LANCASTER UNIVERSITY, MANAGEMENT SCHOOL 2019

ECONOMIC VALORISATION OF
BAMBOO IN ARUNACHAL
PRADESH?

Group 6 under the supervision of Pr.Salomon Darwin

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Students in Master of Corporate Development within Lancaster
University. We did this work with the Smart village movement
launched and developed by the team of Pr. Salomon of Berkeley
University. The smart village movement aim to transform villages in
India by making them advance in terms of technology and
connected to global markets.

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GROUP 6-INNOVATION AND PRACTICE

ECONOMIC VALORISATION
OF BAMBOO IN ARUNACHAL
PRADESH?

BASILE LAUREAU

ANUJ SARAJ

MARIA SHUSHKU

NNAEMEKA CHIDOZIE UBANI

MARCH 2019 - LANCASTER UNIVERSITY MANAGEMENT SCHOOL

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CONTENTS

5 OUR PROJECT

7 THE MARKET

11 A TO Z

12 HARVEST

14 EXPLOITATION PROCESS

15 TRANSFORMATION

17 GEOGRAPHICAL LOCATION

18 IMPACT OF OUR PROJECT

21 DETAILS ON TH PROCESS

25 APPENDICES

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OUR PROJECT

In every industry the demand for plant-based/carbon-neutral ingredients is rising in the western
markets to promote a sustainable planet. Our business case recommends Arunachal farmers to
produce high-quality-high margin bamboo-based charcoal with Himalayan branding to meet the
global demand. This Fast-Moving Consumer Goods market will bring in much needed investment
while generating local jobs and improving international exports for the state.

1. Demand.
Our Buyers, Miyabi, Mr Blanc, etc. are prepared to purchase 250 tons/year of our product at market
price, which generates $360 000 revenue/year. The market for activated charcoal, currently valued
at USD 2.8 billion, is predicted to grow by 13% annually. In addition, the demand for activated
charcoal made from a plant-based raw material is rapidly increasing, while the coal-sourced
activated charcoal market is dying down to improve the carbon footprint.

2. Investment.
Miyabi Inc., a Japanese commercial bamboo charcoal water filter company, is keen on investing in
this venture. The firm wants to grow by establishing an entity in India. The initial capital investment
required is USD 26 000 to set up a small factory that transforms 4 tons of bamboo into 1 ton of
charcoal daily. A total of two industrial heaters, one charcoal grinder and a packaging machine will
be required. Total cost of raw material per day is $203.00. More factories can be set up as the
demand grows.

3. Revenue.
Our projected sales for 1st year are estimated to be $360, 000 from the sale of 250 tons of charcoal.
This will yield $79,500 in net profit. The villagers are paid a monthly salary, which is
approximately two times the average wage of a farmer in Arunachal Pradesh.

4. Operations.
Our operations consist of 7 steps: Procurement - Drying- Cutting - Heating - Grinding - Packaging -
Exporting. This will directly create 15-20 local jobs, 10 of which will be lumberjacks. The venture
requires 150 hectares of land to be rented on yearly basis to not encounter deforestation issues. Our
operating expenses are projected to be $219,700/year that represents income for the local economy.

5. Supply Chain Management (Distribution).

The factory will be set up in Kinekibo. Truckwale will be transporting our finished product to the
warehouse. Our customers will collect the package product from our warehouse in Itanagar and ship
it through their transportation firm.

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6. Marketing.
The marketing of the product is then done by our customers, mentioned in the Demand section. The
“Himalayan Charcoal” brand is already being used by companies such as The Body Shop. The same
brand can be utilized by our customers.

7. Socio-Economic Impact.
Initially, the project will directly create 15-20 jobs. This includes both production workers and
administrative personnel. This project has a very high potential of scaling up throughout Arunachal
Pradesh. As per our financial forecast, in the first year itself, the project will net a profit of $79 500.

Thus, creating employment within the state and improving the state’s GDP. Currently, we have a
capacity of producing 1 ton of bamboo charcoal by using 2 industrial heaters. Taking into
consideration the availability of bamboo in the state, the production capacity can increase up to 10
tons a day by adding 18 more industrial heaters, 10 more charcoal grinders and 10 more packaging
machines gradually. This will then have a huge economic impact on the state while improving the
global carbon footprint.

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THE MARKET
Bamboo: an unexploited resource
30% of the global bamboo resource is located in India, making it the country with the largest
amount of bamboo in the world.

However, India still imports 50% of the bamboo that is used within the country, due to its
inefficiency in procuring the bamboo that is domestically present. The imported bamboo mostly
originates from China, which only has 14% of the global bamboo recourse. 9.2% of the Indian
bamboo resource is found in Arunachal Pradesh.

While the governments of other countries, such as China and Vietnam, have already in the
infrastructure and organisations required to efficiently utilise this resource for various industries.
India has only started investing in this resource recently, making it a latecomer to the bamboo
market. This makes having a unique opportunity more important, in order to not have to directly
compete with established companies that offer the same product.

Demand and Market Analysis

The demand for activated charcoal is growing at a rate of 7% annually. In the US the growth is
almost twice the global rate, currently at an astounding 13% annual growth rate.

