Nukala Bhargav
nitish kumar
vikranth varma
Indian Institute of Technology Bombay - Shailesh J. Mehta School of Management
Ashish Pandey
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INI Farms are changing the horticulture landscape of India. From reducing post-harvest losses (less than 2%) to bringing venture capital to rural India, from increasing farm level productivity (2X) to bringing smiles to thousands of farmers, from woman CEO/promoter to woman supervisors, from growing to delivering products worldwide, INI Farms is making a difference at every step.
INI Farms was established by Pankaj and Purnima in 2009.They changed the way of horticulture value chain in India. They created a model that benefits all the entities involved in the supply chain by removing unnecessary things (Non-Value Addition) and incorporating new technologies.
INI Farms is changing the horticultural landscape in India with their innovative processes. Generally losses account for 15-20% in Indian Horticulture. Of these 10-15% fall under post-harvest losses. INI Farms is able to decrease the loss to 2%. The innovation they developed is a model of contract farming where the company, farmers and society jointly invest into the development of orchards with technology and inputs provided by company. They took lands on lease system known as "batai" where profits are shared in half between land owner and farmer. This results in good profits that are shared between all the three participating entities.
They employed best practices like drip irrigation for water management. All their farms are 100% GAP (Good Agriculture Practices) certified and suitable for exports. The fruit goes through five inspections before reaching the customer, it is tested in all respects.
INI has modern integrated pack houses and cold storage units for post harvesting, sorting and packaging. They are using cold logistics in their supply chain. All fruits are fully traceable up to the field level through use of Farm ERP which is used to monitor and control operations. Using technology during farm growth, fruit testing and employing the E2E cold chain.
Generally intermediaries eat about 30% of the price paid by customer. They removed all the intermediaries and increased productivity. They employed women supervisors. Their first crop was harvested after two years. They kept the production under their control so as to match it with demand in the market.
But there are challenges involved in relation to maintenance of plants, quality of fruit, maintain the skin and color of fruit evenly etc. They kept the brand name as KIMAYE, which in Sanskrit means The Divine. They initially started with pomegranate and now expanded to bananas. Slowly they will include more fruits in their portfolio. They are also exporting to other nations.
The main idea of the organizations is to create sustainable farming practices for all the entities involved in the horticulture value chain. The founders have worked on an assignment related to Fruit and Vegetable business in Europe and India. They observed how well the fruits are produced, handled and maintained and the conditions in India. That created an inspiration in them to revive the fruit business in India.
A graduate from the Indian Institute of Technology, Bombay, a gold medalist from Indian Institute of Management, Calcutta , and after working with McKinsey, Mumbai, for three years, Pankaj Khandelwal ventured into agriculture consulting. In 2003, Purnima and Pankaj co-founded Insight and Intellect Consulting Pvt Ltd (INI), and part of that was involved with horticulture consulting.Slowly they got more interested and innovative ideas to improve Horticulture in India and founded INI Farms.
INI has plantations spread across 800 acres in Maharashtra, Madhya Pradesh and Gujarat. Its business is about Rs 1.6-1.7 crore a month or about Rs 20 crore a year. In the next five years, INI aims to have plantations of 2,000 acres and add an additional fruit to its business. It also hopes to record revenue of Rs 150 crore by then. Even as INI aims to tap the lucrative European market, it already has a few loyal customers in that region. These include Netherlands-based Levarht, a supplier of fresh produce to supermarkets in that country. “InI is among the most reliable and consistent suppliers of good quality pomegranates from India. The product is packaged and supplied according to the standards required by European customers,” Gerbert Van Egmond of Levarht says.
INI Farms buys 25 per cent of the crop from existing growers, while 25 per cent comes from contract farming and 50 per cent from its own farms. Depending on the three modes, it records margins of 10-30 percent.
The company packs, sorts and grades the fruit according to the requirements of various markets such as West Asia, Europe and the domestic market. About 80 per cent of the volumes are accounted by Europe, 15 per cent by domestic markets and West Asia for the rest.
The company expects 2014 to be an important year. Khandelwal hopes to cross the Rs 100-crore milestone in the next three-and-a-half to four years. “Considering the area under management, as well as our plans, we have a visibility of Rs 80-90 crore and we expect the project to break even next year.
Khandelwal says the company is working on a second commodity/fruit, which he plans to soft-launch in October. He doesn’t disclose what the commodity would be.
INI is also keen to extend its operations to South-east Asia and the Far East in the coming years. Here, its relationship with Levarht would come in handy. The company is already helping INI to build supply relations in West Asia. “In the future, we believe we’ll be able to extend our relationship by increasing volumes of pomegranates, as well as adding new products,” says Levarht’s Egmond.
Currently, INI is focused on the export markets, considering it is difficult to secure domestic bulk orders through the year. However, Khandelwal expects the domestic markets to pick up in the next three years. The company is already in talks with domestic retail chains for long-term contracts.
INI Farms are changing the horticulture landscape of India. From reducing post-harvest losses (less than 2%) to bringing venture capital to rural India, from increasing farm level productivity (2X) to bringing smiles to thousands of farmers, from woman CEO/promoter to woman supervisors, from growing to delivering products worldwide, InI Farms is making a difference at every step.
Major Impact:
INI farms changing the lives of Indian farmers. Their Economic condition is improving because they are now dealing directly to the company instead of middle men. The business model is robust and sustainable so it will create a big difference in long run. Middle men are removed by employing a fast cold chain. Fruits are exported in large cold trucks which was never happened before. They planning to enter other fruits in a few years. As of now they have no plans to enter into vegetables.
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Kalpesh Khivasara, General Manager
