Light in Varanasi

Varanasi is a very old, very holy city in the eastern part of Uttar Pradesh, India. Named after two of the rivers, Varanu and Assi, flowing into the Ganges, Varanasi, to me represents all of India. A drive through the city unveils all aspects of the country—modern cars, modern buildings, but in small proportion to the masses of hindus, muslims and others using every form of transportation; construction everywhere; the small shops which become dwellings at night; the cows, oxen, pigs, goats, dogs wandering on the streets and occasional monkeys on window sills; families of five on a motorcycle, with only the driver wearing a helmet; groups of seven or 8 in a three-wheeled motorized rickshaw. tuk-tuk or auto depending on the namer’s provenance; horns, the essential driving accessories, blaring as two lanes become 4 or 5. As one crosses the Ganges and heads toward the villages outside of the main city, the rural character of the country exerts itself immediately. Brick, wood, straw and mud homes in clusters sit adjacent to very dry rice fields with ¼ acre rectangles surrounded by 8 inch high embankments waiting the beginning of the monsoon season.
Last year the monsoon season arrived late producing a smaller first crop and lower incomes. This year the season is expected to start early—good for the farmers, not necessarily good for the primary purpose of our visit. We, http://www.duronenergy,com, are selling a solar home lighting system with three LED lights and a cell phone charger. Six to eight hours of sunlight or a charge from the grid when it is working, provides six to twenty hours of light at three locations, depending on the intensity of light needed. It can also power a fairly robust fan for several hours. With electricity from the grid undependable at best and kerosene in use where the grid doesn’t reach, some form of clean light is needed for safety, security, health and, maybe most importantly, education. Two hours studying under a kerosene lamp is all a child’s eyes can take—forget about the long term impact on his or her health.
However, while the next month is prime season for us, the approach of the monsoon season raises questions about whether there will be sufficient sunlight to charge the system. The need may be greater as school begins and the grid becomes even less reliable. But the sale is a bit tougher. We have a dealer network with shops in the small towns that the villagers come to for a variety of goods, but a solar system at 6000 Rupees is not a drop-in sale. So we have the equivalent of Avon ladies or Fuller Brush men going door-to-door and village-to-village occasionally accompanied by a marketing van—not too different from a traveling medicine show. We are not selling elixirs, but something a bit more tangible. We also, fortunately, have a regional bank with branches in most of the locations we are interested in. The government is providing the banks with incentives to finance alternative energy systems. Ours has been a hit with this bank. It helps that the distributor, who manages the dealer network, has worked with the bank to finance his other product line–three-wheeler motorized rickshaws using CNG as the fuel source. He is already selling a product that is more efficient, produces fewer emissions and provides a higher level of income to the buyers. He is excited about another alternative energy product. While the ticket on the rickshaw is higher, sales don’t occur every day. The solar home system, with the right support, will keep his dealers busy and substantially increase their income. As one can tell, this is early days on retail consumer durable distribution in India. Whoever cracks this nut has a big business.

This entry was posted in Alternative Energy, India and tagged , , by Jack Rivkin. Bookmark the permalink.

About Jack Rivkin

Jack Rivkin retired in 2008 as EVP, CIO, Head of Private Asset Management of Neuberger Berman(NB) and from NB's Executive Management Committee. He was also on the Lehman(LB) Council on Climate Change(CC) and the NB CC Fund Advisory Board. He has been engaged with the United Nations and other entities on policy issues related to Private Capital and CC. He is an Associate Fellow of the Asia Society. He has continued on the NB Mutual Fund Board and with his CC responsibilities. He began his investment career in 68 as an analyst at Mitchell Hutchins(MH), and became Director of Research(DOR) there. After Paine Webber(PW) acquired MH, he served as DOR; CFO of PW; CEO of PWMH-the equity trading and investment arm of PW; Chmn of MH Asset Management and President of PW Capital. 87-92 he was DOR and, subsequently, Head of the Worldwide Equities Division of LB. 93-95, he served as a Vice Chairman and DOR at Smith Barney (now Citigroup). He was an EVP with Citigroup Investments 94-01, responsible for private equity investments. He was also an adjunct professor at Columbia University teaching a course in Security Analysis. He joined NB in 2002. He is the co-author of “Risk & Reward—Venture Capital and the Making of America’s Great Industries,” Random House, 1987. He is a regular guest on various media. He is the principal subject in a series of Harvard Business School cases describing his experience as DOR and Equity Head at LB. He has served as a director of a number of private companies and the NYSSA. He is currently a director of Idealab, Dale Carnegie, Operative, World Policy Institute and other private companies. He is a member of the Economic Club of NY, the Anglers Club, Theodore Gordon Fly Fishers, and a lifetime member of Trout Unlimited. He continues to be an active private equity investor when he isn’t fly fishing. Mr. Rivkin earned his Professional Engineering degree from the Colorado School of Mines and his MBA from the Harvard Business School

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