Scaling to New Markets: An Interview with the Leadership Team of Greenway Appliances
Greenway Appliances is India’s largest manufacturer of biomass cookstoves, which are designed with patented, air regulation technology. Co-founded by Neha Juneja (2019 Alliance Woman Entrepreneur of the Year) and Ankit Mathur in 2011, Greenway has grown from a small start-up to a team of nearly 110 employees across India. In December 2019, Greenway welcomed Achal Mehra as its new CEO of India operations.
The Alliance recently spoke with Juneja, Mathur, and Mehra, about the future of Greenway and the impacts of COVID-19 on their business.
This interview is part of a series of conversations the Alliance is having with business leaders across the clean cooking sector.
Alliance: How has COVID-19 impacted Greenway’s operations?
Ankit Mathur (Mathur): We were thrown a bit off balance but fortunately, less than 15% of our sales typically come in the first quarter, so we are prepared to handle lower cash flows at the start of the year. With India’s lockdown now seeming to ease up, we’ve been able to restart our factory, with safety rules and restrictions, although we are still operating well below capacity. We are looking to increase capacity within the next few weeks, which will help minimize the impacts from a production standpoint. We are also exploring options with lenders, but it’s a challenge: if you raise debt at this point in time, how and when do you service the interest?
Alliance: How is Greenway thinking about its leadership role in the sector in this time of crisis?
Neha Juneja (Juneja): Besides the fear of disease, this pandemic brings a lot of fear about income. Ninety percent of India’s jobs are informal. We have reached out to some of our partners to work on generating new local jobs and exploring options for disseminating cookstoves at low costs without comprising on the quality or performance of the product. Greenway has also traditionally provided consumer credit to its customers, and a lot of our sales have been supported through some form of regulated microfinance. But India’s credit and lending sector has never seen this level of stress. We hope to extend credit for stoves going forward, but we aren’t sure about the timeline yet.
Alliance: Can you tell us more about Greenway’s growth strategy?
Juneja: Over the past year, our main intention has been to multiply growth, to get to a stage where we get close to selling one million stoves in a matter of a few years. We have identified a few tracks as growth enablers, starting with expanding into international markets. We have begun in Zambia with our first carbon revenues project, which involved 100,000 stoves, of which we have already sold 20,000. It wasn’t just carbon that took us to Zambia — there were some very practical reasons, as well. The duty structure in Zambia allows us to import stoves and components at a low rate, and it seemed like a large nation that could also allow us to service other neighboring countries. Whichever country we look to next, we don’t want to be just an entity that exports stoves from India and has a few distribution relationships; we want to have a proper, in-country presence.
Another track is to continue expanding into lower-income markets in India. One way to do this is to reduce the cost of our products, so we’ve been actively looking into decentralizing our manufacturing, to distribute some of those operations to new locations. We are looking to roll this out between September and December, depending on when it will be possible to train the staff at localized assembly plants.
Alliance: How has Greenway stood out to investors and allowed the company to thrive?
Juneja: Regarding investors, we’ve been very capital-efficient. Greenway is one of the most successful enterprises in the sector in terms of dollar raised to dollars delivered in revenue. We are also very proud of the way we view the user as a customer. Our method of engagement is very market-based and similar to how an urban customer would be treated if they were buying a television.
Alliance: Can you tell us more about Greenway’s recent CEO transition?
Juneja: Greenway’s India team is upwards of 100 people now, and Ankit and I have been there from day one. We wanted to transition the India team — and Greenway overall — to more of a “big business” personality as we continue to build up the leadership for our international work, so we are grateful to have Achal Mehra, who comes with a lot of experience from large companies and the social sector.
Achal Mehra (Mehra): I worked with Pepsi and Henkel for the initial part of my career, and then with major media companies in India like ESPN, NBC, Sony Pictures, and a channel called AXNTV. When I met Neha and Ankit, I was very impressed by their social impact story, so we joined hands. Their increase in operations led them to begin looking into international markets, but they needed to ensure operations in India remained stable and that’s where I come in.
Alliance: Where do you see Greenway and the clean cooking sector more broadly in the next 5–10 years?
Mathur: There’s a large part of the market that isn’t covered, and we are currently skimming the surface. There is plenty of scope in India and the entire African continent where we could grow exponentially.
Juneja: Within the next five years, we want to see ourselves as a company that can serve lower-income customers, but serve them as a business. Our work in India has come close to selling a million stoves, but that number is small for the size of the market and the size of the problem. We need a strategy to serve larger numbers. For that, many things need to happen, including lowering costs, and increasing affordability and educational awareness — there is so much scope there.