Company/Organization Business Proposal

Title of the Business Feed the Future Bangladesh Aquaculture and Nutrition Activity
proposal
Name of the private Chaldal Limited
company/ organization

Private company/ Head Office: House - 14, Road - 6/C, Sector - 12, Uttara, Dhaka 1230.
organization detail Postal Address: House - 25, Road - 20, Block - K, Banani, Dhaka 1213.
address
Contact Person (on behalf Name Ishrat Jahan Nabila
of the company/
Designation Director HR, Legal and Compliance
organization)
Contact number +8801947372202
E-mail ishrat@chaldal.com, ijnabila@gmail.com
Proposed start date and From: To:
end date
Total Budget (In USD)
Budget contribution (%) BANA: Company/Organization:

1. Organizational Profile

1.1 Information on Establishment

Chaldal began its operations in 2014. Since then it has scaled up to serve over 5,000 items. Our wide range
of products include day-to-day items like fresh vegetables and fish. Chaldal’s logistics network currently has eight
state-of-the-art warehouses throughout Dhaka, cementing its presence in the grocery and agricultural supply chain
ecosystem in Bangladesh.

1.2 Offices (Headquarters and Field Offices)

Our head office is located in Sector 12, Uttara, Dhaka. Furthermore, our Chaldal Tech Office is located at
Block D, Bashundhara Residential Area while our home-good store is located in Mirpur.

1.3 Core Business and Volume of Transactions

Chaldal is currently the largest online retailer in the country. We began focusing on groceries, with an aim to become
the single most diverse store for customers. That way, Chaldal can make headway towards its ultimate goal of
becoming the “everything store” for the average customer. At the moment, we are serving over 2,000 orders per day
(average $17 per order) and 16,000 - 17,000 households on a monthly basis. Our website gets 38,000 hits per day.
We have captured approximately 80% market share of grocery and retail sales. Data is used in every step of the
process. From predicting customer demand to minimizing wastage, we have algorithms and machine learning
apparatuses in place. These systems have helped us achieve a 96% accuracy in order fulfilment.

1.4 Key Products and Services

We operate an online shop for necessities in Bangladesh. It offers groceries, such as fruits and vegetables,
breakfast, beverages, meat and fish products, snacks, dairy products, frozen and canned food products, bread and
bakery items, home and cleaning products, baking needs, and cooking products; office products, including writing
and drawing, organizing, and printing products, as well as batteries; beauty and health care products; baby care
products, such as diapering, fooding, and bath and skincare products; sweets; and electrical products.

1.5 Organizational structure and number of permanent employees

Chaldal has 440 full-time employees. More will be added to the team in order to be utilized for the proposed aqua
network. The male-to-female employee ratio of the company is 9:1. Therefore, Chaldal has approximately 50 female
employees.

2. Goal & objective of the proposed business:

Chaldal has already reached profitability from an operational standpoint, and has recently raised a $4.4 million round
of equity investment from the World Bank’s IFC, along with major financial institutions like IDLC, to undergo a nationwide
expansion. We have also signed a partnership with DFID’s Business Partnership for the Poor - Bangladesh program
to create a digital vegetable delivery network that will provide backward and forward linkage to our vegetable supply
chain, which already handles 120 tons per month, to 500 micro and small enterprises (MSE’s). Vegetable producers
and retailers can bypass wholesalers to sell to and buy from Chaldal, respectively, while also getting access to finance
via partners like IDLC. We propose to create something similar for fish producers and retailers, in partnership with
BANA. So far, fish is still a small, but growing part of our operations (26.8 tons sold in 2018, but with 109% growth with
minimal marketing or operational effort). We believe it has tremendous potential, and a partnership with BANA can help
accelerate its development and create value for MSE’s, Chaldal, partners and consumers.

3. Proposed business idea in detail:

3.1 Sector overview:

Bangladesh is considered one of the most suitable regions for fisheries in the world, with the world's largest flooded
wetland and the third largest aquatic biodiversity in Asia after China and India. This increase in aquaculture
production has been made possible with the implementation of scientific and technological modernization. From 2000
and 2016, aquaculture production increased from 712,640 and 2,060,408 metric tons, a much larger quantity than the
wild capture production (1.023 million tons) in 2016. There has also been a recent increase in the value of fishery
exports, with more than US $34.08 billion in 2010 rising to more than US $46.60 billion in 2015. However, fisheries
production is well below production targets despite the large gains seen in the aquaculture sector. The fisheries
sector in the 21st century is facing the challenges of food security for the increasing population, habitat degradation,
urbanization, and industrial development. Development of responsible fisheries management and optimal use of
water bodies can address those challenges. Since fishery is a productive growth sector in Bangladesh, it has a high
potential to contribute to the socioeconomic development of the country.

