Sustainability Challenges in the Shrimp Industry

Shrimp Industry Issues:

Challenging task ahead considering the diverse priorities and

attitudes involved.

At the same time, the Eco-System(consulting agency), to be viewed as a trustworthy partner and not biased toward any stakeholder

Shrimp Farming driven by strong demand, grew from 0.6 million t in

1988 to 2.6 million in 2005

Shrimp farming accounts for 40% of shrimp produced globally

Wild Shrimp fishing has been practiced for centuries in many parts of

the world.

Small scale fishing , surprisingly consist of 30% of the total shrimp

catch

Wild Shrimp

Fisheries

Shrimp Aquaculture

Firms

Environmentalists

Policy Groups

Shrimp Industry

Shrimp Industry Overview:

Most valuable fish product, over $10 billion of exports per year and

more than 6 million metric tons

Global shrimp production had more than doubled since 1986, following a strong demand.

US, Japan and Europe contributed the bulk of global shrimp imports

Two ways of catch main source of shrimp:

Wild Catch- Catch of Shrimp in the sea

Aquaculture- Practice of Rising aquatic species under controlled conditions

Concerns of the Shrimp Industry:

Both the wild catch and aquaculture sectors had been accussed of the

damaging the environment, affecting other industries and being

unsustainable.

Shrimp farming grown in mangroves in Indonesia

Land was used to convert to water bodies and were doubled to shrimp

production

Shrimp Industry concerned about the “boom and bust” cycles

The boom of shrimp often crashed cause of diseases, self-pollution and

environmental degredation

Oscillation cycle has been more pronounced since 2000

Price of shrimp was determined by demand and supply

Increase in demand= Increase in supply

Increase in supply resulted in price lowering

Cycle formed and falling prices

Fisheries introduced means to control costs

Shrimp Demand=f(Population, Per Capita Consumption, Shrimp

Price)

Strong prices also boosted production- Exhibit 3

ROI calculated on price level and harvesting rates

Thanks

SUSTAINABILTY CHALLENGES

IN THE SHRIMP INDUSRYGROUP 1

ABHINAV TEMANI (H15061)

ASHISH AGGARWALA (H15073)

ISHAN GAUTAM (H15085)

PARIDHI AGGARWAL (H15097)

SAMUJJAL DUTTA (H15109)

VIVEK MUKHERJEE (H15121)

Facts Of The Case

• Shrimp – the most valuable fish product traded internationally

• Exports > $10 billion/year

• Production > 6 mn metric tons; more than doubled from 1986-2008

• Shrimp - 2 sources of production: Wild catch and Aquaculture

• Shrimp fishing – substantial source of cash in tropical developing

countries

• Shrimp farming - traditionally done in tambaks (brackish water

ponds), rice paddies, coastal areas, river banks and mangroves

Increase in production

Increase in supply

Decrease in prices

Utilization of cost

effective methods

Decrease in prices

Increase in Demand

(source of profits)

Prisoner’s Dilemma Situation

Environmental Impact of Shrimp

Aquaculture

Deforestation : Clearing of mangroves for the development of

shrimp farms

Effluent : Chemicals used in intensive shrimp culture can also contribute to pollution from prawn farms

Salinization: Large amounts of fresh groundwater have been

extracted, which have affected the local hydrology

Expansion of shrimp culture into rice growing areas of Thailand has

led to serious concerns about the impacts on rice productivity

Environmentalist

Keen to raise awareness on the environmental and social impact

Resorted to anti-shrimp marketing campaigns to raise awareness

Global fishing fleet 2.5 times than oceans can support

$1.5 billion worth of government subsidies

30% of total catches are illegal/ unreported

Aquaculture responsible for destruction

52%24%

24%

Utilization of Resources

Fully exploited Overexploited Under exploited

Regulatory Bodies

Policies required for governing industry entry and amount of harvest

Measures taken in Thailand

Ban on shrimp farming within mangrove areas

Prohibited loans for farms located in mangroves

All shrimp farms need to be registered

Limits on the amount of effluent discharge

Dramatic production crashes in 1994 in Thailand and in 1998 in Equador

Inherent delays in response to pricing signals thus imparity in demand supply

Thank You!