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The market value as of 2017 is USD 2.84 billion, while the demand was 1.9 million tons.
Currently the demand is increasing faster than the current producers can supply, which is making
the market price of this product increase. Another trend that characterises this market is the
influence that the push towards environmental sustainability is having in the industry.
Traditionally activated charcoal is made through coal carbonisation. Environmental protection
legislation pushed by governments and NGOs, as well as smarter consumers that are more and more
concerned with the effect that air and water pollution have on their health, are facing companies to
switch to a more sustainable supply source. Some of the new alternatives that have emerged are:
- Wood
- Bamboo
- Coconut Shells
- Olive Pits
- Nut Shells
Although wood is a better source than coal — a finite source that is becoming more and more
scarce — it is still not truly environmentally friendly. Compared to bamboo, which has a 5 year full
growth cycle, most trees average at 40 years. Additionally, using trees contributes to global
deforestation — an issue that bamboo does not have if handled properly.

It’s highly absorptive properties make activated charcoal have many uses, represented in the graph
below:

Other uses include, but are not limited to:

- Dietary supplements
- Cosmetics (face masks, toners, etc.)
- FMCG: toothpaste, shampoo, etc.
- Food

Revenue
The market price for this product ranges from 1300 to 1700 USD/ton. With a factory capacity of 1
ton per day, the annual revenue that this venture generates is USD 360’000. With the current market
price, the revenue will increase proportionally to the tons added, i.e. 1 ton/day = USD 360’000.
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The profit is approximately USD80’000 and USD34’000 is already going to the government
through tax revenue.

The OPEX and CAPEX are represented by the graphs below:

Branding and Marketing

Customers will be able to utilise the Himalayan Charcoal brand in their products. The Himalayan
brand promotes features such as freshness, purity and cleanliness, all of which perfectly match with
what our product does.

Other companies are already using the Himalayan Charcoal brand (mostly home-use water filters
and cosmetics), as well as Bamboo Charcoal (mostly used for toothbrushes and toothpaste), to
market their products. These use cases prove that the brand is successful in marketing a product.

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The companies that are already using these brads are:
- The Body Shop
- Mr Blanc
- Chagrin Valley: Soap & Salve Company
- Unifect
- Glamglow

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FROM A TO Z
For an overview of the process, our operation consists of seven major steps, namely: Procurement -
Drying- Cutting - Heating - Grinding - Packaging - Exporting.

Procurement refers to the process of obtaining something. The operations will require raw bamboo
canes from the farmers on a daily basis. Four tons bamboo is required to produce a total of one ton
of activated bamboo charcoal. The bamboo will be harvested by the farmers and transported to
Kinekibo village region. The pre-processing supply chain consists of labours transporting the
bamboo from the farms on the Brahmaputra river.

This village is close to the river and an ideal project location. The next step would be to dry the
bamboo and get it down to the required moisture content level (less than 10%). This will be done at
the warehouses near the plant. Once the bamboo is partly dried, it needs to the cut down into
smaller shoots so that it is ready to be heated and transformed in to the activated bamboo charcoal.
Once the industrial heater reaches the optimal temperature, the bamboo shoots are put in and it
takes about 8-10 hours for the carbonisation process.

Then the container is left to cool down for approximately 5-6 days i.e, 120-144 hours. Next, the
carbonised bamboo shoots are transferred to the grinding machine to obtain the activated charcoal
powder form. This product is then package with the help of a packaging machine and is ready to be
exported. The post-processing supply chain consists of the transportation of activated bamboo
charcoal powder in trucks from Kinekibo village to Itanagar, the capital of Arunachal Pradesh. The
customers can easily collect the charcoal from there as they already have a well established global
supply chain network.

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HARVEST
The Bamboo:

Bamboo belongs to the plants and flower family, specifically monocotyledonous. It belongs to the
sub-family of the Bambusiadeae. Bamboo is considered to be a grass, just like rice, palm and reed.
Bamboo is mainly grown in warm and wet areas in Asia, South America, Africa and Oceania.
However, it is a resistant grass which can grow in almost any climate. Most of the commercialised
bamboo today came from natural forests. There are more than 90 bamboo variants and
approximately 1300 different species depending on their size, color and shape. Any flora or fauna
specie is identified by analysing the flower. However, the flowering is irregular for bamboo and
thus, the specie is identified by analysing the stalk, leaf and the outer layer that protects the bamboo
shoots.

A main characteristic of the bamboo it is the speed of its growth. Depending on the species, a
bamboo can grow on an average, 10 to 50 centimetres per day during the growth period. Bamboo as
the woody planted could be harvest during most of the year. However, to allow the sustainability of
the forest and ecosystem it is highly recommended to avoid the bamboo shoots emergence period.

The Exploitation:

By dividing the crop cycle in four we highlight all sides of the growing process.

Education phase:

As previously mentioned, bamboo is already being exploited in existing forests. The farmers
and lumberjacks lack the required education and need to be trained on how and more
importantly, when to buck the bamboo canes. Hence, it is vital to provide training to all the
lumberjacks associated with this project. This training can only be provided by an
experienced lumberjack. This will be more of an interaction guide composed of few scheme
which will explain the bamboo shoot sizes, the optimal height and the ideal time to buck the
grass with the chain chainsaw (See APPENDIX).

