Energetica India Magazine January-February 2021

and Diesel. Thus we believe commercial grade pellets would be the new growth drivers for the industry. In the initial stage did you find any challenges while working? Ashvin Patil : Like any entrant, we faced a key challenge of ‘what is your value add?’. We realised that since the industry is barely 20 years old there is ample of scope to improve everything and offer tangible as well as intangi- ble value propositions. Our challenge was to inculcate our vision into our sup- ply partners and all the efforts are focussed on the same. While our internal practices fell in place with the help of our own work experience before this venture and with the help of experienced and qualified manpower. Another challenge was to drive the cognizance to the buyer that cost is not everything but reliability and con- sistency is equally important. That was achieved with few years of exposure with them and testing times such as floods of 2019 and currently the on-going covid situation. What are your views on government support for the start- up ecosystem in the country? What are your expecta - tions from the government? Ashvin Patil : We clearly see the demand rising continu- ously as it’s driven by distinct advantage to the user in terms of cost and environment norms. However, the sup- ply side has to be incentivised to keep up the pace with demand side. There is large occurrence of failure in small manufacturers in this field. This is where the Government support is critical. Government has been supporting rural ventures all along, since we are an agrarian economy and rural India voters decide the fate of Government, having said, the target- ed help to this particular industry can be even more evi- dent. Government has been promoting this industry over the past decade by offering capital subsidies through lo- cal bodies during the set up stage. Almost 90% of the supply of solid biofuels comes from rural areas and they face many challenges from establishing the business to running it. Government can help this in- dustry in monitory and non-monitory ways. One of the ways could be waiving off the GST on Biofuels which is currently at 5%. This will reduce the compliance burden on small manufacturers while make it attractive vis-à-vis fossil fuels such as Coal or Furnace oil. We sug- gest subsidised rate of electricity to be given to small rural manufacturing units to lower their running cost. Other ar- eas to support the ecosystem would be relaxation in the plant setup processes etc. Please share details about investor, funding, capital etc? Ashvin Patil : Biofuels raised undisclosed Series A funding last year and will be looking to raise fresh funding this year. We had raised first round from professionals and friends who had confidence in our capabilities and inten - tions along with strong positive view on this sunrise indus- try. Now we are looking at the next level of funding for more growth & expansion which is mainly 1) strong supply side with wider manufacturing base, enable franchise or partnership model and own units at strategic locations 2) demand sustainability with forward integration – ie taking more boilers O&M contracts. How do you see your journey so far? Ashvin Patil : We are clearer on next stage of expansion and growth agenda. We do know what need not to be done and keep the focus intact. We have concluded that this has to be an asset light model on manufacturing or supply side while driven by own strengths on the de- mand or forward integration side. These lessons from the journey so far have been far valuable and should help us in longer term. What will be your business strategy in coming years? Ashvin Patil : The Business strategy at Biofuels Junction is to identify good quality suppliers, empower them to be- come large manufacturers of clean energy products and work exclusively with us. We are also looking to add our own manufacturing plants at strategic locations from where the logistical challenge of procuring raw materi- als and transporting the final product to customers can be minimised. We have also signed 10 exclusive bri- quette suppliers, and are targeting Rs 100 crore turnovers by FY2025 and look forward to develop manufacturing plants pan India. energetica INDIA- Jan-Feb_2021 37 EMERGING INNOVATORS