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Report | August 2018

"Our machine is compatible with different types of raw materials"

Saral Designs, which works on increasing access to high-quality sanitary napkins through “Swachh”, has sold machines to local entrepreneurs and NGOs and over two million sanitary napkins across India, Bangladesh and Namibia. The company’s CEO - Director, Suhani Mohan speaks on the salient features of “Swachh” machines, and how Make in India has progressed in this segment.

Excerpts...

Take us through the journey of Saral Designs over the years.
Saral Designs, a Mumbai-based start-up, working on increasing access to high quality sanitary napkins through “Swachh” – an automatic sanitary pad making machine designed and developed in-house. Founded in 2015, our aim is to create a better future in menstrual hygiene and sanitation using product design, machine technology and innovative delivery mechanisms.

Since our inception in 2015, we sold 10 Swachh machines to local entrepreneurs and NGOs and over two million sanitary napkins across India, Bangladesh and Namibia. We have more than 40,000 customers and have engaged with over 100 women who are our door-to-door sales partner for last mile distribution. We have also partnered with more than 30 non-profit organisations in the space of education, health and sanitation to increase awareness about menstrual hygiene and sanitation.

In the areas we operate, we have more than 10 per cent market share of the existing market and 15 per cent of our users are first time pad users with a retention rate of >40 per cent. Some of our customers have now become our sales women and menstrual hygiene advocates in their communities.

We are the winners of the National Entrepreneurship Award (MSDE) in India, Millennium Alliance Award by FICCI, Maharashtra Startup Innovation Award (MSInS).

Coming from a background of materials science, machine design, development sector and investment banking, Saral’s founders—Suhani Mohan and Kartik Mehta—bring the right skills to disrupt the hygiene market using machine technology, a unique business model and the right empathy to drive a social behavior change for women.

Saral Designs is into high-quality sanitary napkins manufacturing technology. What are the advantages and benefits of your company’s machines over that of other competitors?
In India, despite there being several organisations working on menstrual hygiene, the challenges around accessibility and affordability have not been resolved yet because:

  • Multinationals produce high quality pads centrally, but with several levels of distribution, the cost of the pad increases by 40-60 per cent and availability in remote regions is low. Their initial cost of setup is extremely high, which makes the break-even point harder to achieve. To overcome their high expenditures, they keep the price of the sanitary napkins high, making it unaffordable for a majority of the population.
  • Small scale manufacturers have made pads affordable, but due to lack of adequate scale of production and machine technology, the quality of the product is inconsistent, often bad and the unit economics per pad is unhealthy for sustainability. Due to the poor quality, retention of customer base is also low.
  • At Saral Designs, we are working towards bridging this gap through our smart, automated and distributed manufacturing technology, developed in-house - “Swachh”. The machine has been designed by our engineers and the quality of pads it produces matches that of established brands using extremely expensive machines. Instead of one huge, central plant, we plan to set up small plants in different districts, cutting down the cost of distribution. Each machine produces 16 pads per minute and can produce up to 4.5 lakh pads per month. This scale of production has a significant advantage over other semi-automatic handmade pads which frequently run into cash flow issues due to poor unit economics and produce poor quality products. With an extensive network of such machines, we will be able to provide an adequate quantity of our product to every community. This model ensures our sanitary pads have a better reach that other companies fail to achieve, creates awareness on menstrual hygiene in BOP areas and enables local businesses.

    How are your sanitary napkins different from the ones manufactured by other top multinational corporations?
    The pads produced by Swachh compare to the best multi-national products (in terms of absorbency, dry feel, finish) in the market and are half the price. These pads do not have harmful additives of colours and perfume. The pads come in a bio-degradable disposal paper with instructions on usage, disposal and healthy practices during menstruation. The pads not just have better functionality than all low-cost pads currently in the Indian market, but also communicate health benefits and are aesthetically attractive for the women wanting to buy these pads. The product design leads women towards proper usage and disposal but also drives the willingness to pay which is critical for long term sustainability of the programme.