As the fish production from aquaculture has increased remarkably over the last few years, many poor and ultra poor
of rural Bangladesh have got the opportunity of full-time and part time employment. About 11% of the people of the
country now directly or indirectly depend on the fish sector for their livelihood. Among the manpower associated with
the fish sector, 10% are women. Moreover, 80% of workers working for fish processing plants and fish drying centers
are women.

The 21st century reveals a fishery management process experiencing unprecedented socioeconomic, environmental,
and institutional challenges. Over the last fifty years, fisheries governance has rapidly evolved from primarily open
access to regulated common property and rights - based institutions. The inland capture fisheries sector faces habitat
degradation through agricultural development, urbanization, and development of industries. The breeding ground for
capture fishery resources has been affected by many environmental and man-made factors. Moreover, substantial
industrialization and urbanization cause water pollution problems that subsequently affect the fisheries resources.
The production sectors of fisheries have now added the networks of input supply, market and distribution, and post-
harvest value addition, particularly in the export sector. These, in turn, involve substantial number of people and
generate significant economic output. Taken overall, income and employment in the sector should expand, and in
sub-sectors growth is particularly likely to be enhanced. The ultimate challenge is in transferring benefits of this sector
effectively to the stakeholders in fisheries. A range of public and private sector investments and initiatives will be
needed to realise the potential for change, growth and expanding economic output. Though numerous constraints
can be recognised, the prospects for doing so are positive, and the recent record of micro-scale and commercial
private sector enterprises, particularly in aquaculture, demonstrates the emerging strength and potentially positive
impact of this sector as a whole.

3.2 Proposed business idea in detail

Chaldal will coordinate a unique fish suppliers network in 2 areas in the FtF’s ZOI/RFA. We will establish hubs where
100 lead farmers can obtain training, inputs, and off-take agreements to sell their fish, which will be
checked/sorted/packed at the hubs according to both best practices and our customer specifications and sent to
Dhaka via our trucking network. The farmers can be identified through AIN partners, based on past performance and
propensity/desire to grow their business. In addition to themes like pond management, balanced polyculture, post-
harvest management and other modules, we will provide them with business training. The lead farmers will, over
time, become “mini-hubs” that will train other smaller farmers in their area and coordinate with us on aggregating their
production. In Dhaka, the fish can be sold through our website, mobile interface, and call center to individual
households, B2B customers such as offices, restaurants, supermarkets as well as a network of 60 fish retailers we
are creating. Chaldal can provide logistics, packing and other solutions as well as business advisory services to the
retailers, who can outsource these functions to us while saving money and time. In return, they must abide by the
best practices and quality standards Chaldal sets. Chaldal will also mobilize its digital marketing prowess to create
consumer awareness around products like tilapia and rui fish. In the long run, the network of retailers and suppliers
will allow for intra-network trading throughout the country, especially as Chaldal scales its logistics. From day one, the
network will generate both individual and collective data for the fish production and retailing sector; this can offer
unique pioneering steps toward developing trading trends, cash flow recording and exploring opportunities for
introduction of financial products such as flexible credit facilities and even personal loans targeted towards the
retailers and producers within the network. This data will also allow for Chaldal to accurately predict volumes and
have stability in pricing, for itself, its consumers, producers and retailers. This project fulfills BANA/FtF’s mission to
strengthen aquaculture market systems and stimulate investment. It meets specific business areas/objectives such
as improving availability of quality seeds/inputs/machinery, strengthening small-scale business enterprises, creating
customized financial packages, strengthening supply channels, creating innovative employment opportunities, raising
consumer awareness and marketing affordable, safe fish products.

2 Districts to Collect the Fish from

1) Jessore - Tilapia
2) Barisal - Rui

Year 1

1) Activity 1 - Getting collection points ready. We will build 2 collection points

2) Activity 2 - Identification of potential farmers (parallel activity with 1)
3) Activity 3 - Getting onboard retailers (parallel activity)
4) Activity 4 - Collection from an initial batch of 20 farmers at each collection point
5) Activity 5 - Selling initially to 20 retailers
6) Activity 6 - Setting up software for farmers and retailers
7) Activity 7 - Training

Year 2
 1) Existing farmers’ inclusion into automation of transaction.
2) Expanding in 3 new locations such as Khulna, Madaripur and Faridpur.

Year 3

1) Expansion at upazila level

2) Scaling with lead farmers
3) Developing an App to give different kinds of support related to farming, weather, FAQs etc

These will be further discussed later in (Section 9. Project Administration & Management Plan).

3.3 Relationships:
[Describe how the proposed business idea will lead to improve the transactional relationships among different market
players (e.g. farmers, traders, arotdars, dealers, retailers, company etc.)]

