E-waste recycling the big biz opportunity

E-waste recycling and refurbishing have the potential to generate big business if 95 per cent of the e-wastes that go to the unorganised sector can be tapped and diverted to an organised sector

By Srabani Sen

Tuesday, May 12, 2009: Are you considering a replacement of your mobile with a snazzy new model? Does you son want a flashy laptop, discarding the old PC, and your daughter a jazzy iPod? Many of us change our mobiles, computers, laptops, cameras and other electronic gadgets as soon as a new model hits the market. Whether it is our show-off or a need, our gadget fever may give us a kick but it is like a spurious drug menace to the environment. Such a fact is nothing new to many of us, yet we choose to turn a blind eye to it.

With society waking up to the vulnerability caused to ecology, the scanner is on the wastes generated by the electronics industry. A MAIT-GTZ study reveals that India generated 3.3 lakh tonnes of e-waste in 2007 and the figure is expected to touch 4.7 lakh tonnes by 2011. Dumping from developed countries and informal recycling of e-waste are also adding to environmental degradation. Concerned environmentalists feel eco-friendly recycling is the need of the hour.

A silver lining

However, this bleak picture has a silver lining. It’s spreading cheer amongst the recyclers, who are not only extracting the maximum out of e-waste and generating good business, but are fighting to make their segment organised. “E-waste can generate good and sustainable business opportunities. Electronic products become ‘waste’ only after they have outlived their useful lives. These items contain a lot of recoverable and recyclable materials like plastics, precious metal, glass, etc. Getting into the e-waste recycling business makes good economic sense as efficient recovery of non-ferrous and ferrous metals, plastics and precious materials can be a viable source for business ventures. The key, however, is the availability of sufficient e-waste to operate a plant at an economically viable scale. However, this is still a challenge in the Indian scenario,” explains K Srinivasan, additional secretary, Electronic Industries Association of India (ELCINA). ELCINA advocates a formal e-waste recycling business model that integrates the present informal stakeholders. It has been actively supporting the cause of responsible and safe e-waste recycling and raising awareness about e-waste and its increasing threat to our environment.

Different business models

A completely new segment of young entrepreneurs is emerging, who have the vision to see e-waste recycling as the next big business opportunity in the coming years. With an urge to be social entrepreneurs, MBA students Mandeep Manocha and Nakul Kumar, developed a sustainable business model, which they claim, could solve the existing problem of non-availability of raw materials. They have formed a company and will launch their services in the market very soon. “More than 95 per cent of e-wastes go to the kabaadiwaalas in the unorganised sector. Hence, there is a huge scope to convert this segment into an organised sector,” says Mandeep.

“Our business model is inspired by Umicore of Belgium, where the waste is collected, segregated and smelted under one company and the material is brought back into the mainstream, saving a lot of valuable resources. The uniqueness of our model is that it focuses on the problems faced by e-waste recyclers and will provide a comprehensive solution for availability of raw materials. The basic idea is to make sure that the e-waste generated reaches authorised recyclers rather than the unorganised sector,” says Mandeep.

Adds Nakul, “Our idea is to build a robust e-waste collection mechanism and bring about a social revolution, which will incite citizens of the country into becoming environmentally responsible and managing their waste outflows efficiently in the future.”

Mandeep and Nakul had started their research on various business models during their B-school days. “We realised that e-waste is an area which is posing great hazards to the environment, with people having limited or no knowledge about them. No doubt, there is big business opportunity in this sector, but government regulations and pressure from the pollution control boards on waste generators will play a significant role. Also, it is the prerogative of the major corporations to take responsible measures in disposing e-waste and not just sell it to the local kabaadiwaalas for monetary gains,” says Mandeep.

Another revenue-generating model that e-wastes open up is the recovery of components and spare parts for reuse. In the process, certain precious metals like gold, platinum, silver, copper and aluminium too are extracted from electronic scrap.

Chennai-based kabaadiwaala, S Hari Krishna, earns Rs 25,000 per mont h by collecting e-wastes from computer centres, offices, as well as households, and after refurbishing, sells them to hardware engineers. “This junk shop was opened by my father in 1988. Despite several appeals to the government, we have never received any help. I now plan to computerise my services and expect to get good response not only from the country, but even from overseas,” says Hari Krishna.

An excellent example of a good business model is the one Polygenta Electronic Services Pvt Ltd, Mumbai, is attempting. “We plan to procure old, discarded electronic equipment like TV sets, music systems, etc, refurbish by replacing the defective components with good parts and sell in tier-2 and tier-3 markets, which comprise semi-urban and rural areas. The products would be sold as refurbished goods and also carry a guarantee/warranty,” states Amit Gupta, CEO, Polygenta Electronic.

