The Rural Opportunities Production Enterprise (ROPE) is a company that successfully graduated from the Rural Technology and Business Incubator (RTBI) of the Indian Institute of Technology in Madras. RTBI has been a member of infoDev's Global Network of Business Incubators and received an infoDev grant in 2006 to further develop its business incubation activities focused on empowering rural poor, women and youth.

The iDISC portal first featured ROPE in 2008, with a success story on their village-based production centers. iDISC now gladly announces that Mr. N.N. Sreejith as been selected as one of India's Most Promising Entrepreneurs in its annual competition.

The following article on "Spinning Rural Profits" was written by Lalitha Sridhar and featured in www.businessworld.in on March 20, 2009.

The heat rises as the bustle of Madurai gives way to arid flatlands on both sides of the rain-fed but currently dry Vaigai river. In a shed off the main street at Melakkal village about 10 km from the temple town, traditional agriculturist Murugesan and his wife Malarkodi supervise 24 local women as they wet, separate, twine and spin nearly 5,000 metres of two-ply banana fibre rope every day for ROPE (Rural Opportunities Production Enterprise) International, the company founded by 31-year-old N.N. Sreejith.

The banana fibre rope being made in Melakkal and T. Kaluppatti, another village 35 km away, will be used for making products such as packing bags that ROPE is sub-supplying to global furniture maker IKEA. Other clients include FabIndia, Mihika, Industree, AIIMS, IIT-Madras and overseas trading houses.

Sreejith, an MBA who was previously working for a micro-finance organisation, has created a network of such rural production centres in villages near Madurai, Theni, Erode, Thiruvalluvar and Thanjavur in Tamil Nadu. Here, indigenous artisans use locally available and environment-friendly natural materials such as banana fibre, elephant grass, korai and sisal (types of reed) to hand-craft customer-specific corporate gift items and lifestyle products.

“The whole idea started based on the premise that while the skills and raw materials of rural craft workers have universal appeal, their products have lower and lower demand with every passing day,” says Sreejith. “So, we have tried to use ICT imaginatively to achieve optimal volumes, particularly in view of the higher costs of managing a distributed workforce and supply chain, to bridge the gap between rural enterprise and the global market.”

Social Enterprise For Profit
“Corporate houses can get eco-friendly, ethically produced bespoke products of good quality from ROPE, which is a huge advantage for them,” says Ashok Jhunjhunwala, professor, Department of Electrical Engineering, and chairman, RTBI (Rural Technology and Business Incubator), IIT-M, of which ROPE is an incubated company.

Sreejith is aiming for Rs 10 crore in revenue by 2012, and 10 times as much by 2020. “I feel there are numerous opportunities for start-up funding now in India,” he says. “In fact, many times the issue is of choosing the right investor.”

He appears to have coped well. “We are very appreciative of Sreejith’s efforts in communicating our specifications to the workers cutting the fibre, and in meeting other challenges in packaging and fumigation,” says Barbara Miller, president, C. Withington Inc., a New York-based import and trading firm, and a ROPE client.

Meanwhile, in January this year, FabIndia placed its first order for floor coverings, table mats and runners with ROPE. “Given the unique array of natural fibre products that they offer, I feel there is significant potential to develop a whole range of lifestyle accessories with ROPE,” says Shilpa Sharma, head, product development and buying, FabIndia Overseas.

Knotty Problems
ROPE’s product range and pricing reflects its leaning towards fair trade and ethical production. In particular, it is well placed to supply to companies that are committed to the growing global demand for environment-friendly products with eco-compliant packaging. ROPE is ready for IKEA’s I-Way audit, which calls for worker-friendly human resource practices, and has applied for the well-recognised Craftmark certification for artisanal products.

But despite these calculations, maintaining supply lines has proved difficult. ROPE’s first major order to provide 100,000 bags, priced at Rs 16, by mid-April, to Tuticorin-based Ramesh Flowers, an IKEA supplier and India’s leading player in the natural botanicals sector (dry flowers, pot pourri), has been delayed by the shortage of banana fibre rope.

“ROPE has cited difficulties in procuring raw materials, and we now hope to get only 30,000 bags by end-April,” says Amit Lodha, director, sales, Ramesh Flowers. “We are disappointed, but we hope he will be able to scale up by then.”

Scaling up is essential, but order-driven. Earlier, ROPE’s lower volumes enabled it to outsource work and procure raw material from rural entrepreneurs. “The IKEA sub-supplier order is our first major order,” says S. Giridharan, senior manager, production, ROPE. “We needed to scale up by about 10 times in terms of raw material sourcing alone. Also, we had to set up our first job work unit.” If the order is successfully executed, Ramesh Flowers has evinced interest in procuring 500,000 bags annually.

Even as he races to expand overnight, Sreejith nurtures other plans to diversify into textiles and apparel using the same model.

“The craft sector in India remains in its infancy, depending significantly upon state and other external support,” says Aarti Kawlra, consultant, RTBI, IIT-M. “ROPE offers efficiencies and risk distribution in craft production at a level that could not be imagined before.”