Clarke: Transformation

for Environmental

Sustainability

-Group 2 (HRM-A)

Company Analysis: Clarke

Core Business: Manufacturing and distributing pesticides: Environmentally harmful

by its nature

Biggest player in the domestic mosquito abatement industry: 43 countries

Sold directly to Government entities

2010: Affected more than 330 million people

Redefining core values as innovation, community, and sustainability

Two-fold purpose: elevate position as an industry leader and leave behind a positive

legacy

Products:

Natular: 15 times less toxic, yet just as effective

DuraNets: durable, low-cost, reusable anti-malarial bed nets, lasted up to 5 times longer

7 Specific Goals

Reduce carbon footprint by 25%

Utilize 20% of energy from renewable resources

Reduce waste stream by 50%

Attain LEED (Leadership in Energy and Environmental Design) certification on

all new buildings

Generate 25% of revenues from “NextGen” products

Donate 2080 employee hours to assist the communities in which they serve

Incorporate a cradle-to-cradle philosophy in all product and service

development efforts

4 Strategic Themes

Extend the Reach

Innovation

Sustainability One Clarke

3 Unique Projects

Utilize Bicycles in 95% of larvicide spraying applications -> slashing costs and

reducing its carbon footprint

Project Regeneration -> improve application efficiency by the implementation

of field computers

Handheld devices -> navigation, mapping, GPS, intelligent scheduling

Swap traditional gas-powered pesticide sprayers with electrical units

Other Sustainability Measures

Bringing employees in line with Clarke’s sustainability mission

Company’s internal blog site that highlighted company-wide and individual

footprints to reduce carbon footprints

Encouraged employees to take action within the community

Natular

15 times less toxic

2 to 10 times lower than traditional synthetic chemistries

Safe to store, ship and handle

Only protective eyewear needed

Limited by two factors:

Price: approximately 18% higher than comparable traditional products

Bureaucratic nature of target customers

Eco-Tier Index

Tool to illustrate environmental impact of different Clarke’s products

Categories:

Conventional

Advanced

NextGen

Meant to emphasise Natular’s advantage over other Clarke products

Backfired as it suggested that older products were less safe

Demonstrated that sustainability was not necessarily valued outside Clarke

walls

Challenges Ahead

Environmentally-unfriendly history creating suspicions

Most pesticides don’t meet Clarke’s standards of do-no-harm or do-less-harm

Sustainability culture -> doesn’t exist in the industry or in its consumers

Success tied to the success of Natular

Internal resistance within the company towards sustainability drives

Can green be effective and profitable?

Recommendations

More education and awareness to employees to bring them in line with

Clarke’s sustainability mission

Publicise the Eco-Tier index

Making customers aware of the importance of sustainability in the long run

More tie-ups with big corporations to increase finances and sell sustainability

on a large scale

Diversify the risk of Natular by focusing on other divisions

Thank You

Clarke

Transformation for Environmental Sustainability

Situation Analysis

• Clarke, a mosquito abatement company seen as having a core business that is environmentally harmful by its very nature

• Core business manufacturing and distributing pesticides for public health market

• Faces unique challenges in transformation into a sustainable enterprise

• Most exciting innovation Natular a naturally derived and highly effective larvicide 15 times less toxic, yet just as effective

• President, Lyell Clarke, in a dilemma that how far could company push its sustainability agenda without damaging business or driving away customers?

Analysis

• Difficultly level involved in transforming a company from an environmentally unfriendly business into an environmentally sustainable services company

• Challenges involved in acquiring necessary buy-ins from employees and customers who are sceptical about sustainability as a potential driver of business strategy

• How industry leaders need to take into consideration a myriad of factors to shift paradigms regarding environmental performance

• Shift in mentality from a double bottom line( effective products, profits) to a triple bottom line ( effective products, profits and societal benefits)

The Company & The Industry

• Grew from basic pesticide application to turnkey mosquito management systems.

