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With 2013 in the books, it is time to take a look back at a year of growth for Upaya.
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Editorial for moneyspentwell.org: Strengthening the silk industry and its workers
This article was originally published 7 April 2014 on moneyspentwell.org.
The sleepy town of Bhagalpur, India, is famous for two things – fertile lands and fine silks. The second largest city in Bihar, Bhagalpur has earned the title of ‘Silk City’ for the high quality of Tussar Silk – a high-luster, strong, lightweight copper silk that wears very well in tropical heat, most valuable when woven by hand. Weaving in Bhagalpur is an art that has been passed on for generations. Working on large wooden pit-style looms found across the city that have been with families for decades, parents share the secrets of crafting fine Tussar Silk scarves and sarees. In fact, there are an estimated 30,000 handloom weavers and about 25,000 handlooms in Bhagalpur.
A silk weaver at his loom in Bhagalpur, Bihar, India. Courtesy: Upaya SV.
However, Tussar Silk weaving is also a dying trade in Bhagalpur as the majority of those 25,000 looms sit idle, unable to provide a livelihood for their owners. It is estimated that that market for sarees in the country stands at $2 billion and poised to grow, but the move to less delicate power looms and an influx of cheap imported chinese silks have flooded the domestic saree market.
Even in the face of this competition, a niche market that values handcrafted products remains. However, exploitative supply chains and a lack of market linkages to wholesale buyers have made it impossible for weavers to earn a viable and dependable living from their work. As such, the average weaver earns less than 25% of the final sale price of a saree that takes weeks to create. Furthermore, without continual skill-building and access to new materials, there is no way for the weavers to build skills needed to meet changing consumer trends and preferences.
Bhagalpur itself has seen very little industrial development, resulting in widespread migration to other parts of the country. As a result many weavers have left the trade altogether, migrating to urban centers to find construction work or taking up farming far from Bhagalpur. In fact, in 2004 the Government of India named Bhagalpur in the list of country’s 250 most backward (note: poor) districts (of a total of 640).
Those who continue weaving do so part time, cobbling together manual labor jobs and other unskilled activities to earn a living. One recent survey has indicated that most weaving households live on less than Rs. 3000 ($50) each month.
Compounding this situation is the fact that payments received from middlemen – local traders intent on buying products as cheaply as possible, regardless of their quality – are opaque and erratic. Many weavers complain that, not only do they not receive payment that they deserve, and are forced to make multiple visits to these middlemen to get their due. Facing the prospect of being seen as “troublesome” and losing their current source of livelihood, many do not pursue the matter and allow the cycle of exploitation to continue.
Eco Kargha weaver prepares bobbins of silk thread in Bhagalpur, Bihar, India. Courtesy: Upaya SV
In November 2012, Upaya Social Ventures initiated a partnership with Bhagalpur based start-up Eco Kargha Marketing Private Limited headed by Dr. Ravi Chandra, a passionate Bihar native with a strong desire to see his state thrive. Hailing from the capital city of Patna, Ravi has worked tirelessly to create institutions in Bihar that can effect large scale economic growth and development in the state.
Eco Kargha was set up to improve the quality of life for rural weavers by providing the linkages and resources for the modernization of the ailing traditional handloom industry. The company trains marginalized Tussar Silk weavers on new skills, techniques, equipment and designs for producing high quality products for the modern retail marketplace. Eco Kargha also manages relationships with large national retailers such as Fab India and ANS Exports, bringing in bulk orders and ensuring that weavers can earn a full-time living from their work at the loom.
“Customers across India know the quality of Tussar Silks and are ready to pay handsomely for them. Weavers in Bhagalpur are extremely talented and ready to produce the garments. All we are doing is bringing those producers and consumers together in a beneficial way,” said Dr. Chandra.
The company is able to break the stranglehold that middlemen and traders have on the industry by directly working with the artisans. By forming formal weaver groups with a master weaver at helm, these groups in collective are ensured of a steady stream of work and greater bargaining power. Through normalizing payments and improving transparency, Eco Kargha is tilting the economics of weaving back in the favor of the weavers. It has also worked to provide additional services – opening bank accounts, obtaining medical insurance cards – to these weavers through partnerships with existing Central and State Government programs.
In one year of operations it has been successful in earning revenues of over Rs. 80 lakhs ($130,000) by selling fabric, sarees and scarves to large export houses and established retail chains throughout India. To increase its footprint Eco Kargha has spent considerable time and effort on a conscious blend of B2B and B2C sales. The company has also launched Eco Stree, its in house brand of saree and scarves. Through their work they have been able to provide steady and predictable source of employment for over 100 weavers and increase their income levels by almost 50%.
