How waste recycling startups are making profits ?
Waste Management is an alarming issue in India and is getting critical every day.
Bengaluru | Red Newswire | Nov 29, 2015 06:35 PM IST.
Spread across over 326 acres in northern Mumbai, the Deonar Dumping Ground has accumulated a massive 18-metre pile of garbage and for the past nine decades has been where much of the commercial capital’s refuse ends up. In a few months, this massive site may be out of space — as early as March 2016, according to civic authorities.
India is facing a garbage crisis like never before; across the country, cities are drowning in detritus. From Mumbai to Bengaluru to Delhi, the effects are starting to tell. In Bengaluru, what was once a serene lake turned into a frothing mess in Bellandur, an eastern suburb, as an array of garbage wreaked havoc. In Delhi, two strikes by collectors quickly saw masses of garbage pile up and exposed the explosive rate at which urban India generates trash.
According to data from Indiaspend.com, a data journalism initiative in Mumbai, 377 million people in urban India generate 72 million tonnes (MT) of garbage daily. Some 45 MT of this is untreated, becoming a source of environmental pollution and, further down the line, an assortment of ailments.
The kind of garbage India generates too is changing; plastic waste and ewaste are growing rapidly and state-run agencies don’t have the capacity and capability to deal with this new surge. Instead, computers and mobiles (often with lead, mercury and other dangerous materials inside) are either tossed into landfills or crudely recycled with little concern for the health and safety of people handling this junk.
India doesn’t know what to do with its trash, even as it continues to generate many metric tonnes more. Landfills are filling up and new ones are facing stout resistance from locals, who have become aware recently of the ills of having mountains of refuse in their neighbourhood. Along with the Narendra Modi’s government’s Swachh Bharat Abhiyan, which is attempting to clean up the streets of India’s cities and towns, fresh thought is required to solve the larger problem of drastically reducing the quantum of garbage generated. And, existing resources (civic administrations with limited facilities), it has become evident, can’t do it all.
Part of the challenge in coping with this crisis is trying to slow the avalanche of trash across the country, especially in urban India. As the pace of urbanization sustains and more people head to cities, the mountain has only gotten bigger. In the next decade, 69 metros, each with a population of 1 million or more, will house 78 per cent of India’s population, according to a study by consultancy McKinsey & Co. Existing facilities have buckled in the face of this explosion of garbage and the problem is only likely to worsen if these urbanisation targets are met. Cities have little chance of keeping up — Hyderabad has been scouting for a new landfill site for years, with little signs of a consensus. Other cities too are staring down the abyss.
In this context, private enterprise hopes to step in where public services fall short. For example Daily Dump in Bengaluru, started in 2006 with 30 customers in Bengaluru, is now in 17 cities with its composting solutions.
Elsewhere, Attero Recycling, a provider of ewaste recycling, raised funds last year and says it recycles nearly 500 tonnes of such trash annually. It now wants to build more recycling plants and is even thinking of taking its business overseas. In other segments, G PS Renewables is converting waste to watts, targeting both industries and homes with their innovative power solutions. In August this year, Saahas Waste Management raised fresh funding as it seeks to expand to quadruple the 20 tonnes of waste it handles daily.
The going won’t be easy. This subject has been closely controlled by government agencies and prone to red tape, corruption and interference from all sides. Companies have to deal with slow payments, meddling officials and intertia-laden administrators loathe to change. The attitude to garbage too is slow to evolve at home and at work, with individuals slow to change old (bad) habits. As these ventures wade through this muck, building a scalable and profitable business may take longer than other sectors.
But, as the progress of these firms shows, there may be a goldmine in the gunk. ET Magazine delves into the operations of eight such waste management ventures that are doing their bit for a cleaner India.
The right karma and kabbadi
Six months into the ewaste recycling business they had started in 2012, Akshat Ghiya and Aamir Jariwala realised that they were not receiving one stream of electronics that was also among the fastest growing: mobile phones. People preferred to keep the spare phones locked up at home and it was not of much use to the kabaadiwaala, who dealt with end-of-life electronics.
“There was no real solution to the future of these smartphones and tablets that are lying locked up. But there’s life in them that can go on for 3-4 years,” says Ghiya. So the two friends who had met in Northwestern University in the US decided to pivot their business and Karma Recycling’s focus became the reuse and recycling of mobile devices and tablets.
