VOLUME 1 > ISSUE 2 > JULY-SEPTEMBER 2013
India’s
first
magazine
Lead Feature 38 Dr. Santrupt Misra:
India’s innovation journey: from ‘somehow’ to ‘how’.
India’s first magazine dedicated to innovation VOLUME 1 > ISSUE 2 > JULY-SEPTEMBER 2013
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Interview 31 Ajit Balakrishnan: Cute innovations are largely pointless.
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THE INSIDER 88 B Karthik:
How ‘Rise’ became a rallying cry.
Change makers first-person case studies on outstanding innovations Change.org, CoCubes.com, Smaat Community Water Centres, Vortex Engineering, Yuva Parivartan.
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Surabhi Manchalwar
Marico Innovation Foundation
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CASE STUDY Change makers
SMAAT COMMUNITY WATER CENTRES: Water for everyone
Karunakara M Reddy, Founder, Chairman, and Managing Director, Smaat India Private Limited As part of the team that set up PepsiCo’s bottled water unit Aquafina in India, Karunakara Reddy realised that most people in the country could not afford water at R10 a litre. At the same time, the economic burden of poor water quality in India is estimated at US $ 600 mn. For a country with such a large base of poor people with pitiable access to potable water, what would be a fair price without compromising on quality? Smaat India, formerly known as Smaat Aqua—Reddy’s second calling after quitting his corporate job—has figured that 20 paise a litre is about right. Reddy’s brainchild Smaat India provides recycling solutions for water- and air-related problems. The company’s technologies do not use chemicals for air or water treatment, and the products consume less energy as compared to conventional recycling machines. Reddy believes that not only should his products help save lives but they should also be affordable to everyone, especially the bottom of the pyramid. Smaat India is engaged in a number of activities in rural India in the form of community water centres (CWCs), awareness campaigns for better sanitation, rainwater harvesting, sewage water treatment, etc. Most of all, Reddy stays invested in these areas and does not operate as a fly-by-night company—which could have been a plausible scenario given how ‘cheap’ his solutions are. Most of us don’t stop to consider that drinking water is an act rooted in absolute trust. Ultimately then, a water purification company is in the business of trust, and Reddy seems to have mastered this through a mix of soft skills and demystified technology. Here, he tells us more.
What do Smaat CWCs do?
How it all started
Challenges
Smaat CWCs are equipped with Smaat India’s trademark cutting-edge, ecofriendly water treatment technology along with other water treatment technologies that supply a village with clean water for as little as 20 paise per litre.
A few years after Smaat India started, Reddy met with the then President of India Dr. APJ Abdul Kalam during one of his projects. Dr. Kalam showed keen interest in his technology and suggested he improvise it so that people in rural India could use it too.
• Convincing investors that a social business in rural areas does not equal a dead investment in a neglected market. • Spreading awareness about the importance of clean water and proper sanitation. • Working on better technology that does not require power but renewable resources to function.
When I started Smaat India (then Smaat Aqua) in 1998, my solutions were for domestic, institutional, and industrial use. I was at the Rashtrapati Bhavan in Delhi for a project when I met Dr. APJ Abdul Kalam, the then President of India, who was very interested in my technology. He said to me that a lot of technologies are available to people who can afford it. But what 76
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about people who live in states with the highest chloride levels in water and die because they can’t afford to purify water? Why don’t we work out a technology that is affordable to the common man? That got me thinking, and in 2004 I started going to villages and giving them affordable technologies for water treatments.
This is how Smaat CWCs came about for end-to-end water treatment solutions for all domestic purposes.
Technology innovation
Differentiation As per our calculations, on an average a person in a rural area loses R1,000 to R1,500
Smaat CWCs have empowered villagers by demystifying the complex process of water purification.
A look at another water missionary While researching Smaat India, we came across LifeStraw, a chemicalfree, portable water filter that does not need electric power, batteries, or replacement parts to function. Made of durable plastic, it is powered by user-generated suction and weighs less than two ounces. Its in-built water filtration mechanism is armed to give the user at least 1,000 litres of contamination-free drinking water. Most of all, it claims to kill a minimum of 99.99% waterborne protozoa, parasites, and bacteria. Created by Vestergaard Frandsen, a Switzerland-based human entrepreneurship business, LifeStraw has helped save the lives of lakhs of people in countries that are affected by a drinking water crisis.
LifeStraw
Our main focus is sustainable technology that is eco-friendly, affordable, and usable by the common man. Our plant can be operated by a 60-year-old woman, it can be operated by an educated man or woman, or even a child. It works on a single-button operating system. After installation, we give the village folk two to three days of training; within a few days they completely understand the plant. Water in most villages in rural India is affected by arsenic, iron, chloride, and other chemicals. The filtration technologies that the government gave villages were conventional. But villagers didn’t have the technical competency or capability to use the machine, recycle, backwash the filters, etc. Since most of them didn’t even understand how to use the technology, they would simply keep it aside. I thought of giving them a readymade product that did not require any kind of servicing on their part [and we have made this happen]. Once in a fortnight, our trained staff goes to the villages and carries out a backwash at the plant. The results of our technology depend on the quality of the ground water. So our tailor-made solutions include combinations of reverse osmosis, ultra filtration, micro filtration, nano filtration, etc. Though reverse osmosis was used for recycling even before we entered the market, it only happened in mineral water plants. We made that technology available for non-bottled-water uses too. Ground water also includes a lot of calcium and magnesium that cause skin and hair damage. We invented a technology called the Smaat Flow Natural Water Conditioner that takes care of all these problems by purifying water in a natural way. It is approved by NASA and The National Physical Laboratory of India. Most of all, this is green, eco-friendly technology and does not involve the use of chlorine that includes cancer-causing byproducts.
