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Scripting a turnaround
Grant Thornton India’s intervention breathes new life into an ailing company
August 2019
Set up in 2013, the Maitree Mahila Dairy and Agriculture Producer Company Limited is a women-led organisation in Rajasthan. Since its inception, this farmer producer company (FPC), with 1,172 members, was following an aggregation model where members used to collect cow and buffalo milk from adjacent villages, bring it to a collection centre and then sell it to nearby markets. This model, however, started to face stiff competition with the arrival of more organised players in the market. As a result, the catchment for the FPC dropped to 16 villages from the 70 recorded in 2013. Milk collections dropped from 10,000 litres per day to mere 1,500 litres per day by 2017-18. Soon, the FPC moved from profit making to subsistence operation.
Given this untenable situation, the Rajasthan Agricultural Competitiveness Project (RACP) – a World Bank-supported initiative of the state government – roped in Grant Thornton India in September 2018 to suggest measures to turn around the struggling FPC. The idea was to leverage the expertise Grant Thornton India had gained by understanding the goat value chain in the state while managing the Agri Business Promotion Facility for RACP.
The Firm’s focus was to ideate on bringing in additional revenue rather than relying on milk trading alone to save the business from going under. The additional revenue driver identified by the Firm was ‘goat milk soap,’ a niche product that catered to high-end customers, thereby ensuring profitability.
Putting this plan into action, Grant Thornton India first suggested that the FPC diversify its content and source goat milk from its remaining catchment villages. Thereafter, the Firm selected 30 women farmers from the FPC to get trained in the goat milk soap making process. These 30 women, trained by experts, further trained more members and started manufacturing small batches of goat milk soaps in three varieties: plain goat milk, charcoal, and neem.
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Handmade goat milk soap |
The Firm selected 30 women farmers from the FPC to get trained in the goat milk soap making process |
These products were then sold to a few buyers, who gave a positive feedback. This feedback indicated the potential for scaling up operations, both in terms of production and sales. In order to propel further production, a manufacturing unit funded by the World Bank/RACP is being set up at Dooni in the Tonk district of Rajasthan. It is expected to be up and running by 15 August 2019.
Apart from the production process, Grant Thornton also helped the FPC secure a monthly order of around 1,400 soap bars from sources like Amazon Saheli, Amazon, Kudumshree, Munnar Hotels & Resorts Associations, etc. The success of this product has also led women to start selling trial production batches in local markets. It is expected that this activity will further help the FPC secure INR 36 lakh as revenue in the next five years.
In less than a year, a group of woman entrepreneurs who were almost at the verge of shutting shop are at the cusp of scripting a unique turnaround story, where they have moved from a trading model to one based on production innovation.
The team behind this turnaround includes Shubhendu Dash, led by V Padmanand and Kunal Sood.