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industree crafts

business plan
IndusTree Crafts Business Plan

CONTENTS
1. Executive Summary 1
2. Organization Overview 2
2.1 Vision 2
2.2 Mission 2
2.3 Core Values 2

3. Target Markets 3
3.1 The Retail Customer 3
3.2 The Beneficiary 4

4. Institutional Assessment & Strategic Environment 5
4.1 SWOT Analysis 5

5. Business Model 9
5.1 Retail Company 9
5.2 Production Company 10
5.3 IndusTree Crafts Foundation 11
5.4 Revenue Fish Bone 11
5.5 Expense Fish Bone 12
5.6 Value Proposition 12
5.7 Objects of Scaling 12

6. Detailed BusinessPlan for Retail CompanyIndusTree Crafts Pvt. Ltd/Mother Earth 13
6.1 Marketing Plan 13
6.2 Operational Plan 13
6.3 Human Resource Plan 15
6.4 Financial Plan 16

7. Detailed Business Plan of production company - IndustreeTransform 17
7.1 Marketing Plan 17
7.2 Operational Plan 17
7.3 Human Resource Plan 22
7.4 Financial Plan 22

8. Detailed business plan of Industree Crafts Foundation Non profit 23
8.1 Executive Summary 23
8.2 Marketing Plan 23
8.3 Operational Plan 24
8.4 Human Resource Plan 26
8.5 Finance Plan 26

Annexure I List of producer groups

Annexure I - Case Study on IndusTree Crafts prepared by International Trade Centre, Geneva

Annexure II - CVs of Gita Ram, Neelam Chhiber, Raminder Singh Reikhi, Arun Raste
IndusTree Crafts Business Plan Page 1 of 26
CHAPTER - 1
EXECUTIVE SUMMARY

For thousands of artisans and farmers in India with low incomes and partial employment,
Industree provides market opportunities, backed by design inputs, skill and organizational
training to enable artisans to work in groups, producing products saleable in urban and global
markets. This brings much needed livelihood opportunities, increasing income, enabling them to
raise their nutrition and childrens education standards. This is achieved not by a top down, but by
a bottom up approach, wherein they are encouraged to invest their savings in and become owners
of their production units, in ways which increase productivity and profits for them.

Rural artisanal and local economy, value addition skills are significant as rural income providers
in India. India is estimated to have anything between 6 million to 40 million artisans. This
includes what has so far been called the handicraft and handloom sector. The prospective
numbers involved in value added organic food in India, would increase these estimations
considerably. Industrees focus will be on raising the level of rural involvement in modern Indian
organized retail which is growing at a scorching pace. The value-added production that rural
India provides to this organised sector will currently be a small percentage, of the total volume
and will mostly be in the sector of food. India is witnessing an unprecedented domestic retail
boom, with expansion in home, food and apparel markets, being tapped by mostly imported
goods in furniture and home, and easily accessible urban producers with larger production
systems in place. These production units are built on a rural workforce which migrates to urban
centers. This indicates a huge market opportunity for the millions of under compensated
handloom weavers, handicraft artisans, and poor farmers who represent a large traditionally
skilled rural workforce, which is unorganized and unadapted, suffering from poor production
infrastructure, access to working capital, and contemporary entrepreneurial skills.

As a company Industree hopes to set benchmarks for sharing urban prosperity with rural India
through mainstream business. It visualizes a large opportunity in linking micro finance with the
development of these producers into production units, which when provided with appropriate
markets, designs, production infrastructure and appropriate management tools, can help bridge
the urban rural divide. Urban Indian economy is growing in double digits while the rural
agricultural economy lags behind in the lower single digit. India has the largest number of poor
people in the world. Industrees approach, as differentiated from a typical micro finance
approach, is that individuals in a group save, towards a group livelihood activity. Rural
production can come of age, if it moves towards group enterprise, wherein a group of
artisans/farmers or a collection of groups come together, pool theirs savings into working capital
and towards overhead expenditure, such as rental of a common work shed, maintenance of their
production center, their manager, their transportation costs, etc. For this Industree will provide the
market pull, by establishing new brands and the supply chain to support the same. It will tap
supply chains being set up as well as existing supply chains, and its very presence will catalyse
the creation of more such supply chains.

Rural India, not getting the opportunities, is migrating to urban India. A crucial link between the
two needs to be established. Urban consumption needs can be well-served by rural Indian skills,
for essentially more and more urban consumers are rising from small town and semi-rural
backgrounds and their roots and tastes are thus very Indian. It is a question of narrowing the taste
divide, by adapting the vast pool of traditional skills and production methods that exist in
abundance.
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CHAPTER - 2
ORGANIZATION OVERVIEW

Industree so far has been a hybrid model, with the for-profit involved in retail, design, sourcing
and warehousing as well as direct artisanal production enhancement, with direct work in four
rural village centers across Tamil Nadu and Karnataka. The not for profit is engaged in capacity
development and skill training for rural artisanal groups. For Industree the customer is the
consumer who purchases the artisanal product and the client or beneficiary is the producer or
artisan.

The company is ably mentored by Mrs. Gita Ram, who has 30 years voluntary experience in the
artisanal sector. Neelam Chhiber, the Executive Director, oversees the day to day operations. An
able team of dedicated staff, is in place for the last 12 years. Design, merchandising, account,
production and warehousing heads are in place. Currently the organisation directly employs 160
people in Bangalore. It has four stores under the Mother Earth brand in Delhi, Bangalore, and
Kolkata and Mumbai. It has been networking effectively with some of the leading retailers in
India such as Shoppers Stop, Future Group, Fabindia, Ebony as well as small boutique buyers,
large global companies such as IKEA, Interface, Crate and Barrel. It is a member of IFAT, and
has a Fair Trade certification. It networks with the related government departments, and the
Office of DC Handicrafts, Ministry of Textiles, has awarded the prestigious AHVY, Natural Fiber
Theme Cluster project to the non-profit, wherein the GOI will invest upto 10 million USD on the
training and production facilities for 7,500 producers across India.

2.1 Vision
Connecting rural livelihood skills to urban markets in an equitable way.

2.2 Mission
To enhance and create rural artisanal livelihoods through marketing of contemporary designed
artisanal produce, such as food, apparel and home products, for urban markets, wherein producers
own equity, in the production and retail brands.

2.3 Core values
Transform the lives of rural producer communities, by integrating them sustainably into the larger
consumption economy through a for profit institutional model of ownership integrated with
design, production and marketing, thereby ensuring-
1.Improved earning capacities of rural families, thereby bringing them into the consuming
economy
2.Reduced pressure on cities and urban centers, by creating opportunity to improve ones life in
rural settings
3.Redution of environmental load of economic activities and Increase in sustainable economic
practises such as organic farming, use of natural materials ,dyes, and proper disposal of effluents,
survival of traditional production practices and sensitivities,( in contemporary forms) energy
efficient and low carbon footprint manufacturing processes,
4.Servicing customers who through their purchase, provide markets and are chief enablers of the
above.

IndusTree Crafts Business Plan Page 3 of 26
CHAPTER - 3
TARGET MARKETS

Industrees customer is the retail consumer buying artisanal and organic products, while its
primary clients are producers. These producers have to manage their business in buyer-driven
value chains, of which national high and middle value markets and export markets represent the
highest earning potential for artisans in developing economies. India currently exports 17,000
crores of handicraft merchandise alone, but this is just 3% of existing global markets. Minor
portions of the same trickle down to the rural artisan. This sector has thrived because of the
infrastructure and capital infusion provided by urban, mostly North and West India based
exporters, in towns and cities. There is very little data available on domestic markets for these
artisanal products.

In order to access these markets and to improve their income situation, small producers need to
upgrade their value chains. Upgrading basically means that clients will earn higher returns when
they value-add their contribution to the value chain.

Higher returns can be obtained:
By changing production processes or techniques (process upgrading);
By producing new products and designs that respond to changing trends (product upgrading);
By taking on additional functions or tasks that are performed by other actors in the chain
(functional upgrading); self managing the enterprise, self checking and supervision, and
By entering a new market channel of the value chain.eg, building a brand, investing in retail
and the brand.

3.1 The Retail Customer
The 2 main markets for client producers are mainstream and fair trade markets. Industree has thus
far catered only to mainstream markets, believing that thereby it has honed its knowledge and
experience base to handle fair trade markets that are relatively simpler. The concept of a Fair
trade market, so far is a western concept, which has not taken root in India. Industree believes that
there is huge potential in establishing an Indianised version of Fair trade, which is what the
brands it will establish will stand for. This basically is the mainstream market. Mainstream
markets can further be distinguished into high-volume mainstream markets, mostly global buyers
and high-value mainstream markets, currently mainly symbolized in India by the designer/high
fashion market which depend a lot on traditional artisanal skills. The fourth is the tourism market,
which has high growth potential. This is partly served by government retail outlets, stores within
5 star hotels, and the like.

Industree currently markets out of 4 of its own brand stores- Mother Earth in Bangalore, Delhi,
Kolkata and Mumbai. These stores are located in malls and prime retail locations. In addition it
markets product lines through shop in shops with leading chains such as Shoppers Stop, Home
Stop, Centrals & Home Towns across metros in India. It supplies to smaller stores in over 12
cities in the country. It has supported its growth through tapping export markets, participating in
some of the leading International fairs, trying to access global markets. It has received access to
some of the most difficult fairs to participate in, due to the unique flavour of its product line, such
as Heimtextile, Ambiente and Tendence. It has participated in Sources New York and has been
supplying to global retailers such as Pier Europe, Ikea, Crate and Barrel.

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3.2 The Beneficiary
Small producers in developing economies either work self-employed in the informal sector or
have ongoing or short-term contracts with aggregators. In such a manual system of production,
small producers typically need a bundle of specific business services. Industree ensures that the
right services are provided. It needs to build up cost-effective ways of providing these services,
and manage the overall organization of the service provision. In other words, it organizes
complex small producer supply chains to meet sophisticated client needs.

Industree provides the essential bridging services between small producers (becoming a value
adding and problem solving distributor) and retailers/importers in the value chain. Small
producers who want to access higher value markets generally need the following key services
Marketing and market access;
Design and product development;
Supply chain management & quality control;
Access to infrastructure and updated/appropriate production techniques
Financing.

Industree thus far has been very successful at the first two, moderately successful at the third &
lags behind in the last two.

Small producers in India generally do not have the resources to afford fee-based business
services. In addition, producers living in remote and rural areas are not an attractive target group
for professional business providers operating from urban centres. Consequently, small producers
have little experience in seeking and contracting for such services. Thus those not geographically
placed suitably to become part of market pulled value chains get totally ignored by this market
system. Secondly the largest weakness in the role of the above intermediaries is that mostly none
of the incomes or profits generated by their services is ploughed back into the supply chain,
enabling any substantial increase in the wages of those right at the bottom of the value chain.
Industree has so far impacted this, and it hopes to scale up this impact. This is its mission.



IndusTree Crafts Business Plan Page 5 of 26
CHAPTER - 4
INSTITUTIONAL ASSESSMENT & STRATEGIC ENVIRONMENT

4.1 SWOT Analysis (Strengths, weaknesses, opportunities, threats & barriers)
4.1.1 Strengths
Traditionally developing economies have not had strong domestic markets to create strong market
pulls. Exports have played this role so far. Export customers have been under no pressure to
effect change down the value chain, initiating more investment of profits into increasing incomes
at the bottom of the pyramid. India is currently poised at an interesting threshold, where its
domestic markets are growing, enabling the establishment of market pulls, which if backed by
suitably thought and planned production linkages, could substantially increase rural incomes.

Example- Viravannalur.
In Viravannalur, Arikesavannalur, Patamadai cluster of villages in Tirunelveli district of
Tamilnadu, Industree Foundation has mobilized 600 women into self help groups and works with
200 of them currently on livelihood. These 200 are traditional Muslim grass mat weavers.
In its three years of work with this cluster, it has raised the average income of half of these
weavers to three times their original income. Through this activity its chief conclusions have
been, that
1)Producers must invest in their own working capital. Ownership in the enterprise is key for long
term sustainability and the reduction of in between layers of supervison, that actually stand in the
way of further increase in their incomes.
2)This will also make the entire value chain, more inclusive such as creating supervisory,
managerial and even design positions open to people from within community resources, ensuring
long term sustainability and pride in traditional occupations.
3)To enable producer ownership, steady markets are required, which is possible through retail
domestic sales initially and eventual scale up of these producer organizations can then be
achieved through global markets.

Example- Bangalore
Seeing huge gaps in the value chain, in the production of products that were essential for
increasing markets for producers it has been working with, Industree experimentally set up some
production facilities in Bangalore. Learning through this activity over the last two years has been
instrumental in its conclusions that such enhanced value chains need to be created in rural hubs,
for farmers/artisans to be able to access, so as to service sophisticated markets, better. It has
through this experience, enough data to show, how incomes of producers go up substantially
when they are moved up the value chain.

4.1.2 Weaknesses
Example-Manapad Palm Leaf Society, Tamil Nadu
This 50 year old society in the deep south of Tamil Nadu is a village of 7000 inhabitants whose
sole source of income is fishing and palm leaf craft. The local Society, with 300 members is
indeed an honest and disciplined one. But it is totally dependent on external investment to move
them up the value chain, in terms of capacity building the members towards effective use of ICT,
equipment enhancement towards skill diversification. Most critical of all, being a cooperative
society weakens any external capacity building measures as societies in Tamil Nadu are quasi
government managed. The solution here is to set up a strong private entrepreneur who will fill in
the production gaps and outsource to the local society.
Example- Viravannalur
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Mother Earth here has noticed the problems when producers and their decision makers become
too dependant on a captive market. They lose alertness and complacency sets in. This is to be
avoided at all costs.

4.1.3 Opportunity
According to a McInsey report, the Indian consumer of the year 2025, does not even exist today.
Looking at Global trends, this consumer will be an educated, aware, green consumer, concerned
with Indias social divides and the environment. Because of the technology and ICT, job boom in
India, the modern consumer is well traveled and exposed to the concept of Fair trade and
environmental issues. Hence a large market potential for the establishment of an organic, natural,
green, socially aware brand exists. Traditional livelihoods are intrinsically largely green in nature,
taking inspiration from nature, and need to be projected as such.

With the huge growth in micro finance, in India, opportunities for partnerships with rural
organizations looking towards workable livelihood intervention models, are also growing.

4.1.4 Barriers and Threats
Costs of retail are growing in India. Very few retailers are actually showing profits, and are in for
the long haul. Industree too needs partnerships prepared for the same. The supply side though has
great potential, but actualizing this potential is going to be a challenge.

Excerpt (Connecting artisans to Markets draft report by ITC, Geneva) The review of the JOBS
projects in Bangladesh (Field and Knopp, p. 16 ff.) discovered for example that intermediary
development can have a negative impact on small producer development if:
The intermediaries developed are not behaving like private sector businesses or cannot
access different market channels and pursue multiple buyers in order to exploit the
capacity of the small producers.
Only one intermediary is developed and linked to the producers (hence creating a service
monopoly and buyer dependency).
Embedded business services are not based on commercial terms (they have to make good
business sense for the intermediaries, meaning they can either reach higher value
markets by providing embedded business services (EBS) to producers, or in general get
more business).

4.1.5 Strategic Goals
As a starting point for every intervention, a value chain analysis, identifying the social relations
and inter-business dynamics, leads us to the following structure. In this case, all actors in the
value chain have to be integrated in order to access higher value markets for small producers.

Industrees scaling strategy involves a hybrid organizational approach. Key to its approach is its
belief in producer owner ship in the retail brand, as well as their investments in production.
Producer ownership in the brand comes from its belief that there is a cultural IPR involved in
merchandise that bases itself on heritage. Producer investment in production is necessary to
revitalize the bottom of the pyramid, since this will ensure growth of producers towards
becoming owners of their enterprises. To achieve this 3 organisations are needed, one that
primarily drives retail and marketing, to the ultimate consumer in urban areas, another that
focuses on production issues with producer groups, builds up the supply chain and accesses
global markets. These 2 are for profit enterprises . On matters of artisanal capacity building,
towards productivity and community owned enterprises a third entity, a not for profit is essential.

Excerpt Connecting artisans to Markets draft report by ITC, Geneva
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Specific demand was the most common stated success factor in all reports and case studies
identified in this research. If there are concrete buyers and orders for handicrafts that can be
produced by artisans, then there is an immediate incentive for all value chain actors to make the
necessary efforts to fulfil the order. Intermediaries will provide embedded business services;
NGOs will provide technical assistance; and small producers will make some extra efforts to
meet requirements.