Customers can get instant quotes for their used devices on the Karma Recycling portal through an algorithm the company has developed. If you would like to sell, Karma Recycling will pick up the device from you and electronically transfer the payment to your bank account. Data is wiped from the phones and then checked by the engineering unit. The refurbished phones are then resold with a new warranty and money back guarantee in smaller towns. Some 70 per cent of the phones it receives do not need any repair, according to the company.
“The demand for pre-owned, refurbished products is extremely high. Indians are very aspirational and want to hold a brand in their hand,” says Ghiya. The startup also began working with large-format retailers over a year ago, using the rationale that people would want to sell their old devices at the place where they are buying their new phones. The company has designed a cloud-based interface called Exchange Hub that can be used to value the devices, and that value can then be worked into a discount in the new device. Karma Recycling is working with 200 such stores across the country and has so far bought and sold 20,000 phones.
The startup, which raised series A funds from London-based clean tech fund ERM and IIM-Ahmedabad’s incubator, is in talks to raise the next round. The good thing is that people are finally starting to realise the problems to the environment that they have created and there’s space for ventures like theirs, says Ghiya. “It’s finally become possible to make money and create a good business while doing a whole lot of good. And if you can earn money doing a whole lot of good, I’d rather do that.”
From rags to riches
It was a chance invitation from an activist to see how waste pickers in Pune worked and lived that convinced MIT graduate Sidhant Pai he had to do something to improve their lives. “They work really hard but get so little in return. That visit had a huge impact,” says the 24-year-old, who adds that he was born just a few kilometres away from the same garbage dump but had never visited that area. Though still in college in the US at that time, Pai began by trying to see how waste pickers’ livelihoods could be improved by converting the plastic they picked into a value-added product. He finally settled on 3D printing filament. “Waste plastic costs Rs 15-16 a kg while 3D filament is Rs 1,200. A lot of value could be captured at the level of the waste picker,” he says. And thus, Protoprint was born.
The startup, which was incorporated in 2013 and is in the product pilot stage, has begun by working with 40 waste pickers who are with Pune-based cooperative SWaCH (which stands for Solid Waste Collection and Handling). The plastic waste they pick is taken to the filament lab set up near a garbage dump in Pune, where it is scanned, cleaned, dried, shredded and then passed through a “RefilBot” which extrudes the filament for 3D printing. “Our filament will be competitively priced with the added value that it is an ethical transaction and you’re buying a Fairtrade product. The idea is not to charge a premium but to provide the added utility of creating an impact,” says Pai, who began working on it full time in 2014, once he had finished his degree in environmental engineering.
Most of the value of the product would go to the waste picker cooperative, with Protoprint keeping only what is necessary to expand. So far, it has received $1,10,000 through grant-funding, which includes an Echoing Green Fellowship. The company has already received preorders for 3,500 kg of filament, mostly from companies abroad. Once they begin production, they would be able to ramp up quickly, he says. The plan is to have filament sheds in multiple locations and work with cooperatives in different regions to scale up. “Waste pickers can then go from collecting waste and selling it to becoming micro entrepreneurs,” says Pai.
In the last 12 months, the utilization of Let’s Recycle’s unit in Ahmedabad has tripled from four or five tonnes per day, as a range of customers from single households to large corporates such as the Adani Group and Torrent Pharmaceuticals have signed up for its services. Even then, there’s room for more; the company’s installed capacity is over 35 tonnes and Let’s Recycle has had to take the long, hard road to this point. Cofounder Sandeep Patel believes that India’s massive problem with garbage can’t be solved using the existing infrastructure.
“Government agencies aren’t equipped to deal with this quantum of garbage and decentralised solutions are a must to manage this mess,” says Patel, who’s also the chief executive of Let’s Recycle.
The company has provided a more robust link between two key pieces of the chain — garbage pickers and generators — to build a more sustainable solution.
To try to add an extra edge to their services, Let’s Recycle is being positioned as a technologycentric recycler — on the lines of taxi aggregator Ola and Uber. So, the amount of waste going in and out of its facilities is measured, productivity of equipment is monitored and an app allows people to ask for refuse to be picked up or to requisition for a bin. “We have over 1,000 waste pickers working with us and we aim to provide them a fair price for the garbage they bring and we have 3,500 touch points to collect waste across the city,” says Patel. Backed by a recent round of funding led by Aavishkar Capital, the company is looking to grow beyond Gujarat.
