How this engineer-MBA clocks Rs 5 crore annual turnover from vermicompost business

After completing his mechanical engineering from West Bengal University of Technology (now Maulana Abul Kalam Azad University of Technology), Raj Singh took up a job in Mahindra’s auto division in 2008. While working, he also completed his MBA in marketing from IIMT, Ghaziabad, in 2014. He then moved to the research and development division.

“My MBA studies brought me in touch with people from business families. Their outlook was different as they believed in taking risks. However, those in the service class avoid taking risks. This creates a block towards entrepreneurship,” Raj tells 30Stades.

Since his two younger brothers were studying engineering at the time, Raj also avoided taking the risk of starting any business as he was the primary breadwinner. 

“However, after my youngest brother Rajesh completed his engineering in IT, he decided to start a dairy farming business. By then, my other brother Shiv Singh was working with Infosys in Pune, and my sister and wife were also working. We could take the risk of starting a business,” says Raj.  

From dairy farming to vermicomposting

Rajesh’s dairy business began in 2016 and the number of cattle reached 300 by 2017 “Daily, a lot of cow dung was produced and we were selling it at dirt cheap rates. That’s when we thought of utilizing cow dung. We researched and learned about vermicomposting online,” Raj says.

In 2017, they started vermicomposting with 50 beds as a side business. “We procured worms from a research centre and had ready cow dung on the farm. This business was generating some income for us,” Raj says.

In 2019, Raj also quit his job to help his youngest brother. However, the dairy business took a severe hit during COVID-19 as gated societies prohibited door-to-door sale of milk. 

“However, there were no restrictions on vermicomposting during the lockdown because it was an agriculture-related business. Along with my brothers Shiv and Rajesh, both engineers, I began focusing on vermicompost. We put up 200 beds,” Raj adds.

They shut down the dairy business in 2021. Though one year was full of struggles, Raj realised the market value of vermicompost as farmers are giving up the use of chemical fertilisers due to rising costs and depleting soil fertility. 

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“During COVID-19, we sold earthworms at Rs 200 per kg and vermicompost at Rs 3 per kg. However, after witnessing somebody’s death due to cancer, we reduced the prices of worms to below Rs100 to help farmers,” he says.

The 200 beds became 350 in one year. Today, Raj and his brothers manage 750 vermicompost beds spread over three locations in Ghaziabad, Uttar Pradesh. 

Each bed is ready in about two months and the six cycles in a year yield 7,000 tonnes of vermicompost (sold at Rs5 per kg). Along with the sale of earthworms, the total annual turnover is Rs 5 crore. 

“The profit margin is more than 50 percent in vermicomposting. It is a low-cost and high returns business,” the agripreneur says.

The global vermicompost market is expected to grow 6.1 percent between 2021 and 2028 to reach two billion dollars by 2028, as per Data Bridge Market Research.

India is currently the world’s largest exporter of vermicompost followed by Sri Lanka, Turkey, Indonesia, and Vietnam, according to Sear Exim Solutions, which tracks export-import data.

“From Kashmir to Coorg and Gujarat to Guwahati, we have customers across India. About 90 percent of our buyers are resellers and only 10 percent are direct users,” Raj says.

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Low-cost vermicompost making

“We run an extremely low-cost vermicompost business. We don’t use plastic sheets below the beds, don’t level the ground and don’t use plaster or any shed. This reduces the investment,” Raj says. 

“Moreover, we use banana leaves to control moisture and heat. About 3-inch to 4-inch layer of banana leaves keeps the temperature at 22 to 24 degrees Celsius even in 45-degree heat,” Raj explains. 

The composting and reproduction rates of earthworms decrease at temperatures above 27 degrees Celsius. 

“Apart from helping earthworms flourish and produce well, banana leaves are also rich in phosphorus. So our vermicompost has over 1.5 percent phosphorous content while others have 0.8 percent,” Raj explains.”

“This compost acts as an excellent source of natural DAP, which is rich in both nitrogen and phosphorus – helpful in fruiting and flowering,” he adds. 

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The brothers use the Eisenia fetida variety of earthworms due to their ability to process organic matter rapidly. “Just eight worms can become 15,000 in six months under favourable conditions. They have to be removed from beds regularly, generating income from their sale,” he says.

The brothers also control costs by keeping the vermicompost bed size large. 

“Our beds vary in length from 50 ft to 80 ft though width is 4 ft. The smaller bed operations are less efficient in terms of labour utilisation compared to larger ones. You require more labour to tend to multiple beds,” he says.

Business and training 

Currently, the brothers have three vermicompost sites in Ghaziabad. “One is in collaboration with Ghaziabad Nagar Nigam, where we use cow dung from their cattle sheds that house 1500 cows. Next to it, in Karera village, we have 350 beds,” he says.

A new unit is being developed in Farukh Nagar in Loni to accommodate 600 beds. “Out of these, 300 are functional,” Raj points out.

Apart from these, he also has 50 partnership sites across India. They have been set up following consultation with Raj. The brothers provide regular support and also buy their produce if they are unable to sell. 

“We stay in constant touch with our customers, monitoring their weekly progress in vermicomposting and helping them as required,” he says.

The brothers provide free vermicompost training on the last Saturday of every month. “The one-day training, including meals, is free. “The paid training, with a fee of Rs 1500, is spread over three days,” he adds. So far, the brothers have trained over 2,000 people in NCR.

“The production will go up once the remaining 300 beds also go live at our Loni site,” Raj says.

(Rashmi Pratap is a Mumbai-based journalist specialising in financial, business and socio-economic reporting) 

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