    What are the salient features of the “Swachh” machines?
    We have developed two kinds of sanitary napkin making machines:

  • Swachh Automatic is the world’s first ultra-thin sanitary napkin making machine at a decentralised scale. The machine is automatic, flexible and easy to use. It has the capacity to produce 4.5 lakh pads every month. The machine will roughly require a 2,500 sq ft space and up to five people managing the production. It can produce multiple types and sized of pads (R, L, XL, XXL) depending on the need of the customers.
  • Swachh Semi-Automatic is India’s best small scale semi-automatic sanitary napkin making machine. The machine is robust and easy to use. It produces over 1.5 lakh pads in a month, requires up to 1,500 sq ft space and seven people managing the production. It can produce multiple types and sized of pads (R, L, XL, XXL) depending on the need of the customers.
  • Along with the machine, we also provide a vast range of support services including – raw materials supply, market linkages, custom requirements, training and mentoring. We are a one-stop solution for all those who want to start a FemCare enterprise.

    Biodegradable sanitary pads are the latest trend. What is Saral doing in this regard?
    Our machine is compatible with different types of raw materials. Understanding the need of the hour, we have partnered with a raw material supplier for replacing plastic with oxo-biodegradable materials, which degrades in compost environment in 2-3 years. We are also constantly looking out for new innovations in the raw materials for sanitary napkins and upgrading our machines to have the capability of adapting with changing needs of women and the environment.

    Awareness on sanitary napkins is still low in rural areas. What do you think is the real problem? What are the solutions?
    Menstruation is still a taboo topic in India. Women and girls are unaware of this natural phenomenon, because we don’t openly talk about this issue. There are several myths and cultural practices associated with menstruation, making it difficult to bring about a behavioral change among people.

    Knowing how important it is to educate women and girls about healthy menstrual hygiene practices, our business model focuses on door-to-door services at the last mile, which is very different from the models that large and small scale companies follow. After comprehensive training sessions with our team on MHM, a “Sangini” (trained village women for sales and awareness creation) provides sanitary napkins and organises awareness camps for women in her village, while earning a substantial margin on each packet she sells.

    This business model makes sure that our product has a better reach in remote areas, creates awareness on menstrual hygiene and health in rural areas, and also provides income to the families of the Sanginis, hence bringing change to the community holistically.

    What are your views on the GST rate on sanitary napkins that’s fixed at 12 per cent?
    A lot of medical products have now been exempt of tax or have a lower tax incidence. Sanitary napkins are still categorised under miscellaneous products and a separate argument always needs to be made because of this categorisation.

    The challenge is that zero tax slab on sanitary napkins will result in complete denial of input tax credit to manufacturers. To elaborate, if the tax on raw materials used in sanitary napkins is still under 12-18 per cent GST rate slabs then making sanitary napkins in zero tax bracket alone will not solve the problem. Since the manufacturers will lose on their input tax credit, there will be no cost advantage to the manufacturer which, in effect, will lead to no reduction on the final MRP of sanitary pads.

    However, if we can reduce the tax slab of pads from the current 12 to 5 per cent manufacturers can get input tax credit which may help in reduction in prices.

    Of course, it is up to the manufacturer if they would want to pass the benefit to the consumers or not. But in this competitive market even if one manufacturer decides to pass on the benefit to the consumers the rest will have to follow ultimately bringing down the price of the pads.

    How do you think Make in India has progressed in the segment that your company deals with? What are your suggestions to give a boost to this revolutionary concept of Make in India?
    In the menstrual hygiene sector, there have been more than 1,000 of micro businesses and NGOs, who have set-up manual machines for making pads.

    But due to inefficiencies in the model and poor quality, they are unable to compete with international brands. In my opinion, Make In India is about boosting local manufacturing and creating job opportunities – not by subsidies or discouraging import, but rather, by making our own manufacturing efficient to be able to make products that can give a tough competition to international brands. For this, backward integration from setting up manufacturing of pads, to making customised machines for the Indian market to producing raw materials locally, is what will bring benefits of localisation to the sanitary napkin industry.

    China’s market penetration of sanitary napkins grew from less than 20 per cent to more than 60 per cent in a span of 15 years. This was because hundreds of local manufacturers started producing pads, making production innovations and branding as per local needs. We are very soon going to hit the tipping point in India with Make In India for this sector.

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