“Our volumes are growing 25-30 per cent every month and we are assessing opportunities across many cities,” Patel adds.
To grow this promising, but slow-to-bloom business, he thinks that attitudes towards garbage, from generators, collectors and administrators, needs to change. These challenges don’t seem to have dimmed his plans.
For example, Let’s Recycle will more than double its headcount from 150 to 350-plus by March, as it expands at home in Ahmedabad and eyes opportunities further afield. “We have made plenty of mistakes along the way, but have also built a scalable model to build a technology-led business in an otherwise low-tech sector,” he adds.
The problem is very big, as big as poverty,” says Poonam Bir Kasturi, founder of Bengaluru-based waste solution firm Daily Dump at the company’s office in Indira Nagar, while discussing India’s growing garbage problem. Not one content to just blame others, the National Institute of Design alumnus came up with a solution to the gargantuan problem that is simple and effective: aesthetically-appealing terracotta composters, or kambhas, and a kit that helps individuals compost their organic waste in their own homes.
This is crucial because organic waste makes up about 60 per cent of an average household’s waste. “All the smells that come from landfills are from the organic chemistry that’s happening. If you keep the organic waste away, you’ll be making a big difference in methane generation,” says Kasturi, who was also a founding faculty of the Srishti School of Art Design and Technology in Bengaluru. From 30 customers when they started out in 2006, the company now counts 30,000 families across 17 cities as clients. There are 20 outlets in Bengaluru alone.
“We call ourselves a not-for-greed company: we sell products, create awareness and sell services,” says Kasturi. Around 70 per cent of revenue comes from products — a three-tiered kambha for a family of two costs Rs 1,400. The rest of the revenue is from services. Last year, it received Rs 50 lakh of impact funding from social venture fund Ankur Capital.
Daily Dump estimates that their products keep 15,000 kg of organic waste out of landfills. But convincing people is nothing short of a herculean task. “The conversion rate is very low,” says Kasturi, joking that she should probably have tried selling cupcakes instead.
She sees the reluctance to compost and handle one’s own waste as a behavioural problem, more than anything else. Waste is a socio-politically sensitive subject, with connotations of caste and class. But composting at home should come as naturally as brushing your teeth, rather than it being a lofty ideal, she feels.
Though Kasturi might sound fed up on occasion with the refusal of people to change, Daily Dump has managed to create a market for home composting solutions in the nine years of its operations. “People accept that it is a possibility, irrespective of whether they do it or not. That has happened quietly, which is how we’d like it to be.”
This company is India’s only extractor of cobalt, the second largest producer of gold and its factories also make platinum, silver and copper. If that sounds like we’re referring to some diversified metals conglomerate you’d be headed in the wrong direction. We’re referring to Attero Recycling, India’s largest and the world’s cheapest recycler of a myriad forms of electronic waste, or ewaste. The company’s founders Nitin and Rohan Gupta, have, in the last seven years, built a recycling business spread across three factories, collecting waste from 950 locations across 22 states.
Along the way, Attero has also shown that it is capable of not just meeting stringent environmental norms (like those mandated in the US) but also building a low-cost high-quality business from India. By leaning heavily on in-house technology, Attero, says Nitin Gupta, is able to build smaller, yet more viable units to recycle ewaste. Attero’s factories, Gupta claims, can be viable even by producing 2,000 tonnes of waste annually (compared to 1,00,000 required by rivals in developed markets), with cost of recycling, too, far lower at $1,500-2,000 per tonne compared to $17,000 in mature markets. “We have built India’s largest and the world’s cheapest ewaste recycling company,” says Gupta.
The challenge for Attero is dealing with a space almost completely dependent on the informal sector and consequently lax on the enforcement of environmental norms and riddled with child labour. For example, the extraction of precious metals has been traditionally done using dangerous chemicals such as sulphuric acid and cyanide, often by children not even in their teens. Unlike any other form of waste, ewaste has inherent value in it — with a range of metals and other substances that can be extracted and sold at a profit. “Ewaste accounts for 4 per cent of total generation but 75 per cent of the total hazardous content in waste in India,” Gupta points out. Rather than elbow out the informal sector, Attero wants to make them part of a safer ecosystem.