Riordan (p. 48 ff) stresses in his article that demand-driven means a concrete interest of a
specific buyer in the products that can be produced by small producers. Demand-driven does not
mean:
Demand of the value chain actors (what they would like to get from a development
project);
General demand established by market analysis (e.g. in the European Union there is a
50 million demand for ethnic rugs).

Industrees current development strategy, is to establish a producer owned brand within the
booming domestic retail economy, to enable direct access to markets, entails the setting up of a
chain of retail stores, and shop in shops. This involves the scaling up of the existing for profit,
through 43% divestment of equity, to an investor and 14% of the shares being put into a Mutually
Beneficial Trust enabling producers to buy shares in Industree at par. This organization is retail
consumer oriented.

It needs to set up a second for profit. This for the moment can be called Industree Transform. It
would need the relevant skills and experience to provide design, product development services,
supply chain management and quality control. It would focus on channeling existing individual
product making skills, towards, group enterprise, emphasizing on the advantages of the economic
benefits of a certain minimum scale, and the advantages of working in collectives. The approach
would be more through the intervention of external supervisory skills, with external investments
in infrastructure, and improved work methods. Here too external social equity and access to debt
at lower rates of interest is required. Here 26% would be set aside for producers to buy at par and
26% would be opened out for equity investment.

The non-profit, Industree Crafts Foundation, will arrange with existing mfis (if any) in the
area to develop microloan packages to enable the above infrastructure and working capital
creation. This will include basic capacity development of its beneficiaries to manage their own
enterprises better, and build up their personal business, quality control and supply chain
management skills. In areas with existing MFIs in operation this would be a little simpler.
Obviously Mother Earth would not be able to limit its sourcing only to areas where existing
MFIs operate, and needs to have a multi faceted approach on being able to achieve its aims even
in areas where MFIs do not operate.

ICF would operate on a BDS(business development services) model, with the add-on of capacity
building producers towards group savings, and investing in working capital. It could have a part
paid for and part subsidized service. It would work on connecting producers to suitable
infrastructure connects, being worked on by other agencies, or towards these entities being able to
establish these facilities by themselves.





IndusTree Crafts Business Plan Page 8 of 26
4.1.6 Growth model



























Category No. of artisans
Fashion / soft furnishings 5000 x 2.5=12,500
Personal accessories 1000 x 2.5= 2,500
Natural fibre 1000 x 2.5= 2,500
Home textiles 1000 x 2.5= 2,500
Craft based lifestyle dcor 5000 x 2.5=12,500
Furniture wood 3000 x 2.5 = 7,500
Food 4000 x 2.5=10,000
Total no. of artisans 50,000
CUSTOMERS
Industree Retail Sales in 5 yrs Rs. 150 Crores /
US$ 31.25 Million
Producer ownership 14%
Industree Transform sales in 5 yrs thru ME Rs.60
crores, thru other retailers, direct sales and global
Markets- 90 crores- Total Rs. 150 crores/
US$ 31.25 Million
Producer ownership 36%
Industree
Transform
Industree Crafts Foundation
PRODUCERS
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CHAPTER - 5
BUSINESS MODEL






SIS- Shop in Shops
ICF- Industree Crafts Foundation
SHG- Self Help Groups
CFC- Common facility Centers
BDS Business Development Services






Industree Crafts Pvt. Ltd
(ICPL) / Mother Earth is
the Retail Company
Industree Transform
large format
retail stores
small
standalone
stores
SIS
shops
Trading
Own value
addition
Producer owned
enterprises with
Industree
Transform
equity
participation
Capacity
Building
BDS
Organisation
Building
Training +
Consultancy
Federation of
SHGS with
CFC
ICF
Social Investor
Retail Investor

MI large
format retail
stores
Future Group
IndusTree Crafts Business Plan Page 10 of 26
5.1 Retail Company
Key to developing rural production is strong and consistent market pull. For this it is essential
that domestic retail operations be strengthened. Once this strengthens the production base, global
sales will be less of a challenge. For successful domestic retail, a clear consumer oriented focus is
necessary. This entails specific organizational strengths, product mix and investments. The
domestic retail brand, which is to be established is envisioned to be a natural, organic,
environmentally as well as socially sustainable brand. Here it is intended that domestic revenues
grow from the existing Rs5 crore/ 1.2million dollars to Rs 160 crores in the the next 5 years, by
broadening the product offering. Currently Industree through the brand Mother Earth operates 4
stores with a maximum size of 10,000 sq ft,(one store) but needs to expand to 12 stores with a
minimum size of 10,000 sq. ft and 25 stores of beween 1000-2000 sq. ft.

In this it is crucial that Industree has an alliance with a successful retailer in India, which has been
secured. Mr. Kishore Biyani, heading Indias largest retail chain, Future Group, is personally
mentoring Industree in it venture, and has invested in Industree Crafts Pvt. ltd, through, Future
Ventures. Mr. R.S. Rekhi has joined as an extremely capable CEO, who shares Mother Earths
core values, has significant mainstream retail experience, with shares in the venture, to manage
the company.

Industree will now invest in Industree Transform, holding 48% of the same, and opening 26% of
this to equity investment from value adding partners, while 26% is kept for producers to buy.

Once the market pull is assured the challenge to create the equitable supply chain lies with
Industree Transform and Industree Crafts Foundation. Industree Crafts Foundation is going to
require funds to achieve this. Industree Foundation currently only provides consultancy and
training to producer groups and government projects. It has 12A , 80G and FCRA. The
foundation would be the interface between grass roots producer entities and social loans. It would
encourage individual producers to get involved in group savings and leverage the same towards
working capital loans.

5.2 Industree Transform
Industree has over the years, become involved in direct artisanal production due to the gaps in the
supply chain. In annexure 1 a list of over 100 producer groups that it has worked with over the
last 12 years is attached. These are generally ngos, societies, cooperatives. With experience it has
noticed critical gaps with specific regard to market oriented livelihood development and the
inability amongst most organizations to raise working capital and production infrastructure to
achieve long term production goals.

It has over the years managed to surmount these difficulties through direct intervention in certain
key aspects of production crucial to its market survival. For a scale up it is essential that these
production, hence artisanal oriented activities become part of a separate for profit organization.
To improve artisanal incomes it is essential to move them up the value chain. To enable artisans
to reach paying markets, constant design, hence technical upgradation, hence infrastructure
development at grass root producer level is essential. Annexure 2 contains the case study on ` by
ITC, Geneva.

Business plan preparations for grass roots production activities, production planning, formation of
rural production entities, would be part of its mandate. It would with the help of Industree
Foundation establish community owned enterprises, that are professionally and commercially
viable. This production organization would hand hold and provide the necessary technical inputs

IndusTree Crafts Business Plan Page 11 of 26
to local ngos, interested in setting up such enterprises with the primary stakeholders- artisans and
rural communities.

5.3 Industree Crafts Foundation
This not for profit is currently, largely self sustainable working with various government bodies
such as Ministry of Textiles, Ministry of Rural Development, IL&FS Cluster Development
Initiative on artisanal owned, market oriented design and technical upgradation initiatives,
through a consultancy model

It needs to work actively with local communities, self governance bodies, govt. organizations that
work with handicraft and handlooms, to access local level infrastructure and funds wherever
possible. Building relationships with existing ngos, working with micro finance organizations,
facilitating their clients towards suitable artisanal group enterprise production will be its
responsibility.

5.4 Revenue Fish Bone


















Total
Revenue
Large format brand
retail stores 60%
Small format brand
retail stores 20%
Brand cut ins, 10%
Shop in shops
Wholesalers 5%
Exports 5%



Retail
company
For Profit.
Industree

Capable individual
artisans, groups, private
aggregators 40%
Production Co.
Industree
Transform- For
profit
Medium capable
artisans, N. India, W.
India 30%
Under capable artisans,
S. India, E. India, C.
India 30%
Industree Crafts
Foundation, Non
profit
Revenues
BDS fees from
Beneficiaries
Grants for capacity
building, group
formation for
enterprise
development
Consultancy Fees from
NGO / MFIs
IndusTree Crafts Business Plan Page 12 of 26
5.5 Expenses Fish Bone






























5.6 Value Proposition
For millions of artisans and farmers in India with low incomes and partial employment, Industree
hopes to provide market opportunities, backed by design inputs, skill and organizational training
to enable artisans to work in groups, producing products saleable in urban and global markets.
This brings much needed livelihood opportunities, increasing incomes. This is achieved by
establishing a market pull, backed with the capacity to empower producers, wherein they are
encouraged to invest their savings in and become owners of their production units, in ways which
increase productivity and profits for them.

The combination of the seamless cycle of access to markets, overall production upgradation
(including access to finance), capacity building artisanal producers to involve their savings in
working capital and part owning their enterprises, is what is unique to Industrees model, as is
ownership in the brand which is to be provided for.

5.7 Objectives of Scaling
Industree aims to target 10,000 artisans/farmers per year, for the first 2 years, after which it
should be able to enhance this figure to 15,000 artisans/farmers per year. Through ownership in
the brand it is envisioned that through internal trading of shares, after three years, when the retail
company goes in for valuation, artisanal/farmer shareholders will be able to have returns of more
than 10 times their investment.
Total
costs
Retail Co.
Mother Earth

Capacity
building, Skill
upgradation
Industree
Foundation
Production Co.
Industree
Transform
Head Office
Expenses
Retail Store
Expenses
Group Enterprise Driver
for small co-ops.
Rents, utilities 1.00%
Payroll 3.88%
Travel 0.35%
Marketing 2.28%
Financial expense 0.68%
Rents, utilities .47%
Travel .35%
Payroll 1.1%
Inventory 1.74%
Advances 2.56%
Financial expense .7%
Production machines 2.9%
Raw material Wages
Inventory 3.38%
Rents, Utilities .43%
Financial expense .87%
Head Office
Expenses
Production center
expenses
Consultancy to NGOs
MFIs, skill training.
Training Module 1.00%
dev cost
Trainers Fees .52%
Travel .35%
Simple machine .6%
tech development
Rents , utilities .52%
Payroll 1.4%
Travel, .52%
Marketing .52%
Communication .35%
Rents, utilities 21%
Payroll 4.28%
Inventory 12%
Store Interiors 18.5%
Store Rent deposits 13.2%
Financial expense .26%
IndusTree Crafts Business Plan Page 13 of 26
CHAPTER - 6
DETAILED BUSINESS PLAN FOR RETAIL COMPANY INDUSTREE CRAFTS PVT.
LTD.

6.1 Marketing Plan
The brand to be launched by the Retail company, is a social, natural/organic holistic food, home
and fashion brand. This will be a national brand, which will sell out of its own stand alone stores,
either in malls or high street locations. There will be 2 versions of these stores. Larger ones,
which are 10,000 sq ft in size, others that are 1000 sq ft, and also the cut in, or shop in shop
model can be explored. In the financials, cut ins and small format stores are clubbed under cut
ins, for the preliminary outlines.

Keeping inputs from the retail experienced investors in mind, and also from its own 10 years
experience in Indian retail, Industree-as Mother Earth sees the need to widen its product mix, into
apparel, home textiles, value added organic and cultural food (specifically things not currently
marketed by others) and mixed material handicraft home accessories. Mother Earth has already
completed a market survey, merchandise mix analysis on these new categories. The stores will
stock existing social brands, whose merchandise fit into the brands seasonal planning. It will
give shop in shop floor space to leading social brands such as SEWA, SASHA, Sahaj, Dharam
etc.

Projected financials attached have been done on an extremely conservative scale, on the market
analysis basis, of 1000 rs sq ft average return per sq ft of retail space. An analysis of major
competition in this sector has shown, on an average almost Rs3,000 sales per sq ft of retail space.
Mother Earth, currently with just its own natural fiber merchandise which is extremely niche, low
value and high volume shows a return of Rs.800 a square foot, in its mall locations.

Exports will not be completely wound down, though there will be no active export marketing
costs. This organization would be involved in operating stores, brand building, marketing,
merchandise planning, design and production initiation. It could source directly from mainstream
producers, till socially oriented production is in place with enough and appropriate merchandise
mix, and will actively develop production from its production company partners.

6.2 Operational Plan

6.2.1 Branding
Branding is the emotional connection between the customer and the product/ service being
offered. In the growing retail economy of India, Industree through its retail experience has
realized the potential that lies in the creation of a relevant brand to service the farmer/
artisanal/rural value chain sector. The Indian customer takes pride in his/her Indian ness. Indias
large, young, educated buying population is keen to explore the concept of Indian-ness, not so
much in the form of tradition but contemporarily packaged in holistic, forward looking cultural
attitudes. Industree will establish a new brand Mother Earth to achieve this customer connect.
Branding will need to be backed by relevant merchandise, store design and communication.
Industree is affiliated to fair trade associations and is officially recognized as a fair trade
organization. It has to Indianise the concept of sustainability- both environmental and social.

Successful brands, Amul, Safal, FabIndia
IndusTree Crafts Business Plan Page 14 of 26
6.2.2 Design and product development
Key to successful retail operations is merchandise. Product categories that encapsulate needs of
the contemporary Indian shopper, need to be established.
Consistently across projects, product design is what entices buyers to take a risk on a new
artisan supplier. ATA Lessons Learned in 20 Years, refreport
Based on a profound understanding of the target market, new designs have to be developed to
meet changing client tastes. Design is the leading competitive advantage in the sector, but
evidently needs to be translated into cost-effective business operations.

6.2.3 Retail Operations
Key to successful retail, are strong retail operations. This entails ensuring operational profits at
retail locations, movement of merchandise to stores, store management.
Coordinating Store design/interiors
Retail software
Sales staff training
Store displays
Store operations

6.2.4 Supply chain management and quality control
The basic operational problems for artisan/farmer micro-entrepreneurs who want to access higher
value markets, lie in the nature of dispersed and/or remotely located small-scale production. This
leads to higher transaction costs with regard to maintaining consistent quality and achieving the
necessary scale. The higher costs arise because of the time dedicated to ensuring that
specifications are met, negotiating with many individuals, and collecting the product from
dispersed or remote collection points.

Industree-Mother Earths(retail company) involvement with supply chain management will lie
upto, providing information in terms of orders, specifications to producers on merchandise that
sells. Comprehensive supply chain management services depending on the organizational
capabilities of small producers will be provided by Industree Transforms that it will set up. It has
in the past organized these tasks by subcontracting
1
larger orders to a number of small producers
and then aggregating the supply for delivery to the client. This will now fall within the purview of
the production company that is being set up. It will comprise the management of the flow of
information and materials needed to produce the goods in accordance with its specifications. In
some locations Industree Transform may need to provide services such as purchasing input
supplies, materials management, provision of finished product specifications, production planning
and costing, quality control, bundling and finishing of products (to ensure standardization),
packaging, warehousing, local transportation. Industree Transforms mandate that ICF will help
fulfill will be to initiate and develop producer working capital participation in an increasing
fashion, first in some, ultimately working towards all of these activities.

With under capacity developed producers, supplier management and supply chain management
have to be performed extremely well by Industree Transform to be able to deliver the demanded
quality and quantity on time and reliably for every order. Mother Earth is well aware of this as a
customer, and needs to perform a market pull function, most necessary for producer upgradation,
remembering that as a brand, it will be hollow in nature and merchandise, and hence basically
unsuccessful unless it works towards a strong Industree Transform and ICF.



IndusTree Crafts Business Plan Page 15 of 26
Mother Earth has noticed that managing the flow of information from customers, over several
intermediaries to the small producers and then the materials and goods back from the input
suppliers over producers and intermediaries to the final customers demands a sound
organizational set-up and clear but simple procedures i.e. a management system. This is also the
reason that Industree Transform is being set up, so that at least part of the supply will be managed
by just one intermediary, thereby cutting through several layers. The ISO 9000 series quality
management systems logic as also more bottom up, self actualized methodologies will be
invoked to achieve streamlining in the supply chain.

With regard to quality control, although handmade, these products still need to conform with the
standardized product specification ordered by the customer and the product finishing has to
comply with market requirements (e.g. health, safety, environmental and social standards).
Quality control or more sophisticated quality assurance methods are extremely important for
Industree Transform and other intermediaries who will bundle deliveries from a large number of
producers who operate individually and have different levels of education and technical skills.

Mother Earth is affiliated to fair trade associations and is officially recognized as a fair trade
organization, which entails some auditing according to set criteria.

