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Designing the Next Generation of Sanitation Businesses

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Designing the Next Generation of Sanitation Businesses DESIGNING THE NEXT GENERATION OF SANITATION BUSINESSES A REPORT BY HYSTRA FOR THE TOILET BOARD COALITION - SEPTEMBER 2014 SPONSORED BY Authors Contributors Jessica Graf, Hystra Network Partner Heiko Gebauer, Eawag Olivier Kayser, Hystra Managing Director Lucie Klarsfeld, Hystra Project Manager Simon Brossard, Hystra Consultant Mathilde Moine, Hystra Junior Consultant To download this Report, visit www.hystra.com For more information on this project, please contact: [email protected] About Hystra Hystra is a global consulting firm that works with business and social sector pioneers to design and implement hybrid strategies, i.e. innovative market-like approaches that are economically sustainable, scalable and eradicate social and environmental problems, and combine the insights and resources of for-profit and not-for-profit sectors. For more information, visit www.hystra.com ACKNOWLEDGEMENTS The authors of this Report would like to thank the Sponsors that made this work possible. Integrating their different perspectives has been critical in shaping meaningful recommendations for the sector. We also want to thank the social entrepreneurs who shared Nageshwara Charitable Trust (NCT), Sanishop India, their innovative work, and the experts who contributed eKutir: Rita Bhoyar, Mukund Dhok, HMB Murthy insights over the course of this study. Your support and (Nageshwara Charitable Trust), R. Subramaniam Iyer, commitment are deeply appreciated. Sundeep Vira (WTO), KC Mishra (eKutir), Tripti Naswa (Sattva) In addition, the authors would like to acknowledge that the SOIL/Re.source: Sasha Kramer, Leah Page work presented in the Report builds on the research work WaterSHED: Phav Daroath, Aun Hengly, Lyn Mclennan, undertaken by the Toilet Board Coalition, a global business- Geoff Revell led alliance that aims to promote market-based solutions X-Runner: Jessica Altenburger, Isabel Medem to sanitation and bring them to scale. In particular, the Banka Bioloo: Namita and Sanjay Banka research conducted on behalf of the Toilet Board Coalition GSAP Biofil: Arthur Mumtaz by the London School of Hygiene and Tropical Medicine Mohan Rail: Vivek Kumar Manaktala provided a very thorough review of innovations in the field Stone Biotech: Sudip Sen of sanitation. Tiger Toilet: Walter Gibson Finally, special thanks to Heiko Gebauer and Eawag, who prepared the case studies on SOIL and X-Runner. Research Advisors Val Curtis (London School of Hygiene and Tropical Medicine) Report Sponsors and Jack Sim (World Toilet Organization) Céline Gilquin, Cassilde Brenière, Martin Leménager (Agence Française du Développement), Guy Howard, Simon Bibby, Toilet Board Coalition experts Jane Crowder, Rob Whitby (DFID), Tom Berry, Kelly McNeff, Helena Wayth (Consultant), Therese Dooley (UNICEF), Jenny Lewis, Alyson Gomez (Kimberly-Clark), John Stone and Jonathan Hague, Nimish Shah, Julia Fentem, Miguel Pestana, Sarah Hedley (Stone Family Foundation/NPC), Jean-Laurent Lisa Smith (Unilever), Kara L. Nelson (University of Berkeley), Ingles, Carolyn Jones, Analia Mendez (Unilever). Pr. Sohail Khan (University of Loughborough), Yu-Ling Cheng (University of Toronto), Nick Burn (Water for People), Case studies Guy Hutton (World Bank WSP), Sam Parker and Andy Narracott (WSUP) 3S: Tapan Apte, Colonel A.A. Gune, Rajeev Kher, Ranjit Kher, Amey Mahure, Ulka Sadalkar Banza: David Dunn, Joy Kiruki, Patrick Kiruki, Joseph Njenga Other experts Ciudad Saludable: Javier Flores Pérez, Paloma Roldán Ruiz Debasish Ray Choudhuri, Subhadip Roy (Bandhan), Samrat Clean Team: Lisa Hawkes, Andy Narracott, Bob Gooderick Gupta (BASIX), Walter Gibson (Bear Valley Ventures), R.R. Gramalaya: Mr. Damodaran, Mr. Elangovan, Mrs. Geetha, Kalyan (CDOT), Minh Chau Nguyen (East Meets West), Mr. Sathianathan Abhijit Banerji (FINISH), Paul Sathianathan (Guardian), Ashok Honeysuckers: Luca Di Mario (University of Cambridge), Hadapad (Precast Koppal), Kim Nace (Rich Earth Institutes), Heiko Gebauer (Eawag), Vishwanath Srikantaiah Steve Sugden (Water for People), Tim Wade (Waste (Biome Environmental Solutions) Enterprisers), Eduardo Perez (World Bank/WSP), David IDE: Cordell Jacks, Yi Wei Auerbach (Sanergy) IFC-WSP Kenya: Yolande Coombes, William Llewelyn Davies, Lewnida Sara Peepoo: Medina Abubakar, Wachira Haron, Prof. Nancy Karanja, Karin Ruiz, Camilla Wirseen THE TOILET BOARD COALITION The Toilet Board Coalition is a global, business-led coalition of leading public and private organizations, sanitation experts and non-profits that aims to end the sanitation crisis through scalable business approaches. It will catalyze market-based solutions through initiatives that will bring together the resources and expertise of