Good Businesses 2014

A lot on her plate

Earthware is using corn starch to create bioplastics that are environment-friendly

In 2008, Samanvi Bhograj completed her electrical engineering from MS Ramaiah Institute of Technology and went on to do her MBA at Bharatiya Vidya Bhavan, Bengaluru. While that may seem the norm for most engineering graduates these days, it wasn’t enough for Bhograj. “I am a third-generation entrepreneur. My grandfather and father are into steel forging and manufacturing automobile parts. My uncle, B Ramana Rao, is a Padmashree awardee for his philanthropic work in the field of medicine. This inspired me to work harder.” 

Three years ago, the 25-year-old combined that entrepreneurial spirit and philanthropic drive to start her own social enterprise. “When I was exploring options before starting my business, I realised that being eco-friendly and going green had become a trend. But you have to actually start implementing it. It is more about the action and intent than just claiming that you are green,” she says. Bhograj had always been keen on working for the benefit of society, creating a single-phase preventer that was designed for farmers during her college years. This was, by design, a low-cost product used to start or stop a motor without burning it. She also helped design solar panels for nebulisation at her uncle’s clinic.

That streak continues, with Bhograj now running the Bengaluru-based Earthware, which manufactures 500 kg to 1 tonne of bioplastic products every month. By 2015, her company is aiming to grow those numbers to 2-5 tonne per month. 

Breaking things down

It all began in 2011, when Bhograj’s initial research into sustainable, environment-friendly products led her to the concept of bioplastics, which are plant-based hydro-biodegradable plastics. Bioplastics are often confused with the more easily available and prominently promoted oxo-biodegradable or virgin plastic products, but there’s a critical difference. When decomposing, regular plastic and oxo-degradable plastic goes through photodegradation, in which sunlight breaks the plastic down at a molecular level; as the polymers break down, the plastic loses the property it is most known for -— its strength. This is when it breaks into small pieces and stays in the soil. Bioplastics, on the other hand, are made from polylactic acid (PLA) and plastic made out of corn starch, which decomposes into water and carbon dioxide within 45 days to 12 weeks, depending on the product.

This greener option is direly needed. According to the Supreme Court, India produces 5.6 million tonne of plastic waste annually. Delhi generates the most at close to 700 tonne, followed by Chennai at 429 tonne. Kolkata and Mumbai aren’t far behind, with 425 tonne and 408 tonne, respectively. Bhograj is acutely aware of the situation and is ready to offer a solution. “We are sitting on a plastic time bomb. The main idea behind starting this company is to be able to educate people on why they shouldn’t use plastic or at least, disposable plastic,” she says. 

Along with friend and co-founder, Suhasan Reddy, Bhograj spent over a year researching how different starches reacted — some of her experiments included grating 2 kg potatoes and ordering samples of bioplastics from the US, the UK and China. While Reddy put up ₹20,000 of the initial investment of ₹1 lakh, Bhograj’s grandfather — Vishnu Forge Technologies chairman, B Raghavendra Rao — provided the rest. The R&D effort established that corn starch was the easiest and best option for bioplastics. The corn starch is converted into pellets called resins, which are used with pellets of PLA to create the final product. 

Focusing on cutlery and kitchenware, Bhograj designed the products herself, partnering with Bhaskar Yadav, CEO of plastic product manufacturer UMD. The moulds were made at Vishnu Forge — they didn’t come cheap, though, costing over ₹1 lakh each. Apart from cups, plates, bowls and cutlery, Earthware also produces bin liners, wet waste bags and garment covers. 

For now, the company outsources its manufacturing processes, using its own moulds at two plastic product manufacturers’ facilities. The processes are of two types — injection moulding (used for making cutlery and sapling covers) and extrusions (used for bioplastic bags). UMD handles the former and another company handles the latter. Both are paid for labour and production costs. Yadav’s manufacturing unit can make up to 5,000 pieces of cutlery in an eight-hour shift, but plastic bags involve a longer process.  

