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Turning Agrowaste into Building Blocks

Paving the Path to Sustainable Construction in India

Every year, a staggering 650 million tonnes of agricultural waste is generated in India. Have you ever wondered what happens to this enormous amount of residue? Surprisingly, a significant portion, nearly 100 million tonnes, ends up being burned, contributing to environmental degradation.

At Anthill Ventures, while evaluating start-ups in proptech for our Gruhas ASPIRE accelerator program, we evaluated companies that could use agrowaste to make composite materials such as blocks, wood alternatives, and sheets that could be used in construction. We dug deeper to uncover some interesting insights about the ‘waste to value’ idea.

Now, of course, agricultural residue is seasonal, and its supply is highly fragmented. So how do we make this input the backbone of a scalable AND profitable business? We asked ourselves questions such as: how do we tackle logistics? Is the demand for sustainable materials significant in the Indian construction space? How would the heterogeneity of the input be dealt with? And finally, what is the MOAT here? (excuse us for being very ‘VC’ here for a minute).

The key ultimately lies in the 3Ps; Processing, intellectual Property (IP), and Price.

Let’s take wheat straw for example.

Wheat straw can prove to be too voluminous to be transported in its rudimentary form, so it would have to be Processed before it makes it to the factory. This is where leveraging the rural economy would help. Outsource as much as possible, closer to the farm, and then transport your inputs to the central factory.  Keep only your final processing, your trade secret, and your process know-how.

The next catch then makes its presence felt: if you’re going to crush the wheat straw and create a composite material, neither do you have an IP nor a solution for input heterogeneity. The ideal strategy would be to disintegrate the input into its most basic form and use the IP-protected process to make the construction materials. Essentially, keep the ‘value addition’ part of the process to yourself and outsource everything to rural entrepreneurs who are closer to the farms. This strategy will be your stone that hits the birds of heterogeneous inputs, your MOAT, and logistics.

One ideal method would be to disintegrate the input into its most basic form and use the IP-protected process to make the construction materials.

Now that your product is ready to be shipped, let’s address the elephant in the room. How would we keep the Price of these construction materials competitive in our free market? If you’ve figured this out, drop us an email! Jokes apart, if the costs of inputs, rural processing, and logistics still leave room for a healthy margin AND manage to be competitive with the average construction materials in terms of pricing and quality, you’re REALLY onto something here.

Construction materials account for 11% of carbon dioxide emissions. Agriculture stands at 10%, and repurposing agrowaste as inputs in materials provides an opportunity for circularity. With strong tailwinds from the construction industry to adopt sustainable building materials, cracking this tough nut would hit that nail on the head or separate the wheat from the chaff.