Another business that is gaining currency is the ‘take back scheme’. Titan, a leading watch retailer, has been doing it for years and Nokia has followed suit by launching such a scheme in January 2009 by creating a network of collection points where anyone can drop their unwanted mobile instrument and get a gift in return. This model ensures that end-users of products have a safe and a responsible channel for disposing of their unwanted items. It also lends credibility to the company that takes back and proves to be a responsible manufacturer. The company then ensures that the discarded items are handed over only to authorised and established recyclers who operate in an environment-friendly manner. In some cases, companies take back their own brand products only, recondition them and resell in rural and semi-urban areas.

Contribution to economy

E-waste recycling is good for the economy due to three main reasons—it facilitates safe disposal of electrical and electronic waste, it enables recovery of materials like precious metals, plastics, etc, which can be reused and it provides opportunities for employment in the entire value chain.

“As the volumes of e-waste grow, efficient and responsible recycling will become more and more important and essential for ensuring a safe environment and health of our citizens and conserving the precious resources of the earth,” points out Srinivasan. Unfortunately, in India e-waste collection and metal extraction processes are largely carried out by the unorganised sector in a hazardous and inefficient manner. Items like plastic have low commercial value and are non-biodegradable. These are discarded as disposable waste. The existing process not only poses a hazard to the environment, but also to the workers involved in recycling. “A suitable policy framework needs to be established so that all e-wastes get channelised through a safe and organised recycling system, which also utilises the services of the existing unorganised sector in collection and dismantling,” opines Srinivasan. “E-waste is an emerging business in India, that converts a zero value product into a highly profitable product as 95 per cent of this waste can be converted into something useful,” he adds.

Biggies vow green

As a recent development, many corporate biggies vow that potentially hazardous materials like lead in picture tubes of TVs and painted on PCBs, are being handled responsibly. Bengaluru-based company, E-WaRDD (Electronic and Electrical Waste Recycling, Dismantling and Disposal), has recently got its first corporate client—Titan Industries, which extends an exchange offer every year, whereby old watches are exchanged for new ones under a special discount scheme. Last year, about 7 lakh old watches were collected under this scheme, most of which finally ended up in a landfill. Titan has partnered with Saahas, a development organisation working with e-waste, for safe recycling. The watches collected under this programme will be finally given to e-WaRDD for dismantling and retrieval of components. The toxic content will be stored for disposal in a hazardous waste landfill.

The Electronic Manufacturers Recycling Management Company, a joint venture of Panasonic, Sharp and Toshiba, working in partnership with private recycling facilities, has inaugurated a consumer electronics recycling programme in 10 states. Most of these states already have laws in the books that demand that manufacturers take back their old, obsolete goods whenever they sell new ones. Sony and Samsung also have gotten into the e-waste take back business, partnering with e-waste concerns.

Although recyclers in India pay IT or electronics companies for buying the scrap and not vice versa like abroad, the Indian system generates far more jobs than other countries per tonne of e-waste processed. Collection, dismantling, sorting and segregation and even metal recovery are done manually in India. Therefore, the e-waste recycling sector, a majority of which is still informal, employs many unskilled or semi-skilled workers.

While there are no national figures available yet, estimates of an EMPA study in 2004 show that at least 10,000 people are involved in recycling of e-wastes in Delhi alone. Another study states that 25,000 people are involved in recycling and recovery operations in Bengaluru. The figures will be much higher if the entire value chain of collectors, transporters and traders are included. With the volume of e-wastes going up by the year, these figures have unquestionably gone up. It would be interesting to see the transformation of the Indian e-waste industry from an informal to a formal sector as the government, industry, users and NGOs have started taking notice of the growing hazards of e-waste and have reached a consensus that recycling and resource recovery have to be environmentally compatible.

Beast of Burden

A peering eye could bring the magnitude of the problem into focus: A total of 3,30,000 MT of e-waste is generated annually in India, while an additional 50,000 MT is illegally imported into the country. However, only 19,000 MT of this is recycled After China imposed a ban on the import of e-waste in 2002, India has emerged as one of the largest dumping grounds for the developed world Currently, e-waste recycling, especially processing, remains concentrated in the informal sector, which, due to poor processing technologies and very small capacities, contributes significantly to pollution and environmental degradation The informal sector is handling and recycling over 95 per cent of India’s precious metals refinery There are just two CPCB-authorised e-waste recyclers in the country—Bengaluru-based E-Parisaraa and Chennai-based Trishyiraya. They recycle merely 600 tonnes and 350 tonnes of e-waste respectively on a yearly basis

Electronics Bazaar, South Asia’s No.1 Electronics B2B magazine