Over the last few years there has been an increased focus on infrastructure sector by the government. While Smart Cities is one of the major initiatives, the sector continues to attract investments in areas like construction of state and national highways, rural roads, railways, irrigation and water supply projects and town and country planning projects. Growth in infrastructure also means growth in construction equipment industry. Last two decades have seen the construction material/equipment industry grow in size and diversity.

RCC Hume Pipe is of utmost importance in infrastructure and has no genuine substitute for the product. Mekalsuta Cement Pipe Industries, started in 2007-08, is a RCC (Reinforced Cement Concrete) Hume Pipe manufacturing company based in a remote district of Madhya Pradesh called Dindori—recognised as India’s first Tribal Habitat District. The district is home to Baiga tribe, which is found only in Dindori and is most vulnerable.

Challenges

Establishing a business in tribal district like Dindori had multiple challenges. Mekalsuta faced a lot of resistance from the locals as well as from the government. The demographics of the location also did not make things easier to run the business. There was lack of basic amenities like electricity, water supply and poor road infrastructure and non-availability of skilled or semi-skilled workers made matters worse. Land availability was an issue as most of it belonged to local tribals and were unwilling to sell-off their land as they saw outsiders as a potential threat. There was also harassment from local politicians which directly impacted the smooth running of the business.

Being located in a remote area also meant poor access to banks and also their unwillingness to take the risk. Credit availability for raw material was almost negligible and recovery of cash was a long process, which often resulted in cash crunch.

Another challenge in rural areas was shortage of necessary items as power, water and modern day manufacturing technology, which resulted in poor demand expectation.

Solution

The land woes were overcome by leasing of one of the owner’s land for 15-years. This ensured commencement of operations and also smooth running as there was no further ruckus by the locals. Further, employment and training imparted to tribal people also meant that they were dependent on the business to earn their wages on a regular basis. The capital requirements were taken care of by mortgaging property to the bank. Since the standard manufacturing process could not be applied as such in the unit, the manufacturing process was customised (with Jugaad technology), which could work in such adverse conditions for production of RCC Hume Pipes.

The company provides jobs to around 30 rural individuals as semi-skilled labourers and clerical staff and has made them stakeholders in the
business activity.

For an organisation located in a remote district, ICT is an effective tool to increase the visibility and brand awareness amongst customers. It has resulted in making business processes more transparent leading to paperless documentation. The market outreach has also become easier.

Growth Factors

Since majority of large-scale projects are driven by the government, product recognition in that sphere becomes all the more necessary in order to increase the sales. Business development is key towards achieving this goal and a highly skilled team of marketing individuals can promote the product.

Being the tribal habitat, no one was willing to provide services due to huge demographic challenges. Mekalsuta took the challenge as an opportunity and converted it into an enterprise. To distinguish oneself from the competitors in the market, Mekalsuta appropriately positioned itself in the potential market with less competition and established its brand by maintaining quality standards to the nearest IS Codes. This has not only widened the scope of work, the company would have on offer, but also increased the sales of existing products because of newer customer base that got created as a result thereof.