• The company has always had innovative strategies – predictive mosquito flight

• Environmentally friendly aquatic management packages

• Intended to show that profitability and sustainability can go hand in hand – ‘two fold purpose’

• Have provided services to every major U.S natural disaster since 1999.

• Wants to double its reach and wants to reach 660 million people by 2014.

• Vast majority of growth planned from pesticides

The Company & The Industry

• Clarke doesn’t sell to average consumer, but sells to municipalities, health agencies etc.

• All these bodies have been criticized for the use of toxic chemicals

• EPA clearance required, which is expensive and time consuming but slightly fast-track for ‘green’ chemicals

• Managers of government bodies very cautious in trying out new ‘sustainable’ ideas

More than a dead mosquito..

Extend the reach

Innovation Sustainability One Clarke

Goals of Clarke

•Reduce carbon footprint by 25%

•Utilize 20% energy from renewable resources

•Reduce waste stream by 50%

•Attain LEED(Leadership in Energy and Environmental Design)

•Generate 25% revenue from “NextGen” products

•Donate 2080 employee hours to assist communities

•Cradle to cradle philosophy in all product and sevice efforts

Implementation Utilizing bicycles•Abandon use of Chevy – an old highly valued job benefit

•95% spraying using Bicycles

•Cost cutting - >50,000$ as well as reduction in carbon footprint

Project regeneration•Advancement of technology

•Techniques like navigation and GPS used

•Reduced paper usage as well as miles driven -> cost cutting

Electrical units•Change in spraying techniques

•Comparably safer as well as effective

Challenges ahead

•Bulk of products do not meet company’s standards of “do not harm” or even “do less harm”

•Unfriendly past not easy to rectify

•Success intertwined with the success of Natular

•Culture of sustainability difficult to introduce in the system when it is not followed outside of it

•Can profitability be maintained

Changing the game – Retiring Tempenos

Pros

• Because of new vision, have to do away with it as it is extremely toxic

• Would be the first step towards long term goal of the company

• Future utilization of resources in line with company’s sustainable policies

• Would make way for Natular

Cons

• Product already has a proven track record

• Dangerous for company to withdraw from market

• Stakeholders resistant for the change to happen

• Very high risk

Changing the game – Introducing Natular

Pros

• Environmentally friendly – 15X less toxic

• High Efficacy - >95%

• Easy application – no protective gear

• Some MAD directors liked Natularand were willing to recommend

Cons

• Market proven product Altosid

• Cheaper FourStar

• 18% higher price than traditional

• Stiff bureaucratic budgets

• Most MAD directors had no interest in going green

Eco Tier Index

Recommendations

• Making the customers understand that the sustainability agenda was profitable in the long run

• Selling sustainability as a stronger extension of its proven innovation

• Leveraging the risk of Natular by other divisions of the business

• Promote the MAD director’s network – the person to person connection was working

• Convince the employees of the value in sustainability so that it no longer remains merely Clarke’s vision

EcoMotors

InternationalH15005 AKRITI VERMA

H15017 BHANU GUPTA

H15029 KRISHNA ADITYA G

H15041 PRATIK JAIN

H15053 SIDHARTHA PALIWAL

COMPANY OVERVIEW

Founded in 2008 by Peter Hofbauer

Develops 2-stroke “opposed piston, opposed cylinder”

(OPOC) design for internal combustion engines

Better fuel efficiency, smaller size, lower material to

capital cost compared to conventional 4-stroke engines

HISTORY

Initial design developed at

Volkswagen but not

implemented

Joined APT , developed an OPOC design which got the attention of

DARPA

$15 million contract by DARPA to

develop an OPOC design

for military trucks and tanks

CAP, a joint venture

formed with L3

communications in 2006

EcoMotorsformed in 2008

upon split of CAP. L3

Communications - military use EcoMotors -

commercial use

CURRENT SCENARIO

2008-2013, the CEO’s helped in building the culture, financing

the growth and developing a strategy to prove its technology

Many rounds of investment by companies because of its high

potential and capital efficient scale-up model

In 2013, Amit Soman hired as COO of company to help in

expansion of company to a point where it becomes self-

sustainable

Select the target market segment and decide upon a

business model to attack this segment

BENEFITS OF OPOC TECHNOLOGY

•Less than half the friction of 4-stroke engine

•Twice the number of power strokes per revolution

•Better surface area to volume ratioFuel efficient

•Can be decoupled – one engine can be turned off when decelerating or idle, saves powerDual OPOC 35-40%

more fuel efficient

•Doesn’t require valve trains or cylinder heads

•Reduction in small complex parts

•Reduced manufacturing complexity due to lower number of complex moving parts

Low material costs and capital expenditure

•Flatter engine allows more flexibility while installing the engine, more seating space