Furthermore, our sustainable approach of the subject pushed us to contact a couple of NGOs
and experts specialised in bamboo exploitation. Patrice Lamballe and Aurélie Vogel are two
French researcher belonging to the GRET a french development organisation. However, the
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analysis of the exploitation impact on the ecosystem and the sustainability of the forest has
to be done on the basis of a 5 year period. This analysis is based on different data such as
the number of plants per hectares, the number of bamboo shoots per plant, the other plants
growing near the bamboos, ground analysis and others criteria which enable analysts to
evaluate the situation of the forest.
To do this analysis, the “World Bamboo” is an organisation that works for promoting and
exploiting bamboo in a sustainable manner. The “INBAR” is an organisation that works to
use Bamboo and Rattan as a growth tool in emerging areas. Initially, an audit of the
potential zone will have to be conducted along with the World Bamboo, NBM (National
Bamboo Mission) and the INBAR (International Bamboo and Rattan Organisation). These
three organisations are the specialised and recognised organisations in the bamboo industry.
This collaboration aim is to evaluate the sustainable ways of the forest exploitation and also
educate the lumberjacks to improve their method to the harvest. In one of the research
papers based on a project in north Vietnam, INBAR sent an expert on the field for the first
week of the bamboo exploitation to educate the farmers and to collect data. The above
mentioned organisations have teams which are specialised in similar projects who ensure a
sustainable exploitation of resources.

Pre-harvest phase

As mentioned above, the bamboo is a grass but is exploitable as the woody plant. Thus, it
does not need any pre-harvest process as other fruits or vegetables require. During the non-
harvest time, lumberjack and some of the manufacture employee will cut wood in order to
create a sufficient stock of fire wood for the heater. However, during the off season, the
main bamboo business can be complemented with a groundnut exploitation business. Such a
combination could enrich the diversity of the exploitation and on the long term to create a
sustainable ecosystem.

Growth & Management Phase:

Time required from growth to maturity for the bamboo (see below) is around 5 years. The
project needs 150 hectares to enable a sustainable cycle between the harvest and the growth
of bamboo. During these period 10 lumjack will work on the harvest of bamboo and its
transportation to the processing unit.

Post-Harvest Phase:

The post and pre-harvest in the bamboo crop cycle is the same thing. Both represent the four
months ( May to August) when bamboo shoots grow. During this period the lumberjack
will cut firewood, plant groundnut and prepare everything for the next harvest. On mid and
long term groundnut will create an additional revenue for the company.

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EXPLOITATION PROCESS
As mentioned previously, bamboo will be harvested for 8 months of the year to allows a sustainable
management of resources.

During the four other months the lumberjack will be preparing for the next harvest season, plant
groundnut in the forest in a perspective of complementary revenues and they will also prepare
firewood that is required for the industrial heater. The project will employ 11 lumberjacks to cut the
bamboo and transport it to the manufacture. In the morning lumberjacks will go the the forest to cut
bamboo. The tools used by the lumberjack, are mainly chainsaws this chainsaw will need to be
refilled every day. Using a “Stihl Cast Iron Chain Saw MS-170” is highly recommended taking into
consideration the quality/price ratio. Mid-day, the lumberjacks will transport the bamboo from the
forests to the processing plant through the river. The process of transporting bamboo via river is a
famous and old practice which is being used currently in the state. This mode of transportation is
inexpensive and way more eco-friendly as compared to the trucks. A larger amount of bamboo can
also be transported using the “raft” method.The project will require 150 hectares of bamboo forests
in order to operate and procure 4 tonnes of bamboo daily. This area can used in rotation which will
in turn create a sustainable exploitation process overall.

Bamboo

Diameter 1,5 from the ground (mm) 105 to 115

Circumference 1,5 from the ground (cm) > 34

Tall utilisable (m) 9,8

Average weight/meters (kg) 3,32

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TRANSFORMATION PROCESS

The transformation process from bamboo to activated bamboo charcoal particles is not a very
complicated one. The entire operations can be broken down into seven major steps:

Procurement: In this process the raw material (Bamboo) will be obtained from the bamboo farms
and transported to the manufacturers. Approximately 10 lumberjacks will be employed who will be
responsible for plantation of bamboo, bunking of the crop and transporting it to the project site. A
total of 4 tonnes of bamboo will be required on a daily basis. The bamboo will be harvested by the
farmers and transported to Kinekibo village region. The pre-processing supply chain consists of
labours transporting the bamboo from the farms on the Brahmaputra river. This village is close to
the river and an ideal project location.
This is a very cost effective and efficient method that is commonly used in the Northeast Indian
regions. This supply chain method is a very environmental friendly method as well as there is no
carbon footprint in this step.

Drying: Drying is natural process in which the bamboo will have to be stored so that it loses the
excess moisture content and is ready to be used as a raw material for carbonization. This step
usually takes about 48-90 hours (2-4 days) depending on the weather. This is a very important
process as if bamboo canes with a high moisture content (>15%) are used, they will end up getting
burned. Hence, resulting in the carbonization process to prolong. Additionally, due to the high
moisture content, the heat will not be spread across the bamboo shoots evenly and might result in
the shoots getting cracked. This degrades the quality of the bamboo charcoal produced.

