E-WASTE RE-CYCLING – BUSINESS OPPORTUNITIES
E-waste typically includes discarded computers and components, cathode ray tubes (CRTs), printed circuit boards (PCB), mobile phones, headphones, wires & cables, and white household goods such as liquid crystal display (LCD), plasma TVs, ACs, refrigerators etc.As per Industry body ASSOCHAM, India’s e-waste generation is likely to increase by nearly three times, from the existing 18 lakh MT per annum to 52 lakh MT per annum by 2020 at a compound annual growth rate (CAGR) of about 30%.
Figure 1: E waste across cities and categories
Despite increasing number of registered recyclers/dismantlers in the country and large volume of E-waste generated, only about 5% of it is processed through formal sector. The remaining is either donated or goes to Kabadiwallas.For example, although Hyderabad generates about 32 000 metric tonnes of E-waste annually the formal sector recyclers whose combined capacity is only around 20,000 tonnes do not get adequate waste.
Source: The Hindu – article dated at June, 2016
Source: ASSOCHAM-Frost & Sullivan study, April, 2016
The biggest e-waste recycling market in India is Delhi and approximately 30% to 40% of the e-waste in India lands there.
E waste recycling process can be divided into two parts; separation and size reduction of metals (aluminium/copper/steel) & plastics andextraction of precious metals. Majority of Indian E waste companies do not have refinery/precious metal recovery facility, due to high capital cost (over INR 8 crores for refinery of 1 tonne per day) and lack of adequate waste availability.
Figure 2: E Waste Dismantling Process
The quality of e waste also plays a big role in deciding the nature of recycling facilities. For example PCB (Printed Circuit Board) around which the business of E waste recycling revolves can be divided into various grades depending on the gold content. As per Umicore, a precious metal refinery in Belgium, the PCBs can be divided into four grades (Table1)
Whilerefining is useful for high grade PCBs, for low/medium grade PCBS manual dismantling coupled with extraction of copper is a more viable option.
The total number of registered E-waste recyclers in India is 178., whereas Hyderabad has 5. Some of the large players are as under
Source: List of Registered E-Waste Dismantlers/Recyclers in the country (as on 29-12-2016)
Source: Telangana State Pollution Control Board
Capital Expenditure (CAPEX) for various options:
E waste recycling chain begins with a collection centre, which can be set up for Rs. 10 lakhs. However,standalone collection centres are not encouraged to register, unless they are being set up by a recycler/refurbished or an electronic product manufacturer. A collection centre combined with a dismantling unit can be set up for around Rs. 45 lakhs. In India, recycling is restricted to separation of Metal and Non-metal and granulation, as the technology for extraction of precious metal is not economical.
Figure 3: Capex required for Setting up a E-waste processing unit
The industry is governed by e-waste rules which specify the approvals and infrastructure requirements. The approvals need to be obtained from the State pollution control body.
The profitability of e waste recycling company depends on its access to waste and cost of waste. Cost of waste accounts for around 75-85 per cent of total cost of operations. The revenue depends on the quality of waste collected by the company. For simple dismantling operations, the estimated cost of waste and recovery per tonne is as under:
Other than the raw material cost, which has been discussed above, rentis another significant cost, Assuming a dismantling capacity of 5 tonnes per day, the area requirement @ 300 square meters per tonne of waste is 1500 square meters and rent can be up to INR 3-5 lakhs per annum. Further, there are other fixed overheads such as labour and interest. As such, one needs to process at least 3-5 tonnes per day, just to recover the costs.
Opportunities for a new enterprise
The e waste sector has grown at a slow pace over the last five years, largely due to lack of awareness about e waste rules, absence of strict guidelines for disposal of e waste and challenges from the informal sector recyclers who are able to offer a better price for the waste. However, the regulations around e waste are expected to tighten and would bring unorganised sector into mainstream.
While opportunities for e waste recycling are only expected to increase in future, profitability would depend on the value addition done by the enterprise. Therefore, aspiring e waste companies would also need to build skill sets in e waste segregation and in identifying reusable waste. We believe that
- Dismantling can be a profitable option if you are able to establish a network of waste collection centres and develop skill sets to identify reusable waste
- Setting up a refurbishing centre, where salvaged computers/phones can be repaired using new or old components should also be attractive.
- Recyclers would need a large network of collection centres or need to import waste to ensure capacity utilisation
How we can help you?
We are an advisory firm green business. We can help you assess viability of your proposed E waste recycling and support you in raising capital for the same. If you are looking to purchase/sell an existing E-Waste recycling company, we can identify prospective buyer/ seller and support you throughout the transaction.
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