An uphill task

The production process essentially remains the same as that of regular plastic. The end product also bears an uncanny resemblance to the disposable cutlery you see at homes, restaurants and takeaway joints. So, why does Earthware consider itself to be catering to a niche audience? Yadav explains that it’s plain economics at work. “In terms of raw materials, bioplastics cost 200% more than usual and 40-50% more in terms of production. So, if 1 kg of plastic costs ₹200, 1 kg of bioplastic would cost ₹560,” he says. And this, when Earthware uses easily available and cheaper corn starch imported from Europe and Asia, rather than the more expensive sugarcane or potato starch. 

The high input costs act as an automatic entry barrier for customers seeking disposable products. A three-piece cutlery set costs ₹9.50, coffee cups cost between 95 paise and ₹2.95 for sizes between 90 ml and 300 ml, bin liners are priced at ₹3-9 each and carry bags at ₹4-10, depending on the size, thickness and print -— all several times more expensive than regular plastic products. “Our products offer higher value and we seek customers who appreciate that,” defends Bhograj.

Pricing isn’t the only challenge for Earthware. The company is also looking into ways to extend the shelf life and properties of its bioplastic products. Currently, some products take 12 weeks to degrade in compost, but even otherwise see a reduction in properties in just eight to 10 months. The material stays intact, but the product becomes fragile. Sealing the bags is also an issue since bioplastics cannot handle high temperatures. Then, bioplastics are not as strong as regular plastic. For instance, if a regular plastic bag can carry 10 kg, bioplastic bags can take only up to 7-8 kg. 

Still, Earthware does have its takers. The initial e-mailers, along with a slight social media push and word-of-mouth marketing, have been able to get word out about the company. The company accepts a minimum order of 5,000 pieces of cutlery and at least 50 kg of bin liners in any size. It broke even in January this year. 

Though the business is largely concentrated in urban areas, Earthware’s product range is also available across Karnataka, Tamil Nadu, Andhra Pradesh and Rajasthan. “Plastic is banned in Rajasthan. So, we get a lot of orders for thalis, which is something new that we have tried to design,” explains Bhograj. 

The company’s products have also found unlikely customers in trekkers. Bengaluru-based Indiahikes was one of Earthware’s first customers and uses its liners in portable toilets. The often rough terrain and climate on arduous treks made waste disposal difficult, says Indiahikes’ Green Trails co-ordinator, Izzat Ansari. “We didn’t know of any company that made 100% biodegradable plastic bags before we found Earthware. We make the trekkers pay for the bags (₹100 for 10 bags), which we sell to them at cost price.” Another customer group is MNCs and residential associations in Bengaluru, which make up the bulk of Earthware’s clientele.

Currently, Earthware’s biggest crowd-puller are its bin liners, which degrade in a compost in 45-180 days. The raw material for the bags, which bring in 65% of revenue, takes two weeks just to dry and process while cutting and other aesthetic processes take a little more time. It takes three hours to make 50 kg of bags, which are later sold by the kilo. Earthware also sells the bags to environmentally-conscious residential associations at ₹150 for 30 bags. That’s several times the cost of regular plastic bags, which retail at ₹30-60 for 30 pieces. So, in June, the company started offering bin liners to residential associations at subsidised rates in exchange for old newspapers, which, in turn, are being recycled into carrybags. The initiative is still at an experimental stage, explains Bhograj.  

Taking root

Earthware is now looking to scale up. In the next six months, the company’s own manufacturing unit at the HMT Industrial Estate at Jalahalli in Bengaluru will be operational. Built at an investment of over ₹30 lakh, which will also be funded by Vishnu Forge Industries, the unit will have the capacity to make 2-5 tonne of bioplastic products every month. Bringing manufacturing in-house will also help keep costs under check, Bhograj hopes, and help make Earthware’s products more affordable. As things stand, she admits, competing with the existing plastic market is not an easy task. “Considering the cost, it is difficult for us to ask a shop to sell our products,” she says.

Still, Bhograj is exploring launching new products, such as covers for rubber saplings in plantations as well as bioplastic coffee mugs and toys. “There are opportunities within the plastic business and in terms of eco-friendly wares as well. The whole disposable plastics range can be replaced by eco-friendly products. I do see growing consciousness among people, from simple things such as refusing to use plastic carry bags to composting waste at home,” she says. 

Bhograj is also optimistic about the demand increasing for the product over time. “Our philosophy is that of ‘From the earth and back’. We want to teach people to reduce their consumption of plastic, if not stop it altogether.”