One of the biggest pain points for Eco Kargha and other businesses that work directly with weavers is the high requirement for working capital. A big component of the raw materials costs is the cost of yarn and dyes. This upfront advance payment constitutes almost 50% of the value of the order processed, but puts a strain on the company’s cash reserves. Due to the early stage of the company, financial institutions and lenders are reluctant to extend a line of credit.
Eco Kargha also faces the challenge of breaking into a saree market that has been dominated by a handful big players for decades. India’s saree market is estimated to generate $2 billion per year in sales and is projected to grow at 8.5% per annum. Within that market, Bhagalpur-made Tussar Silks remain a specialty product despite their nationwide renown. To tap this behemoth industry with deep-rooted interests is a challenge. To overcome the obstacles, Eco Kargha is assembling a professional and dynamic sales team with the right blend of industry experience and fresh talent.
Eco Kargha is projecting a growth rate of over 100% over the next two years, however, it will require equity investment up to $200,000 and an additional $160,000 in working capital debt to meet its goals. The investment will allow Eco Kargha not only to ramp up its production capacity, but also to build infrastructure like dying units and establish a retail brand presence that will further enhance its competitive edge. Best of all, if Eco Kargha’s growth continues as projected, the company will be able to provide dignified employment to over 500 weavers and provide their families with a real path out of extreme poverty.
Upaya Presents at Harvard Social Enterprise Conference 2014
On March 30th Upaya board member Caroline Vance presented the organization’s work at the Harvard Social Enterprise Conference 2014 on a panel titled “Sustainable Businesses to Empower the Poor.”
Joining Caroline on the panel were leaders from across the social enterprise space including Jaipur Rugs Inc. President Asha Chaudhary, One Acre Fund USA Managing Director Matthew Forti, and Tugende Co-Founder and CEO Michael Wilkerson. The session was moderated by the Clinton Global Initiative’s Head of Market-Based Approaches Bulbul Gupta.
“The panel went great, and the standing room only audience was really engaged,” said Upaya Board Member Caroline Vance. “People were really into Upaya's model, and it was such a joy for me to tell the story,” said Vance.
Attended by Harvard students and faculty, the conference bills itself as “one of the world’s leading forums to explore the intersection of business and social impact.” Entirely student-run, the conference was jointly hosted by students from the Harvard Business School and the Harvard Kennedy School of Government. The theme for the 15th Anniversary of the Social Enterprise Conference was “Reflecting on the Past, Shaping the Future.”
Upaya board member Caroline Vance (left) presents on March 30th at the Harvard Social Enterprise Conference 2014
Tamul Plates Named Winner of NSDC 2014 “Power to Empower” Challenge
Upaya congratulates Tamul Plates CEO Arindam Dasgupta for winning the National Skill Development Corporation (NSDC) and India@75 “Power to Empower 2013 Challenge” (P2E 2013).
“Winning this award is a great recognition of all the hard work Arindam and his team have put into growing Tamul Plates and the Tambul Plates brand,” said Upaya’s Director, Business Development Sreejith Nedumpully. “Not only is Tamul Plates building new skills in rural communities across the North East, but the company is ensuring that those who do gain new skills have a direct opportunity to earn a steady livelihood from them,” said Nedumpully.
Tamul Plates was selected for Upaya's LiftUP Project initiative in December 2013, a choice that has resulted in equity funding and ongoing business development advisory support for the Barpeta, Assam-based company.
With this win Tamul Plates receives a cash gift from the Muthoot Pappachan Foundation. Additionally, Tamul Plates will gain access to the capacity building Empretec program (an initiative of the United Nations Conference on Trade and Development), along with admission to the iDiya program at Indian School of Business (ISB) Hyderabad and to the upcoming Diffusion workshop at ISB. Each of these forums will provide increased visibility for the company, its palm leaf plates and bowls, and its innovative technology for producing the highest quality disposable dinnerware products.
Tamul Plates CEO Arindam Dasgupta (left) receives the first place prize at the Power to Empower 2013 Challenge
Catch Upaya Onstage at Sankalp Unconvention Summit 2014!
Upaya's Sreejith Nedumpully will join a panel of industry leaders to discuss the experience of supporting promising entrepreneurs in their earliest days.
Bridging the Pioneer Gap: Are We Meeting the Needs of Social Startups & What Can We Do Better?
