A virtuous trickle

A virtuous trickle

A water purifier manufacturer forms an NGO to supply clean drinking water at 17 paise a litre in 55 Andhra Pradesh villages. This is just the beginning.

Business ideas for the bottom of the pyramid come in unlikely situations. Four years after running a purified, bottled water business, Kammili Satyanarayana Raju, an alum of the Indian Institute of Management, Ahmedabad, decided it was logical to make machinery that purifies water. After all, it was just a series of filters to keep out particles with an ultraviolet light source to kill bacteria or a reverse osmosis unit thrown in.

So, in 2004, a few months after setting up manufacturing, Hyderabadbased Raju approached Byrraju Foundation, a philanthropy vehicle set up by the business family of accounting-scandal-hit Satyam Computer Services. One of the activities that the foundation wanted to get into was safe drinking water and Raju, 54 today, had the expertise. He offered "a cost-effective integrated solution that made us opt for him," recalls Verghese K. Jacob, Chief Integrator, Byrraju Foundation. (Raju and Satyam's tainted founder Ramalinga Raju are not related.)

Poorvi Enterprises and Center for Water and Sanitation (CWS)

The IIM-A alum, after some 20 years in agrochemicals (the last thirteen as an entrepreneur), started making water purification plants in 2004. Set up CWS in 2007 and will start Academy of Water and Sanitation in March 2010.

INNOVATION: Control right from manufacturing to setting up to training staff to running the purification plants.

MODEL: Partnership with NGOs, panchayats, corporate for part-funding, providing land, building and raw water connection.

SCALE: In 55 villages today; targeting 500 in five years.

Today, Raju has dovetailed his business and mission. His company, Poorvi Enterprises, fabricates drinking water plants, while an NGO he founded in 2007—Center for Water & Sanitation or CWS—partners with other NGOs, rural local bodies such as panchayats and corporates to set up and run water plants in villages, setting prices within consumer reach as also offering sustainability for the business. A consumer pays Rs 60 monthly for a 12-litre can of water a day.

A typical water treatment plant needs to process about 200 cans of water a day to break even and depending on the demand, collections vary between Rs 6,000 and Rs 25,000 a month. After spending on running and maintenance costs, "the surplus is used to pay back for the initial investment on the plant over a three-to-five year period,” says Raju.

Raju's initiative has the makings of a water empire serving India's poor millions, who bear the brunt of water-borne diseases such as diarrhoea. In the last two years, he has covered 55 villages across Andhra Pradesh, Tamil Nadu and Karnataka with pilot projects on in Orissa, Madhya Pradesh and West Bengal. "In five years, we will cover 500 villages," says Raju.

Even more ambitious efforts, apart from Raju's, are under way. Piramal Foundation and Piramal Water Private Ltd. operate what their CEO Anand Shah calls a "market-based franchise model" across 140 villages in Rajasthan and Gujarat, supplying water at a monthly charge of Rs 150 for 20 litres a day with plans to reach 5,000 villages in three years.

Raju's edge lies in having manufacturing technologies in-house and the ability to set the price of water sustainably. The other differentiator could be a training school he is starting from March that will start off with training a batch of 10, who could end up as water plant operators or owners of the plants. A one-week training programme may be expensive at Rs 12,000 but Raju's intention is to approach companies to sponsor them and offer funding to set up a water purification plant.

Such an approach, Raju believes, will create a network of "waterpreneurs” (target: 500 in five years), whose work will benefit villages. Sure, he will benefit, too, with demand for his water purification plants climbing but the legup for public health and economic opportunity outweigh such gains.