6.2.5 ICT and communication
Mother Earth will have to communicate effectively with forward linkages in the value chain = its
retail stores and shop in shop operation. Communication has to take place regularly between
customer and producer. As, visible and successful exporters in the fair trade market
communicate their story to the public, so will Mother Earth need to do the same, with its retail
customer. It should have television screens in each store that is playing videos of its activities in
villages. Customers should be encouraged to connect with their producers in innovative ways.
Industree Transforms mandate should be to link production centers through webcams with
stores, so that customers are able to talk to producers, whose goods they are purchasing, giving
them feedback.

Depending on the target market, Mother Earth will need to develop and use state-of-the-art
information and communication products to communicate effectively using online catalogues, or
online marketplaces. For this it may be effective eventually for it to tie up with a leading Indian
online seller, as Target did with Amazon.(Connecting artisans to Markets draft report by ITC,
Geneva)

IndusTree Crafts Business Plan Page 16 of 26
6.3 Human Resource Plan

































Branding, Store design will be outsourced, but an in-house brand custodian is necessary to ensure
smooth communication from consultant to organization. Similarly, senior merchandisers will be
responsible for inventory, but a separate person, to focus on this is important. The person
responsible for administration, will also look into HR, travel, stay, issues for the first year.
Warehousing and dispatch salaries have not been addressed separately in the Financial plan, but
these costs will be included in cost of goods.


6.4 Financial Plan



CEO
Head
FOOD
Head
HOME
Head
APPAREL
Merchandiser
Designer

Designer
CFO
Custodian
Branding
Store design 1
Accountants
2
Inventory 1
Jr Merchandiser
1
Merchandiser Merchandiser
Jr Accts,
1
Jr Merchandiser
1
Jr Merchandiser
1
Warehousing
Despatch
1+10
ICT, WEB
Comm 1
Retail Concept - Mother Earth Profit & Loss Account
Profit & Loss Account
(All figures are in Rupees Lacs.)
Particular's
Total No of Store 6 14 23 32 41
Standalone Stores 1 4 8 12 16
Cut-ins 5 10 15 20 25
Standard Area (Chargeable) in Sq Ft 16,500 53,000 99,500 146,000 192,500
Standalone Stores 10,000 40,000 80,000 120,000 160,000
Cut-ins 6,500 13,000 19,500 26,000 32,500
Standard Area (Carpet) in Sq Ft 12,375 39,750 74,625 109,500 144,375
Standalone Stores 7,500 30,000 60,000 90,000 120,000
Cut-ins 4,875 9,750 14,625 19,500 24,375
Sales Per Sq Ft
Standalone Stores 11,067 12,727 15% 14,636 15% 16,099 10% 17,709 10%
Cut-ins 11,067 12,727 15% 14,636 15% 16,099 10% 17,709 10%
Sales Per Sq Ft (Growth Rate %)
Standalone Stores 15.00% 15.00% 10.00% 10.00%
Cut-ins 15.00% 15.00% 10.00% 10.00%
No of Months of Operation
Standalone Stores 7 7 8 8 9
Cut-ins 7 7 8 8 9
Particular's Amt % Amt % Amt % Amt % Amt %
Sales Turnover 798.88 106.22% 2,951.00 106.22% 7,281.24 106.22% 11,752.44 106.22% 19,175.70 106.22%
Standalone Stores 484.17 106.22% 2,227.17 106.22% 5,854.27 106.22% 9,659.54 106.22% 15,938.24 106.22%
Cut-ins 314.71 106.22% 723.83 106.22% 1,426.98 106.22% 2,092.90 106.22% 3,237.46 106.22%
Less: Sales Tax / VAT 46.78 6.22% 172.79 6.22% 426.35 6.22% 688.15 6.22% 1,122.82 6.22%
Standalone Stores 28.35 6.22% 130.41 6.22% 342.79 6.22% 565.61 6.22% 933.25 6.22%
Cut-ins 18.43 4.04% 42.38 6.22% 83.56 6.22% 122.55 6.22% 189.57 6.22%
Total Net Sales 752.10 100.00% 2,778.20 100.00% 6,854.90 100.00% 11,064.29 100.00% 18,052.88 100.00%
Standalone Stores 455.82 100.00% 2,096.76 100.00% 5,511.47 100.00% 9,093.93 100.00% 15,004.99 100.00%
Cut-ins 296.28 65.00% 681.45 100.00% 1,343.42 100.00% 1,970.35 100.00% 3,047.89 100.00%
Cost of Goods Sold 457.19 60.79% 1,661.04 59.79% 4,029.88 58.79% 6,449.19 58.29% 10,477.59 58.04%
Standalone Stores 277.08 60.79% 1,253.62 59.79% 3,240.10 58.79% 5,300.70 58.29% 8,708.65 58.04%
Cut-ins 180.10 60.79% 407.43 59.79% 789.78 58.79% 1,148.49 58.29% 1,768.94 58.04%
Total Gross Margin 294.91 39.21% 1,117.16 40.21% 2,825.02 41.21% 4,615.10 41.71% 7,575.29 41.96%
Standalone Stores 178.73 39.21% 843.14 40.21% 2,271.37 41.21% 3,793.23 41.71% 6,296.34 41.96%
Cut-ins 116.18 39.21% 274.02 40.21% 553.65 41.21% 821.87 41.71% 1,278.94 41.96%
Occupation Cost 152.08 20.22% 473.55 17.05% 1,046.43 15.27% 1,600.83 14.47% 2,484.06 13.76%
Energy Costs 14.91 1.98% 51.16 1.84% 115.89 1.69% 178.92 1.62% 278.96 1.55%
Staff Costs 25.20 3.35% 91.51 3.29% 211.02 3.08% 327.84 2.96% 512.79 2.84%
Security & House Keeping 4.52 0.60% 15.33 0.55% 33.48 0.49% 49.44 0.45% 73.58 0.41%
Shrinkage 2.34 0.31% 9.04 0.33% 22.65 0.33% 36.75 0.33% 60.14 0.33%
Credit Card Commission Charges 2.86 0.38% 10.77 0.39% 26.75 0.39% 43.27 0.39% 70.69 0.39%
Packing Charges 7.52 1.00% 22.23 0.80% 51.41 0.75% 82.98 0.75% 126.37 0.70%
Staff Travelling & Conveyance 0.88 0.12% 2.45 0.09% 5.00 0.07% 7.20 0.07% 10.58 0.06%
Printing & Stationery 0.88 0.12% 2.45 0.09% 5.00 0.07% 7.20 0.07% 10.58 0.06%
Warehousing Cost - 0.00% - 0.00% - 0.00% - 0.00% - 0.00%
Legal & Prof 0.60 0.08% 2.44 0.09% 6.18 0.09% 10.08 0.09% 16.53 0.09%
Insurance Premium 0.89 0.12% 3.41 0.12% 7.96 0.12% 12.88 0.12% 18.05 0.10%
Communication Expenses 0.98 0.13% 2.87 0.10% 5.96 0.09% 8.64 0.08% 12.74 0.07%
Repairs & Maint Others 0.60 0.08% 2.44 0.09% 7.84 0.11% 10.99 0.10% 18.03 0.10%
Misc Expenses 0.26 0.03% 1.12 0.04% 2.89 0.04% 4.74 0.04% 7.81 0.04%
Other Overheads-Share of Cut-ins - 0.00% - 0.00% - 0.00% - 0.00% - 0.00%
Total Store Overheads 214.50 28.52% 690.75 24.86% 1,548.46 22.59% 2,381.78 21.53% 3,700.88 20.50%
Markeing Cost 24.00 3.19% 51.78 1.86% 131.36 1.92% 214.12 1.94% 351.14 1.95%
Total Store EBITDA 56.41 7.50% 374.63 13.48% 1,145.20 16.71% 2,019.20 18.25% 3,523.27 19.52%
Total Head Office Expenses 158.04 21.01% 219.79 7.91% 304.16 4.44% 409.97 3.71% 600.24 3.32%
Headoffice Rent 8.00 1.06% 18.00 0.65% 19.80 0.29% 19.80 0.18% 19.80 0.11%
Salaries & Welfare 135.38 18.00% 166.69 6.00% 222.78 3.25% 304.27 2.75% 451.32 2.50%
Printing & Stationery 1.50 0.20% 5.56 0.20% 6.85 0.10% 8.30 0.08% 13.54 0.08%
Staff Travelling & Conv 3.76 0.50% 9.72 0.35% 20.56 0.30% 33.19 0.30% 54.16 0.30%
Legal & Prof 1.88 0.25% 4.17 0.15% 6.85 0.10% 5.53 0.05% 9.03 0.05%
Communication 2.63 0.35% 6.95 0.25% 13.71 0.20% 18.81 0.17% 21.66 0.12%
Misc Expenses 1.88 0.25% 5.56 0.20% 10.28 0.15% 16.60 0.15% 27.08 0.15%
Electricity Expenses 3.00 0.40% 3.15 0.11% 3.31 0.05% 3.47 0.03% 3.65 0.02%
Total Company EBITDA (101.63) -13.51% 154.84 5.57% 841.05 12.27% 1,609.23 14.54% 2,923.03 16.19%
Interest Cost 20.90 2.78% 58.78 2.12% 96.80 1.41% 134.07 1.21% 134.39 0.74%
Depreciation Cost 10.39 1.38% 33.96 1.22% 73.81 1.08% 116.98 1.06% 164.28 0.91%
Total PBT (132.92) -17.67% 62.10 2.24% 670.43 9.78% 1,358.17 12.28% 2,624.36 14.54%
Tax - 0.00% 20.70 0.75% 223.46 3.26% 452.68 4.09% 874.70 4.85%
Deferred Tax - 0.00% 0.00% 0.00% 0.00% 0.00%
Total PAT (132.92) -17.67% 41.40 1.49% 446.98 6.52% 905.50 8.18% 1,749.66 9.69%
Year 5
Year 5
Year 4 Year 1 Year 2 Year 3
Year 1 Year 2 Year 3 Year 4