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CASE STUDY Change makers
Inside the Smaat CWC plant in Yenugonda, Andhra Pradesh.
on hospitalisation, apart from losing working days, due to illnesses caused by unclean water. I believe that they should spend only 50 paise per day on water. Ironically, as prices of things are constantly increasing, our purified water is getting cheaper. In 2004, we sold water for 25 or 30 paise per litre. We currently provide water for 20 paise per litre. Its quality under laboratory testing is equal to that of Aquafina or Kinley or any other bottled water that is sold upwards of R15 per litre. In my personal experience, technology can be copied and transferred, but localisation makes a lot of difference. Let me give you an example. There was a US-based company that somebody approached for similar solutions as ours, thinking technology from abroad is better than Indian technology. They ended up charging the client about R24–25 lakhs, while I was establishing my product for only R4 lakhs. Ours is a localised experience. I believe there should be less capital investment and you should get your money back as early as possible so that you can reinvest and scale up. But if your capital investment is R25 lakhs, imagine the interest added to that! My people at Smaat India are common men. They don’t wear fancy shoes and ties because if they have to work with rural people they have to be approachable. That’s how we are 78
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different because as someone with a rural background, I know how to communicate with rural folk and build relationships.
Scale, sustainability, and spreading awareness We started with one plant in 2004, and in three years we had 24 plants. Earlier we didn’t focus on scale and functioned as a philanthropic company. But once we saw our RoI and the acceptance of people, we started concentrating on scale. Currently, we are adding more than 1,000 to 1,500 villages to our existing network. We are covering 1,000 villages in Karnataka, we have between 1,500 and 2,000 plants in Andhra Pradesh, and we are also working in West Bengal and adivasi (tribal) areas of Jharkhand. Most importantly, we stay with these villages for at least 10–15 years. Plus, we provide employment opportunities to two to three rural people per village; we also try and take people who are physically challenged. As part of our low-profit model, we provide water free of cost to rural and government schools. This makes kids in those schools demand clean water from their parents at home as well. We create a lot of hygiene programmes in schools and organise interschool drawing competitions to spread awareness about the importance of sanitation and hygiene. We also encourage people to build their own toilets by making them aware of available government subsidies. The government
will pay around R9,000 nowadays for the construction of a sanitary latrine. In these ways, we encourage a lot of sustainable practices in villages.
Defining Smaat
Investments Based on our success story, the government has come forward to invest. We are getting a lot of support from them in the form of grants. We also approach public representatives such as MLAs and MPs who have constituency development funds, since villagers don’t come forward to invest. We also approach corporates and bankers. Apart from that, I have more than 20% RoI. If I invest a lakh in a year, I make R20,000 by the end of it, and in five years I get the whole amount back. The National Bank for Agriculture and Rural Development (NABARD) and Andhra Bank are my current investors. The water treatment industry in India is expected to be worth US$3trn by 2020, and India is estimated to have the second-largest water requirement in the world. Keeping this in mind, I am going for an IPO next year, because if this industry does indeed acquire that size by 2020, focusing on only 0.1% of the pie will make my company worth $3bn. I see that much scope in this market for this innovative business.
Beyond CWCs There is a lot of water scarcity in parts of India where there is no ground water. Green technology looks at ways to protect natural resources. Oorani is one such initiative, which involves the construction of community water ponds for storage of up to 1.5 million litres of water in areas where there is a scarcity of water and it is problematic to pump out ground water. We are working on municipal solid waste management that involves recycling domestic and industrial waste water, where human waste is converted into energy, used as manure, or used for biogas generation.
We are also working on a concept called ‘use and get paid’. While most public toilets charge money for use, we will ‘pay’ people in the form of incentives like a litre of water to use public toilets. We have already begun this but are testing the reception before we scale. We are taking this to wherever we have CWCs as we have a network across over 3,000 villages.
Flowing ahead
All photos courtesy: Smaat India
Water collection at a CWC at Chikkabanagere, Karnataka.
Sa – represents a good start M – stands for peace in the Malhar raga of music A – stands for aqua A – stands for air, as the company also provides solutions for air recycling T – stands for technology
Social businesses are always tricky. Keeping this in mind, we are building a lot of local partnerships. The market is huge, so we require huge investments as a lot of scalability options exist. If we ask for private equity, investors look at rural areas as a neglected market, and they ask questions like what is the spending and earning capacity of the people in these areas. People want to invest and they expect returns within two to three years, but we want to look into sustainable areas. That’s why my target is small. If funding was easy, I would target 5,00,000 villages of India, but given this challenge, my target is only 25,000 villages. Further, while most of the equipment at the CWCs require electricity, we are experimenting with a plant that works on solar power. Currently, we are looking at a self-sustainable model of water treatment that runs on renewable energy such as solar or biogas. It should run on its own. We don’t want to depend on power. We are investing our time and money in R&D in this sphere for sure success. (As told to Sabiha Ghiasi.) Feedback: innowin@spentamultimedia.com
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