SABRAS the second salt march... 12,0002,50,000 SABRAS the second salt march... an enterprise impacting the lives of 12,000 small salt producers & 2,50,000 workers of India Rajesh Shah Chairman & Managing Director May 2010

Theory of Change If the comparative strengths of aggregated small salt producers & professional managers are combined, then small salt producers will have access to markets, technologies & institutional credit, thereby significantly increasing their livelihoods.

India: 3 rd largest salt producer 200 lac MTs Current Production: 200 lac MTs Current Utilization Domestic – Human use40% – Industrial use 48% Export 12% Rs Cr Current Volume: Rs Cr 400 Lac MTs By 2020 Production: 400 Lac MTs Indian Salt Industry Overview

India’s Salt Producers Total 13,000 Total 13,000 11,700 Small salt producers 11,700 36% Production 36% 2854 Cr Market Value 2854 Cr 86 Cr Salt workers only get 3.35% 86 Cr Salt workers in 1.5 lac Production 1.5 lac 1.0 lac Handling 1.0 lac SALT PRODUCTION & ISSUES

Problems to be solved Health Problems Due to constant exposures to - High temperatures, - Dusty winds, - Glare & Salty water in desert Salt producers - Suffer - High blood pressure, - Eye & skin diseases - lack of access to water, health, education and community life. when agarias are cremated their feet do not burn as they contain lots of salt.

Problems to be solved (cont’d) Economic Problem A salt producer annually Produces 10, ,000 MT Cost of Production Rs. 70/MT Borrows : Rs. 50,000 from local trader and locks the sale price Sale price : Rs. 80/MT Earns: Rs. 10,000 – Rs. 12,000 per year Salt producer only get between 1% - 8% of the final market price The value of the bag is more than the salt it contains Salt Producers operate individually and do not have access to institutional credit, technology & markets

SABRAS OVERVIEW

8 Formation of the Company February 2007 Operations Procuring, processing, packaging and marketing salt in Kutch, Gujarat Ownership Structure 85% SAVE Ltd (Technical Service Organisation) 15% Salt Producers Governance Structure Three Directors (One from SAVE and Two from salt producers group) Management Professionals Managers COMPANY OVERVIEW

Management Team Rajesh Shah CMD of the SABRAS is an architect by training and MD of SAVE Ltd, having 30 years of engagement in social & commercial sector Umar Kureshi Manager Production, having 40 years of experience in salt production in Little Rann of Kutch Suresh Thakkar Manager Marketing, having 35 years of experience in Marketing of fruits & vegetables, spices & salt Mukesh Thakar Asst. Manager, having 10 years of experience in salt production in Little Rann of Kutch Vijay Solanki Field Supervisor Chetan Mehta Accountant (part) Rohit Dudhela Company Secretary (part)

SABRAS BUSINESS MODEL Industry expertise Experience in production and distribution Market access On-site support Regular field visits with salt producers Strong relationships with salt producers Understand community Governance Access to credit / asset ownership Govt. subsidies Guarantor to banks Loans / interest paid with salt sale proceeds

Salt supply chain & SABRAS Salt Producer TraderTransporterProcessorRetailerConsumer Industrial User Wholesaler Present Future (Over next three years ) 1.Sold 30,000 MTs of salt 2.Increased procurement price from by from Rs. 80 MT to Rs. 125 MT 3.Trial of two solar pumps 1.Reduce transportation costs 2.Provide 250 Solar pumps 3.Achieve annual sale target of 1,25,000 MTs 4.Explore production of by products 5.Initiate Brand Development Pass on surplus to salt producers Rs. 120 MTRs. 7,200 MT

Start Year 2008 Current Year 2010 No of Suppliers28 salt producers39 salt producers Quantity of salt7,500 Tons22,000 Tons ProductBulk Procurement PriceRs. 80 per TonsRs. 125 Per Tons Designed & tested equipments for salt pan making & harvesting solar energy driven pump Set up Community Resource Center for salt 01 Provide Knowledge services28 Salt Producers100 salt producers Achievements to date

GROWTH PLAN Technology, Volume, By-products, Brand

SOLAR OPPORTUNITY Data based on field trials supported by National Bank for Agriculture and Rural Development (“NABARD”) Pump Type Life of Pump CostAnnual Maintenance Annual Fuel costs Savings over Life of pump Diesel10 years25,00010,00060,000- Solar15 years2,00,00015,000- 8,25,000 Solar pumps save 4 metric tons of CO 2 per salt producer per annum Producers can recoup capital costs within 3 years

Goal for the next 3 years Particulars No of Suppliers39 salt producers250 salt producers Quantity of salt22,000 Tons1,25,000 Tons ProductBulkBulk, Retail & By – products Procurement PriceRs. 125 per TonsRs. 140 per Ton Costs reduction (use of solar pump) Rs. 60 per Ton Provide solar pumps02250 Provide Knowledge services100 Salt Producers4,500 Salt Producers

Growth Plans: Resources Linkages Scaling up Partner – Agaria Hitrakshak Sangh (AHS) with 4,500 members. A representative is a member of board of directors of SABRAS Knowledge Resources – Tied up with Central Marine Chemical and Salt Research Institute, (CMSCRI), Gujarat, India Financial – NABARD, local banks & Government have agreed to provide credit linkage for salt production & purchase solar pumps.

FINANCIALS

FY FY FY Solar pumps provided Revenue 70,96,750 99,08,625 2,61,97,000 % growth39%164% EBITDA 28,50,250 40,79,500 1,19,00,250 % margin40%41%45% Carbon emission reduction (metric tons) FINANCIAL SUMMARY

TRI-PARTY FINANCIAL AGREEMENT SABRAS Bank 70% subsidized loan Government 30% cash subsidy SABRAS Links bank/govt./ pump supplier Procures salt Repays loan Salt Producers 5% margin money Repayment 500 MT of salt for three years The Ask: Rs 1.5 Crore revolving overdraft facility

THANK YOU Invest in SABRAS for the second salt march