PARTICULARS Year 1 Year 2 Year 3 Year 4 Year 5
I SOURCES OF FUNDS
1 SHAREHOLDERS FUNDS
Share Capital 600.00 600.00 600.00 600.00 600.00
Share application Money -
Reserves & Surplus (132.92) (91.52) 355.46 1,260.96 3,010.62
2 LOAN FUNDS
Secured Loans-Term Loan 156.00 396.30 693.30 801.90 481.70
Secured Loans-Working Capital Loan 102.69 222.38 313.86 354.87 414.75
3 DEFERRED TAX LIABILITY
4 Inter Unit Balance
725.77 1,127.16 1,962.62 3,017.72 4,507.06
II APPLICATION OF FUNDS :
1 FIXED ASSETS
Gross Block 208.00 570.00 1,080.00 1,616.00 2,148.00
Less : Depreciation 10.39 44.35 118.16 235.14 399.42
Net Block 197.61 525.65 961.84 1,380.86 1,748.58
Capital work-in-progress including advances
2 INVESTMENTS - - - -
3 CURRENT ASSETS, LOANS & ADVANCES
Inventories 76.20 276.84 671.65 1,074.86 1,746.26
Sundry Debtors 6.57 24.25 59.85 96.60 157.61
Cash & Bank Balances 372.19 105.45 11.79 133.76 631.14
Loans & Advances
Deposits 130.35 402.60 761.23 1,137.79 1,533.17
LESS : CURRENT LIABILITIES & PROVISIONS
Current Liabilities & Creditors 57.15 207.63 503.73 806.15 1,309.70
Provisions - - - -
NET CURRENT ASSETS 528.16 601.51 1,000.77 1,636.86 2,758.49
4 MISCELLANEOUS EXPENDITURE
(To the extent not written off or adjusted)
Preliminary expenses
Capital issue expenses - - - -
Deferred Revenue expenses - - - -
725.77 1,127.16 1,962.62 3,017.72 4,507.06
Dif if any - - - - -
25.62 93 228 365 594
PROJECTED BALANCE SHEET
Year 1 Year 2 Year 3 Year 4 Year 5
Sources of Fund
Opening Cash - 372.19 105.45 11.79 133.76
Share Capital 600.00 - -
Retained Earnings (122.53) 75.36 520.79 1,022.48 1,913.94
Loan Fund 258.69 359.99 388.48 149.61 (260.32)
Increase/ (Decrease) in Borrowings - - - -
TOTAL 736.16 807.54 1,014.71 1,183.88 1,787.39
Application of Fund
Capital Expenditure 208.00 362.00 510.00 536.00 532.00
Increase/ Decrease in Working Capital 25.62 67.85 134.29 137.55 228.86
Others
Deposit 130.35 272.25 358.63 376.56 395.39
Closing Cash 372.19 105.45 11.79 133.76 631.14
TOTAL 736.16 807.54 1,014.71 1,183.88 1,787.39
Diff. 0.00 0.00 0.00 0.00 0.00
Projected Consolidated Cash flow
Retail Concept - Mother Earth Standalone Stores
Profit & Loss Account
(All figures are in Rupees Lacs.)
Particular's
Total No of Store 1 4 8 12 16
Standalone Stores 1 4 8 12 16
Cut-ins - - - - -
Standard Area (Chargeable) in Sq Ft 10,000 40,000 80,000 120,000 160,000
Standalone Stores 10,000 40,000 300% 80,000 100% 120,000 50% 160,000 33%
Cut-ins - - - - -
Standard Area (Carpet) in Sq Ft 7,500 30,000 60,000 90,000 120,000
Standalone Stores 7,500 30,000 300% 60,000 100% 90,000 50% 120,000 33%
Cut-ins
Sales Per Sq Ft
Standalone Stores 11,067 12,727 15% 14,636 15% 16,099 10% 17,709 10%
Cut-ins
Sales Per Sq Ft (Growth Rate %)
Standalone Stores 0.00% 15.00% 15.00% 10.00% 10.00%
Cut-ins
No of Months of Operation
Standalone Stores 7 7 8 8 9
Cut-ins
Particular's Amt
% of
Sales
PSF OR
MONTHLY Amt
% of
Sales
PSF OR
MONTHLY Amt
% of
Sales
PSF OR
MONTHLY Amt
% of
Sales
PSF OR
MONTHLY Amt
% of
Sales
PSF OR
MONTHLY
Sales Turnover 484.17 106.22% 2,227.17 106.22% 5,854.27 106.22% 9,659.54 106.22% 15,938.24 106.22%
Less: Sales Tax / VAT 28.35 6.22% 130.41 6.22% 342.79 6.22% 565.61 6.22% 933.25 6.22%
Total Net Sales 455.82 100.00% 2,096.76 100.00% 5,511.47 100.00% 9,093.93 100.00% 15,004.99 100.00%
Product 261.13 57.29% 1,190.71 56.79% 3,088.54 56.04% 5,073.35 55.79% 8,333.52 55.54%
SCM Cost 15.95 3.50% 62.90 3.00% 151.57 2.75% 227.35 2.50% 375.12 2.50%
COGS 277.08 60.79% 1,253.62 59.79% 3,240.10 58.79% 5,300.70 58.29% 8,708.65 58.04%
Total Gross Margin 178.73 39.21% 843.14 40.21% 2,271.37 41.21% 3,793.23 41.71% 6,296.34 41.96%
Occupation Cost 77.00 16.89% 110 323.40 15.42% 116 776.16 14.08% 121 1,222.45 13.44% 127 1,925.36 12.83% 134
Energy Costs 9.45 2.07% 18 39.69 1.89% 19 95.26 1.73% 20 150.03 1.65% 21 236.29 1.57% 22
Staff Costs 18.38 4.03% 35 77.18 3.68% 37 185.22 3.36% 39 291.72 3.21% 41 459.46 3.06% 43
Security & House Keeping 3.15 0.69% 6 12.60 0.60% 6 28.80 0.52% 6 43.20 0.48% 6 64.80 0.43% 6
Shrinkage 1.60 0.35% 7.34 0.35% 19.29 0.35% 31.83 0.35% 52.52 0.35%
Credit Card Commission Charges 1.82 0.40% 8.39 0.40% 22.05 0.40% 36.38 0.40% 60.02 0.40%
Packing Charges 4.56 1.00% 16.77 0.80% 41.34 0.75% 68.20 0.75% 105.03 0.70%
Staff Travelling & Conveyance 0.35 0.08% 5,000 1.40 0.07% 5,000 3.20 0.06% 5,000 4.80 0.05% 5,000 7.20 0.05% 5,000
Printing & Stationery 0.35 0.08% 5,000 1.40 0.07% 5,000 3.20 0.06% 5,000 4.80 0.05% 5,000 7.20 0.05% 5,000
Warehousing Cost - - - - -
Legal & Prof 0.46 0.10% 2.10 0.10% 5.51 0.10% 9.09 0.10% 15.00 0.10%
Insurance Premium 0.59 0.13% 2.73 0.13% 6.61 0.12% 10.91 0.12% 15.00 0.10%
Communication Expenses 0.46 0.10% 6,500 1.82 0.09% 6,500 4.16 0.08% 6,500 6.24 0.07% 6,500 9.36 0.06% 6,500
Repairs & Maint Others 0.46 0.10% 2.10 0.10% 7.16 0.13% 10.00 0.11% 16.51 0.11%
Misc Expenses 0.23 0.05% 1.05 0.05% 2.76 0.05% 4.55 0.05% 7.50 0.05%
Other Overheads-Share of Cut-ins - 0.00% - 0.00% - 0.00% - 0.00% - 0.00%
Total Store Overheads 118.84 26.07% 497.95 23.75% 1,200.71 21.79% 1,894.21 20.83% 2,981.27 19.87%
Markeing Cost 9.68 2.12% 44.54 2.12% 117.09 2.12% 193.19 2.12% 318.76 2.12%
Total Store EBITDA 50.21 11.02% 300.65 14.34% 953.57 17.30% 1,705.83 18.76% 2,996.31 19.97%
Year 5
Year 5
Year 1 Year 2 Year 3 Year 4
Year 1 Year 2 Year 3 Year 4
Retail Concept - Mother Earth
Profit & Loss Account
(All figures are in Rupees Lacs.)
Particular's
Total No of Store 5 10 15 20 25
Standalone Stores
Cut-ins 5 10 15 20 25
Standard Area (Chargeable) in Sq Ft 6,500 13,000 100% 19,500 50% 26,000 33% 32,500 25%
Standalone Stores
Cut-ins 6,500 13,000 19,500 26,000 32,500
Standard Area (Carpet) in Sq Ft 4,875 9,750 14,625 19,500 24,375
Standalone Stores
Cut-ins 4,875 9,750 100% 14,625 50% 19,500 33% 24,375 25%
Sales Per Sq Ft
Standalone Stores
Cut-ins 11,067 12,727 15% 14,636 15% 16,099 10% 17,709 10%
Sales Per Sq Ft (Growth Rate %)
Standalone Stores
Cut-ins 0.00% 15.00% 15.00% 10.00% 10.00%
No of Months of Operation
Standalone Stores
Cut-ins 7 7 8 8 9
Particular's Amt
% of
Sales Amt
% of
Sales Amt
% of
Sales Amt
% of
Sales Amt
% of
Sales
Sales Turnover 314.71 106.22% 723.83 106.22% 1,426.98 106.22% 2,092.90 106.22% 3,237.46 106.22%
Less: Sales Tax / VAT 18.43 6.22% 42.38 6.22% 83.56 6.22% 122.55 6.22% 189.57 6.22%
Total Net Sales 296.28 100.00% 681.45 100.00% 1,343.42 100.00% 1,970.35 100.00% 3,047.89 100.00%
Product 171.22 57.79% 388.69 57.04% 756.19 56.29% 1,099.23 55.79% 1,692.75 55.54%
SCM Cost 8.89 3.00% 18.74 2.75% 33.59 2.50% 49.26 2.50% 76.20 2.50%
COGS 180.10 60.79% 407.43 59.79% 789.78 58.79% 1,148.49 58.29% 1,768.94 58.04%
Total Gross Margin 116.18 39.21% 274.02 40.21% 553.65 41.21% 821.87 41.71% 1,278.94 41.96%
Occupation Cost 75.08 25.34% 165 150.15 22.03% 165 270.27 20.12% 173 378.38 19.20% 182 558.70 18.33% 191
Energy Costs 5.46 1.84% 16 11.47 1.68% 17 20.64 1.54% 18 28.89 1.47% 19 42.66 1.40% 19
Staff Costs 6.83 2.30% 20 14.33 2.10% 21 25.80 1.92% 22 36.12 1.83% 23 53.33 1.75% 24
Security & House Keeping 1.37 0.46% 3 2.73 0.40% 3 4.68 0.35% 3 6.24 0.32% 3 8.78 0.29% 3
Shrinkage 0.74 0.25% 1.70 0.25% 3.36 0.25% 4.93 0.25% 7.62 0.25%
Credit Card Commission Charges 1.04 0.35% 2.39 0.35% 4.70 0.35% 6.90 0.35% 10.67 0.35%
Packing Charges 2.96 1.00% 5.45 0.80% 10.08 0.75% 14.78 0.75% 21.34 0.70%
Staff Travelling & Conveyance 0.53 0.18% 1,500 1.05 0.15% 1,500 1.80 0.13% 1,500 2.40 0.12% 1,500 3.38 0.11% 1,500
Printing & Stationery 0.53 0.18% 1,500 1.05 0.15% 1,500 1.80 0.13% 1,500 2.40 0.12% 1,500 3.38 0.11% 1,500
Warehousing Cost - - - - -
Legal & Prof 0.15 0.05% 0.34 0.05% 0.67 0.05% 0.99 0.05% 1.52 0.05%
Insurance Premium 0.30 0.10% 0.68 0.10% 1.34 0.10% 1.97 0.10% 3.05 0.10%
Communication Expenses 0.53 0.18% 1,500 1.05 0.15% 1,500 1.80 0.13% 1,500 2.40 0.12% 1,500 3.38 0.11% 1,500
Repairs & Maint Others 0.15 0.05% 0.34 0.05% 0.67 0.05% 0.99 0.05% 1.52 0.05%
Misc Expenses 0.03 0.01% 0.07 0.01% 0.13 0.01% 0.20 0.01% 0.30 0.01%
Other Overheads-Share of Cut-ins - 0.00% - 0.00% - 0.00% - 0.00% - 0.00%
Total Store Overheads 95.66 32.29% 192.80 28.29% 347.74 25.88% 487.57 24.75% 719.62 23.61%
Markeing Cost 3.15 1.06% 7.24 1.06% 14.27 1.06% 20.93 1.06% 32.37 1.06%
Total Store EBITDA 17.37 5.86% 73.98 10.86% 191.63 14.26% 313.37 15.90% 526.95 17.29%
Year 5
Year 5 Year 1 Year 2 Year 3 Year 4
Year 1 Year 2 Year 3 Year 4
Retail Concept - Mother Earth
Capital Expenditure Plan
Year 1 Year 2 Year 3 Year 4 Year 5
Area(Large Format) 10,000 40,000 80,000 120,000 160,000
Capex Rate 1,200 1175 1150 1150 1150
Capex (Large Format) 120.00 470.00 920.00 1,380.00 1,840.00
Area(Large Format) 6,500 13,000 19,500 26,000 32,500
Capex Rate 1,200 1175 1150 1150 1150
Capex (Small Format) 78.00 80.00 140.00 216.00 288.00
Total 198.00 550.00 1,060.00 1,596.00 2,128.00
Head Office Capex
Area 5,000
Capex Rate 200
Cumulative Capex 10.00 20.00 20.00 20.00 20.00
Grand Total 208.00 570 1080 1616 2148
Additional Capex 208.00 362.00 510.00 536.00 532.00
Deposits
Rent/sqft
Large Format 110 116 121 127 134
Small Format 165 165 173 182 191
Incremental Area
Large Format 10,000 30,000 40,000 40,000 40,000
Small Format 6,500 6,500 6,500 6,500 6,500
No Of months 6 6 6 6 6
Total Deposits 130 272 359 377 395
Cumulative 130 403 761 1138 1533
Year 1 Year 2 Year 3 Year 4 Year 5
Debt Outstanding 156.00 396.30 693.30 801.90
New Loan (% of additional Capex) 75% 75% 75% 60% 0%
Additional Capex 156.00 271.50 382.50 321.60 -
Debt Repaid - 31.20 85.50 213.00 320.20
Net Amount 156.00 396.30 693.30 801.90 481.70
Interest Rate 11% 11% 11% 11% 11%
Interest Amount 8.58 32.09 64.63 93.95 88.21
No. of Months of New Loan 6 6 6 6 6
Tenure (in years) 5 5 3 3 3
Repayment for new Loan per month 2.6 4.5 10.6 8.9 0.0
Loan Repayment
Period Of repayment
Amt taken Year 1 Year 2 Year 3 Year 4 Year 5
Year of taken
Year 1 156.00 31.20 31.20 31.20 31.20
Year 2 271.50 54.30 54.30 54.30
Year 3 382.50 127.50 127.50
Year 4 321.60 107.20
Year 5 -
Total Repayment - 31.20 85.50 213.00 320.20
TERM LOAN
Retail Concept - Mother Earth
Rate Year 1 Year 2 Year 3 Year 4 Year 5
Fixed Assets-New
Gross Block 208.00 570.00 1,080.00 1,616.00 2,148.00
Accumulated Depreciation 10.39 44.35 118.16 235.14 399.42
Net Block 197.61 525.65 961.84 1,380.86 1,748.58
Capital Work-in-Progress - - - -
Depreciation on New Assets 10.39 33.96 73.81 116.98 164.28
Depreciation for the year 10.39 33.96 73.81 116.98 164.28

Fixed Assets-New
Retail Assets Rates 198.00 550.00 1,060.00 1,596.00 2,128.00
70% Furniture & Fixture 4.75% 138.60 385.00 742.00 1,117.20 1,489.60
30% Computers etc 16.21% 59.40 165.00 318.00 478.80 638.40
Corporate Office Assests
60% Furniture & Fixture 4.75% 6.00
40% Computers etc 16.21% 4.00 20.00 20.00 20.00 20.00
CUMULATIVE TOTAL 208.00 570.00 1,080.00 1,616.00 2,148.00
Schedule of Fixed Assets
30-Mar Rate Year 1 Year 2 Year 3 Year 4 Year 5
Working Capital Requirement
Retail Sales 798.88 2,951.00 7,281.24 11,752.44 19,175.70
Cost of goods Sold 457.19 1,661.04 4,029.88 6,449.19 10,477.59
Inventories
-Finished goods 60 76.20 276.84 671.65 1,074.86 1,746.26
Sundry Debtors 3 6.57 24.25 59.85 96.60 157.61
Cash & Bank Balances (days of sales)
Loans & Advances/Lease Deposits 130.35 272.25 358.63 376.56 395.39
Gross Current Assets 213.11 573.34 1,090.12 1,548.02 2,299.26
Creditors 45 57.15 207.63 503.73 806.15 1,309.70
Provisions
Total Current Liability 57.15 207.63 503.73 806.15 1,309.70
Net Current Assets (1) 155.97 365.71 586.38 741.87 989.56
bank borrowing
75% of Current Assets (excl cash & bank balance) 159.84 430.01 817.59 1,161.01 1,724.45
Net Current Assets -25% of Gross Current Asset 102.69 222.38 313.86 354.87 414.75
Maximum bank Finance 102.69 222.38 313.86 354.87 414.75
Working Capital Borrowings 102.69 222.38 313.86 354.87 414.75
Interest On Working Capital Loans 12% 12.32 26.69 32.17 40.12 46.18
Bank Charges 0% 0.000 0.000 0.000 0.000 0.000
Interest On Working Capital 12.32 26.69 32.17 40.12 46.18
Schedule of Working Capital Requirements
Retail Concept - Mother Earth
Margin Model :-
CONCEPT Rs./Lacs % of Net SaleRs./Sq.Ft. Rs./Lacs % of Net SaleRs./Sq.Ft.
Line ref. Description Unit
1.00 STORE INFO
1.01 Store Area Chargable sq ft 10,000 1,300
1.02 Store Area Carpet sq ft 7,500 975
1.03 Store Type Mall & Standalone (Large Format) Small Format
1.04 Total Staff nos. 31 4
1.05 Own Staff nos. 31 4
2.00 INVESTMENT
2.01 Capex Rs. / sq ft 140.00 1,867 18.20 1,867
2.02 Deposit (Rent & Maint.) Months 33.00 3 440 6.44 3 660
2.03 Inventory days 78.08 60 1,041 10.15 60 1,041
2.04 Net Working Capital days 83.27 45 1,110 11.57 45 1,187
Capital Employed 256.27 3,417 36.21 3,714
3.00 MARGIN MODEL
3.01 Retail Sales 830.00 106.2% 11,067 107.90 106.2% 11,067
3.02 Less : Sales Tax 48.60 6.2% 648 6.32 6.2% 648
3.03 Net Sales 781.40 100.0% 10,419 101.58 100.0% 10,419
3.04 COGS 475.00 60.8% 6,333 61.75 60.8% 6,333
3.05 Gross Margin 306.40 39.2% 4,085 39.83 39.2% 4,085
3.06 Occupation Cost 132.00 16.9% 1,760 25.74 25.3% 2,640
3.07 Energy Costs 16.20 2.1% 216 1.87 1.8% 192
3.08 Staff Costs 31.50 4.0% 420 2.34 2.3% 240
3.09 Store Overheads 20.75 2.7% 277 2.16 2.1% 221
3.10 Retail Operating Cost 200.45 25.7% 2,673 32.11 31.6% 3,293
3.11 Marketing Cost 16.60 2.1% 221 1.08 1.1% 111
3.12 Store EBITDA 89.35 11.4% 1,191 6.64 6.5% 681
Corporate Overhead 37.35 4.8% 498 0.81 0.8% 83
Company EBITDA 52.00 6.7% 693 5.83 5.7% 598
4.00 RATIOS
4.01 GMROL Rs. 980,480 995,800
4.02 GMROF Rs. 4,085 4,085
4.03 GMROI % 119.6% 110.0%
4.04 Gross Sales / Capital Employed no. 3.2 3.0
4.05 Gross Sales / Fixed Capital Employed no. 5.9
4.06 Inventory Turn no. 6.08 6.08
4.07 EBITDA / Capital Employed % 20.3% 16.1%
4.08 ROCE % 12.1% 8.6%
Stand Alone Store
Scalability Unit Year1 Year2 Year3 Year4 Year 5
No.Stores Nos 1 6 12 20 30
Retail Space Sq Ft (Carpet Area) 7,500 45000 90000 150000 225000
Capital Investment Rs./Lacs 140 840 1,680 2,800 4,200
Capital Employed Rs./Lacs 256 1,538 3,075 5,125 7,688
Retail Sales Rs./Lacs 830 4,980 9,960 16,600 24,900
EBIDITA - Store Rs./Lacs 89 536 1,072 1,787 2,681
EBIDITA - Company Rs./Lacs 52 312 624 1,040 1,560
Cut Ins
Scalability Unit Year1 Year2 Year3 Year4 Year 5
No.Stores Nos 5 10 15 20 25
Retail Space Sq Ft (Carpet Area) 4,875 9750 14625 19500 24375
Capital Investment Rs./Lacs 91.00 182.00 273.00 364.00 455.00
Capital Employed Rs./Lacs 181 362 543 724 905
Retail Sales Rs./Lacs 540 1,079 1,619 2,158 2,698
EBIDITA - Store Rs./Lacs 33 66 100 133 166
EBIDITA - Company Rs./Lacs 29 58 88 117 146
Combined
Scalability Unit Year1 Year2 Year3 Year4 Year 5
No.Stores Nos 6 16 27 40 55
Retail Space Sq Ft (Carpet Area) 12,375 54750 104625 169500 249375
Capital Investment Rs./Lacs 231 1,022 1,953 3,164 4,655
Capital Employed Rs./Lacs 437 1,900 3,618 5,850 8,593
Retail Sales Rs./Lacs 1,370 6,059 11,579 18,758 27,598
EBIDITA - Store Rs./Lacs 123 603 1,172 1,920 2,847
EBIDITA - Company Rs./Lacs 81 370 712 1,157 1,706
EBIDTA % % 5.93% 6.11% 6.15% 6.17% 6.18%
Mother Earth Stand Alone Store Mother Earth Cut In
Annual Plan Annual Plan
IndusTree Crafts Business Plan Page 17 of 26
CHAPTER 7
DETAILED BUSINESS PLAN OF PRODUCTION COMPANY - Industree Transform

7.1 Marketing Plan
INDUSTREE TRANSFORM will market its merchandise to Mother Earth, as per Mother Earths
market requirement. Its growth would happen through 60% of its sale to Mother Earth whilst the
balance could be exports, supply to other retailers.(designs and ranges that do not conflict with
Mother Earth sales) Producer groups it has helped develop will be encouraged to take shares in it
as also in Mother Earth. These groups will be aware of the importance of the markets Mother
Earth provides. If they have surplus production capacity, they will be encouraged to supply to
external markets, for which Industree Transform could act as an agent and receive the agents
commission for the same. Industree Transform would look at global sales, in a latent fashion, for
the first few years primarily focusing on fair trade markets,but the potential scaleup in global
markets is gigantic.

