B-Plan on Waste Management

IIM Lucknow Pooja Choudhary [email protected] 9695915590

WASTE MANAGEMENT Business Concept: Domestic waste generated in India today generates close to 42 million ton of solid waste per day. