siddhivinayak agri processing pvt ltd

27
Jul

A SACK FULL OF IDEAS

As somebody who spent his corporate career in companies such as Pepsi, ITC and Walmart, Hemant Gaur experienced firsthand the ills that plagued agricultural supply chain in India. Fortunately, for himself, and the 1,500-plus potato farmers he now works with in Maharashtra, Uttar Pradesh, Madhya Pradesh, Gujarat, Punjab and Karnataka, he spotted the immense entrepreneurial opportunities these gaps throw up. 
So, along with his director of operations Ganesh Pawar (who also had successful stints in Pepsi and ITC), Gaur founded Siddhivinayak Agri Processing, an end-to-end potato supply chain company in 2008. “It’s all very easy to talk about farm-to-fork but not many people have been able to actually execute that.” Gaur thought a start-up had advantages none of his big employers did at cracking that puzzle. “Corporates have entered and failed to make an impact here because remote control management doesn’t work in agriculture. Flexible, frugal organisations can make this happen.” Also, corporates only worry about sourcing agricultural products, or setting up mechanisms to move post-harvest yield. The Indian agricultural system, Gaur says, has deep deficiencies at every level. “It’s a much more complex story. Interventions and corrections have to be seeded in at every stage—from plantation to transport logistics. Unless you have that end-to-end solution, it won’t work.” 
Although the story of every crop is the same, Gaur realised in the early days of the business that he first needed to demonstrate the model's effectiveness on a single crop. So, he focused on potatoes. In the farming communities SV Agri works in, they begin with providing farmers best-quality seeds, and then help provide every input element—fertilisers, irrigation, insurance, mechanisation—to enhance the yield. In these four years, the company has gathered distributors from nearly 22 companies to supply these inputs, and also help farmers tie up with banks and insurance companies. “The goal is simple—to provide a conducive agro-ecosystem.” 
It’s actually a model which is weaved from a series of backward integrations. Gaur explains that they first figure out who their ultimate buyer is—companies like ITC, Bharti Walmart, Parle and Aditya Birla Retail—what their needs are, and then work backwards to fulfil them. Post the crop harvest, SV Agri also takes care of cold storage, and movement of the produce. 
You can’t sit in a fancy corporate office and do this.” - Hemant Gaur 
Well, the model seems to be working, and how. Gaur rattles off growth numbers. “In the first year itself, we did around Rs12 crore in turnover, Rs23 crore in year 2, and Rs31 crore in year 4. This year, we’ve bagged a turnover of Rs50 crore, and helped cultivate 30,000 tonnes.” In total, they have a catchment potential of two lakh million tonnes of potato. 
The growth forecast is looking even more bountiful now with their recent round of funding for an undisclosed amount by the SONG Fund, an early stage impact-focused VC fund that makes investments in agriculture, education and health. 
Both sourcing talent to work in the company, and inking potential partnerships with large players is now easier to attract. Gaur says confidently, “We will breach Rs500 crore in revenue in the next five years, and should cross revenues of Rs100 crore in two years.” For Gaur, two learnings fertilise these ambitions. One, is the ability his teams have in building trust with the local community— helping farmers adopt new technologies, opening up new access to capital, and showing them SV Agri is not some make-a-quick-buck urban company. Being rooted to the village is key, says Gaur. “You can’t sit in a fancy corporate office and do this.” 
More importantly, macro indicators will provide a fillip. Vegetables and fruits rotting on the sides of streets is an oft-seen sight in India right now, he says. “But will anybody waste crop if they saw economic returns in saving it?” The sharp rise in agri prices will open up a lot of opportunities, both to increase crop yield, and to save wastage. It incentivises the whole chain—farmers want to invest more in inputs to increase productivity, and those in the supply chain have greater incentives to improve.


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