PROFILE OF A START-UP

REMATERIALS - The Next Big Thing In Affordable Roofing?

Submitted in partial fulfilment of the requirements of the course

CREATIVITY, INNOVATION, KNOWLEDGE NETWORK AND ENTREPRENEURSHIP (CINE)

To

Instructor: Professor Anil Gupta

By

Vignesh Labam (PGP13390)

Date: January 18, 2015

Indian Institute of Management Ahmedabad

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TABLE OF CONTENTSINTRODUCTION:.............................................................................................3

BUSINESS MODEL:........................................................................................3

WHAT MAKES IT A SOCIAL ENTREPRENEURSHIP:...................................4

COMPETITION ANALYSIS:.............................................................................4

CHALLENGES FACED:...................................................................................5

ROAD AHEAD:.................................................................................................6

CONCLUSION:................................................................................................6

EXHIBIT 1: PRODUCT PERCEPTION............................................................7

EXHIBIT 2: PICTURES OF PILOT SITE..........................................................8

EXHIBIT 3: TYPICAL URBAN SLUM SITE......................................................9

EXHIBIT 4: WATERPROOFING OF THE PRODUCT...................................10

EXHIBIT 5: TEAM WITH THE PRODUCT.....................................................11

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INTRODUCTION:

Rematerials is an organisation that was founded by Mr. Hasit Ganatra, a

serial entrepreneur, in collaboration with University of California, Berkley and

United States Agency for International Development. The vision of the

organisation is stated below:

With major research work being carried out in a facility at University of

California, Berkley, mass production and market testing are being carried out

in India. Rematerials strives to make roofing cost-effective from sourcing raw

materials like rejected materials like disposed paper, coconut fibres, etc. The

firm has a facility in Ahmedabad, Gujarat in GIDC area.

BUSINESS MODEL:

In the quest for an alternative to concrete, Rematerials have come up with the

solution of recycled paper-based roof tiles. Using cardboard paper-mache and

coconut fibre, they make rectangular tiles of 2 ft. x 2 ft. which could fit on the

houses using a framing structure. These tiles would interlock with each other

and have the qualities of protection from heat, rain and sturdiness. Currently a

consumer going for roofing solution has primarily two options, a concrete slab

($10/ Sq. Ft.) or tin/corrugated cement sheet ($1-1.5/ Sq. Ft.). There is not

mid-range option available which can be better than cement sheets but not as

“ReMaterials develops and utilizes innovative materials with the goal of

providing superior shelter for slums and villages in the developing world.”

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highly priced as concrete slab. Rematerials aims at providing such an option

to consumers, with better insulation from heat and water proofing ability than

sheets at a lot lower price.

WHAT MAKES IT A SOCIAL ENTREPRENEURSHIP:

The product has a lot of attractive characteristics such as modularity,

durability, cost to benefit ratio and ability to easily replace. These

characteristics in a roof command a huge price premium in the market.

However, the founders have taken a conscious decision to price it between a

concrete slab and a corrugated cement sheet. This price is just enough to

sustain the business and carry the operations forward without facing any

financial liabilities. This price is not unaffordable by the people from the

targeted segment i.e., slum dwellers.

The raw materials used in the business are paper cardboard and coconut

fibres that are disposed in the environment as typical industry and domestic

waste products. The firm utilizes these disposed materials to ensure an

environmentally sustainable model. Thus the firm leaves behind lesser carbon

footprint.

These aspects of the business illustrates that the venture is indeed a social

entrepreneurship.

COMPETITION ANALYSIS:

The main competition in the industry comes from corrugated cement sheets,

concrete roofing and corrugated plastic roofing. The industry is pretty

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unorganised and the main influencer for the decision is the contractor. The

house-owners do not have any contact with the vendors of different alternate

products and hence depend on the contractors to guide them. The corrugated

cement sheet and plastic sheet are the cheapest options for urban slum

dwellers. However, these products are available in the sizes of 4ftx10ft and do

not have modularity. When a small hole occurs at one point of the sheet, it

becomes really difficult to replace it. Hence these house owners have to block

the hole with plastic paper etc.

The cement roofing is bit more expensive alternative form the corrugated

roofing. They last longer and people who can afford it will always go for this.

However, when it comes to the scale of usage, it is very low in urban slum

areas. Many two storeyed building have concrete roofing for their first floor

and corrugated roofing for the second floor.

CHALLENGES FACED:

The major challenges faced by the business are as follows:

1. People’s mentality is fixed inside a very narrow list of alternatives when

it comes to roofing. Awareness of such a product is the first issue.

2. People are very sceptical to use a new product in their houses. This

nature of doubt is quite natural and as the penetration increases, the

scepticism around the product would also slowly fade away.

3. The financial affordability of the target segment is quite low. Expecting

them to spend on a house while their daily survival is in question is an

ambitious target.

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ROAD AHEAD:

1. The firm has to bring awareness to the target segment in terms of

word-of-mouth, pilot sites, goodwill, social projects, etc. A move away

from traditional advertising and towards community advertising would

help increase visibility in this profile.

2. The target segment is highly sceptical about new products and this has

to be removed through proof. Pilot sites and roofing for open sites (like

colony hall, verandas) can be a good method to increase the reliability

in the product.

3. Alternate financial arrangements such as monthly instalments, pay as

you use model have to be developed to facilitate those interested in the

product but cannot afford them at one go.

CONCLUSION:

In conclusion, Rematerials is a social venture that has taken up a goal of

providing affordable roofing to the urban slum dwellers by reusing disposed

materials. The product is unique and tries to bridge a price gap in the industry.

The do face some challenges from the competition of cement roofing,

corrugated roofing, etc. However with right approach in marketing schemes

and financial plans, Rematerials can be a beacon of social entrepreneurship.

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EXHIBIT 1: PRODUCT PERCEPTION

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EXHIBIT 2: PICTURES OF PILOT SITE

8

EXHIBIT 3: TYPICAL URBAN SLUM SITE

9

EXHIBIT 4: WATERPROOFING OF THE PRODUCT

10

EXHIBIT 5: TEAM WITH THE PRODUCT

11