11:45 AM - 1:15 PM, April 11 2014
Grand Ballroom A3
Hotel Renaissance, Powai, Mumbai
Over the past few years we have heard the conversation about the needs of businesses in the “Pioneer Gap“ reach a fever pitch – particularly in a frothy impact investment market that finds itself starving for more established, less risky opportunities. At the same time, a chorus of ambitious social entrepreneurs with promising models talks about finding themselves in a desert of funding and advisory support. The reality is that, if we rely on traditional venture capital models, most social investment funds will be financially unable to find, fund, and advise these companies in their infancy.
With the majority of these entrepreneurs exhausting their limited runways long before their transformative potential can be realized, there is a strong need to mobilize our peers and create an ecosystem for Pioneering Capital to fill the gap. The assembled panel will explore what’s working, what’s not, and what steps the sector can take to mobilize more resources for the next generation of effective social enterprises.
Moderator:
Ashish Karamchandani, Partner, Monitor Group
Speakers:
Sreejith Nedumpully, Director, Business Development Upaya Social Ventures
Harish Hande, MD, SELCO
Aditi Shrivastava, Head, Intellecap Impact Investment Network
Simon Desjardins, Programme Manager, Shell Foundation
Paul Breloff, Managing Director, Accion Venture Lab
Elrhino and Upaya Social Ventures Come Together to Create Jobs, Protect Wildlife in Assam
Upaya Social Ventures is proud to announce that it has begun work with Guwahati, Assam-based Elrhino, a promising venture with an unlikely product - handcrafted luxury paper, stationery products, and packaging materials made from recycled rhinoceros and elephant dung and other natural waste. The company will receive seed capital and ongoing business development support from Upaya through the latter’s LiftUP Project framework.
Elrhino manages the entire dung paper production chain including collection, preparation, processing, and sale of finished dung paper goods. The company is led by Nisha Bora, a young Assam native who is building on the work begun by her father over three years ago to create new livelihoods and increase the value of rhinoceros and elephants to local villagers. In the two years since its creation, Elrhino has made its mark in the Indian market as well as in France, and has created significant brand equity.
“We started Elrhino because we wanted to see Assam and its rhinos thrive,” said Elrhino CEO Nisha Bora. “We are creating opportunities for people to earn a truly sustainable living, one that provides economic stability for families and encourages people to preserve the natural habitats of these great animals,” said Bora.
Elrhino sees opportunities to create jobs for and build the skills of people - in the rural areas around Guwahati and the reserve forests of Assam. With its current infrastructure, Elrhino has the capacity to produce 15 tonnes of paper per year, which at capacity will equate to approximately 100 full-time jobs in paper processing and an additional 500 part-time jobs through a combination of resource collection and value-add production.
“We are committed to creating rural livelihoods and a skilled workforce in Assam,” said Sreejith Nedumpully, Upaya’s Director, Business Development. “At Elrhino, people learn two skill sets: how to make paper, and how to convert paper into products. We are very excited by the job creation potential in both areas,” Nedumpully said.
While Elrhino is Upaya’s sixth overall investment and second partnership in Assam, Nisha Bora is the first female entrepreneur in Upaya’s LiftUP Project network.
“Trust is a critical element of building successful companies in ultra poor communities, and across our portfolio we have seen a unique trust dynamic emerge between female managers and the women who work for the company,” said Nedumpully. “While she is the first woman leader we’ve partnered with, she will certainly not be the last,” he said.
Upaya's Sreejith Nedumpully Joined By Several LiftUP Project Partners at 3rd Annual Action for India Forum
This January Upaya's Director, Business Development Sreejith Nedumpully travelled to Delhi to participate in the 3rd Annual Action for India forum. The two-day, invitation-only national conference brought together 100 leading social innovators with an equal number of donors, technology leaders, impact investors, and senior government officials.
At the event Sreejith was joined by many of Upaya's LiftUP Project partners including Dr. Ravi Chandra of Eco Kargha, Swapnil Chaturvedi of Samagra, and Ajaya Mohapatra of Justrojgar.
"The forum was a wonderful opportunity for Upaya to meet the best of India's emerging and established social entrepreneurs, and to introduce our current LiftUP Project partners to the country's leading supporters of social innovation," said Nedumpully.
This year's forum was headlined by leaders from across the spectrum of Indian innovation and industry including Mr. Sam Pitroda, Mr. Desh Deshpande, and Mr. R Chandrasekaran.
