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Rajesh Shah Chairman & Managing Director May 2010

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

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Rajesh Shah Chairman & Managing Director May 2010

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

  2. 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.

  3. Indian Salt Industry Overview India: 3rd largest salt producer Current Production: 200 lac MTs Current Utilization Domestic • Human use 40% • Industrial use48% Export 12% Current Volume: Rs. 7500 Cr By 2020 Production: 400 Lac MTs

  4. SALT PRODUCTION & ISSUES India’s Salt Producers • Total 13,000 • Small salt producers11,700 • Production36% • Market Value 2854 Cr Salt workers only get 3.35% 86 Cr Salt workers in • Production 1.5 lac • Handling 1.0 lac

  5. 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.

  6. Problems to be solved (cont’d) Economic Problem • A salt producer annually Produces 10,000 - 12,000 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

  7. SABRAS OVERVIEW

  8. COMPANY OVERVIEW 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

  9. 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 UmarKureshi 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 MukeshThakarAsst. Manager, having 10 years of experience in salt production in Little Rann of Kutch Vijay SolankiField Supervisor Chetan Mehta Accountant (part) RohitDudhelaCompany Secretary (part)

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

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

  12. Achievements to date

  13. GROWTH PLAN Technology, Volume, By-products, Brand

  14. SOLAR OPPORTUNITY • Solar pumps save 4 metric tons of CO2 per salt producer per annum • Producers can recoup capital costs within 3 years Data based on field trials supported by National Bank for Agriculture and Rural Development (“NABARD”)

  15. Goal for the next 3 years

  16. 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.

  17. FINANCIALS

  18. FINANCIAL SUMMARY

  19. TRI-PARTY FINANCIAL AGREEMENT 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 SABRAS Bank 70% subsidized loan • The Ask: Rs 1.5 Crore revolving overdraft facility

  20. Invest in SABRAS for the second salt march THANK YOU

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