Good Businesses 2014

When you got to go, you got to go

Eram Scientific is setting up affordable self-cleaning toilets across Indian cities

Vijayan has been working as a waiter at the Ammachi hotel in Pettah, Thiruvananthapuram, for the past 14 years. For the past couple of years, he is a regular user of a contraption that has come up near his eatery. Not only that, he evangelises to the many who frequent his eating joint to check it out as well. What Vijayan raves about is a basic necessity that many of us take for granted and surely cannot do without. But for many of his regular customers, such as taxi driver Sivadasan, head loader Mohan, tea stall worker Thulaseedharan and fish-vendor Rafeeque, who frequent the Pettah market, it is no less than a boon.

Vijayan is at work from 6.30 in the morning till 10 in the night and hence the electronic public toilet (eToilet) installed near Pettah railway station is a source of great relief for him. He says, “Earlier, I used the facility at the Pettah railway station, where the contractor charges ₹3 to use the urinal and ₹5 to use the toilet, but here I only have to pay ₹2.” This price differential has resulted in the eToilet getting shitloads of business. But there is so much crap waiting to be offloaded that the toilet contractor
at Pettah railway station has barely noticed this steady leakage of potential crappers.

It is not only hotel waiters, taxi drivers, loaders and tea stall workers who are benefiting from the eToilet, which is accessible 24 hours; others are experiencing unintended benefits too. Unni at Kanaka Nagar and Mariam at Shangumugam beach use the eToilets near their shops and get frequent sales from customers who need coins to access the eToilet.

These eToilets are the handiwork of Thiruvananthapuram-based Eram Scientific, a company which started life as Dea Celara, itself an R&D arm of Rain Concert Technologies, started by MS Vinod along with his friends. When Vinod started exploring the potential of an eToilet in 2008, he approached a lot of investors. One of them was the Saudi Arabia-headquartered Eram Group founded by Siddeek Ahmed. Originally, Rain was looking for funding of ₹50 lakh but Ahmed was convinced that ₹50 lakh would burn out in no time without delivering any tangible output in a challenging field like sanitation. Ahmed favoured a long-term approach that would gradually increase the sanitation footprint in the country. Much against the advice of many an advisor, he decided to buy a majority stake and the company’s name was changed to Eram Scientific. 

Poop trouble

In the beginning, users were wary of the electronic toilet. The fear was multifold — is somebody watching us in action? What if the door opened in poop mode? What if we get stuck after our business is done? To improve overall design and to alleviate user apprehension, the eToilet has undergone about 400 modifications so far and the current eToilet is the fifth iteration. The appearance of the sensor was modified so that it did not resemble a closed circuit camera. To address the fear of getting locked in, Eram changed entry to access control and made the exit manual.

Women users had their own apprehension. While Eram was keen on locations with high footfalls, it created its own problems. Though women did want to use the eToilet, they did not want to do so in a very public place with its fair share of gawkers. To address that, Eram added an advertising layer to create the illusion of private space. It is an entirely different story that in the beginning they did not get anybody to advertise on the eToilet. If you are still interested, a local textile merchant was the first to sign up.

An even bigger step to gain the confidence of women users was creating women-only toilets in partnership with the Kerala State Women’s Development Corporation. The so-called She-Toilets are currently operational only in 23 locations in Kerala, with a further 25 to be installed. These toilets also have a sanitary napkin vending machine and incinerator.

Then, getting service engineers for the eToilets was a problem too. A much repeated observation is that a Keralite will do anything outside Kerala but within the state, they want to do only white collar jobs. The focus among those being interviewed to service the eToilets was more on toilet than on ‘e’. Hence, in the beginning, Eram had an extraordinarily hard time getting people to work with them.

The eToilet was a hardsell not only among its intended users and service engineers, but also among the gentry. To raise the profile of the first eToilet in Thiruvananthapuram, a minister was invited for the inauguration. The minister agreed to grace the public function, only to back out at the last minute citing that inaugurating a toilet was infra dig. All this while, Ahmed and the rest of the management were waiting for the minister in 40° heat. 

Plug and poo

Eram’s approach, in a way, is very similar to what other retail businesses do. It looks for high footfall areas that are starved of or have inadequate sanitation facilities. Location scouting is near busy areas such as public market, gardens, temples, etc. It then approaches the local municipality to install an eToilet there. The biggest difference is that for most retailers, not every walk-in converts to a sale. For Eram, however, every walk-in is a foregone sale. 

The user relief that follows might be relative, but in Eram’s case, it also tries to ensure a delightful customer experience time after time. But for the final wash, almost every process in the toilet is automated. “An eToilet has to be like an ATM that is self-operated at all hours; entry should be automated and the structure stable and safe,” says Ahmed. Along with a floor washing system, there is an automatic flush cycle, which is activated before and after use. To conserve energy, the light and fan turn on only when the user steps in. 