“We want to integrate and formalise the kabaadiwaala network for ewaste,” says Gupta.
The company has tied up with some 350 corporates to source this waste, has a website for homes and residential complexes to call for a pick up and has plans to build three to five more factories (it operates three at full tilt) in India. The company even allows users to value and sell their dated electronics online.
However, Attero’s big push will happen when it takes its low-cost waste processing units overseas. “We are building our first plant overseas and want to be in two or three locations overseas in the next few years,” Gupta says. “We think we can grow Attero’s business 10-fold in the next three to five years,” he adds.
Waste to Watts
When Sreekrishna Sankar and Mainak Chakraborty graduated from IIM-Bangalore in 2010, they decided to give themselves a year to figure out which social and environmental problem they should tackle, using technology. “I know that sounds like a very romantic idea now,” says Chakraborty, laughing. With Bengaluru facing a perennial garbage disposal challenge, they turned their attention to how they could make waste valuable and come up with a solution that would be relevant in urban areas. They spent close to a year ideating and travelling to understand both the waste and technology aspects before starting up GPS (Green Power Systems) Renewables.
Armed with this experience and their background in engineering, they developed a prototype that could convert organic waste to energy — specifically, biogas that could be used to power the same kitchens generating the waste. They ran the BioUrja (the smart biogas plant) for a year before setting up the first modular system for Akshaya Patra Foundation, the Bengalurubased not-for-profit that supplies mid-day meals to schools across the country.
Two years down the line, the startup is operating over 25 projects in India and Bangladesh, with another 20 coming up, including units in the US, Malaysia and Sri Lanka. Along the way, the company, which has been profitable since it launched, has won various international awards and recognition from World Wildlife Fund.
The BioUrja needs to be fed at least 100 kg of organic waste a day, and one tonne of waste can generate 70 kg of LPG or the equivalent of five cylinders. The gas is piped back to the kitchens. Each unit costs between Rs 10 lakh and Rs 50 lakh, depending on the capacity, but the company says clients can recover the cost in less than two years through the generation of energy that replaces gas cylinders. Each unit, which is pre-fabricated, is remotely monitored “like a doctor diagnosing a patient”.
“This is the first internet of things innovation in biogas,” says Chakraborty. GPS has other innovations in the works, including a mini bottling plant in Hyderabad, where gas generated from organic waste will be bottled.
They have already set up a mini power plant in Andhra Pradesh which uses poultry droppings. “Since villages don’t generate much waste we are looking at other feedstock such as seaweed in areas on the coast and elephant grass in the north-east,” he says.
We can make it work because we can monitor the systems remotely, says Chakraborty. And that, he adds, is the future.
A Swachh Restart
Three years ago, Waste Ventures’ bold attempt to recast waste management in India ended in tears. The company, founded by Parag Gupta, a former associate director with World Economic Forum, had tied up with seven city municipalities to collect and process solid waste. However, in two years, the company had to give up on all of them, as payment delays and graft across the system dealt a heavy blow to their aspirations. In their second coming, Waste Ventures is taking a different approach to building a business around garbage. “If you have a large capital budget (30-50% of a municipality’s outlay) focused on waste hauling and dumping and systems that don’t have the best accountability, people will take undue advantage of it,” says Gupta. “The tendering system in India is broke and doesn’t encourage the best behaviour from people responsible for managing waste.”
This time around, the company has positioned itself as an interme-diary, letting civic bodies make capital expenditure in the system, while it focuses on getting its revenue from actually managing the garbage. There’s plenty of garbage to manage in India — a city like Hyderabad has some 18 unofficial dump yards where tonnes of garbage are illicitly piled up. Waste Ventures has recast its business to focus on tier III towns (the fastest-growing piece of urban India, typically locations with population under five lakh) to try to perfect its new strategy.
“We have developed a system that is self-sustainable and focused on earning revenue from selling the different byproducts of waste,” says Gupta. It has made some serious headway on this front — its compost in Hyderabad is back ordered for three months — even as other offerings also gather steam. “There is a wealth of knowledge around waste, but not wealth of solutions … there is an apparent crisis in solid waste management,” says Roshan Miranda, a director at Waste Ventures India. Waste Ventures wants to grow both at home in Telangana and beyond. Recently, it signed a letter of intent with the state government to provide its waste management services to 50 locations across the state. It also plans to expand to 20 smaller towns nationwide and to at least one large metro in the next two or three years, according to Miranda. “Until we figure how to get enough volume, our task isn’t done,” says Gupta. “We are, however, confident we have the building blocks to build a scalable business …Waste Ventures can be a national player.”
