Mumbai 5 March, 2011.

Tie Entrepreneurship honour award to Satyajit Kumar

“Absolutely, 100%” seems to be Satyajit Kumar Singh’s stock response to many questions. The upbeat tone of his voice is in some sense a reflection of his Patna-based firm Shakti Sudha Industries’ journey.

Started nine years ago, Shakti today procures makhana (fox nut/gorgon nut) from 18,000 farmers, mostly in Bihar. “Every year, we add 2,000-2,500 farmers,” says Singh.

In 2010-11, Shakti pays the farmers Rs215 per kg of makhana. Makhana is a common ingredient in the north and west India cuisines. It is also said to have numerous medicinal properties.

“We sell both raw makhana and value-added products such as flakes, pop and kheer mix for Rs315-380/kg to mandis such as APMC (Agricultural Produce Market Committee) in Vashi,” he said.

He also mentions that for every 10 kg there is wastage of 2-3 kg, trying to tone down the seemingly huge profit margin. “The cost of logistics is high.”

Punit K R, a farmer from Gangoli Kanakpur in Darbhanga district of Bihar, feels fortunate to be associated with Shakti. Before joining Shakti, he was seldom paid well. “If I trade in the bazaar, it will fetch me only Rs160/kg and the payment is also not upfront. Whereas, Shakti Sudha pays immediately,” he says. Shakti doesn’t do business with big retail chains for the same reason.

“They want 60-70 days’ credit which is not possible,” says Singh. Shakti aims to promote makhana farming, which requires at least two feet of water to grow in. Bihar accounts for 90% of the world’s fox nut production.

“We cover 35% of Bihar and that region alone has a capacity of 60,000 mtpa (metric tonne per annum),” says Singh. Traditionally, Bihar used to have about 1 lakh hectare (or 2,40,000 acre) under makhana cultivation. But, in recent years the number has dwindled.

According to a study by IFRPI (International Food Policy Research Institute), in Purnia and Katihar districts, 23% more land has been brought under cultivation.

Shakti, with a staff of 180, now operates in 11 other states in the north and east of the country and eyes Rs50-60 crore turnover this fiscal.

“Funding is a problem for expansion. We will approach investors in a year,” Singh says. Apart from funding, Shakti has to put in place an efficient distribution model to engage with retail giants. Shakti is planning to start trading in mustard oil from next year. “The mustard oil market is worth Rs1,200 crore. Rajasthan produces about 90% of the commodity,” says Singh. There is no reason why Shakti can’t emulate its makhana success in mustard oil.