Depending on how the eToilet has been configured, one can either use a ₹1, ₹2 or ₹5 coin to access it. Some eToilets, such as those in Tamil Nadu, have free access as the government there wants to keep it free, but largely, a minimum charge is levied to service the annual maintenance contract (AMC). The eToilet has an expected life of 10 to 15 years and can handle about 50 to 120 users a day. For now, the installed eToilets sees traffic of 70 to 80 users per day. Eram not only installs the eToilet, which takes about a day and occupies 35 square feet, it also assists in maintaining them through AMCs. Anvar Sadath, chief executive officer, Eram Scientific, says, “The AMC comes in different options, such as a monthly payment for cleaning support and technical maintenance or for spare replacements and support on need basis. A typical AMC would be about 18% of the unit cost of an eToilet.”

In order to ensure that the eToilets are functioning properly, they are linked through a GPRS-based remote monitoring system.  “The service engineers can’t rush to all the locations, so we built a central system that tells us if a particular eToilet is working properly, how many transactions occurred, what is the footfall, at what time, what is the water condition, etc. If the water level hits the low mark, it is communicated via SMS to the service engineer and the head office,” points out Sadath. For the last two years, that the system is in place, it has led to savings in time and man-hours and an improvement in service quality. 

Poo fighters

Besides the ₹20 crore that Ahmed has pumped in so far, he has helped Eram lever its reach to get technical collaborations and also pushed the company to participate in the Reinvent The Toilet Challenge (RTTC), an initiative of the Bill & Melinda Gates Foundation, that seeks to eventually build a toilet that is self-sustaining and does not depend on the grid for water or electricity nor emits any pollutant.

Eram eventually went on to become the only Indian company to win a grant for research as well as prototype testing. The BMGF grant has played its own role in raising the profile of Eram Scientific. Through the Gates Foundation, Eram has been able to partner with other grantees of the RTTC. Eram is collaborating with the California Institute of Technology (Caltech) and Duke University to integrate various models of eToilets with their waste treatment and anaerobic treatment system respectively. The Caltech field trial is on at Ahmedabad, while the one with Duke is on at Chennai. The ultimate aim is to make the eToilets self-sufficient in water and energy requirements. Another collaboration with the University of South Florida aims to develop cost-effective and sustainable eToilets for slums.

Ahmed is eager that the cost of the school eToilet model, currently the cheapest at ₹1.94 lakh, be brought down to ₹1 lakh. (In Kerala, the other two models, mild steel and stainless steel, cost ₹2.8 lakh and ₹3.7 lakh respectively) That in itself is a challenge because inputs costs, such as that of steel, have been rising and the company already manufactures the cheapest eToilet in the world. The only way out could be a subsidy — government and/or private — and through the reduction of excise or import duties. There is a 25% import component with parts coming in from Canada, Germany, Italy, China, etc.

As a cost-reduction technique, Eram is exploring local manufacturing of the sewage treatment plant (STP) that it uses in its eToilets, to save on import duty. In the STP that is currently imported from Italy, solid waste is turned into liquid and an internal filtration process takes over; the water thus processed can be used for floor washing or gardening purposes. Ahmed says going ahead with the plan could mean a fresh investment of ₹100-150 crore in the next couple of years.

While the primary demand could come from stationary locations such as houseboats in Kashmir or the railways, standalone households could also be a big market. “The current system is to dig a pit and let it stagnate. Earlier, the houses were spread far and wide and the distance between the well and the septic pit was not a big issue. But now, houses are next to each other, so your toilet could be leaking into somebody else’s well and that creates the danger of E coli,” adds Ahmed. 

Eternal crap

In order to achieve operational break-even, Eram is actively scouting for opportunities outside Kerala. More interest is being evinced from Maharashtra, Delhi, Gujarat and Punjab. The management is confident of tripling sales from ₹4.2 crore in FY14 to around ₹15 crore in FY15. It has achieved sales of ₹3.2 crore thus far in FY15. “The model has changed in FY15; it takes less time to fabricate and install, takes up less space and components have reduced from 2,000 to 234,” explains Sadath to support his claim of faster execution. The next biggest concentration of functioning eToilets after Kerala could soon be Bengaluru, where another 70 eToilets are soon to be installed. This is in addition to the eight already in operation.

On the surface, Eram may be creating a sanitation facility, but dig deeper and you realise it is not just about the lack of toilets. It is also about dignity of labour associated with those cleaning toilets and the associated health risks that arise, especially for women, owing to non-access to clean toilets. While Eram has experienced user apathy at no less a cosmopolitan city like Bengaluru, where water faucets are pulled out and sticks inserted to stop the water flow, there is also the encouraging story of taxi drivers in Kannur who take care of the eToilet as if it was their own. “It is their only convenient option and they make sure there is no misuse. They call up even if there is a minor issue; that kind of ownership also does exist,” says Sadath.

As for Ahmed, he takes immense pride in the fact that, as a result of the 105 eToilets installed in government schools, kids who used to return home with full water bottles no longer do so. That, in itself, is good reason for Eram Scientific to stay put in this satisfyingly filthy business.