India accounts for the generation of 350 million tonnes of agro-waste generated every year. Apart from this, thousands of tonnes of waste is generated by factories that manufacture cotton, fruit juice, potato chips, coffee, and more.
It was to make the best of this waste that Dr Sidharth Arora in 2017 launched , which uses proprietary micro-organisms and a novel solid state fermentation (SSF) bioreactor to produce industrial enzymes from agro/fruit/forest waste.
Based out of TIDES Business Incubator, IIT-Roorkee, the startup aims to contribute towards a circular bio-economy by converting agro-industrial waste into value-added products such as high-quality industrial enzymes and ensure farmers’ prosperity.
“Our technology provides a unique solution that takes care of waste, but also generates enzymes and specialty chemicals for which the market in India is growing at 12 percent. This also addresses the energy crises in India, since the end residue results in fuel pellets that are high in calorific value. We have been able to achieve a high calorific value (CV) of 19.2 MJ/kg from fermented pine needles, and the research outcome has been published in Renewable Energy, a highly reputed peer-reviewed international journal,” Sidharth says.
The founder says the heterogeneous nature of agriculture biomass provides a unique opportunity to produce a multitude of metabolites of commercial interests.
Siddharth Arora, Founder & CEO, Fermentech Labs Pvt Ltd
Fermentech uses carefully designed unit operations to process agro-waste and for reactor operations to ensure multiple products with a high yield. The process yields three products: enzymes, prebiotics, and high CV fuel pellets (for heating boilers).
At present, the startup manufactures four enzymes with wide applications across industries. These include pectinase (used by the fruit juice, wineries, textile, aquaculture industries), amylase (brewery, fruit juice, pharmaceutical, bakery, and textile), xylanase (bakery, animal feed, textile, pulp and paper), and cellulase (animal feed, biofuel, detergents, textile).
In the beginning
The seeds of this startup were sown during Sidharth’s PhD days when he was working on a novel SSF bioreactor—a system that usually involves fermentation of solid waste by fungi for the production of metabolites of commercial interests, under the supervision of Professor Sanjoy Ghosh, Department of Bioscience and Bioengineering, IIT Roorkee.
The challenge with SSF technology is scalability, and the duo was able to demonstrate a modular design with high substrate loading for enzyme production. The results were published in peer-reviewed international journals and a patent was also filed.
“We were able to realise the economic potential of using low-cost raw materials to produce not only enzymes, but also a side stream rich in commercially viable products. This proof of concept was appreciated by BIRAC, Department of Biotechnology, and we were awarded the prestigious Biotechnology Ignition grant. At the time, IIT-Roorkee TIDES Business Incubator was also coming up and provided us legal assistance on company formation, team building, and access to mentors,” Sidharth says.
In March 2018, they started operations on a lab scale in IIT Roorkee with two reactors: 5 kg and 15 kg capacity. At present, a 150-kg bioreactor is under installation.
Apart from bringing production costs down by using waste as raw material, Fermentech encourages industries to adopt green technologies and reduce their dependence on synthetic chemicals for processing biomass.
“Disposal of agro and fruit waste is a headache for industries. For example, HPMC, an apple juice manufacturing company based in Parwanoo, Himachal Pradesh, generates around 60 tonnes of apple pomace daily. Godrej, on a per-day basis, generates around 200 tonnes of empty palm fruit bunches. Our solution is aligned to not only mitigate the pain point but also add value,” Sidharth says.
He adds that the startup is directly aligned with the target of doubling farmers’ income, reducing carbon emissions, and making India self-sufficient. Around 28 farmers have benefited so far from this, and are making around Rs 5,000 annually.
Fermentech was started with an initial investment of Rs 10 lakh by the founder in 2020. It was awarded a seed fund from BIRAC, through a-IDEA, NAARM, under the BioNest programme to scale enzyme production in 2021. It has also received a seed grant from Engineers India Limited for development of cellulase from agro-waste in 2018.
The startup was among the top 15 grant winners in 2021 of Land Accelerators South Asia, organised by World Resource Institute and Sangam ventures, and was part of the 2018 Indian delegation to Slush, a startup meet in Helsinki, Finland.
Team at Fermentech Labs
Business model and traction
The Indian industrial biotechnology (enzymes) market continued to witness sturdy growth in 2020-21 at 12 percent to touch Rs 2,907 crore during the year as against 10 percent recorded in 2019-20, with the industry crossing Rs 2,500 crore during the year.
Fermentech’s business model is focused on sustainability. It works with companies and government bodies that generate agro/fruit/forest waste and for whom disposal is a pain point.
Siddharth says, “We use this waste as raw material to make industrial enzymes, specialty chemicals, and high CV fuel pellets. Ideally, the company or government will also be a consumer of enzymes. In this win-win model, we aim to scale up operations.”
He cites the example of HPMC and the byproduct it generates: pomace. “This does not add value to the finished product. The pomace is rich in lingo-cellulosic content and results in increased biological oxygen demand (BOD) when discarded in water bodies and landfills,” he says.
HPMC generates around 60 tonnes of apple pomace per day during the crushing season and its disposal is a headache for the company. This residue can be used by Fermentech for the production of enzymes such as pectinase.
“HPMC presently imports pectinase for juice clarification, which can be replaced by our product at very competitive price using HPMC’s own waste. Plus, they get to use the fermented residue pellets as fuel in their boilers!”
Refusing to divulge names, Siddharth says the startup has two customers, one in the fruit juice sector and other in the bakery industry.
This year, Fermentech Labs has supplied around Rs 50,000 worth of enzymes to the fruit juice, bakery, and the textile industry, and received repeat orders.
The founder says pilot operations at the 150-kg bioreactor over the next three months will help add at least 10-15 customers in the next year.
“With the facility expected to be fully operational in three months, revenue is expected to increase by at least 20X in the next year. This will be mostly achieved through online distribution channels. We have also applied for FSSAI certification for our food-grade enzymes,” the founder says.