•Lighter engine allows more payload to be carried which increases the revenue per vehicle

40% lighter and 40% smaller

MATERIAL COST

Conventional Engine EcoMotors OPOC Engine

Base engine short block

assembly

2020 916

Cylinder head & valve

train

1660 0

Fuel charging 2720 2240

Air charging subsytem 2420 2980

Lubricant & cooling 1220 1106

Sealing & power

conversion

1028 944

All other systems 612 448

CAPITAL EXPENDITURE

Conventional Engine Ecomotors OPOC engine

Total machining 304 164

Total assembly 43 36

Total tooling 84 46

Manufacturing Subtotal 431 246

Other supporting

departments

13 8

Total manufacturing 444 254

Supplier tooling 90 48

Total plant investment 534 302

DISADVANTAGES OF OPOC

Lack of dedicated lubrication system, parts wear-out faster

2-stroke oil can be expensive as mixing ratio is about 4 ounces per gallon of gas and 1

gallon of oil burns for every 1000 miles

Produce more emissions from the combustion of oil in the gas

MARKET SEGMENTS

Types of Customers

• OEMs who are engine

integrators (eg: Volkswagen)

• OEMs who are engine

aggregators such as Generac

(Generator Sets)

• Established independent

engine makers

• New entrants independent engine makers

Selection Criteria

• Market Application

• Light duty on road market

• Medium and heavy duty

on road market

• Off road market

• Percent of engine volumes in

‘emissionized’ countries

• Average horsepower of

market segment

GLOBAL ENGINE MARKET

SEGMENTATION

Global engine market107.3 million units

Off-road

22.5 million units

3.6% CAGR

60% captive

27% emissionized

185 average HP

Medium & Heavy on-road

3.3 million units

4.8% CAGR

50% captive

74% emissionized

316 average HP

Light on-road

81.5 million units

4.1% CAGR

90% captive

100% emissionized

156 average HP

THE BUSINESS MODELS

How to sell to

market

“the what”

“the so what”

“the how”

Licensing:

• License intellectual property to manufacture its OPOC engine

• Capital and manpower to build and run engine plant

• Money through royalty revenues

Advantages:

• Lower risk and capital lightness

• Focus to take technology to mass market

Disadvantages:

• Lower long term value capture

• Royalty revenues a fraction of what the company could make

• Lose royalty rights- “white-label” supplier

Make and Sell:

• All capital to run an engine plant

• Responsible for Sales and Marketing product

Advantages:

• Full control over development

• Greater long term value capture

• No IP issues

Disadvantages:

• Capital intensive

• Non core activities expertise needed

• R&D focused – Marketing

THE BUSINESS MODELS

Joint Venture Partnerships:

• Partner with larger company to build engine

plant

• Less capital intensive

• More development control

Advantages:

• Benefits of licensing (capital light, low risk)

• Benefits of making and selling (value capture,

control, branding)

Disadvantages:

• Need to pitch to right customer

• Most JVs established with proven technology

Lease and Subscription:

• Offer customers a risk free way to try OPOC

engine

• Get paid slowly-

• over time - lease

• per mile –subscription

Advantages:

• Allows customer try unproven technology

• Early technology adopters to mainstream

markets

Disadvantages:

• Never been successfully tested

ACTIONS TAKEN

Joint Venture with “OEM who are Engine Integrators”

