Supply Chain Solutions in India
March 21, 2017
At the close of 2016, we disbursed $6 million to IntelleGrow, as a part of our $8 million commitment supported by OPIC. IntelleGrow, incubated by Shell Foundation, provides customized debt financing to small and growing businesses in India in several sectors.
As India ranks second worldwide in farm output, one of Intellegrow’s focuses is agricultural supply chain. The sector is growing rapidly, but still requires supply chain improvements to meet both domestic demand and global benchmarks.
As a part of this work, IntelleGrow has made a recent loan to Shreedhar Dairy, a startup based in the northern India state of Uttar Pradesh that focuses on developing innovative ways to deliver dairy products to the Indian market. Shreedhar Dairy’s goal is twofold: to increase access to nutritious, pure dairy products, and to tackle the daunting supply chain problems that come with trying to serve the world’s second largest population.
Most of India’s dairy farms farms have less than 10 cows and operate on a hyper-local level, and the cooperative model of dairy farming has been the norm since the country’s independence. Cooperatives are the central players in the formal dairy sector; India’s number one dairy products producer, The Anand Milk Union Cooperative, more commonly known as Amul, is Asia’s biggest dairy business venture.
While cooperative farming offers a democratic system, there is no agreed upon rate for dairy farmers who participate in the system. Private sector expansion into dairy offers a lot of potential to improve rural incomes. Unlike other agricultural products, dairy products can be produced year round, and most Indian dairy farms are small-scale operations. A well-developed private sector in the dairy industry would improve both incomes as well as nutrition in rural sectors.
Shreedhar Dairy enfranchises 14,000 network farmers across 1,375 villages in Uttar Pradesh and promises timely payments to the farmers at the rate agreed, with the belief that these practices will have a sustainable economic impact on the life of each individual farmer. Milk chillers located throughout Uttar Pradesh in village networks keep milk as fresh as possible.
Milk from these private farmers is then turned into Shreedhar branded products, like milk, yogurt, and paneer. With a loan from IntelleGrow, Shreedhar Dairy’s dairy processing plant was able to be equipped with up-to-date technologies. In India’s long distribution chain, products need to survive - one of the main reason that the dairy industry in India operates on a hyper local and cooperative level. Through innovative packaging, Shreedhar dairy products are free of contaminants and bacteria that can plague the local milk from small farms that most Indians drink.
Here at Calvert Foundation, we are excited to continue our work supporting the multifaceted Indian small business sector. Your investments make capital accessible for entrepreneurs, like those managing Shreedhar Dairy, who are working towards social and environmental good. To invest, visit vested.org/india.