Current scenario of the fish supply chain from the farm/sea to the main warehouse in Dhaka involves several middlemen
such as traders, artodars, dealers before they end up in the hands of the retailers. During this transition, every
middleman keeps a commission for every transaction. These middlemen are sometimes influential enough to lower the
price of the fish at the farm-gate, which is disadvantageous to the fishermen/fish farmers. On the other hand, due to
having so many middlemen in the process, the end fish retailer has to buy the fish at a steep price which is then borne
by the end consumers. On the whole, the presence of middlemen diminishes equity for both fishermen/fish farmers as
well as end retailers and consumers.

The proposed business idea streamlines the entire fish supply chain by getting rid of all the middlemen as Chaldal will
be taking charge of collection, transportation and distribution from end to end. This will bring about a change in
relationship among the relevant stakeholders. In the proposed model fishermen/fish farmers will no longer need to
communicate with the traders and arotdaars. Chaldal’s field force and transportation system will bring the fish from the
very source and distribute it to the end retailers. In other words, representatives of Chaldal are the only players that
fishermen/farmers will correspond with. In this model, fishermen/farmers will be able to fetch a higher price for every
unit of fish the sell, retailers will be receiving the fish at a lower price than what they pay in the incumbent scenario and
lastly, consumers in Dhaka will gain unrestrained access to fresh fish as the current model will reduce transportation
and transaction time.

3.4 Target Group:

We will target 60 retailers/traders and 100 lead farmers, who will oversee other farmers they can impart their own
knowledge onto. The lead farmers should come from the AIN network. We will target 20% of the farmers in the
network to be youth under the age of 24. In case of job creation 20% shall comprise of women.

3.5 Geographic Coverage:

Initially for the first year, we will be targeting Jessore for tilapia fish and Barisal for rui. Once the 3rd year of the
project is reached, our scalability will include more upazilas subject to progress and viability of the project.

3.6 Incentive matrix of the business idea:

Market actor Innovation or value addition in their Incentive

Role function
[What is their
Market Actor [What is their [What is the new in their function?] Incentive in
role in the participating in this
business?] Previous Situation Envisioned Situation business?]
catching, Do not get direct Fish farmers will
Fetch a higher price
Fish Farmers nurturing, selling access to communicate with
for the fish sold than
fish to retailers retailers due to Chaldal field force
 the presence of only to directly send they are currently
multiple their produce to the doing.
middlemen like retailers.
artodar, traders
and dealers.
Fetch low price
for the fish sold.
Retailers Purchasing from Retailers buy fish Retailers will be in Retailers can source
farmers and from middlemen direct contact with fish at a lower price,
selling to instead of directly fish farmers through enjoy higher margin,
customers from fish farmers. Chaldal is the only sell fresh fish. Enjoy
mode of transport reduced price
and collection. volatility.
Customers Purchase fish Buy fish from Purchase fish from Consumers will
for consumption retailers, unsure the retailer or direct receive a better price
of the freshness supply of fish from for the fish and
of the fish, pay the farmer to their receives assurance
very high price doorstep. of freshness of the
for fish. fish. Enjoy reduced
price volatility.

4. Activities detail
We plan to roll-out the entire plan in 4 phases as follows. That way, after every phase, we can make the necessary
corrections and adjustments to our overall strategy. After each phase, we plan to look at the subsequent outcomes of
the plan as per its roll-out till that specific time period. Certain changes will be made as per required before further
scale-up. This will allow us to tinker with our strategy as we move along and make fixes to any shortcomings or
mistakes before we expand and delve deeper into our overall plan.

● Phase 1 - establish collection points and qualify/onboard retailers, develop software, set up infrastructure and
source from wholesale bazaars in hub areas while waiting for supplier network to be created, establish marketing
campaign, collect baseline data

● Phase 2 - identify key farmers in each hub area as leads, giving them intensive training of 2-3 months on
production techniques, business planning and sign offtake agreements with them

● Phase 3 - lead farmers become trainers themselves, start supplying to us

● Phase 4 - trial value-added services for producers and retailers such as finance, inputs/machinery rentals in
partnership with banks, input/machinery companies and others

5. Activity plan with timeline (Gantt chart)

Timeline
Sl. No. Activity
August, 18 Oct, 18 Dec, 18
Phase 1 establish collection set up infrastructure develop software,
points and and source from establish marketing
qualify/onboard retailers wholesale bazaars campaign, collect data
Phase 2 identify key farmers training for farmers business planning and
signing agreements
with farmers
Phase 3 establish connection training to become establish chain for
with lead farmers trainers themselves farmers to supply to us
 Phase 4 devise plan for value- trial the VAS with finalize aforementioned
added services (VAS) everyone along the VAS to be used
for everyone in the supply chain subsequently in later
supply chain phases

6. Expected outcome of the proposed business

For year 1, we will target 3x sales to 60 tons for Chaldal, while increasing farmer/retailer incomes by 20% on average.
We want 50% to avail credit. We will also track job creation, with a target for 20% of jobs to be for women.
Commercial metrics can be tracked by Chaldal’s digital channels.