The beneficiaries it needs to market itself with are producer groups, who are involved in
production of merchandise that Mother Earth is interested in marketing, or sees potential in
developing. At the same time it would create market potential for producers who request for it,
through design, skill training, infrastructural and internal group management/working capital
creation inputs. For these it would take the assistance of the nonprofit, as well as use its margin
on the product cost. It would bear the costs of design, skill training, production management from
its margins and depend on the non profit for inputs on infrastructural enhancement, internal
working /capital generation, group work. The break up of expenditure on these elements would
vary from location to location and the 2, Industree Transform and the non profit would need to
plan expenditure such that, it would be viable for both entities from the point of view of their
individual resource models.

Target markets-Phase 1

STATE District
Bihar
Purnia
Gaya
Nawada
Orissa
Puri
Bargarh
Sambhalpur
Bolangir



West Bengal





Nadia
E Midinapore
Cooch Behar
Purulia
STATE District
Tamil Nadu
Krishnagiri
Dharmapuri
Erode
Tirunelveli
Tuticorin
Kanyakumari
Andhra Pradesh
Prakasam
Guntur
East Godavari
Rajasthan
Alwar
Dausa
Baran
Uttar Pradesh
Firozabad
Lucknow
Sitapur
Varanasi
Bhadohi



IndusTree Crafts Business Plan Page 18 of 26

Phase -3
Increase no of people per location, increase no of locations per state, increase no. of partners,
increase no. of MFI partners, etc.


7.2 Operational Plan of Industree Transform
7.2.1 Design and Product Development
The themes, product specifications, color ways, motif requirements, packaging requirements, etc.
will be placed with Industree Transform or direct vendors, by Mother Earth. Comprehensive
supply chain management services depending on the organizational capabilities of small
producers will be provided by Industree Transform for the enterprises that it will help set up or
select for expansion. It will comprise the management of the flow of information and materials
needed to produce the goods in accordance with its specifications. In some locations Industree
Transform may need to provide services such as purchasing input supplies, materials
management, provision of finished product specifications, production planning and costing,
quality control, bundling and finishing of products (to ensure standardization), packaging,
warehousing, local transportation. Industree Transforms mandate that ICF will help fulfil will be
to initiate and develop producer working capital participation in an increasing fashion, first in
some, ultimately working towards all of these activities.

Its key activity will be enabling production of craft skill mix, such as leather with wood, textile
with leather, wood with ceramic and other market led innovations not currently available in the
market, which existing vendors do not make it their business to deal with.





















INDUSTREE , has mobilized all its existing hand skilled members in Bangalore involved in
direct production, into self help groups. These groups will be capacity built to invest in some
working capital for their production. Industree Transform will purchase from these groups. This
is the way, it is functioning in Viravannalur, and it will expand this strategy to its expansion in
Bangalore/Rural Bangalore production. The key areas of production it will address first will be
INDUSTREE
TRANSFORM
food
Home +
gifts
Apparel
Exports,
Nat fiber
Natural Fiber,
Metal, Textile
Wood,
Metal
Personal
accessories
Jewellery
Clothes

IndusTree Crafts Business Plan Page 19 of 26
the ones that are most crucial for its branding. Currently these are apparel, fashion bags (personal
accessories), Home accessories/gifts and furniture. Food packaging, additionally will be a key
area, which it envisages quite a direct role in initially. In Year one it projects that it will supply
upto 20% of the revenues of Mother Earth, 30% in Year 2, 40% in Year 3, 60%% in Year 4 and
80% in year 5.

INDUSTREE TRANSFORM will have to communicate effectively with

Forward linkages in the value chain = buyers, clients. Communication has to take place
regularly and create trust among potential business partners. Additionally, it will have to
communicate its story to the public, other stake holders, as well as potential partners. It
will need to build alliances with a number of NGOs, donors and other supporters in the
field (Ashoka, the Skoll Foundation, the Schwab Foundation, Aid to Artisans, United
Nations agencies, bilateral donors, ministries, exporter associations, chambers, etc.).

Backward linkages = material suppliers, producers and other service providers. These
business partners have to be coordinated constantly.

It will need a powerful website, as well as continuous recording of its social impact.

7.2.2 Types of business models
Industree Transform will work in various models with producers. Just for clarity it has taken the
4 typical business models, studied in this sector, in the ITC draft report. Connecting artisans to
Markets draft report by ITC, Geneva.

7.2.2.1 Vendor Model
Industree Transform enters business relations with producers/aggregaters but does not influence
them actively or enter into any longer-term contractual relationships. It basically does not
influence the production processes of these vendors. It ensures that they adhere to double bottom
line issues and follow Fair trade procedures. With this target market INDUSTREE
TRANSFORM will not demand constant and managed production innovation. In the simplest
form of the vendor model, it visits the producers/aggregators regularly to buy or order existing
product designs that seem suitable for its collections. For this it requires a base of well qualified
rural based aggregators that are willing to sell to it

7.2.2.2 Sourcing Model
The sourcing model is workable if it reduces the high transaction costs involved in identifying
small producers, unique skills with a wide geographical dispersal, essential for market
penetration. This is going to be applicable to the food/ gift/souvenir business, that Industree
Transform will get involved in. Industree Transform will receive concrete market requirements
from Mother Earth, whether in the form of requests for changes to products proposed by the
producer or in the form of product specifications drawn up by it. In a simple version of the
sourcing model, Industree Transform will propose selected products developed by producers to
Mother Earth, which then may then propose certain changes. These are then communicated to the
small producers. If additional production training is needed by these producers, then Industree
Transform uses local representatives or staff to do the training and to monitor production. In a
more complex version (which comes close to the subcontracting model), Industree Transform
will develop new designs/products together with master artisans/core food producer. If the new
idea sells, Industree Transform will launch training and monitoring activities with selected
producer groups. Similarly, retail customers often provide inputs on new product ideas and
IndusTree Crafts Business Plan Page 20 of 26
specifications, which will be communicated by Mother Earth, to Industree Transform which will
then identify and train suitable producer groups.

INDUSTREE TRANSFORM needs to have access to working capital in order to pay small
suppliers in advance for such concrete orders (most case studies report an advance payment of
50%).Retail being a capital intensive business its likely Mother Earth will not be able to afford
this and hence the emphasis of the entire model on producers participation in working capital
generation.

7.2.2.3 Sub Contract Model
The subcontracting model will be mainly applied by Industree Transform for the high-volume
business. Here a certain scale of production, following fashion trends, buying seasons with
frequent product innovations and developments is required. Industree Transform will organize
and manage a vast and often dispersed supply base of small producers to meet the sophisticated
expectations of its clients. In this model it is essential that Industree Transform has access to
product development in-house. Thus if its producers have spare capacity it develops products
with them, that it markets to Mother Earth, other clients, domestic or global. Besides developing
and proposing its own designs, Industree Transform will prototype designs for high volume
production developed by Mother Earth.

In this model, Industree Transform mostly invests in capital expenditure of production facilities
and encourages producer ownership in working capital. In addition it subcontracts certain works
and orders to its supply base of small-scale producers. Industree Transform needs to have a
management system in place (e.g. adapted from ISO 9000) in order to manage the flow of
information from Mother Earth to the suppliers and back as well as the flow of goods involved in
producing the merchandise. Industree Transform brings a difference to this model by pushing
these facilities to rural environments, in partnerships with producer groups in those areas/
individual small entrepreneurs/local ngo, whichever is the most suitable in the location, or a
combination of these.

Given the high expectations of its end customers Industree Transform has to use quality assurance
methods in order to manage these complex supply chains efficiently. Industree Transform will
have quality monitoring staff who visit the producers regularly and who train producer
representatives in basic quality assurance. Furthermore, Industree Transform may decide for
reasons of quality assurance and design protection to assemble and finish products in-house. This
gives it the added benefit of having the final control over which goods leave the premises for its
clients. The incentives for producer groups to work with Industree Transform will lie in the
income derived from the number of orders provided over the year, favourable financing and
payment conditions, as well as further training provision and special social schemes provided by
Industree Transform/ICF. Once again the introduction of ownership in the enterprise not only of
the small suppliers to the Industree Transform managed value added units, but also of the
members of the value adding units, will enable smother functioning of the entire value chain.
Industree Transform will link its producers to working capital in order to enable them to produce
the merchandise properly and on time. Due to the scale of the operations, Industree Transform
will need to have access to working capital and trade financing based upon the professional
support of a commercial bank or finance institution

7.2.2.4 Social Model
In this and the other 2 preceding models Industree Transform will seek to empower small
producers and to increase their income with the help of commercially viable business operations,
encouraging them to invest their earnings in working capital of their enterprises. This approach
IndusTree Crafts Business Plan Page 21 of 26
will be in different stages of development in all Industree Transforms models. In this model, the
approach would be in an advanced stage with special emphasis on producer empowerment, and
the fulfilment of social goals as an additional benefit to producers. To enable Industree Transform
and ICF to attain success with this model especially, Mother Earth needs to be very professional
when it comes to public relations and communication. Their customers want to buy a story
they want to know whom their spending will benefit.

Mother Earths extra effort into branding, the development of promotional materials and
packaging, will create better markets for Industree Transform. Products might for example be
labelled with a special tag telling the story of the individual artisan who produced the item.
Another typical example is specific promotions, such as every product sold resulting in a
donation of Rs 50 for the building of a school in the producer village.

A necessity in this model will be for Industree Transform to monitor and communicate this value
to stakeholders, meaning that it will need to publish evaluation reports and success stories.
Often, Industree Transform/ICF will look for ongoing support for its social activities and thus
will have to know how to become visible in the development community and how to write project
proposals for different national and international agencies. These activities demand specific skills
and extra time on the part of the management of Industree Transform. Industree Transform will
have to prospect the various big alternative trading organizations, some of which have
subsidiaries or partner organizations in developing countries. Online marketing is important in
this market segment, too. It would eventually have to register with different fair trade online
shops and set up its own web presence to foster credibility among global fair trade clients.

This model is very similar to the subcontract model. Here Industree Transform will manage the
full range of services in the area of supply chain management with greater involvement of the non
profit. This comprises organizing the supply of input materials, inbound logistics, production
training, quality monitoring, warehousing. The difference lies in the characteristics of the small
producers who will usually need more support and development than in the case of the previous
subcontract model. Often, in this model Industree Transform trains unskilled workers to become
artisans capable of producing certain merchandise. The development effort is thus considerable
and Industree Transform cannot expect to get everything right first time. Case studies and reports
indicate that it takes about five years to set up valid global operations. Hence the huge need for an
alliance with the non profit.

Small producers are often organized into groups with leaders who are trained by Industree
Transform/non profit, to organize the workflow and to communicate on behalf of the group.
Cooperatives and other participatory business models can become vast operations with several
thousand suppliers being grouped into hundreds of teams or sections. The supply chain
management operations will become quite complex and expensive to manage. These overheads
will have to be covered by Industree Transforms sales margin.

Financing for this model is usually a mixture of donor and development project support for social
activities and commercial bank or client financing support. Profits will often be completely
reinvested into this model.

IndusTree Crafts Business Plan Page 22 of 26
7.3 Human Resource Plan
The Industree Transform CEO, is envisaged as a person with one hand in productivity issues and
the other in capacity building, with a well rounded healthy balanced view on market requirements
vs producer limitations. This leader has to be backed by staff with experience in production
operations, the setting up of production standards, and a focus on productivity issues in hard
goods, apparel and food. This could not possibly be found in one person and would necessitate at
least having three or more, since experience in apparel/accessory production is going to be
different from hard goods and food. Currently these three are being designated as aggregators as
their view cannot be limited purely by production issues of a single unit, but a series of diverse
units, spread out geographically.





























7.4 Financial Plan
Industree Transform
CEO
Food
Aggregator
Home + Gifts
Aggregator
Apparel
Aggregator
Exports,
Nat fiber
Natural Fiber,
Textile, Ceramic.
Wood,
Metal, Horn..
Personal
accessories
Jewellery Clothes

Jr
Merchandiser
Jr
Merchandiser
Jr
Merchandiser
JR
Merchandiser
Accounts,
Inventory
ICT
Profit & Loss Summary (Rs. lakh.)
2005 2006 2007 2008 2009 2010 2011 2012 2013
Net Sales 309 364 382 426 347 1,350 3,943 7,413 13,300
COGS 190 180 177 251 251 710 2,044 3,814 6,772
Gross margin 119 184 205 175 97 640 1,899 3,599 6,527
Other Operating Income 8 6 4 2 9 0 0 0 0
Operating Cost 104 144 176 150 345 754 1,581 2,510 3,943
EBITDA 23 46 32 27 (240) (114) 318 1,089 2,584
Less:
Interest (2) (4) (11) (13) (39) (42) (83) (174) (210)
Depreciation (3) (7) (11) (9) (14) (20) (48) (78) (97)
Profit before Tax 18 35 10 5 (293) (176) 187 836 2,277
Net Profit after Tax 10 21 3 4 (293) (176) 187 836 2,277
Balance Sheet Summary (Rs. Lakh.)
2005 2006 2007 2008 2009 2010 2011 2012 2013
SOURCES OF FUNDS
Shareholder's Funds 37 60 77 91 461 284 622 1,458 3,735
Loan Funds 16 54 129 100 81 384 1,010 1,708 1,509
Deferred Tax Liabilities 0 (0) (4) (4) 0 0 0 0 0
Total 53 114 202 186 542 669 1,632 3,166 5,244
APPLICATION OF FUNDS
Fixed Assets 13 60 72 77 184 298 699 1,110 1,314
Investment 0 0 0 0 0 0 0 0 0
Net Current Assets- excl cash 31 50 125 86 243 292 884 1,644 2,732
Cash 8 4 5 23 116 78 49 411 1,198
Misc. Expenditure 0 0 0 0 0 0 0 0 0
Total 53 114 202 186 542 669 1,631 3,166 5,244
Summary-Operational Page 1 of 2
Cash Flow Summary (Rs.Lakh.)
2005 2006 2007 2008 2009 2010 2011 2012 2013
Profit After Tax 21 3 4 (293) (176) 187 836 2,277
Add: Depreciation 7 11 9 14 20 48 78 97
Add: Deffered Tax (2) (4) 0 0 0 0 0 0
Change in Working Capital (19) (74) 39 (157) (49) (592) (761) (1,088)
Capital Expenditure (52) (23) (14) (122) (135) (449) (490) (300)
Free Cash Flow to the Firm (45) (87) 37 (558) (340) (805) (335) 985
Change in Debt 38 75 (29) (19) 303 625 698 (199)
Free Cash Flow to Equity (6) (12) 8 (577) (37) (180) 363 786
Drawings/dividends 0 0 0 0 0 0 0 0
Issuance of additional Equity 2 13 10 49 0 150 0 0
Net Cash Flow (4) 1 18 (528) (37) (30) 363 786
Opening Cash Flow 8 4 5 23 (504) (541) (571) (208)
Closing Cash Flow 8 4 5 23 (504) (541) (571) (208) 578
0 0 (0.0) (0.00) 619.94 619.59 619.59 619.59 619.59
Ratio Analysis
2005 2006 2007 2008 2009 2010 2011 2012 2013
Revenues 309 364 382 426 347 1,350 3,943 7,413 13,300
Growth Rate 18% 5% 12% (19)% 289% 192% 88% 79%
Gross Margin% 39% 50% 54% 41% 28% 47% 48% 49% 49%
EBITDA Margin % 7% 13% 8% 6% (69)% (8)% 8% 15% 19%
PBT Margin % 6% 10% 3% 1% (84)% (13)% 5% 11% 17%
PAT Margin % 3% 6% 1% 1% (84)% (13)% 5% 11% 17%
Debt : Equity 0.4 0.9 1.7 1.1 0.2 1.4 1.6 1.2 0.4
Debt / EBITDA 0.7 1.2 4.0 3.7 (0.3) (3.4) 3.2 1.6 0.6
Debt (Net of Cash) / EBITDA 1.09 3.82 2.81 0.14 (2.67) 3.02 1.19 0.12
Net Working Capital - Days 47 54 124 93 376 100 86 101 108
Net Working Capital - /sqft 0 0 1,418 1,432 1,928 2,909
Current Ratio 2 2 3 2 3 9 8 9 9
ROCE (average)% 46% 14% 9% (70)% (22)% 24% 42% 59%
ROE (average)% 43% 5% 4% (106)% (47)% 41% 80% 88%
ROIC % 34% 11% 10% (47)% (20)% 17% 32% 47%
Net Interest/average debt 11% 12% 11% 43% 18% 12% 13% 13%
Tax/PBT 44% 39% 66% 33% - - - - -
Inventory - Stock Turn 6.01 2.74 3.28 2.08 3.39 4.45 3.91 3.84
Inventory - Days 61 133 111 175 108 82 93 95
Inventory - /sqft 0 0 906 1047 1193 1671
Capex/sqft 0 1200 1250 1250 1250
Summary-Operational Page 2 of 2
IndusTree Crafts Business Plan Page 23 of 26
CHAPTER - 8
DETAILED BUSINESS PLAN OF INDUSTREE CRAFTS FOUNDATION - NON PROFIT
8.1 Executive Summary
Rural unorganized production intermediaries have to understand the value chain(s) that serve
their target market(s) in order to be able to develop suitable business models.

