GloTech Organics: ...

GloTech Organics: Innovative Agribusiness Incubated at TREC-STEP, India

GloTech Organics is a research-based technology venture dedicated to the research, development, manufacturing, and commercialization of agro-based value added products that preserve soil and water, increase plant productivity under a crop eco-system.

GloTech Organics is a research-based technology venture dedicated to the research, product development, field-testing, manufacturing and commercialization of a range of agro-based value added products that preserve soil and water, increase plant productivity under a crop eco-system, and increase photosynthetic efficiency in crops.  An incubatee of the Tiruchirappalli Regional Engineering College - Science & Technology Entrepreneurs Park (TREC-STEP), GloTech Organics has launched two products to the Indian market: (1) SEAMIC, an innovative plant growth supplement and bio-pesticide, and (2) NEMATE GRO, an innovative product for improved fertilizer efficiency. 

TREC-STEP received a grant from infoDev in 2004 to develop regional competencies for identifying and harnessing opportunities through start-up ventures, with the aim to generate jobs and wealth in the region. TREC-STEP has to date graduated over 180 companies with more than 5000 employees from its business incubator. In the case of GloTech Organics, TREC-STEP provided the company with a nursery incubation space and various business incubation services. GloTech Organics was furthermore able to leverage its association with TREC-STEP to receive seed financing (approx. USD 40,000) from the Technology Development Board (TDB) of the Government of India, as well as a research grant from the Indian Institute of Technology-Madras (IIT-M). Currently, GloTech Organics is also seeking cooperation with the National Bank for Agriculture and Rural Development (NABARB) to develop an array of agro-based products.

In November 2008, infoDev conducted the following interview with Mr. Augustine, an innovative entrepreneur and the head of GloTech Organics.

"TREC-STEP, with a deep understanding of my venture and regional business synergies, has helped in devising appropriate financial and marketing plans, as well advised in preparing grant proposals for further financial support."

Mr. Augustine, GloTech Organics

Is this the first company that you have started, and what drove you towards it?
Yes, this is the first company that I started. After working in an R&D division in a big fertilizer company for nine years, I developed several product innovations including formulas for bio-pesticide activity and soil fertility management. However, the company closed down its R & D operations and wanted to place me in another business segment, which gave me the final push to start up my own company. I came across TREC-STEP’s media campaign for innovative ideas and visited TREC-STEP to hear more about their activities. After a series of discussions focusing on how to launch and grow my business idea, my company was chosen to be a client at the TREC-STEP business incubator in March 2007. TREC-STEP is also a shareholder in our company. After only a year and half at the business incubator, GloTech Organics has grown into a dedicated team with 7 members, and recently became an ISO 9001:2000 certified company.    

How did you finance your start-up operations and how long did it/will it take for the company to become self-sustainable?
After several rounds of discussions about venture prospects, TREC-STEP allotted a nursery incubation space to GloTech Organics, and provided support services such as planning for business strategy, finance and marketing, the opportunity to attend training programs, and networking with other like-minded entrepreneurs. TREC-STEP also supported GloTech Organics in applying for a Seed Fund from the Technology Development Board (TDB) of the Government of India:  I have been able to work closely with the TREC-STEP finance support team in preparing my business case, complete with mock presentation sessions. Finally this venture was awarded Rs. 2.0 million (approx. USD 40,000) as seed financing.  I was also successful in receiving a research grant from the Indian Institute of Technology in Chennai. TREC-STEP has supported GloTech Organics in receiving other research grants from the Department of Scientific and Industrial Research and the National Bank for Agriculture and Rural Development (NABARD) in developing a series of neem value-added products.  The application to the Department of Bio-Technology is under examination for developing another unique product.

In this way, GloTech Organics is continuously involved in research and product development and simultaneously it concentrates on the marketing of field-tested products. We expect that the company will become self- sustainable within the next three years.

What are your major products and services and how are they unique in your business sector? What is your competition?
GloTech Organics had launched two organic products: NEMATE GRO and SEAMIC. NEMATE GRO is an ecologically friendly and efficient way to  improve fertilizer efficiency, which enables disease, pest and front management. SEAMIC is an organic liquid containing six essential nutrients that strengthen the plant’s immune system and boost its growth.

These organic products serve multiple purposes in enhancing agriculture productivity, such as the supply of nutrients, control of pests and diseases and acceleration of crop growth. They also enable the farmer to save on costs, can be applied to all crops, and overall support in the ecologically friendly shift towards organic farming.

These are unique products in the Indian market and so far, we have no direct competition.  We are in discussions with patent attorneys and hope to complete the patenting process shortly.

How did you first launch your product/services?
Overall, we target high value crops such as grapes, coffee and floriculture and our products are focused on crops with a year-round yield. In our current company growth phase, we are focusing on establishing high product volumes with low margins.