Cutting: Due to bamboo’s low thermal conductivity, longer pieces will take a long period of time
to heat up and thus slow down the entire carbonization process. Also, as the bamboo needs to be put
in the heaters, it has to be cut down into smaller pieces. The recommended size of bamboo canes for
the heater is 10cm X 40cm. Any size smaller than this dimension is also acceptable.

Heating: This is the process of raising the temperature inside the container is known as heating.
Firewood is added on a daily basis to keep the fire going which turns the bamboo into activated
bamboo charcoal. Once the feeding is complete, the intake gets sealed once again and is not opened
until one batch of bamboo has undergone carbonization. The firewood feeding will depend on the
temperature. The feeding is stopped if the temperature escalates too quickly and it difficult to
control. If the operates are unable to control the temperate, the bamboo might crack and not get
carbonized. Once the temperature reaches 250-260 degree mark the bamboo will start to decompose
rapidly. Around the 450-500 degree mark, the refining stage of the process will start. In this stage,
the bamboo’s hardness will be enhanced. Some more firewood is added to increase the temperate
and achieve the 950-1000 degree mark. At this temperature, the carbonization process takes place.
The workers are trained to determine the carbonization process progress by the smell and the colour
of the smoke. When the process starts, the smoke will show white colour complimented with a lot
of steam. Soon the smoke turns slightly yellow and emits a a tar smell. Finally, at the end of the
carbonization process, the smoke colour turns bluish.
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After the carbonization process, it is vital to keep the container sealed and let the carbonized
bamboo to cool down. The cooling process depends on weather but generally takes about 120 to
144 hours (5-6 days). If the container is opened during the cooling process, the output can easily get
oxidized thus losing its effectiveness. When the container has a temperature lower than 50 degrees,
it is the ideal time to take out the activated bamboo charcoal. The project will require two industrial
heaters with a capacity to produce 500 kgs of output each on a daily basis. In order to produce 1 ton
of activated bamboo charcoal, 4 tonnes of raw material (bamboo with desired moisture level) will
be required.

Grinding: The bamboo charcoal is then put into the grinding machine to transform the activated
bamboo charcoal canes into activated charcoal bamboo powder. This is an important step in the
operation cycle as most of our customers need the activated charcoal in a powder (finer particles)
form. The grinding machine has a capacity of grinding 300 kg of activated charcoal bamboo canes.

Packaging: The packaging of the product is done immediately after the grinding process. The two
machines will be connected with a conveyer belt and one employee will be needed to manually feed
the empty bags to the packaging machine. The packaging machine has multiple capacities and can
depend as per the customer’s requirement. There are five most common bag sizes (10kgs, 25kgs,
50kgs, 75kgs and 100kgs). Both the grinding and the packaging are continuous processes.

Exporting: After the activated bamboo charcoal powder is packaged, it will be sent to Itanagar, the
capital of Arunachal Pradesh. The post processing supply chain of transporting the activated
charcoal powder bags from Kinekibo to Itanagar will be outsourced to the transportation company,
Truckwaale. They are a transportation company with expertise in these kinds of industrial jobs. The
output will be then stored in the warehouse in Itanagar. This is done so that our customers can
easily get them collected from the warehouse. As we are a B2B business, our customers will be the
companies that use activated charcoal as a raw material for their products such as water filters, air
filters, tooth pastes, face masks etcetera. As the customers already have a well established supply
chain network all over the globe, it would be easier for them to collect the charcoal powder from
Itanagar. They will save up on the freight costs and make the whole process more effective.

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GEOGRAPHICAL LOCATION

Arunachal Pradesh is north east state of India, is one of the 29 states of India. Arunachal Pradesh is
a part of the seven sisters and shares its borders the states of Assam and Nagaland to the south and
shares international borders with Bhutan and Myanmar. Itanagar is the capital of the state. As four
tonnes of bamboo is required for this project on a daily basis, the optimal site for this project would
be near a water body (running downstream) and also with bamboo forests at a comfortably
reachable distance. Hence, the village of Kinekibo village (village code: 263994) was finalised.

Kinekibo village is located in Jengging Tehsil of Upper Siang district in Arunachal Pradesh, India.
This small village is situated at the banks of river Brahmaputra and has dense bamboo forests on
both sides of the river in a 2-5 kms radius. The river has a downstream flow and can be used to
transport the bamboo canes from the forests to the manufacturing site by the lumberjacks. Kinekibo
is approximately 13-14 hours away from the state capital, Itanagar by road.