Such an exercise was reported from AFE in Ghana when a group of Ghanaian exporters visited
Viet Nam in order to understand their competitors value chains and business models. After
returning from the study tour they concluded that they could not compete on mass production of
standard products because of the more efficient labour force in Viet Nam (the Vietnamese
exporters used a business model similar to theirs). Ghanaian exporters needed to put more effort
into product development. Their new target market would be the high-end mainstream markets.
(Connecting Artisans to Markets - )

In the triumvirate of retail co, production co and non profit, the non profit needs to position itself
as the innovator, incubator and includer, its aim being to facilitate inclusive growth, which
actually can be achieved through the other two.

8.2 Marketing Plan
8.2.1 Value chain analysis
The usefulness of understanding the specific merchandise value chains in a given region or
product area, will be the foundation of the non profit. In order to understand how small producers
might best access markets, one first needs to know the processes and actors involved in getting
orders and delivering them to the final client. The value chain settings define the framework for
developing market linkages for small producers

Rural Artisans/value adding producers in
India
Size Needs
All India 40 M Employment, Stable/increased Income,
awareness of the value of their skills, Self
management of their micro enterprises.
Easily accessible artisanal clusters, near
towns, connected to already established
NGOs/ MFIs/
10 M Employment, Stable/increased Income,
awareness of the value of their skills,Self
management of their micro enterprises.
already catering to urban markets.

Easily accessible being women
.25M


.75M
Stable/increased Income, awareness of the
value of their skills, Self management of
their micro enterprises.

Description: Masses of artisanal hand skilled people in rural India. Many with a skill and cultural
product heritage going back thousands of years.
Characteristics: Most from the landless class, lower classes, minority community (Muslim),
women and tribals.
Needs: To relearn to work in groups rather than as individuals, as some traditional communities
did as guilds, to hone their skills and productivity to meet contemporary urban market needs, to
earn better and continuous incomes
How needs met: Suitable domestic urban market created for their skills, through the
establishment of a new artisanal owned social brand. Suitable micro organizational, production
IndusTree Crafts Business Plan Page 24 of 26
and working capital facilities created to enable supply to the new brand.
Estimate of size: Rural artisanship is the second largest rural income provider after agriculture*.
No accurate data available on size. Definitely the 4
th
or 5
th
largest rural income provider.** Indian
artisanal skills, were the basis for all production in the Indian economy pre industrialization, a
mere 100 years ago. *Basis for the estimation: Office of Development Commissioner
Handicrafts, Ministry of Textiles, Govt. of India. **Sample Survey on Rural livelihoods
conducted by Basix, for their Rural Livelihoods School started in 2004.
8.2.2 Market Positioning:
Alternative Characteristics Size Positioning
Piece rate
work for
traders






Sell directly in
village/local
markets
Traders provide poor wages, individuals
not able to negotiate rates as a group
could, part time employment, poor family
incomes, often children and women
involved in the labor, costs of which not
calculated.

Invest their individual limited working
capital/time, use local natural resources
and raw materials, make traditional
products, for local needs.


9M







1M



Convenient to work from
the house. No risk
involved. Irregular work.



Convenient to work in their
traditional surroundings. If
incomes reasonable,
healthy living
environments.
Dwindling markets,
irregular work.
Non-
consumption
Agricultural
labor

Village/road
/irrigation
works in rural
employment
schemes


Unemployed

Part time employment, Hard manual
labor, poor family incomes, malnutrition,
no education for children

Part time employment, Hard manual
labor, poor family incomes, malnutrition,
no education for children

Migrate to towns and cities,
live in unhygienic conditions in slums.

Families with single incomes in place,(
women) do not strive for a double income,
thus depriving overall improvement in
family income.
10M




10M






10M
Part time job security until
there is crop failure.


Part time job security if
scheme effective in the
particular village


Mother Earth Local production centers, working with
known NGOs whom they have trust and
relationships with.

10,000
per year,
increasing
to 20,000
per year
after 2
years

Striving towards full time
work either in local
production center or at
home, 3 times the current
wages, accessible, striving
towards artisanal self
governance

IndusTree Crafts Business Plan Page 25 of 26
8.3 Operational Plan
8.3.1 Market Segment Analysis
Segment
Definition
Compelling Reason for
Adoption
Reasons for Non-adoption of Product or Service
1
.
Traditional
artisans, those
who have been
working on their
craft
Easily pick up skill upgradation,
Incomes substantially increase,
faster
No access to markets
No access to improved product knowledge
No access to better production facilities
No access to working capital
No access to organized group enterprise
2
.
First generation
artisans, those
who have not
actively pursued
hand work
Easily learnable skills, such as
natural fiber skills, tailoring
skills, food packaging, organic
pickles, preserves, etc.
Substantial increase in incomes
No access to markets
No access to improved product knowledge
No access to better production facilities
No access to working capital
No access to group enterprise

Successful intermediaries are driven by a person who owns the project or the business mission.
This person is not meant to be autocratic or to do everything herself or himself, but does have to
be on site. She or he has to be the relentless driver of the intermediarys efforts. For example, the
ILO report on SME clusters in Indonesia (Isdijoso et al, p. 47 ff.) showed that in most clusters the
Government has attempted to organize small producers through a cooperative. However,
government-initiated cooperatives have not been successful, for two main reasons:
There is a lack of ownership among producers, who do not feel responsible for the
development and improvement of the cluster;
Successful networks are often managed by leading firms or buyers.

Projects lacking this local and competent ownership will fail, because small producer supply
chains consist of many actors and elements that need to be managed coherently. If there is no one
on-site who takes care of this coherence and who can fix issues the moment they occur, key
elements of the business model will not work properly and the value chain will be broken.

MOTHER EARTH and Industree Transform will play the role of the market pull and
intermediary. ICF will have the mandate to teach small producers to work in groups, move
towards mutual trust, collective responsibility and enterprise ownership. There are enough
success stories and ICF is confident of enabling this through effective institution building, and the
use of correct processes. It has identified suitable partnerships to effect this.

ICF is needed to develop an overview of the situation, and build up strong skill sets to analyse
situations arising at MOTHER EARTH , Industree Transform and the entire system, which
require trouble shooting, as the system is going to be in a state of flux before it stabilizes.



IndusTree Crafts Business Plan Page 26 of 26
8.4 Human Resource Plan






































8.5 Financial plan
ICF CEO
Value chain analysis
Design
Strategy for
sustainable inclusion
Capacity building
Group Enterprise training
Leadership development
Govt. projects
Consultancy
Partnerships
Market responses
Research
ICF BOARD
Incubation Inclusion Innovation
Field coordinators
Field staff

Project
coordinators
Project
implementing
staff
Designers
ICF monthly annual expenses
Salaries
CEO 18,00,000 1 18,00,000
Vertical Heads 6,00,000 3 18,00,000
Vertical Leaders 4,50,000 3 13,50,000
Field Staff 10,000 10 12,00,000
Field Staff Jr 6,000 10 7,20,000
Accounts 30,000 1 3,60,000
Accounts Jr. 8,000 1 96,000
Design 12,00,000 1 12,00,000
Design Jr. 60,000 2 12,00,000
website 30,000 3,60,000 3,60,000
Rents,Utilities
rent 25,000 3,00,000 3,00,000
phone 10,000 1,20,000 1,20,000
electricity 6,000 72,000 72,000
stationary 10,000 1,20,000 1,20,000
Travel 1,50,000 18,00,000 18,00,000
Programs 2,00,000 24,00,000 24,00,000
workshops 2,00,000 24,00,000 24,00,000
training 2,00,000 24,00,000 24,00,000
promotional material 12,00,000 12,00,000
Capex
computers 10,00,000 10,00,000
office furniture 5,00,000 5,00,000
Vehicle 30,00,00 3,60,000 3,60,000
Consultants fee
Capacity Building 10,00,000 10,00,000
Leadership 10,00,000 10,00,000
Institution Building 10,00,000 10,00,000
Total expenses 246,00,000
Income
consultancy 40,00,000 40,00,000
BDS Fees 12,500 6 months 75,000
rs 25x500
Grant-in-aid 205,25,000
Annexure 1
list of producer groups
Tamil Nadu
Jeeva sevalaya
Manapad Palm leaf cooperative
society
Kanniappan
Pulicat palm leaf cooperative
society
Tamil nadu state palmgar and fibre
marketing cooperative society
Share
Rural development Movement
Basheer korai mat
Sri asthalakshmi mat Industries
Viji grass mats
Mani Mattings
Sreeram Matting
JKS Exports
Seva Bharathi Handicrafts
Srinivasan Service Trust
Sadhana Foundation
Virvanallur mat weavers industrial
cooperative society
New Bharath Impex
Texmart Exports
Thangam Handlooms
Murugeshan
Kerala
Golden Arts and Crafts
Pala Vanitha handicrafts,
cooperative society limited
Vimalalayam
Nirmalalaya
Anavoor Mahila Samajam
Kasturba Village Development
Centre
Vishwagaji Madom
Shertallay Womens Welfare
Cooperative society
The trivandrum district palm
products, development cooperative
federation
Chavara Block mahila cottage
industrial cooperative society
Kodungallur Thazhappaya
Thozhilalind Industrial cooperative
society
Kottapuram Integrated
Development Society
Kottayam Jilla Mahila Thazappaya
Vikasana Federall Samithi
Mitraniketan harijan Handicrafts
cooperative society
Killimangalam Koragrass mat
weaving cooperativeSociety
Kerala Rural Development Society
Jawaharlal Memorial Social Welfare
Public Co-operation Centre
Christian Agnecy for Rural
Development
Evanjelical Social Action Forum
Thanga Screw pine craft
Vishnu Handicrafts
Karnataka
Myrada District approach
Programme
KGF women association
Kishkinda Trust
Koraga Mahila Cooperative society
Sandur Kushala kala Kendra
Krushi Vigyan Kendra
Sabala
Latha Fine Arts
Andhra Pradesh
ASP- SR puram mandal women Co-
operative society
Udaya Basker Grama Pedala
Welfare Association
ASP-Ammalapuram
Krushi Samasthe
Chaitnya Jyothi Welfare Society
Youth Club Bejjipuram
Narasimhulu
Padmavathi Associates
North-East
Canecraft
Barak Cane
NABCO
Cane Beautiful
Temenglong Bamboo and Cane
Development Centre (TAMBAC)
Womens Worth
Tripura Handicrafts Development
Samity
Banashree
Bamboo & Cane Development
Institute
Bihar
Shivan Paswan
Madhya Pradesh
Centre for Advanced Research and
Development
MPHSVN
Orissa
Adventure
Raaha
Unnayan
Bhramarbar Nayak
West Bengal
Crafts Council West Bengal
Pushpa Rani Jana
Child and Social Welfare Society
IndusTree
sources from
more than
hundred
producer
groups and
continuously
builds their
capacities in
designs &
guides them
towards
technical
upgradation
Annexure - 2


Industree Crafts Private Ltd. A Case Study 070618-Case-Industree-En.doc--1
Industree Crafts Foundation, A Case Study
1


In December 1994, Neelam and Gita, an industrial designer and a crafts activitist by
profession, gave birth to Industree Crafts Private (ICP), a craft enterprise in Bangalore
India. Their initial business plan was to outsource crafts collected from small
producers located in Indias remote rural areas. After a difficult start, these
two ingenious ladies worked on a new business idea and targeted a craft
market which had been unexploited so far, natural fibre crafts. Ten years
down the line, ICPs turnover has grown from nil in the first year to 45 million
Ruppes in 2008. ICP now supports the livelihood of more than 5000 women.

The setting
The Republic of India, commonly known as India, is a sovereign country in South Asia. It
is the second most populous country and the most populous liberal democracy in the
world. With the world's twelfth largest economy by exchange rates and the fourth largest
in purchasing power, India has made rapid economic progress in the last decade.
Although the country's standard of living is projected to rise sharply in the next half-
century, it currently battles high levels of poverty, illiteracy, persistent malnutrition, and
environmental degradation.

The setting of the case study is set in Bangalore City which is the capital of the State of
Karnataka in Southern India. Following Indias independence in 1947, Bangalore
evolved into a manufacturing hub for public sector heavy industriesparticularly
aerospace, telecommunications, machine tools, heavy equipment, space and defence.
Bangalore has an estimated metropolitan population of 6.5 million (65 lakh), making it
the fifth-largest metropolitan area in India. It is said to be the fastest growing city in Asia.

The Birth of Industree Crafts
Gita assigned Neelam, an industrial designer, on behalf of Indias Crafts
Council to undertake a study on the stone crafting industry as it was seen as a high
potential sector. This mission exposed them to numerous design projects put in place by
Indias Government agencies. Through out their study, they realized that these
abundant design related projects operated in a vacuum. Acquiring new skills is always a
beneficial experience but for the latter to be put into practice requires a demand from the
market.

With this is in mind, Neelam and Gita took the decision to open a crafts shop in
Bangalore which was to serve as a market place and outsource crafts emanating from
small groups of producers located in remote rural areas. This project gave birth to ICP in
December 1994. At the beginning, both ladies had not imagined that this project was
going to be such a challenge. While the first three years were difficult and rather
unsuccessful, this time period enabled them to learn some valuable lessons. Firstly, they
learnt that they needed to target the domestic and the international markets if they
wanted to be succesful. This could only be undertaken following a well-designed export
strategy. Moreover, they realised that they needed to specialize in a product that nobody

1
This case study has been prepared for the Market Analysis Section, International Trade Centre, by Basti aan Bijl, under
the supervision of Roberto Cordn, and is based on two sets of interviews held with Neelam Chhiber in 2006 and 2007.
The ITC gratefully acknowledges Ms. Neelam Chhibers to have taken some time to review this case study.


Industree Crafts Private Ltd. A Case Study 070618-Case-Industree-En.doc--2
else was exporting. After some field research, attending crafts trade fairs and observing
what other producers were exporting, Neelam and Gita identified their niche market,
natural fibre crafts.

Moving into Natural Fibres
Moving into the natural fibre sector made a lot of sense for five major reasons. Firstly,
raw materials were available in abundance. Secondly, the group of producers they were
working with had already exceptional skills in fibre weaving and more producers could be trained
easily. Thirdly, Neelam and Gita identified by ways of interactions at trade fairs that consumers
preferences were moving towards hand-made and natural fibres. Fourthly, their experience in
design enabled them to add significant value by making use of natural fibre products. Finally, the
natural fibre sector had a huge potential for product differentiation. That is to say, if one product
was not well received by consumers, production could easily be switched to other goods
e.g. floor mats, place mats, hand bags and baskets.

Right from the start though, they were careful not to go into the clothing and fashion
sector. Through their experience, they knew that this is a very tricky sector which is
highly volatile and they felt that their group of producers would not have the capabilities
to adapt quickly enough.

ICPs products are differentiated according to three factors: the type of fibre used, the
manufacturing process and the products value added.
In terms of the type of fibre used, ICP has one leading material: river grass. This material
can be weaved tightly, has an excellent
texture and absorbs natural dyes very
well. ICP also makes use of another
material, banana fibre, which is peeled
from the bark of banana trees. It gives
an excellent rustic look when weaved
with thin white threads.
Further differentiation then occurs when
the basic weave is converted into mats,
baskets, handbags, gift boxes,
Venetian blinds etc.

To communicate the information
relating to those three product-
differentiating factors, ICPs
merchandisers place orders
in the field directly to the source. They
carry the responsibility of making sure
that the order makes its way to the
factory on time and meets any
requirements. Neelam explained that her merchandisers are crucial players in the
production chain and that she has spent years honing their skills.