JV worth $ 200 million with First Automobile Works (FAW) group in China

Enter all the three Market Applications, namely

Light-duty on-road

Medium and heavy duty on-road

Off-road

Acquisition of Katech USA for

Speeding up R&D

Prototyping and testing of motors

THANK YOU

Section C – HRM 2015-17

Sustainable Development : EcoMotors International

Submitted by-Aman Tripathi

C.AnishManas Tiwari

Pritha DubeSnigdha Talapatra

EcoMotors International: Company Profile

• Started by Peter Hofbauer: 20 yearsguiding development of Volkswagen andAudi engines globally

• Series of financing rounds led by Khoslaventures, Bill Gates and Braemaer Energy

• Gene pool engineering: Hiring keypersonnel like Don Runkle, CEO, AmitSoman, COO and Ian Ridley, VPTechnology

• Lean Startup Approach: Creatingminimum viable products and controlledscale up

2003: OPOC design developed at APT

$15m DARPA contract for their helicopters, and military trucks & tanks later

2006: JV between L3 communications and APT called Compact Advanced Propulsion

2008: EcoMotors formed upon splitting of CAP, retaining rights to develop OPOC design for commercial use

EcoMotors International: Company Profile

Current Scenario:

• 200m$ of licensing agreement with Chinese conglomerate, Zhongding Power for EcoMotor’s first engine plant

• 24 months of cash supply, need to self-sustain

• Decisions to be made:

• Selecting the right market segment : Engine consumers and engine application

• Selecting the right business model.

Opposed Piston, Opposed Cylinder (OPOC)

Fuel efficiency:

15% improvement

, upto 35% for dual OPOC

40% lighter and 40% smaller

lower material and capital costs

Additional seating space

or payload

EcoMotors International: SWOT Analysis

Weaknesses

Shortage of time & Capital Technical challenges in regions with

more stringent emission regulation such as USA, Europe & Japan

Requires huge investment in infrastructure to reach the scalability

Threats

Apprehensions in the mind of investors due to the failure of ‘Clean’ energy startups like Solyndra (Solar) & A123Systems (batteries) (Exhibit 9)

Multiple big integrators who has invested a lot of capital

Scope of change of technology in 5-7 years

Strengths

New disruptive technology High potential for growth Multiple options of growth i.e.

applicability in all the segments Experienced team ‘Lean Startup’ approach of creating

minimum viable products

Opportunities

Higher oil prices Higher fuel economy standards Increasing awareness of climate change Complexities in Hybrid & Electric

vehicle business model

SWOT

Decision Variable: Market Segment Factors

Customers

• OEM’s who are Engine Integrators• OEM’s who are Engine Aggregators• Established Independent Engine Makers• New Independent Engine Makers

Market Application

• Passenger Cars & Light commercial trucks• Medium and Heavy duty on-road• Off-road

Emissionized Zones

• Europe• US & Canada• Asia & Africa• Oceania• Latin & South America

Others

• Growth Rate• Overall Volume• Captive Markets• Average Horsepower

Decision Variable: The Business Model

LicensingPros:• Lower Risk• Capital LightnessCons• Lower long term value capture• Intellectual Property Rights issues

Make-and-sellPros:• Higher long term value capture• Full Control• No IP rights riskCons• Capital intensive• Outside the domain of expertise

JV PartnershipPros:• Non capital intensive• No IP rights risk• Partner’s strengths can be leveragedCons• Untested option since JVs only with companies

having proven technology.

Lease & SubscriptionPros:• Reduces apprehension of customersCons• Time intensive• Never been successfully used in automobile

sector• Lower long term value capture

The Decision Matrix

Critical Success Factors Lower Implementation

CostLess Break Even time

Higher Value Capture

Larger Market Share

Growth Rate

Lower Emission Standard

Captivity%

BestOptionDecision Variables

Market Segmentation

Cutomer

IntegratorsAggregators

& New Entrants

Aggregators

Independent

New

Market Application

LCV - -

M&HCVM&HCV - -

Off Road - -

Emissionized Zones

Europe - - - - - -

Asia, Africa,Latin & S. America

US & Canada - - - - - -

Asia & Africa - - - - - -

Oceania - - - - - -

Latin & S.America - - - - - -

Business Model

Licensing - - - -

JVPartnership

Make-and-sell - - - -

JV Partnership - - - -

Lease & Subscription - - - -

Best Option

2nd Best Option

3rd Best Option

- No data available in case

Recommendations

SHORT TERM

• Enter into a JV Partnership

• Target the aggregators and new entrants

• Target the Medium & Heavy On-road Market

• Target the Asian, African, Latin American, South American markets (Higher Growth Potential and lower emission standards)

