Creating a Rural Biomass Supply Chain
M/S Gram Laxmi Biofuel Pvt Ltd (GLBPL) is a social enterprise that intends to invigorate rural economy in Maharashtra, India by fulfilling industrial and domestic fuel demand. GLBPL will convert agricultural and forest residues into pellets and sell them to industries and households as fuel. GLBPL will encourage locals to take advantage of large tracks of barren land and farm energy crops or trees as source of biomass to become part of the supply chain as a green entrepreneur. Green entrepreneurs will be the local suppliers of biomass that they may farm or collect (agricultural and forest residues). A small processing machine will convert the biomass into pellets or briquettes that will be sold as fuel to industries and other micro consumers. This business model is targeted to be replicated in 75 sites over a 5-year period, creating business opportunities for many local villagers. GLBPL will act as a central coordinating body that will ensure supply of biomass raw materials, guarantee the high quality of the pellets, and market the product to large-scale end-users. The total project cost is $603,500, and GLBPL is raising capital investment worth $500,000. Half of the capital will come from equity investors with the other half coming from debt financing amortized over 5 years at 12%.
What problem are you trying to solve? Who has this problem?A number of companies in India have switched from using furnace oil to biomass briquettes/pellets to save on boiler fuel costs. The projected requirement in briquettes in the Maharashtra state alone is about 6 million tons fuel per year. This demand can be easily met by efficiently collecting biomass wastes such as coconut husks, rice straws, and other forest and agricultural residues that are otherwise left in the open and cause or spread fires. The lack of employment opportunities in rural areas result in the mass migration of the youth to the cities. Unfortunately, urban employment has also stagnated and many young migrants remain jobless. Crop farming is near impossible in vast barren lands in the villages. However, it can support growth of energy crops that require less environmental resources and low agricultural maintenance. By creating a demand for biomass, the youth may be enticed to stay in the rural areas to collect or grow biomass and become Green Entrepreneurs.
Value PropositionGLBPL is a social enterprise business that will act as a producer and aggregator of biomass. These raw materials are then processed into marketable biomass fuels, and sold to industries and commercial establishments. GLBPL will source its raw materials from Green Entrepreneurs. These are locals who collect biomass residues from farms and forest areas, or energy crops in barren lands. The collected or harvested biomass will then be processed into pellets or briquettes in a central facility. GLBPL will secure the market for the product and ensure continuous demand for processed biomass. In the next five years, GLBPL will setup 75 production sites in different villages that include their own processing facility. A plant will have the capacity of producing 8,540 tonnes of biomass pellets or briquettes per year. Each site will produce business opportunities for entrepreneurs and livelihood opportunities to other members of the rural population.
- Create livelihood opportunities to locals as suppliers of biomass raw materials
- Make use of vast barren lands for growing energy crops or trees that are source of biomass
- Collect forest and agricultural wastes that will help prevent occurrence or spreading of forest fires
- Ensure fuel supply for industries and commercial establishments
- Make available a cleaner cooking fuel alternative for rural households
- Reduce 1,100,00 Mt of Greenhouse Gas Emissions in 5 years
- Plant 600,000 trees in 5 years
Vilas Parave, CEO