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IMPACTS OF OUR PROJECT

Business Perspective:

From a business point of view, this is a very lucrative project. This is because we add value by
processing the bamboo that we buy from the cultivators and then sell it to firms that use activated
bamboo charcoal. Thus, creating a win-win situation for all the stakeholders. As Arunachal Pradesh
has a lot of bamboo, the resource is not being used to its optimal level. Studies show that
approximately 70-80 percent of bamboo resource in Arunachal Pradesh goes waste and the rest is
used for activities such as paper production, manufacturing of furniture and other building
materials. Hence, the government has also taken incentives to promote the use of bamboo and
bamboo products (Northeast Window, 2017).
Villagers who cultivate bamboo sell it in the nearby open markets and in most cases do not get fair
price that they deserve. This is usually because there is no or minimal value addition in this
transaction. The bamboo is used locally for various activities such as manufacturing houses and
furniture.
However, as we will be exporting the bamboo after adding value (process bamboo in the industrial
heaters to convert it to activated bamboo charcoal), we can pay the cultivators a fair amount.
Demand for bamboo and bamboo related products in the APAC (Asia- Pacific) region are growing
notably both in terms of value and volume. APAC is projected to create an increment of opportunity
close to US $5000 million between 2017 and 2027 (Future Market Insights, n.d). In addition to the
rise in demand in the APAC regions, bamboo’s demand in the European countries is on a rise due to
the proven health benefits. Some of the major health benefits are assist kidney function, natural
water filter, teeth whitening and oral health, skin care, deodorant etc.
Thus, there is a very high scope to export activated bamboo charcoal in the APAC and the European
regions. For our customers (the companies that manufacture products using the activated bamboo
charcoal), we add value by lowering the cost of their raw material by exploiting the economies of
scale. With the ample amount of bamboo resource that is present in Arunachal Pradesh, the
government support and the relatively low cost of labor in the state there is no reason for the project
to fail.

To conclude, it is advisable to monetise on the growing global demand of bamboo and bamboo
related products (Appendix “ Impact of our project” ). In the long term, our vision is to provide an
easy way to enable people in the rural areas to access clean water through the use of activated
bamboo charcoal water filters.

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Villagers Perspective:

The smart village movement is built on the principle of empowering villagers to take ownership of
their environment in order to better their lives in a socio-economically sustainable way. The launch
of this venture will do just that. The central objective of our project is to create value for the people
in the villages in Arunachal Pradesh through a business model that is unique to the region, but has
been proven to work in the global market.
All the requirements and goals we set for the project are rooted in creating a business model that
will benefit the villager first. Through the creation of an ecosystem centred on the human aspect and
improving their welfare, all other stakeholders — government, university and businesses — can
profit, resulting in a stronger triple helix.
Through the establishment of this venture the villager benefits in many ways. The creation of
employment opportunities is the key element through which the villagers benefit from this venture.
When selecting a business opportunity to exploit the bamboo resource a great emphasis was put on
making a choice that will not require high-skilled workers. This was done to ensure that the
villagers in the area would be the ones to benefit from the created jobs.

Directly, the venture creates jobs as/in:

• Lumberjacks: harvesting the bamboo and preparing it for transport.
• Forest maintenance: planting and ensuring an efficient growth of the bamboo.
• Transporters: transporting the raw material to the processing facility.
• Factory workers: workers that will take part in the cutting, drying, cooling and packaging of the
product. Once they get a better feel of the business, the workers will also be trained in building
and nurturing customer relations.

Throughout all the positions the villagers will be trained and educated on the entire ecosystem
created, so they can reap the full benefits. The business model is very labour intensive, so as the
business grows, more and more people will be needed in the
workforce. Later on, with the establishment of a brand, positions for a high skilled human resource
will be available. This attracts talent that will be essential in the development of the area. Active
bamboo charcoal has many uses in addition to being used for a water filter. This creates the
opportunity of many different types of businesses entering the ecosystem. By having more
companies establish themselves in the region indirectly creates more employment opportunities.
Additionally, the diverse nature of activated charcoal creates opportunities for entrepreneurial
behaviour; new businesses that use activated bamboo charcoal can be established by the villagers in
the region.
In the long-term the charcoal will also be supplied to the rural areas in India, and other developing
or underdeveloped countries. As of now, having clean water is still a big problem for many
countries. The properties of active charcoal allow it to be a simple, cheap, yet effective, solution for
“at-home water treatment”. A portion of the revenue gained will be used to fund this step in the
development of the business. This step solidifies the focus on increasing the living standard and
villager empowerment.
Additionally, this also benefits the government, by substantially cutting costs in healthcare.

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Government Perspective:

In one of the last plan of Arunachal Pradesh government (PEACE, PROGRESS AND PROSPERITY
IN THE NORTH EASTERN REGION: VISION 2020), bamboo represents the major proportion of
the agricultural part. For several legitimate reasons, bamboo is represented on thousands of hectares
of land and most of it is not exploited, or not even reachable. To develop an ecosystem around by
launched of complementary industries which allows synergies and value creation for the
stakeholders (villagers, government…) is one of the government goals. The project will impact the
government of Arunachal Pradesh in five different ways: Firstly, the bamboo transformation in
activated charcoal will have an impact on employment. From lumberjacks to the final transporters,
it will employ initially approximately a hundred persons. More on the long term with similar or
complementary businesses and our project growth, the bamboo industries could become a major
employer in Arunachal Pradesh. This employment, paid for by the revenue generated from export,
will contribute to increase the wealth and the commercial balance of Arunachal Pradesh.