LONG TERM

• Invest in engine development• Reduce the emissions of the current

engine• Enter Europe, USA

• Improve the design, targeting Light On-Road Market

• Enter the higher price segment of Light On-Road Market• Supply to new and premium models of

Integrators

Thank you

Questions?

ECOMOTORS INTERNATIONAL

Presented by

- Group 5

(Akshit Bhuwalka H15065

Bhavya Sharma H15077

B Krishna Kumar H15089

Pratyaksh Sindhwani H15101

Shrey Sharma H15113)

Origin of EcoMotors• Peter Hofbauer recognizes potential of 2 stroke engine

• 1990s: Volkswagen rejects the design over emissions issues

• 2003: Hofbauer joins APT; OPOC technology is used for military purposes

• 2006: L3 communications formed a joint venture with APT called CAP

• 2008: EcoMotors International formed with the split of CAP

• 2008-2013: EcoMotors develops culture, growth and strategy to prove technology

• 2014:EcoMotors looks for further expansion

Problem Statement“To develop a marketing strategy by selecting right market segment & complimenting marketing strategy to promote an engine which has the breakthrough potential of transforming entire industry.”

Advantages of OPOC Engine

• 9-15% more fuel efficient than a conventional engine

• Can derive an additional 35-40% fuel efficiency when two OPOC engines are coupled

• Requires lower material costs and lower capital expenditures

• 40% lighter and 40% smaller than conventional engines

4 stroke engine 2 stroke OPOC engine

Customer Segments

• OEMs who manufacture both the engine and the equipment

• Prefer only proven technology and focus is on Economies of scale

Engine Integrators

• Outsource manufacturing of engine and assemble equipment in house

• Prefer proven engine technology

Engine Aggregators

• Focus solely on engine manufacture

• Pride themselves on advancing engine technology

Established Engine Makers

• Companies based mainly in emerging economies

• In process of scaling up their manufacturing and looking to enter Global markets

New Entrant Engine Makers

Market Segments

• Largest market by volume

• Light passenger vehicles & cars

•Dominated by Engine Integrators

Light Duty On-road Vehicles

•Smallest market by volume

•Work trucks & trailer trucks

• Looking for innovation through better fuel efficiency

Medium & High Duty Vehicles

•Second largest market by volume

•Highly fragmented

•Agriculture, construction, industrial, marine & power generation

Off-Road Vehicles

Business Models

• Earn revenues through royalty through licensing

• Risk of the IP being modified and taken over by clientLicensing

• Control the entire value chain, larger long term value capture

• Huge initial investments and no expertise in S&DMake & Sell

• Partner with an established company and hedge the risks

• Companies going for JV prefer proven technology

Joint Venture Partnership

• Either make the engines or partner with a company

• Provide the engine upfront and get paid slowly

Lease & Subscription

Comparative Study

Business Plan Trust Factor Financial Constraints

Patent &licensing issues

Licensing Low Low High

Make and sell Low High Low

JV Partnership Medium Low Low

Lease & Subscription High Low Medium

Customer Segmentation Preferred Business Plan

Engine Integrators Lease & Subscription

Engine Aggregators Make & Sell

Independent Engine Makers JV Partnership

New Entrant Engine Makers JV Partnership

Proposed Market Strategy• Diverse market strategy

• Separate b-plan for each market segment

Build Trust using Lease & Subscription Method

Focus on engine integrators

Move to Make & Sell Strategy

Gain market share by using JV partnership B-

plan

Focus on independent engine makers who are

established and those who are new entrants

Move to Make & Sell Strategy & focus on engine

aggregators

Medium & Heavy Duty and Off-Road Vehicles Light Duty On-roadVehicles

THANK YOU