Government Sanitary Napkin Scheme Threatens BoP Innovator
Last month, the Indian Newspapers were all ablaze with stories of Indian Government rolling out a massive national scheme under which they will provide the women in rural areas with sanitary napkins. While the exact details are unclear, women below the poverty line will be provided with the napkins free of charge where as the rest of the rural women will be charged Re 1 (.02 USD).
This is clearly a great step towards the end goal. However, there’s a 48 year old Coimbatore resident, A. Muruganatham, who isn’t smiling.
A. Muruganatham and his invention, a machine that can churn out 120 sanitary napkins an hour, has been creating a lot of waves in the developmental sector. A high school drop out, Muruganatham created his machine after realizing that there was an immense need for low cost sanitary napkin at the base of the pyramid. According to him, it costs just about 1 rupee (0.02 USD) to produce these napkins and the machine itself costs Rs 66000 (approx USD 1500).
India’s National Innovation Foundation (we covered them earlier here & here) came to Muruganatham’s aid and helped him scale his idea by inviting more and more SHGs to buy his machine as well as spreading the word. He has also obtained a patent for his invention, something which he is really proud of. He has received offers from large corporates to buy his idea, but he’s adamant on passing on his technology to only SHGs, women’s cooperatives, NGOs and avoids corporates.
Muruganathan spent close to 4 years researching sanitary napkins and has worked on the nitty gritty details to make his product adhere to the world standards.
He has sold over a hundred of his machines to women entrepreneurs all over India. Further more he emphasizes that using his machine, the napkins can be customized to the size of heavier women as well, a service that the major corporations don’t offer since they deal in bulk quantities. State Governments of Maharashtra, Uttar Pradesh have also struk a deal with him. He’s also started getting offers from Ethiopia, Sri Lanka, and Kenya. The US-based Massachussets Institute of Technology (MIT) has placed orders for his machine, which they plan to use in Bangladesh.
Assuming the napkins are sold at Rs. 1, the project will cost the government a minimum of Rs. 2000 crore (USD $400M) and cater to 200 million rural women. Muruganatham argues that 100,000 units of his machine can be bought for less than half the cost (approx USD $140M) and as a result provide employment to over 1 million women. He further adds that if the government would sign an undertaking saying that they would buy the napkins churned out by his machine, the banks wouldn’t hesitate to give loans to SHGs to buy his machines. This way the government wouldn’t incur any capital costs.
Furthermore, MFI linkages could also be used to market this product and deliver it at doorsteps. This would effectively reduce the number of supply chains, decrease middle men and bring the overall costs further down.
In an earlier post of mine I had stressed on the importance of involving the masses (especially rural) in production.
According to P C Vinoj Kumar, a journalist who was until recently working for Tehelka, the two major players in the Indian sanitary napkins market are P&G (who own the Whisper brand) and Johnson & Johnson (who own the Stayfree & Carefree brands). He says that the Government will most likely strike a public private partnership with them or a third player, Kimberly Clark Lever (a JV between Kimberly Clark & Unilever).
“What really ticked me off was when I heard that the Government was providing these napkins at a highly subsidized rate. This would mean that it would buy those napkins at a higher cost from elsewhere. What is the need of that, when my technology provides with a similar product at a cheaper price and at the same time generates a lot of rural employment,” says Muruganatham. Muruganatham laments that the newly announced central government scheme apart from involving a lot of corruption, will effectively kill an innovation that has the potential of providing employment to millions of Indians, especially women.