corporations, and the innovations and know-how from the civil society and development sectors. The Toilet Board Coalitions’ mission is also to advocate and share knowledge about market-based approaches for sanitation. It will continue to support the creation of free-to-use, innovative content, such as this very Report. This Report was prepared in close collaboration with and in support of the work of the Toilet Board Coalition. We aim to provide strategies and solutions that tie in with those of the Toilet Board Coalition, by providing insights and recommendations about promising initiatives and business models, and how to accelerate and replicate them. TABLE OF CONTENTS Two Indian women in a rural village Credit: Hystra Designing the next generation of sanitation businesses INTRODUCTION Dozens of innovative sanitation solutions have gained After analyzing the challenges that these innovations face, ground across the world: NGOs are training village-based we found that large corporations can play a crucial role in producers to adopt efficient latrine production techniques addressing them. For instance, consumer goods companies and market them in neighboring villages; scientists are could leverage their marketing expertise to develop better developing new processing technologies to capture sanitation marketing campaigns, construction companies economic value from human waste; local entrepreneurs are can help manufacturing quality and affordable toilet units developing waste collection services in slums. and chemical companies can help developing efficient solutions for odorless toilets. What makes these projects distinctive is that they serve the Base of the Pyramid1 (BoP) in a financially sustainable While we acknowledge the role that the public and non- manner by selling improved sanitation solutions at a price profit sectors need to play and continue to play, this Report that the poor are willing and able to pay. is designed to highlight opportunities for business to contribute their distinct capabilities and resources to solving This Report is a testimony of the work of these innovators the sanitation crisis. and entrepreneurs – their creativity, vision and energy. Yet, although these market-based innovations have already provided millions of poor with access to improved sanitation, they struggle to scale-up and reach the estimated two and a half billion people who still do not have access to improved sanitation to this day. 1 The Base of the Pyramid refers to the 3-4 billion people who live on less than $2.50 per day. This is the largest but poorest socio-economic group. 1 Designing the next generation of sanitation businesses EXECUTIVE SUMMARY THE GLOBAL SANITATION CRISIS RURAL AREAS: CREATING Over the past two decades, almost two billion people have AND ACTIVATING LOCAL gained access to an improved sanitation facility, bringing the sanitation coverage to 64% in 2011. SANITATION VALUE CHAINS AND MARKETS However, two and a half billion people are still without access to improved sanitation facilities to this day. 71% of Many projects globally work at facilitating the creation of them live in rural areas where the penetration of improved local, rural sanitation markets. Mostly run by non-profit solutions has been progressing at a slow pace, as latrines organizations, they work on both the demand side by often remain unaffordable or simply unavailable in villages. increasing household awareness and motivation to invest In urban areas, rapid urbanization challenges the capacity of in sanitation, and on the supply side by identifying and cities within most developing countries to provide improved strengthening local businesses to take over the different sanitation to all urban dwellers. stages of the supply chain (manufacturing, delivery and installation). These projects aim at building entire Lack of access to sanitation has dramatic consequences value chains that could be self-sustained after an initial on health - the WHO estimates that diseases related to intervention period. unsafe sanitation were responsible for 6% of global deaths2. But it also impacts other sectors such as education – girls These projects have demonstrated that there is a large are withdrawn from schools due to a lack of appropriate untapped solvable demand for improved sanitation in rural facilities – and livelihoods. The development community has areas. Indeed, low-income rural families are ready to pay been devoting increased attention to this crisis, but the two for comprehensive and aspirational sanitation solutions, in billion dollars spent yearly on sanitation is still not enough particular when they are offered a financing solution. These to reach the Millennium Development Goal target of 75% of projects also manage to enroll and professionalize local sanitation coverage by 2015. hardware stores, so that they can
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