7. Future plan:
Beyond Year 1, we want to further develop the network through additional products/services at the hub-level (e.g.
community feed centers), while also getting to the farmers at the “last mile” through a hub-and-spoke model through
mini-hubs. We want to replicate the model throughout Bangladesh. Chaldal is in the process of raising $10-15M for
nationwide expansion beyond 2019, for which we already have pre-commitments. Our primary target for use of those
funds is on the supply side, for both vegetables and fish. Providing a proof of concept (with technical and financial
support from BANA) will help us close this investment and expand this model.

8. Monitoring and Evaluation Plan

Will be provided by WorldFish’s MEL Team.

9. Project Administration & Management Plan:

In building and managing a project such as this, with space for scalability. Certain systems need to be in place. A few
definitive managers need to be assigned, and other employees will be required to carry out the necessary work. in
each of the collection points, 2 managers will be taking the lead while 2 others will handle sorting and logistics when
the fish arrives from the farmers. There will be 6 other employees handling sorting on behalf of the retailers. All this
will be necessary for Activity 1 in Section 3.2.

As Chaldal specializes in efficiency in conducting business by digitizing various processes, we plan on developing
software to help streamline fishing industry. As part of that overall plan, in Activity 6, we will create software for both
the farmers and retailers that will periodically upgrade to better predict market demands and other fluctuations that
will help better serve all the stakeholders involved. For such an undertaking, we will require 2 senior software
engineers, 1 systems architect, 1 UI developer, and 1 project manager. This portion of the project will make us stand
out as Chaldal specializes in digitizing otherwise relatively inefficient activities, which subsequently makes them more
efficient.

For Activity 7, we will require 1 aqua expert full-time. We will also need 2 ground trainers for the 2 collection points.
The aqua expert will go to both the collection points and train the 2 ground trainers. The training will bear fruit when
these ground trainers train the farmers on all the activities they have to part-take in.

10. Environmental Screening Report Form:

Will be provided by WorldFish’s environment specialist.

11. Budget, Reporting and Payment Schedule

12.1 Budget Summary:
 12.2
Budget details:

The following modifications to the budget require written approval from WorldFish:

To change the required funding amounts necessary to fulfill the stated project objectives.

▪ To change or temporarily replace key project staff.

▪ To reallocate between budget lines items an amount greater than 10% percent of the main
budget line.
▪ To add a line item to the budget.
▪ To subgrant or subcontract any portion of this budget to a third party.

12. PAYMENT SCHEDULE AND DELIVERABLES

*Subject to further meetings with WorldFish

Amount (USD)
Payment
Activities Deliverables Sub- Total
BANA due date
grantee Budget
 1.1 Setup Chaldal Aqua
Network (CAN) Collection 25,000 10,714 35,714
Centers
1.2 Upgrading
infrastructure at existing
20,000 8,571 28,571
Chaldal Warehouse

1.3 Development /
Maintenance of software
8,856 35,429 44,285
(UI designer, product
manager, engineer)
2.1 Program Lead 14,000 6,000 20,000
2.2 Fish Sector Expert /
12,000 5,143 17,143
Operations Expert
2.2 Hub Personnel (2-4 per
25,715 25,714 51,429
site x 6 sites
2.3 Collection, Sales, and
0 12,857 12,857
Marketing Sales
2.4 CEO / CTO / CMO /
Ops Director / Legal or
0 42,857 42,857
Compliance Directors
(20% of the time)
3.1 Truck Rentals (10k x
27,428 41,143 68,571
2x/week x 6 sites)
3.2 Annual Training
60,750 20,250 81,000
Budget (2700 x $30)
5.1 Marketing ($250/day) 25,500 59,500 85,000
5.2 Operating Expenses of
0 42,857 42,857
CAN Hubs
Grand Total 219,250 311,035 530,285
(%) Contribution 37% 63% 100%

With the exception of the first payment of XXX, subsequent releases of funds to Subgrantees are subject
to following conditions:

1. Technical and financial reports that are due are received and accepted by WorldFish.
2. Subgrantee’s approved expenditure reports cover at least 75% of the previous cash transfers from
WorldFish………..Not Mandatory for Fixed Grants

Payment should be made to the below account number:-

Bank Account Holder Name: Chaldal Limited

Bank Name: Trust Bank
Bank Account Currency: US Dollar
Address: CItyscape Tower (3rd and 4th Floor) Holding No:-53 Gulshan Avenue Dhaka-1212
Bank Account Number: 0016-0210012665

Other Reports (Deliverables for Fixed Amount Awards)

WorldFish may, at its discretion, require other necessary reports (supporting documents) from
Subgrantee .