TARA Machines Tech Services Private Limited SOM Team

TARA Machines & Tech Services Private Limited SOM Team: Randy Armstrong, Anna Ching, Adam Rose, Bettina Scott & Ashraf Virk September 5, 2012

Institution & Context o Development Alternatives (DA) founded in 1983 n n n Mission: fulfill basic needs of rural populous, enhance employment and training opportunities to rural populous, and develop clean environmental practices that reduce hazardous waste and GHG emissions Method: engage in scientific research and innovation, on -the-ground implementation of eco-solutions as well as communication and policy influence Structure: conglomerate composed of non-profit “societies” and for-profit “social enterprises”

DA Organizational Structure

Introducing TARA: Mission o o Develop high quality, green building materials Create rural enterprises and jobs Enhance access to affordable housing Drive innovative, sustainable results: Recycle waste Conserve energy Reduce carbon emissions

Introducing Tara, Cont. o o Financing Structure: 100% equity investment by co-founders and external investor TARA’s Current State & Growth Strategy: Current Growth Plan Employees 14 23 Offices Delhi (corporate); Jhansi (R&D center); Chhattisgarh, Orissa, and Jharkhand (regional) Delhi (corporate); Jhansi (R&D center); Nagpur (warehouse); Chhattisgarh, Orissa, Jharkhand, Bihar, Orissa, West Bengal, and Maharashtra (regional) Sales $700 K (2010) $7. 7 M (2018 E) Geographies of Sales Domestic: Chhattisgarh, Jharkhand, Madhya Pradesh, and Uttar Pradesh; International: Sri Lanka, South Africa, Bangladesh, Nepal, Afghanistan, Indonesia, and Cameroon Domestic: Chhattisgarh, Jharkhand, Madhya Pradesh, Uttar Pradesh, Bihar, Orissa, West Bengal, and Maharashtra; International: Sri Lanka, South Africa, Bangladesh, Nepal, Afghanistan, Indonesia, and Cameroon Growth Stage III (Success) Stage IV (Take-off)

Products & Services Provided TARA Concrete Formed Products Specialty Products: Roofing Tiles Floor Tiles Paving Stones Window & Door Frames Paper Recycling Brick Making: Brick. Mek Mech. Ram (MX, MV, MI) Eco. Kiln Paper. Mek XV Paper. Mek I

Products & Services, Cont. Balram MI Brick. Mek Super http: //taramachines. com/Videos. aspx

Customers & Consumers o Direct B 2 B: Micro, SMEs (Brick Makers); Small Building Contractors (Concrete Product Manufacturers) o Engage NGOs, Corporations & Other Orgs o n Indian Army, Aga Khan for re-construction projects n Ambuja, KPMG for green community enterprises n SEWALANKA, TARAYANA for enterprises End-Consumer: Underserved Homebuilders

Financial Highlights o Annual Income for FY 2010 -11 $696, 927 n o Revenues ($) 800, 000 EBIDTA($) 600, 000 5% EBIDTA margin, 2. 8% after tax margin 400, 000 Annual expenses for the FY 201011 $661, 402, which constituted mainly of COGS, personnel costs, and G&A TARA is targeting a CAGR 35% revenue growth rate from 2010 -18 [Broken out by product line if possible, not yet available] 200, 000 2008 2009 2010 Revenues ($) 10, 000 o o 8, 000 CAGR est. 35% 6, 000 4, 000, 000 2008 2009 2010 2014 e 2018 e

Impact TARA affects change via homes, jobs, “waste to wealth” o How is client impact gauged? o n Create rural enterprises and jobs for local production of green materials n Provide access to affordable roofing and walling components n Promote the use of industrial wastes and reduce use of virgin materials What has been the impact? n Created vibrant network of 200+ profitable micro, SMEs in rural India n Resulted in 2, 290 jobs n Produced over 10 MM bricks and built 2, 100 homes during post tsunami reconstruction across India and Sri Lanka

Strategy: Technology & Brand o Fill critical gap between clay/engineered products o Technical service support o Brand Recognition Assured Quality o In-house R&D capability for creating new products High Cost Engineered Products Low Cost Clay Low Quality High Quality

Current Situation / Challenges o Growth in Indian and some foreign markets n n o Cost competitiveness Financing of customers and consumers Identifying core competitive advantage n n Eco-friendly building material and design Job promotion and economic development Speed of delivery Brand equity

Initial Opportunities to Strengthen o o Identify financial support for customers and consumers Undertake consumers and customers viewpoint n n o o Price competitiveness with rivals (bricks) and substitutes Who is the target end consumer for the many products? Allow TARA products to be modified to fit local needs (Incorporate Design Thinking, e. g. franchising? ) Leverage relationships to enhance local and national expertise Grow pivotal success stories beyond disaster relief Reduce dependence on international organizations to provide enterprise finance (e. g. price point must be low)

GSE Fall Project o As Proposed Today: A. B. Evaluate export strategy in Africa and SE Asia Evaluate merits of novel financing strategy in India and elsewhere [Develop a financing strategy for B 2 B within India]

Initial Metrics End Goal: Actionable deliverables Project A: o For the detailed evaluation of 4+ export markets: ─ ─ ─ o o Preferences of Home Builders relating to materials, prices Eco-system of entrepreneurs and distribution channels Financing and government agency support available Increased # of customers outside of India by 2015 Increased revenues outside of India by 2015 Project B: o o Increased customers in rural India by 2015 Increased revenues in rural India by 2015

Work Plan o Weeks 1 -3: Brainstorm & Align o o o Create detailed scope of work, final deliverables Identify data/info needed from SEs plus other resources Begin researching, seeking “other” resources, outreach Hypothesize Write Letter of Agreement Weeks 4 -6: Research & Data Collection Weeks 7 -9: Test, Write & Design Weeks 10 -13: Finalize & Submit

Concluding Thoughts: Some Additional Questions o Given the aggressive growth rate, what are the key drivers from which Tara will look to garner this growth from? n o o Annual revenues by product line? Export analysis completed to date – products, sales, etc. ? Marketing and sales pitch to social entrepreneurs in field? Anticipated, key deliverables: n n o By product lines, categories, regional markets Export strategy roadmap study Financing strategy for micro enterprises Key activities before Sept 16 – 21 visit: n n Speak with Tara 2+ times Realign project strategy and plan, discuss next steps