Secondly, fed by the need of transport between the manufacture and the main transport axes, this
project will step by step contribute in the improvement of infrastructures, e.g. concrete roads, which
will first reduce the “distance” between rural and urban areas, and secondly it will increase the
attractiveness of rural areas which was hitherto isolated. More it will allow other local companies
which, due to the lack of appropriate supply chain couldn’t export beyond their small perimeter.

Thirdly, the empowerment of the people by creating a fruitful channel for one of the most present
assets of this state. By designing a new supply chain which aims to create value through bamboo
our project permit the launch of similar projects in Arunachal Pradesh and, also in the other Indian
states.

Fourthly, through the taxes the government will harvest the result of this project. By paying the
VAT, corporate taxes, income taxes etc. the government of Arunachal Pradesh will benefit from the
launch of this project and the positive externality of it.

Fifthly, moreover it will reduce the contamination of water and and the health and economic issues
that arise due to it. By reducing the water’s intoxication level, our project will contribute to the
reduction for the government health expenses. “The smart village movement” could be considered
as a potential goal for government to break the rural isolation which maintains the poverty and
unemployment, our project through the study of a potential process and supply chain brought
opportunities which have to be developed. Both initiative and empowerment are the factors which
will back up the government policies and enable a future for rural areas.

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DETAILS
Ressources:
Below you will found the detailed costs for the harvest and the first transportation.

TOTAL cost Per Year for the Harvest and Transport USD

lumberjack 23,400

Material 600

OIL 475

TOTAL 24475

Ressources Avaibility Unit kg

Bambou exploitable ( 5y) per hectare per year 500 8.5
Quan=ty need per day 4
Quan=ty need per year 880
hectars needed 120
price of one hectare of forest in A.P.
price of one hectare of forest in A.P. (rent/month)
Labor cost Per Year for the Harvest and Transport Number cost of one salary USD
lumberjack 11 2000 22
Labor cost Per Year Number cost of one salary USD
employee 8 2400 19,200
Manager 1 4200 4200
Total 9 23,400

Total Hours needed per day hours

Pre-heater process 14
heater process 8
package process 15
Back office 15
Management 8
total 60

Number of employee needed Hours per weeklumberjack needed

lumberjack 40
Needed 432 11

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Material cost Unit USD USD per Week
Chainsaw 1 100
quan=ty needed 6 600
oil for one unit per day 0.5L 0.4 2.4
1 year deprecia=on chainsaw (6) 600
human cost of the harvest Unit KG hours
Produc=on a lumberjack per day (8 -1h break) 40 7
number of Lumberjack for Quan=ty need per day 6 42

Hours of works needed per day Harvest river Transporttotal

hours of works 42 30
total 72
transport @me Km Unit of bamboo KG Hours
Preparing the transporta=on 0 1
on the river 5 50 850 4
from the river to the manufacture 0.5 50 850 1
total for 4 T 240 4000 30

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Transformation:
Details cost of plant and machinery:

The cost of plant & machinery is estimated at USD$ 16,900 including transportation and
installation charges. The installed production capacity is 0.5 Ton x 2 per cycle i.e. per day.

Item Unit Quantity Amount Specification Electricity

price (USD) Usage (Per
(USD) hour)
Zhengzhou Wanqi $8,440 2 units $16,900 Model No. : THL 4 2.5 kw * 2 =
Mechanical Output: 500kg/ 8hrs 5 kw
Equipment Co Ltd Carbonizing time:
8hours

Charcoal Grinder $1,200 1 unit $1,200 Wanqi 500: 300kg/hr 7.5 kw

Charcoal Sawdust $3,500 1 unit $3,500 LG-PD 4 kw
Packaging
Machine

Total $21,600 16.5 kw

Based on the processing capacity of 1 Ton per day, 4 Ton of bamboo and 2 ton of firewood and
16.5kW of electricity per hour, so, 148.5kW is required per day.

Security deposit for the electricity in India (Single Shift): Rs. 2448, i.e USD $35.
Tariff (Rs/kW): Rs. 3.50 per kW, i.e USD $ 0.05/kw.

We have employed farmers to cultivate the bamboo required. Explained further later in the report.

The cost per ton for the firewood is Rs. 7000 i.e. USD$98.5

Total cost of raw material per day is:

Particular Price (USD) Requirement Total raw material cost per day

Electricity (per hour) 0.05 16.5 * 8 $6.6

Firewood 98.5/ ton 2 $197

Total $203.6

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Number of employee needed Hours per week lumberjack needed
Employee 40
Needed 360 9

Arunachal Pradesh electricity costs:

http://www.arunachalpower.org.in/pdf/Tariff%20orders/
2018%2006%2015%20Tariff%20Order%20FY%202018-19.pdf

Heater: https://www.alibaba.com/product-detail/Activated-Carbon-Making-Machine-Wood-
Charcoal_60528835419.html

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APPENDICES CONTENTS:

FINANCIAL DETAILS

IMPACTS OF OUR PROJECT

OTHER

Page 25 of 38
FINANCIAL DETAILS:

Page 26 of 38
Page 27 of 38
IMPACTS OF OUR PROJECT
Reference for the BUSINESS PERSPECTIVE :
• Arunachal Pradesh: An Important Position among the Bamboo Bearing States.
(2017, October 07). Retrieved from http://www.thenortheastwindow.com/2017/10/
arunachal-pradesh-important-position-among-bamboo-bearing-states/
• Bamboos Market: APAC Projected to be the Most Attractive Regional Market
During the Forecast Period: Global Industry Analysis 2012-2016 and Opportunity
Assessment2017-2027.(n.d.).Retrievedfromhttps://
www.futuremarketinsights.com/reports/bamboos-market
• Huizen, J. (n.d.). Activated bamboo charcoal: 8 uses and what the science says.
Retrieved from https://www.medicalnewstoday.com/articles/322609.php

Page 28 of 38
OTHER
APPENDICES:
Appendix A: Black + Blum charcoal water filter.
The image below creates a visualisation of how the charcoal water filter works.
- Lasts 6 months
- Uses binchotan (wood) charcoal. Works similarly to bamboo charcoal, however it is
less sustainable because trees need more time to grow.

Appendix B: How to use Bamboo Charcoal as water filter filters

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 Bamboos market :

Different sources:
- How to create value through bamboo, different ways. ( French)
(http://www.laboress-afrique.org/ressources/assets/docP/Document_N0225.pdf)

- “A review of low cost alternative of water treatment in rural area”, potential use of our charcoal
in rural area.
( h t t p s : / / w w w . r e s e a r c h g a t e . n e t / p u b l i c a t i o n /
272089418_A_review_of_low_cost_alternative_of_water_treatment_in_rural_area)

- “Bamboo charcoal as a natural Water Filter - An indigenous rural application”, an indian

perspective
(https://www.indiawaterportal.org/articles/bamboo-charcoal-natural-water-filter-indigenous-rural-
application)

- “Production of activated carbon from bamboo scaffolding waste—process design, evaluation and
sensitivity analysis”
(https://www.sciencedirect.com/science/article/pii/S1385894705001051)

- Todays potential water filters for heavy metals: “A review on economically adsorbents on heavy
metals removal in water and wastewater”
Page 30 of 38
(https://link.springer.com/article/10.1007/s11157-013-9330-2)

- “Modification of bamboo-based activated carbon using microwave radiation and its effects on
the adsorption of methylene blue"
(https://www.sciencedirect.com/science/article/pii/S0169433209017346)

- “Arsenic Removal from Water by Iron-Modified Bamboo Charcoal”

(https://link.springer.com/article/10.1007/s11270-011-0921-7)

- Existing projects of the INBAR involving Bamboo charcoal:

(https://www.inbar.int/?s=charcoal)

- Potential hitters on Alibaba:

(https://french.alibaba.com/product-detail/Activated-Carbon-Making-Machine-Wood-
Charcoal-60528835419.html?spm=a2700.galleryofferlist.normalList.341.79c07d21mFZW4y)
(https://french.alibaba.com/product-detail/continuously-type-jute-stick-charcoal-furnace-charcoal-
p o w d e r- m a k i n g - m a c h i n e - 6 0 6 2 7 3 7 9 3 5 4 . h t m l ? s p m = a 2 7 0 0 . m d _ f r _ F R . m a y l i k e e x p .
5.70c5131cSHXWyR)

- “Adsorption of dyes from aqueous solutions on activated charcoal”

(https://www.sciencedirect.com/science/article/pii/S0304389406006376)

- “Adsorption of chromium from aqueous solution by activated alumina and activated charcoal”
(https://www.sciencedirect.com/science/article/pii/S0960852406001325)

- “Activated charcoal filter layer for gas masks”

(https://patentimages.storage.googleapis.com/bc/3b/6e/37d82da71fb71d/US4992084.pdf)

- “Efficiency of Moso Bamboo Charcoal and Activated Carbon for Adsorbing Radioactive Iodine”
(https://onlinelibrary.wiley.com/doi/full/10.1002/clen.201000012)

- PRODUCTION, CHARACTERIZATION, AND APPLICATIONS OF ACTIVATED CARBON

(https://pdfs.semanticscholar.org/4d8c/b2cbc834c17949fd5e24ffb46d864cd84a15.pdf)

- “Bamboo-based activated carbon for supercapacitor applications”

(https://www.sciencedirect.com/science/article/pii/S1567173914002983)

- Company producing activated carbon in India with coconuts :

(http://rajcarbon.com/index.html)

Appendix E: Business Model

What is the customer segment – pain points?

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The usage of active bamboo charcoal products all over the world is increasing in products such as
water filters, face mask, toothpastes and many more. The companies producing these products
usually charge a premium from their customers due to the lack of availability of active bamboo
charcoal products globally. Hence, as we will be producing active bamboo charcoal, our customer
segment will initially be the companies producing bamboo charcoal related products.

What is your value proposition – pain relievers?

As there is plenty of bamboo present in Arunachal Pradesh, with the use of economies of scale, we
can convert the bamboo into bamboo charcoal at a very low cost. We can pass on this benefit to our
customers, thus adding value by making their raw materials (active bamboo charcoal) at a lower
cost.
Sustainability is also an issue for all companies currently using Binchotan (tree) charcoal.
Supplying them with charcoal that is produced from a grass will solve this pain point.