Initially trials and product demonstrations were conducted directly on the farmer’s field in various soil conditions and with a variety of crops in many districts. After this, based on feedback, the products were improved and marketed with support from the buyers. After the successful completion of trials, we seek the support of farmers to interact with distributors and other farmers on the benefits of our innovative products. This is very helpful in getting the products to reach the market.

We are constantly in touch with the pulse of the farming community. Based on favorable trends and feedback obtained from the farmers of the region, the product is stocked at the distributors there. When new distributors hear about the success of the product, they contact GloTech Organics, and so the distribution channels continue expand.

Furthermore, GloTech Organics has been recognized in the media and interviewed by two popular TV channels as an exemplary case that immensely benefit farmer communities and the environment.     

How do you measure the success of the company?
We have several measurements of success for our company. A key success factor is being able to improve GloTech Organics’ relationship with the farming community, where we have to ensure uniform product performance, and with distribution agencies or buyers. Reaching and convincing more and more farmers to use organic farm products is also an important measurement.

Finally, we aim to introduce at least one innovative product every year, based on the needs in the market and our ability to match those needs. This includes quality and quantity improvement and providing new value adds to the existing innovative products. We are planning to have a substantial growth rate between 30-40% every year.

Who are your clients and how many do you have? How are you focusing on expanding your user community?
Farmers make up the majority of our clients, and we have reached around 2000 farmers in many districts of Tamilnadu, Nasik & Pune. Our distribution is done primarily through progressive farmers or direct retail network. Farmers that are already engaged in organic farming are targeted for faster growth since, once convinced, they favorably influence the usage of this product among the community. The company is in process of finalizing business deals with distributors in most of the districts of Tamilnadu, Maharashtra, Punjab, Andhra Pradesh, and Karnataka.

There are also prospects for us to internationalize our product. We have established direct links with distributors for marketing the products in Sri Lanka, Malaysia, Mauritius and several African countries.  We are working with TREC-STEP to identify new international markets and devise an international marketing plan.

What was the biggest challenge in starting an innovative business in your country and how did you overcome that?
There are several challenges that are related to both the growth of the company as well as the ability to reach our users in the farming community.

In terms of the farming community, the underlying challenge is a lack of awareness in the use of organic products in crops. We do our best to conduct product demonstrations and then incorporate feedback from farmers into our product development. There are also imitation organic products in the market that are of course offered at a lower cost. Therefore the role of farmers is very important in comparing and evaluating the impact of these products on their farming business.

In terms of developing an innovative agribusiness, our core challenge was in planning the necessary capital as well as raw material. Since most organic raw materials are purely seasonal, we were initially unable to conduct careful financial planning for these, but with TREC-STEP’s business incubation services we learned techniques for advance planning. With issues related to general business planning and marketing, catering to national and international markets simultaneously demanded strong planning and strategic direction, which was another area where TREC-STEP gave us important input.

How have you benefited from business incubation?
The unique knowledge development and networking opportunities provided by TREC-STEP, along with infrastructure support, has been very vital for my venture, helping GloTech Organics to refocus on core areas of product development. TREC-STEP has motivated and supported me to attend many training programs in Trichy, Hyderabad and Mumbai at the very initial stages of my business start-up, which was important on the  growth path of my venture.

TREC-STEP, with a deep understanding of my venture and regional business synergies, has helped in devising appropriate financial and marketing plans, as well advised in preparing grant proposals for further financial support.  TREC-STEP has provided GloTech Organics with enormous opportunities to interact and present before many government officials and national and international experts on entrepreneurship and start-up development.  These introductions and networks have been very important for the venture in our growth phase.  This has also improved my presentation skills.

With hindsight, are there any particular lessons or messages that you wish you would have known when you started up your company, and which you would like to share with fellow entrepreneurs?  
Strong business strategies with financial and marketing planning are very essential.  We should continuously monitor and fine-tune our strategies to steer towards growth.  Need-based new innovations are important for continuous product improvement. And for an agri-business venture like ours, R&D is one of the most important criteria for ensuring rigorous field testing and for standardizing the product.

Do you feel that you had the necessary advisory and support network when you started your company?
Yes, being an incubatee at TREC-STEP has provided the necessary support such as strategic business support, infrastructure, mentoring, training, financial support and IPR guidance.  TREC-STEP has closely worked with us in devising the business strategies and also monitors the milestones and achievements for further fine-tuning them on a weekly basis, which is one of the reasons for the success of this venture. 

What is your message to supporters (financial or otherwise) and what is your message to the users of your product?
Organic products serve multiple purposes in enhancing agriculture productivity, such as supply of nutrients, control of pests and diseases and acceleration of crop growth – they are highly beneficial to both the farming community and the environment. Eco-consumer loans for farmers, distributors and retailers for using organics farm products would increasingly encourage the farming community to use organic products. This would provide sustainable farming techniques that are environmentally friendly, and would help start-up companies working in this area to overcome initial market acceptance and penetration problems.

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