Industree Crafts Private Ltd. A Case Study 070618-Case-Industree-En.doc--3
Domestic sales are well positioned

Product positioning
Neelam and Gita have managed to position their products very well on the domestic
and international market by diversifying their production into a range of related products
and by adding value to basic materials. For example, they no longer make simple
traditional mats. They make a whole range of beautifully coloured mats with attractive
linings on the edge. They also process plane weaving material into beautifully designed
baskets, place mats, desk file holders, gift boxes, hats etc.

Neelam gave examples of how value was being added to her products. In ICPs early
days, mats were bought for 400 rupees from suppliers and were sold for 800 rupees in
their shop. ICP has always implemented the golden rule of the 100% mark-up see the
Price section for more information. Following this strategy, they only managed to sell 1
mat per month. Now, the cost of their mats which includes additional linings, finishings,
colours and designs has declined to 120 rupees. This impressive decline in production
cost originates from the introduction of simple mechanisation and the spread of
economies of scale. Now, they sell 1000 per month at 350 rupees. Neelam though
emphasises that her products added features such as upgraded quality, improved
product finishing, nice linings and use of fashionable colours have played a crucial role
in ICPs increasing success and that without them, mats would only sell for 70 rupees.

Managing the products positioning
includes taking decisions on the
product line and controlling
product differentiation. Neelam
knows that one of her companys
strength lies in the natural and
hand-made features embedded
within her products. These
features are already part of the
product positioning and are also
important determinants of ICPs
success. One should note though
that product differentiation entails
different packagings which usually
include a mixture of materials such
as plastic and leather additions. Such a process leads to a move away from ICPs
natural/ hand-made image/ branding and Neelam insists that she always avoids the
temptation, especially when big orders come in. The natural and hand-made features
make up ICPs identity. This sense of natural and hand-made is nicely put forward by the
companys well-designed logo which represents a hand and a tree and which is printed
on every product.

Place of Sale
Neelam explained that selling goods is an expensive venture. In order to be successful,
one needs to have at least ten points of sale, but maintaining ten shops is very
expensive as you have to pay for the sales persons wages, the shops rent, taxes etc...
As a result, ICP has chosen to go for a mix between its own shops and having retail



Industree Crafts Private Ltd. A Case Study 070618-Case-Industree-En.doc--4
points. Currently, it sells its products in four of its own shops called Industree and has
established a partnership with an additional 50 retail points across India. The number of
retail points stood at 30 in 2004.


In 2004, ICP had tried a different strategy.
For a couple of years, ICP owned two shops
in partnership with a furniture company.
These two shops, one in Bangalore and one
in Chennai, were called The Design Store.
The Design Store was a 50:50 partnership
with a company that sold contemporary
furniture. Literally, when one entered one of
the two Design Stores, all the furniture on
sale was on the left and all the crafts were
on the right. ICP undertook this joint sale
approach because it wanted to break away
from the stigma associated with craft shops
in India which have the reputation of being government-funded with products collecting
dust on shelves and being sold for giveaway prices. By attracting contemporary furniture
shoppers, Neelam and Gita felt that they would catch clients in a different frame of
mind and this selling strategy proved to be very successful.

In 2006, ICP moved away from this partnership agreement with the furniture company
and decided to open four of its own shops. Two in Bangalor, one in Delhi and one in
Calcuta. I was very surprised when Neelam told me that she had changed her strategy
and I was very interested to find out why. Neelam clearly pointed out that having a
partnership agreement with another brand was not a long-term solution. By having
Industree shops, the brand can be effectively marketed and recognised. Neelam did
not see a joint partnership as a long-term solution. Even though the opening of the
Industree shops have brought ICPs revenues down, it was the only way to go forward
according to Neelam. The opening of these shops have also brought a diversification
element to ICP. As the sale of craft on their own could not sustain the opening of
Industrees independent shops, ICP has introduced furniture in its goods basket, which
are even more revenue generating than crafts.

Price
ICP had two pricing policies which hand to merge into one under an MRP.The first pricing policy
put in place in ICPs Industree shops follows a rule of thumb: mark-up a price by 100% on top of
its production cost -- e.g. if a handbags production cost is 100 Rupees, put it for sale for 200 Rupees.
For the second pricing strategy which is implemented in retail stores, the retailer takes 40% of the
sale, but is encouraged to push the price up to a maximum amount. For example, still using the
same example as above, the retailer is encouraged to sell the bag at 300 Rupees even though its
production cost was 100 Rupees. Once the retailer collects his 40% share on the sale of the bag,
ICP gets 180 and therefore made 80 Rupees profit on each handbag. Therefore ICP is forced to to fix
MRP at 3 times the landed cost even its own stores, as the product must be at the same price
everywhere While retailers push prices up as much as possible, retailers undergo a careful selection
process. This course of action is undertaken because ICP does not want its products too be seen
as upmarket as this would create a negative image, classifying them in the unaffordable bracket.


Industree Crafts Private Ltd. A Case Study 070618-Case-Industree-En.doc--5



Promotion and Market Research
ICPs domestic promotion is undertaken through three channels: exhibiting at trade fairs,
advertisement through various business magazines and product catalogues together
with the promotion linked to the visibility of their brand shown on ICPs and retialers
shops. In terms of international promotion, ICP relies mainly on its well designed web
site: www.industreecrafts.com, exhibiting at trade fairs, and through a network of export agents in India.

Though ICP benefits from the promotion provided by its own four shops, the impact is
fairly limited as ICP has only four shops located in three different locations. On the other
hand ICP also has 50 retailers located all over the country which are high potential
promotion points. Prior to 2006, ICPs brand was not shown on the retailers
advertisements and hence ICP was loosing some visibility. Now, Neelam has
implemented the freedom to promote and she realised that those retailers who were
promoting the brand have continued distributing ICPs products and those who did not
have stopeed. Indeed as Neelam has noted, there are two types of retailers, those who
do it to promote then own brand and those who chose to retail known brands.

In terms of market research, ICP has a broad knowledge of its domestic market. Careful
testing is done by designers at trade fairs and in various outlets to identify which design
sells best. The companys merchandisers then feed these findings back into production.
Up until now, Neelam has focused mainly on the domestic market as she knows the
market, she gets immediate response on the product she sells, there is no lag in fashion
etc and more importantly, Indias domestic market is currently booming.

On the international front though, Neelam admits that market research is very much lacking. This is
an issue which she wants to address as soon as possible. So far, ICPs reliance on meeting prospective
clients at the few international trade fairs they attend every year is too risky. She recognizes that
there is an urgent need to carry out extensive research to understand much better prospective
international markets and buyers. Such an undertaking could eventually lead to an
international strategic partnership resulting in long term sustainable orders. The journey has
started with ICP - starting to supply to IKEA - the world's largest home retailer.

Exports A tough learning process

Exports started only in the fourthyear of their business & now they represent one third of ICPs business.
So far, ICP has processed approximately 150 export orders for 15 countries. Neelam does not see
the benefit in going 100% global as the domestic market is booming and going global would take away
their freedom. International firms often request products which cannot be produced due to ICPs
supply side constraints. Indeed Neelam notes a huge gap between the volume of the domestic market
and that of the international. Recently, IKEA, the huge scale design store, has asked ICP to produce
one of their products in bulk. It did not take long for Neelam to reject the offer as she decentralised
and not want her small business to turn into a large scale factory in Bangalore city. This was not the
philosophy behind the startup of the business. The business started to promote rural livelihood.




Industree Crafts Private Ltd. A Case Study 070618-Case-Industree-En.doc--6
That being said though, one third of ICPs business still emanates from the international
market. Going global is not an easy undertaking and ICP had to learn to export through
trial and error.

For instance, Neelam sited examples of the many orders where there has no reordering
occuring because they failed to meet the committed requirements. On many occasions, even the
management team who was supposed to be on top of all issues related to exports was
surpassed by all the details which had to taken into account when fulfilling an
international order.

In the early stages, when ICP was going global, very few orders were being renewed.
This was primarily due to ICPs international marketing strategy. Indeed, their
international business depends solely on chance meetings at trade fairs. Many of their
clients will be chance-meeters themselves, i.e. looking for that single order to place,
rather than a long term strategic partnership. It is only recently that international clients
have started renewing orders and this is somewhat linked to a lucky encounter. During a
trade fair held in Hong Kong, ICP met a South African buyer of Venetian blinds. The
South African liked ICPs banana fibre blinds and made an order under one strict
condition, the order had to be followed by an inspection agent. This condition which was
at first a burden turned into a gold mine very soon as the inspection agent gave them
excellent advice on crucial measures which had to be followed when exporting abroad.
This encounter made them realize why they had had so few repeat orders in the
past.

International Positioning
Though knowledge about international markets is not Neelams best playing card, she
shines when it comes to identifying the competitive strengths and weaknesses of her
competitors around the world. Looking at TradeMap tables, she can quickly explain why
unit values diverge on the table of world exporters of natural fibre plaited floor mats.











Industree Crafts Private Ltd. A Case Study 070618-Case-Industree-En.doc--7
Figure 1: List of exporters
for 460120 Mats, matting and screens of vegetable plaiting materials



Figure 2: List of products at tariff line level exported by China in 2005
for 46012090 Mats, matting and screens of vegetable materials




Industree Crafts Private Ltd. A Case Study 070618-Case-Industree-En.doc--8
Figure 3: List of products at tariff line level exported by Indonesia in 2005
for 460120900 Mats, matting and screens of vegetable materials



Figure 4: List of products at tariff line level exported by India in 2004
for 46012090 Mats, matting and screens of vegetable materials


With such knowledge on board, Neelam does not fear her competitors. She is well
aware of the market segmentation and knows that she is the strongest in her own
segment. She knows that the Chineses producers strength resides in their mechanized
process which enables them to produce large volumes at low cost with significant
economies of scale. There unit value (1.71/unit) is lower than Indonesias (3.55/unit) and
Indias (2.48/unit). However, the Chinese do not dye their weaved fibre and hence offer
lower quality products. Keep in mind that Trade Maps lower unit values can not only be
a good indicator of price but also of the quality of the good and the value which has been
added to it. The Chinese cannot match Indias dying strength and hence do not pose a
threat to ICP. The Philippines, Thailand and Indonesia are even stronger than India in
terms of fibre colouring. They have a long history in dyeing natural fibres and have
perfected the dyeing process through very strict discipline together with the help of dyes
provided by their international buyers. Neelam does not currently see these countries as
a threat because they are at a much higher price segment. So, internationally, ICP is
well positioned vis-a-vis its competitors based on its dyeing strength and lower prices
which compensate somewhat for its lower quality compared to that of the Philipines or
Indonesia. In addition, ICPs natural and hand-made goods characteristics reinforce
their strength on the market place.


Industree Crafts Private Ltd. A Case Study 070618-Case-Industree-En.doc--9

10 years down the line!
After a difficult start lasting for three years, ICP took the decision to specialise in natural
fibres. Its products took off and their performance on the domestic market has increased
ever since on a yearly basis. This was not solely due to the excellent selection of the
initial crafts segment but also to decisions relating to how to position the products, how
to price them, where to sell them, how to promote them, and how to brand them.

ICPs turnover in the first year was non-existent. ICPs labour was made up of unpaid
volunteer workers. In the second year, ICP started making money with a 3 million
Rupees turnover. Ten years after its implementation, ICP was making a 32,5 million
Rupees turnover in 2004. In 2006, that turnover had increased to 45 million (over $1.1
million). Lately, the turnover has been growing at 15% per annum and profit margins
have also been on the increase on a yearly basis. It is hard to believe that ten years ago,
Neelam was struggling with a shop which had constant excess stocks. Neelam and
Gita started working with around 30 groups of producers which include 50 women
each. For the last few year, ICP supports the livelihood of 110 groups of producers (over
5000 women).

They have managed to achieve this phenomenal expansion through identifying the right
product, positioning it well and adding value through good design and quality. They have
learnt how to secure repeated export orders through increased attention to detail,
making sure that product faults never occur and delivery target times are respected.


The Trust
In 2000, ICP further committed it self towards enhancing and expanding the presence of
Indian made natural fibre products in the national and international market by establish
the Industree Crafts Foundation (ICF) . Towards this end, ICF has been registered as a
Trust and can be seen as the not-for-profit wing of the company. The Trust is set-up to
help build and expand the producer groups design and production capacity. ICFs
designers offer their services to various government funded training projects that aim to
assist artisans in design, production, micro-credit, management of production units etc.
A co-dependency relationship exists between the company and the trust as the company
benefits from improved capacity of the producer groups to meet order requirements and
the trust benefits from the financial support from the company. Neelam and Gita are
very well aware of this co-dependency and will continue to support both the company
and the Trust.


What is ICPs plan for the future?
Neelam explained that ICPs expansion through the domestic market wound continue
that the company could only majorly expand through exports. It is through exports
that they are able to think & plan large volumes. But as was the case with IKEA recent proposal,
export orders will lead to significant supply side changes. Groups of producers will need
to enhance their skills and be able to cope with the tough requirements linked to large-
scale export orders. Neelam believes that such a change could only take place through
the establishment of a donor funded project. The Trust established by ICP is currently in
the process of making proposals to various donors.
Annexure 3
CVs
Gita Ram
Neelam Chhiber
Raminder Singh Rekhi
Arun Raste
Gita Ram



Date of Birth : 14.10.1943

Education : M.A. Economics Delhi School of
Economics 1965
Positions Held:
Current: Managing Director Indus Tree Crafts (P) Ltd
Executive Committee Crafts council of India since 1979
Executive Committee Madras Craft Foundation since 1985
Trustee Foundation for the Advancement of Craft Enterprise and
Skill since 1997
Trustee Charities Aid Foundation India since 1998
Trustee IndusTree Craft Foundation since 2000

1995-1997.1.1 Director Tamilnadu Handicrafts Development Corporation

1993-1995.1.1.1 Ex-Officio member AAA Committee set up by Government of
Tamilnadu for Town Planning of Kodaikanal & Udagamandalam

1993-1994 : Advisory Committee
National Handicrafts & Handlooms MuseumNew Delhi

1993 1995 Vice Chairman Crafts Council of India
1984 1992 Deputy Vice President S.Asia World Crafts Council
1979 1993 Honorary Secretary Crafts Council of India
1987 2000 Honorary Secretary Madras Craft Foundation
Experience : As Secretary CCI & MCF written and implemented projects for
Craft development;
Examples:
~ Technical Training & Skill Upgradation-
Wood comb makers(CCI)
Soft Stone Lathe (MCF)
29 Prithvi Avenue
Chennai 600018, Mobile: 9841014103
Improved dyeing techniques for natural fibre workers(CCI)
~ Workshops at all India level
terracotta,basket making
~ Survey Documentation
Stone crafts of India
Languishing crafts of Madhya Pradesh
~ Promotion of Crafts
Organised exhibition sales approx 30.
~ International Seminar on Craft Museums 1986
UNESCO sponsored workshop on craft documentation 1993
Indus Tree Crafts (P) Ltd is a business enterprise based in
Bangalore engaged in the export and retail of crafts.

FACES us a Trust set up by the Confederation of Indian Industry

Madras Craft Foundation is a Registered Society for the promotion and preservation of
folk performing arts and crafts.

Crafts Council of India is a registered body for the promotion and preservation of
traditional crafts.It has 14 affiliated Councils and is ffiliated to World Crafts Council.
NEELAM CHHIBER

Date of Birth : 29 October, 1962
Address : No. 84, 16th C main, 4th Block, Koramangala,
Bangalore - 560 034.
Phone : (080) 41308182, 98450 16024
E-mail : neelam@industreecrafts.com
Fax : (080) 41308184
Home page : www.industreecrafts.com

Founder Director, Industreecrafts Pvt. Ltd, a social, self sustainable, for profit, design led
enterprise. A turnover of 4 crores, membership in Fair Trade, working with over 2000 rural
producers,selling to over 50 stores in India and exporting to companies such as IKEA and
Interface has led the company to work through its Trust with the Indian government, the
European Union, ICICI bank and Future Group, towards building marketing platforms, supply
chains focused on rural livelihoods and most important of all, capacity enabling producers to
manage themselves in changing scenarios. Design education has been key to attempting 360
degree thinking.

1979 1984
Qualified the Professional Education Programme at the National Institute of Design (NID),
Ahmedabad, specialised in Product Design.

Experience
Banana & natural fibre craft
15 years of experience in designing & technical development & also handling marketing of
natural fibre craft products in India.