How do you maintain relationship to keep the value fresh?

Keeping a close relationship with our customers through constant communication.

How to you distribute the value you create to your customers?

Customers will either take care of the distribution themselves or we will be utilising the services of
transport companies that can handle large-volume shipping (Ex: amazon). There are also
possibilities of creating synergies with other groups’ supply chains. Leveraging economies of scale
and scope in this instance will lower the costs for every product.

What resources do you need to create the value?

In order to create the value (providing cheaper bamboo charcoal), we will mainly need access to the
bamboo dominant regions in Arunachal Pradesh. Also, we will need the government’s aid in terms
of the required permissions and funds to set up an industrial heater that would produce active
bamboo charcoal.

What activities you will do that will contribute to your value proposition?

Producing active bamboo charcoal at a cheaper rate than the competitors and extensively marketing
it globally. Partnering with companies producing bamboo charcoal related products and establish
long term professional relationships. Hiring influencers and bloggers to promote the bamboo
charcoal related products to create awareness.

Who are your partners that will enhance your value proposition – save costs and lower your risks

The Arunachal Pradesh State Government’s approval enhance the value proposition as the project
will then have the government’s support. Additionally, an investment from a company that produces
bamboo charcoal products will ensure that the bamboo charcoal that we produce will have at least
one assured buyer.
(We have already contacted companies that are interested to expand their activities in carbon-active
charcoal water filtration in India.
Page 32 of 38
How do you capture the value you create? How do you make money? What is your revenue streams
and what are your costs?

Capture the value: Exporting the bamboo charcoal to countries that use bamboo charcoal products
and are willing to pay a premium for these products.
Make money: As we plan to sell the bamboo charcoal at a cheaper price than the competitors, we
need to focus on volumes…
Revenue Streams: Proceeds from the sale of bamboo charcoal products worldwide.
Costs: Buying bamboo from the local community and the operational costs of the industrial heater.

Comparison to Biosand Filters

While the Biosand Filter is a form of water filtration, it is not a water disinfectant. We looked into
the Canadian company that is producing Biosand Filters and in their website they state that this
filter can only be used as one step in water purification - after which the water has to be further
purified through other technologies such as chlorine, solar (UV), boiling, etc.
(https://www.cawst.org/services/expertise/biosand-filter/more-information)
This technology is currently being used in Cambodia. So far the research on it has had mixed
results. In addition, the Biosand Filter has no effect whatsoever on arsenic. (https://
www.clearcambodia.org/home/household-water-filter-program/)

In conclusion, activated charcoal and biosand are very different technologies that have a different
effect on water.

Some of the other uses for active bamboo charcoal currently being used by companies (Face
wash, Soap, Shampoo, Natural water filter, , Teeth whitening and oral health, Skin care,
Deodorant, Insect Bite treatment , Air Purification , Reduces High, Colestrol)

The Many Uses of Bamboo Charcoal. (n.d.). Retrieved from http://bamboohabitat.com/the-many-

uses-of-bamboo-charcoal/

What Can Bamboo Charcoal Do for Your Skin? (n.d.). Retrieved from https://www.birchbox.com/
guide/article/what-can-bamboo-charcoal-do-for-your-skin

All-Natural Black Powder – Naturally Improve Cholesterol, Acne, Yellow Teeth, and 7 More. (n.d.).
Retrieved from https://www.foodmatters.com/article/10-activated-charcoal-benefits-and-uses

Huizen, J. (n.d.). Activated bamboo charcoal: 8 uses and what the science says. Retrieved from
https://www.medicalnewstoday.com/articles/322609.php

Page 33 of 38
Ever Bamboo. (n.d.). Why Bamboo Charcoal? Retrieved from https://everbamboo.com/pages/why-
bamboo-charcoal

Explanation of not taking the biomass or combustible charcoal (biocoal)

route.

Our goal for the project was to create a business model that would be sustainable in the long term
and that would provide economic growth and empowerment to the villagers themselves.
Considering the focus on creating a long-term opportunity we made the decision not to pursue bio-
coal due to a few reasons:

• There are many solutions available to produce energy in an easier and much more
sustainable way.
• Locally creating energy and injecting it into the grid is a delicate process that usually
involves a tendering process. Competing with large corporations on this front was a major
downside.
• Many companies (including ones in the neighbouring state, Assam) are already using
bamboo for energy purposes. This would make us very late entrants into the market.

- As of now there is an MoU signed with a company to use a portion of the bamboo
in AP to produce biomass in the plant in Assam, however we are not able to find
out what is stopping them from following through. As this issue has already been
discussed between the two state governments, any further research provided by us
would not add much value and it wouldn’t provide any innovative ideas.
- Producing paper from bamboo has a similar issue.

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Machine details

Grinder: https://www.alibaba.com/product-detail/Durable-Coconut-Charcoal-Grinding-Mill
Best_60545051185.html?spm=a2700.7724838.2017115.1.b7f17e8ewPYKVj

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!

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!

PackagingMachine: https://www.alibaba.com/product-detail/Longer-Machinery-Charcoal-
Sawdust-Packing-Rice_62008493263.html?spm=a2700.7724838.2017115.98.455d2e0cTAildP

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!

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