T he picturesque hill station of Kalimpong, with under 50,000 residents, is a test bed for one venture’s ambition to be a national player in the market for garbage management. This company, Sampurn(e)arth, founded by three graduates of Tata Institute of Social Science’s (TISS’) Master’s programme in Social Entrepreneurship, has evolved from an attempt to do something for societal good to a growing business, providing waste audit, designing and customising solutions and operating and maintaining these systems for corporates, industrial complexes and residences.
For example, in Kalimpong, their system processes three tonnes of garbage a day. The company’s founders Debartha Banerjee, Jayanth Nataraju, and Ritvik Rao sharpened their awareness and knowledge while working with Stree Mukti Sanghatana, a women’s empowerment forum, even as they sought to build a sustainable area in the field of garbage management. “A one-size-fits-all solution won’t work in India, where housing societies, corporate parks and factories have very different types of garbage generation,” says cofounder Debartha Banerjee. To try to meet their varied requirements, Sampurn(e)arth has devised a range of waste management solutions for everyone from a small housing society to a sprawling factory complex.
For example, the company has devised a range of biogas units ranging from half a tonne to three tonnes for its customers. At their alma mater, TISS, they have installed a biogas system which receives some 300 kg of input and produces around one cylinder of cooking gas. Larger offerings have been installed at corporates as diverse as Ernst & Young, Axis Bank and TCS, Banerjee says. Rather than restrict themselves to small residential complexes, Sampurn(e)arth, is thinking bigger. It wants to work with city municipalities to help them draw up (or recast) waste management systems.
For instance, it wants to use smaller locations like Panvel, on Mumbai’s outskirts, as a launch pad to target larger metros that have a more severe garbage crisis and require a rethink of how they deal with the problem. “Rather than survive on the existing infrastructure, a decentralised waste management system is very important to help solve this crisis,” says Banerjee. To try to juice some business from this market, Sampurn(e)arth is targeting a range of locality management bodies to try to push them to change their waste generation, separation and management habits. However, the last piece of its waste management strategy is perhaps its most challenging one. Sampurn(e) arth wants to reset the waste collection and payment system in India. It is working with a group of NGOs and groups representing garbage pickers to try to evolve a fair trade model for the sector. The company is setting up a chain of outlets for these pickers to sell their wares and promises to pay them a fair wage for the scrap they sell.
Waste Monster – A Bengaluru based Startup
Waste Monster is another Solid Waste Pickup, Bengaluru based Startup, founded by Vinay Puri, Chief Executive of Webinova Techs LLP. Webinova is an ecommerce web & software development, digital marketing Startup started in 2008, when Vinay Puri was in his B.E Comp. Sci 1st year. Today Webinova is a leading Digital Marketing Company and has 3000+ small & big clients from several countries with a team comprising of 32-35. It also serves as a platform for bulk content services and has 500+ freelancers onboard with it from India, Phillipines, Bangladesh & Singapore.
Waste Monster is a core waste management, pick-up & recycling startup & claims to be implementing an innovative idea bringing a revolution into the waste recycling & management industry. Waste Monster will be launching its services in Jan 2016 in full swing. As reported, it is also seeking seed funding from angel investors to the tune of USD $2-$5 Million to start with. The startup will be launching in Bengaluru only as the first step and plans to expand to all major cities in India by Dec,2016.
Vinay Puri will serve as COO at Waste Monster. He says, “We have seen a high boom in the ecommerce industry in the past few years, specially during 2014-15 and now waste management is the next big thing to click great heights. Waste management industry is one that employs the illiterate or semi-educated crowd, thus bringing them into the limelight & that increases the count of employed people in India with so many waste recycling firms existing & coming up. However, the semi-educated waste pickers need to go through good training. You don’t need a techie or simple graduate to pick waste I suppose.”
With entrepreneurs taking keen interest in social issues and coming up with solutions for them, the government needs to be flexible enough to support their endeavors.
Source: ET Bureau. Edited by Red Newswire Team.