Natural fibre products range developed
Home Accessories
Office accessories
Corporate gifts
Furniture products
2007
Provided Design services to Wood Inlay Integrated Design & Technical
Development Project (From April to September 2007) at Bangalore (IndusTree Crafts
Foundation)
Provided Design services to Stone Craft Integrated Design & Technical Development
Project (From May to September 2007) at Bangalore (IndusTree Crafts Foundation)
Design Development Workshop at Midnapur on bamboo craft August 14 to 29,2007
April September 2005
Provided Design services to Integrated Design & Technical Project in sisal floor coverings
at Seoni, Madhya Pradesh for Madhya Pradesh Hastashilp Vikas Yojana
April 2003
Authored two volumes of Stone Crafts of India to be published by Crafts Council of India.
December 2002
Presented paper, about craft development in India called The Dinosaurs Egg at
International Council of Society of Industrial Designers held at National Institute of
Design, Ahmedabad.
August 2000 - Current
Managing Trustee of Indus Tree Crafts Foundation, a craft design and marketing consultancy.
Fellow Trustees Mrs. Gita Ram, Mrs.Nivedita Ram. ICF is currently the design agency for AHVY
Natural Fibre Project being conducted in 6 states, training 7000 women in new product
developments.
Design Development Workshops under ICF:
Design Development Workshop on Kashmir Willow Craft, Srinagar, J & K
Client: Jammu & Kashmir (S&E) Corporation, Srinagar,Sponsored by: DC(H).
Design Development Workshop on Jute Craft, Srikakulam, AP
Client: Youth Club of Bejjipuram, Srikakulam,Sponsored by: DC(H).

October 1994 Current
Director of Indus Tree Crafts Pvt. Ltd., Designing hand crafted products and managing the export
of the same. Managing and designing for The Design Store in Bangalore and Chennai. The
following are some of the crafts in which new ranges were designed and have been sold at the
stores for the last 5 years.

Wood Inlay Craft of Mysore: Development of furniture, clocks, trays, photoframes.
Chennapatna Painting Craft: Development of candle stands, trays, spoon holders, pegs, small
shelves and desk accessories.
Stone Craft of Orissa: Development of candle stands, desk accessories and gifts.
Papier mache of Kashmir: Development of contemporary hand painted designs on the
complete range of Kashmiri products.
Tibetan carpets of Mysore: Development of contemporary carpet designs at the
Tibetan Centre near Mysore.
Madhubani Hand Painting: Mithila painting was adopted for use on contemporary products
such as photo frames, boxes, trays, furniture.

June 90 June 94
All India stone crafts documentation, sponsored by Development Commissioner (Handicrafts),
New Delhi, Seven Volumes covering 13 states with five junior designers as field workers.
June 89 June 90
Consultant to ITC, Export division, N.Delhi, Development of Handicrafts for exports, vases,
planters allied metalware in Moradabad.
Consultant to UP Export Corporation, Development of wooden handicrafts in Saharanpur,
boxes, frames and coasters etc.,
Consultant to Office of Development Commissioner of Handicrafts, jute product development,
design of soft luggage, and bags.
June 88 June 89
Consultant to ITC, Welcomgroup, Maurya Sheraton, New Delhi.
Design of table ware, menu for Dum Pukht and other restaurants.
Study of related crafts production areas, such as metal ware Moradabad, Ceramics Khurja,
Stone ware, Agra, Glass ware, Firozabad.
June 87 June 88
Consultant to Tamilnadu State Handicrafts Corporation, Development of sheet metal beaten
products in Kumbakonam, Tamilnadu.
Documentation of lost wax metal casting in Kerala, popularly known as Charakku casting,
technique involving casting of bronze vessels upto 12ft. in diameter,
sponsored by Development Commissioner (Handicrafts), New Delhi.
June 86 June 87
Consultant to Handicrafts and Hand loom Export Corporation, New Delhi, development of lost
wax metal cast products at Bastar, Madhyapradesh.
June 84 June 85
Thesis projects at National Institute of Design sponsored by Handicrafts and Handloom Export
Corporation, documentation and development of lost wax crafts in Bengal, Orissa,
Madhyapradesh.


Resume

Raminder Singh Rekhi
Age : 39 years (15th April 1968)
Marital Status : Married with Twin daughters aged 3 years
Wife Sweety, is an MBA now on a sabbatical, taking care of the twins
Academic Profile :
1996 Diploma in Business Finance(ICFAI)
1990-92 : MBA (IRMA)
1985-88 : BA ( Delhi Univ.)
1985-88 : Diploma in Electronics

Address : CONTACT
2404, Challenger Tower 2
Thakur Village, Kandivili E Mumbai
400 101
Ph. 93248 48750
rsrekhi@vsnl.com

WORK EXPERIENCE

Jun05 to date: Working with Radhakrishna Foodland Pvt Ltd, Mumbai.

Jan07 to date :

Sr. Vice President (Corporate Development)

Looking after the Fresh business for the organization including Fruits, Vegetables, Chicken, Mutton,
Fish and Bakery. It is a profit centre responsibility and a greenfield activity for handling the business
from end to end from procurement, to processing, to sales to the retailers and also helping the
retailer sell to the consumers.

I opted for this challenge as this domain needed to be managed in a focused manner to increase the
sale and the category penetration, and also wanted to be in a domain where could foster a
relationship between the market driven economy and the farmers.

Also looking after the In the community program of the organization in partnership with an NGO
called Mumbai Together that is attempting a pilot at enabling the spirit of volunteerism and
empowerment of the local people taking ownership for their neighbourhoods.

Prior to this assignment was looking after the sales and marketing functions of the company - which
is in the broadline food distribution business. It was a profit centre responsibility for food distribution to
the retail segment encompassing merchandising, sales and marketing.

The division that I am working for is into the business of providing backend solutions to food and
grocery retailers. We are supplying to around 100 odd retailers in Mumbai and have a monthly
turnover of approx Rs.9 crores overall and Rs.2 crores fresh.





Apr 96 to May05 : Working with Pantaloon Retail (I) Ltd

Head Operations (East & North), Pantaloon Retail (I) Ltd., Calcutta

As the Head of Operations of the East Zone, a profit center, my job entailed profit center
responsibility, meeting top line and bottom line targets, people and related issues (training, HR)
control and commercial issues, maintaining customer satisfaction levels, marketing activities, media,
purchase of merchandise, project execution etc.

Since Jun01, had been instrumental in the opening of 12 new stores totaling 3,78,000 sft (Prior to
Jun 01 Pantaloons had just one store of 12,500 sft) and increasing turnovers from Rs. 20 crores to
Rs. 250 crores in 2004-05.

The East Zone also looked after the operations in Kanpur, Gurgaon, Ghaziabad and Bhubaneswar
apart from Calcutta.

The East zone was the best performing zone in the organization in terms of Market leadership,
systems and quality of manpower an achievement that needs to be attributed to the wonderful team
that I have been able to create, for whom excellence is the motto.

Prior to this had been based at Mumbai and Calcutta, looking after areas of purchases, logistics and
distribution and front end Retailing.

Achievements in the role - The East Zone was awarded the prize for the Best Pantaloons store, the
Best Zonal Support and the Best Factory outlet awards for the year 2002-03 and 2003-04. These
awards were a culmination of the fact that the systems of operations in the East are the best in the
country for Pantaloon, as are vendor relations and sales.

In terms of empowerment of the team, the team was very empowered and took decisions based on
customer first a credo that had been built through personal example and living the credo by the
core team. The HR practices in the zone were the best in the country and were replicated elsewhere.
The logistics and commercial practices were also the best in the country for Pantaloons. The zonal
office and its processes in Calcutta had been ISO certified.

Jun99 to Jun00: Development Professional, Seva Mandir, Udaipur
(Consultant Pantaloon*).

While working with Pantaloon since 1996, had taken a sabbatical for a year for working with Seva
Mandir, an NGO based in Udaipur. Worked with a project for capability building of village groups
through creating a village level corpus, by monetising the shramdan of the villagers and by training
and motivating the villagers to manage these funds in a democratic and transparent way for common
good. There was also an attempt to build the confidence of the village groups by asking them to
undertake small developmental works by using these funds as seed capital. Also contributed by
setting up an objective and open performance appraisal system in Seva Mandir.

While in Seva Mandir, helped make the strategy for the income generating patchwork division of
Seva Mandir, Sadhna. Sadhna has since grown from a turnover of Rs.6 lakhs per annum to a
turnover of Rs.140 lakhs per annum and passing on member contribution of over Rs.45 lakhs per
annum.


As a consultant to Pantaloon provided inputs on planning, budgeting, systems, HR, tie-ups, new
businesses, marketing and promotions for the Calcutta store. This was done for 1 week every month.


Oct93 to Mar96: Executive Assistant to the Chairman, the Venkateshwara Hatcheries Group of
companies, Pune (Oct93 to Oct94 EA to the Zonal Head, VHL Hyderbad)
Responsibilities:

Monitoring operations on financial and physical parameters including the appraisal of annual
budgets and review of new & existing projects
Suggesting better funds management and tax planning measures
Design and implementation of Management Information Systems
Suggesting policy changes and follow up on policy guidelines

Jun92 to Sep93: Assistant Executive (Oil Projects Group), National
Dairy Development Board, Anand. Responsibilities
Project Finance, appraisals and monitoring

Nov88 to May90: Assistant Project Manager, M/s Continental
Enterprises, New Delhi. Responsibilities:
Independent incharge of projects on railway signaling on two stations
Project execution, testing and commissioning.

ACHIEVEMENTS :

In my career, have been working on the philosophy that hard and smart work with a base on actual
facts and with a holistic and long term view is necessary for both self and organizational growth. To
continue this work on a long term basis a very focused stress on excellence is also essential to keep
you going on and on.

Also it is necessary to develop backups and to train others so that the systems, processes and values
of work survive even after you.

To this end have helped develop MIS and data analysis systems and passing them on to the line
managers as users and ensuring that the work of the line managers becomes more efficient and
decision making better as a result of these reports and analysis thereof. Have also been involved in
strategising and in implementing these strategies. Have worked on creating a better man-
management and motivation system. A mind open to new learnings is also critical to achieving these
ends.

Working honestly and sincerely on this philosophy has yielded results in terms of increased
efficiencies, cost savings, dropping of unviable businesses, increased sales, development of a core
team and a sense of achievement that I have contributed to making the businesses better for then
and later (by ensuring that the ideas and systems got passed on). Another sense of achievement
came from the fact that the efforts and outcome were recognized and appreciated.

The career graph, both in terms of the diverse kinds of businesses that I joined and mastered, and
the hierarchical and responsibility growth within each organization, I guess, confirms the fact that the
philosophy and its outcomes were beneficial to the organizations and were accepted and
appreciated.

Now would be looking for a larger mileu to work on with larger and wider ranging responsibilities.

EXTRA CURRICULAR ACTIVITIES: Reading and Philately and spending time with my daughters.
CV of Arun Raste
Contact Details
Phone (resi) 009122 2854 9380
Phone (office) 009122 2835 2811 / 2823 5246(discretion required)
email nura2020@hotmail.com

Experience and Career Highlights

Current: Director (CEO) of a non-profit International Resources for Fairer Trade (IRFT) since October 2002.
IRFT (www.irft.org) is committed to combating poverty through Fair trade and ethical business. The major
programmes are:

Community Business Support (CBS) Supporting Community Business Enterprises (CBEs) and SMEs that are
involved in business activities and work with disadvantaged communities. By providing Business Development
Skills to SMEs and thereby increasing their productivity, it is possible to increase income, employment
opportunities and enable sustainable livelihood options for the poor. Our intervention is for improving
their business performance and market access to improve livelihoods of poor.

Domestic Fair Trade: IRFT initiated a multistakeholder (Business, Government and NGOs) national Fair
Trade initiative in India (www.profit.org.in) The endeavors is to develop a strong network and organization to
work with both food and craft producers on one hand and markets on the other thru a social label.

Ethical Business Programme: We seek to work with businesses in Indian sub continent - helping them understand
the social and ethical dimensions of their work. We create a safe environment for people to question what they do
and how they do it and then work with them to develop creative, pragmatic solutions and strategies and robust
systems. Towards this we conduct monitoring, and offer corrective action consultancy and training services, both in
agriculture and manufacturing including home-based workers.Organic Agriculture Till recently we were
government of India approved organic certifiers.

CSR We work with a leading business chamber to promote business ethics. Our focus is on CSR is the supply
chains and specially SMEs.

Current Role and Responsibilities
Programme Development: and Management
Design, secure and monitor implementation of relevant programme approaches and standards and assess
performance against agreed programme objectives and indicators and to ensure that programmes achieve
excellence in terms of situation analysis, impact assessment and quality assurance.
Advocacy and Representation:
Earlier Assignments (chronological)

2. National Bank for Agriculture and Rural Development (NABARD) 10 years+ (1985-95) Ahmedabad and
Mumbai. (Manager, Assistant Manager, and Officer.)
Because of this decade long stint, I gained exposure to rural livelihoods and infrastructure issues in the third world. I
have in-depth experience of agricultural financing, strategic development of agribusiness portfolios, operating
procedures , loan appraisal, supervision and recovery mechanisms for non-farm (small and tiny) enterprises,
implementation and use of MIS etc. The major areas of work included Potential Linked Credit Planning (PLP)
an approach that helped in promoting various income generation activities and promoting innovative schemes to
generate additional incomes for rural populace. This initiative provided an exceptional opportunity for NABARD to
explore, synthesize and develop a working framework for implementing rural credit programmes. There was as
much focus on internal learning and capacity building as there was on delivering external improvements. This
initiative allowed development of a model for identifying and maximizing "what works" within an area.

Projects funding
In diversifying rural revenues for the poor, promoting non farming (self) employment andfacilitating market access
for locally important value chains (diversification) was the focus of the projects team.
Vikas Volunteer Vahini (Microfinance)
Volunteers promoted thrift in a group (VVV Club) and this led to micro-enterprise development. The key outcomes
1) increasing the ability of poor women and men to utilize small-scale agricultural activities to help them develop
and sustain secure future, 2) savings 3) timely repayment thru intervention of the club members.

3. Associated Cement Companies Limited (ACC) Deputy Manager Corporate Communications (2 years 1996-
98)). ACC the largest cement company in India is now a part of Swiss Cement major Holcim. The stint helped me
sharpen my communication skills. Key result areas included development and dissemination of information in an
innovative manner, successfully managing stakeholders communication/ relations, advertising and promotion etc .

4. FIEO (Federation of Indian Export Organizations) Deputy Director General (April October 1998). FIEO is
the apex chamber of Exporters and a network of different chambers. As the regional had I was responsible for
seeking continual improvement in appropriate management systems, procedures and liaison with government for
promoting exports.

5. Megatech India Chief Operating Officer - (Jan 1999- September 2002): Megatech a specialist agency in
Customer Care and direct marketing field has been associated with some blue chip companies as back office /third
party support provider. Responsibility included that of a Profit Centre Head and Business Development as also
setting up Mumbai office, HR and General Administration, Recruitment and Training etc.

International Events Participation/Representations
FLO MOM Bonn Germany 2002
WSF Porto Alegre, Brazil 2003
IFAT Bi-Annual conference New Castle UK 2003
CSR Conference SMI One Stop Shop Kualalumpur Malaysia 2003
WTO Ministerial IATP Fair Trade Symposium at Cancun Mexico 2003
CSR is Asia Seminar, Ethics magazine, Singapore 2003
Asian Coalition for SMEs, Seminar on CSR, Hainan China 2004
UNCTAD XI NGO delegate Sao Paulo, Brasil 2004
European Parliament PSE Conference, Brussels 2005 ESE Roundtable Lille France 2005
PEKEA Conference Rennes France 2005
RIPPES Conference in Dakar Senegal in 2005
WTO Ministerial IATP/ICTSD Seminar on Fair Trade at Hong Kong 2005
Wilton Park Sustainable Development Conference in UK July 2006
FAO RAP Seminar on Fair Trade New Delhi July 2006
BTC Conference on Fair Trade Brussels October 2006
IFAT conference Blackenberge Belgium May 2007
Fair Trade Seminar Kinki University Nara Japan September 2007
CSRSME Conference Manila October 2007

Personal Details
Birth Date 31 August 1961

Education
BA, DMM, MA (E), MBA(1), DCJ

Professional Training
SA 8000 Lead Auditors Training conducted by SAI USA
ISO 9000 2000 Lead Auditors Training, IRCA UK approved

Extra Curricular
Visiting faculty at NMIMS, a leading management institute in Mumbai
Freelance writing