a couple of layers in the distribution process and share that with the farmer to increase their income. We also ensure that the nutrient value of the food is not diminished, through our pre-cooling and then refrigerated transportation. Cumulatively we have touched close to 20000
farmers till now through our experience in the management team.
6. What is the company’s growth opportunity through collaborative efforts with industry, farmers and retailers?
We are very strong believers in collaboration and not competition. When we look across, even in nature, we see collaboration all around. As in the case of humans, there is a difference between human needs and human wants, similarly is the case for companies also. While the collaborative approach may impact the bottom line slightly today, it is much more scalable and profitable over a longer time frame.
As highlighted, we pass on the margins saved in buying material to our partners in the solar pumping industry, we share profits with the farmers and are able to give retailers produce at a better rate than the market rate so that they can earn better. We collaborate at all levels to ensure our partner’s benefit.
7. Tell us about your opinion of the market? What are the opportunities and challenges for the company and industry?
Indian agriculture is still very heavily dependent on monsoons and rain fed cropping systems. India is a country of 11 cr farmers wherein only 3 Cr use pumps ( either electric or diesel) and the solar scheme will add another 35 lac pump sets.
There are still close to 8 Cr farmers who do not have access to water. From a standalone perspective this is a huge opportunity and if we can club and synergize the solar pumps with the quality agri produce then it becomes an even bigger opportunity.
The biggest challenge is not to produce but to transport and sell it at the right price by establishing the right market linkage. We plan to overcome that with our fleet of reefer vans and cold storages, thereby linking the entire agri supply chain seamlessly. We have created a diverse team who are experts in their own fields and will propel the company forward.
The challenge today is that all industries are working in silos and dependent on government support over a long term to build businesses. We should look at the bigger picture and rise to the challenge of creating a sustainable economy which will run long after the government program ends. The second challenge is in
terms of the thought process.
We should realise that the potential is immense and we do not need to cut corners and compete tooth and nail to win orders. We should rather focus on giving the best to the farmers in terms of material and service and then let the market pan out effectively.
8. What are the plans and goals of Sadbhav Futuretech?
At Sadbhav, we envision to become the largest agri-renewable company in India. This can only be achieved when our stakeholders grow with us. The focus at Sadbhav is to help increase the farmers income and also introduce sustainable agri-renewable practices.
This full stack solution offering will work to systamise the fragmented agricultural economy of India. As solution providers we look to tackle the challenges of inadequate water supply, low agricultural productivity,high food wastage and poor market linkages.
These comprehensive solutions create immense value for all our stakeholders including farmers, retailers, investors and business associates. With our uniquely collaborative approach, we
ensure that we are drivers in an ecosystem of change in the Indian energy and agriculture sectors.
9. What message would you like to convey to our audience?
India’s growth and sustenance as a global economic powerhouse is intrinsically linked to how well it manages, grows and leverages the abundance of opportunities that lie in its rural landscapes. Central to this are the focus areas of energy and agriculture that are vital cogs in the rural economy.
While the segments are poised to grow exponentially, it cannot and more importantly should not happen in silo. Changes in this landscape are people and community driven
that require the participation of collaborative forces.
At Sadbhav, we see a prosperous future for the farmers with the sun shining bright. If you do too, let make it happen together!