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A sweet change for salt workers

Sep 07, 2011

A social enterprise called SABRAS is empowering salt workers in the western Indian state of Gujarat by giving them a share in their company and offering fair prices for their produce to protect them from middlemen. The company also provides cost effective and environment friendly solar pumps to improve the efficiency of the salt producing process.

With an annual export of 2.25 million tonnes, India is among the leading salt producing countries in the world. Majority of this salt is manufactured in the Little Rann of Kutch salt pans of Gujarat.

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The salt workers, locally known as Agariyas, produce salt for eight months a year in a harsh coastal and desert environment. They lack access to basic amenities such as drinking water, schools and hospitals.

Furthermore, these salt workers are paid low wages, suffer heavy exploitation from traditional middlemen and traders, and earn only 1 to 8 % of the total salt value in the market.

To improve the quality of life of Agariyas and achieve greater efficiency in salt production, Saline Area Vitalization Enterprise Ltd. (SAVE) a techno-marketing service organisation in Gujarat has established a social enterprise called SABRAS Processing and Marketing Pvt. Ltd. SABRAS provides procurement, processing and marketing services to small scale salt workers in Little Rann of Kutch.

SABRAS was established as a producers owned, producers controlled and professionally managed for-profit company. The company at present has an equity of Rs. 5.5 lakhs, of which 14% is held by 28 small salt producers, 48% by SAVE while the remaining 38% is held as private equity.

By making salt workers shareholders of the company, SABRAS is providing them with the opportunity to become owners and increase their profits. The salt workers paid for their share in the form of salt. As shareholders, the salt workers share the risks and profits that the company makes.

In the SABRAS business model, salt workers are shareholders of the company and produce salt, the management team ensures proper access to market, credit and technology. The process is organised such that SABRAS directly buys salt from the workers at higher than market price, and then sells it in bulk to processors and network of distributors.

Additionally, to improve productivity, SABRAS provides environment friendly and cost effective solar water pumps to reduce the dependence of salt workers on inefficient diesel pumps for salt production.It is offering an innovative solar technology solution to replace the inefficient and costly diesel powered pumps. This technology will not only reduce harmful carbon emissions but also drastically reduce production costs in the long run and improve the efficiency of the salt production process.

SABRAS is empowering the salt workers from just being producers to owning a company and participating in the entire supply chain. They are no longer dependent on the traders for selling the salt.

SABRAS successfully leverages  institutional partnerships to enhance its business model. Strong partnerships with the government and private players are helping SABRAS build a brand name, which in turn is strengthening its capacity to assist the salt workers. These partnerships provide SABRAS with the necessary technical know-how as well as financial support, which otherwise is difficult for individual salt workers.

SABRAS is successfully accomplishing its business objectives as well as creating a social impact on the lives of the salt workers in Little Rann. It is combining commerce with a cause to improve livelihoods. To date, it has procured 22,000 tons of salt from over 39 salt workers and expanded its marketing network from 4 to 13 commercial companies.

Initially having faced problems of quality, transportation and storage, the company could not meet its economies of scale but currently has earned a profit of approximately Rs. 200,000 lakhs.

Gradually the processes involved are getting streamlined, as SABRAS plans to enter into more partnerships, attract investors and develop innovative and efficient technology.

In the future, SABRAS is looking to expand its operations into the processing of salt. SABRAS is in discussion with a leading retailer in India to undertake a new co-branding effort for a SABRAS brand of edible salt that would be sold directly to retailers. On the side lines, SABRAS also hopes to develop a local brand of SABRAS salt for circulation in villages and aims to generate additional revenue through the sale of salt by-products like potash. In this manner profit margins are expected to increase, ensuring the long term sustainability of SABRAS.

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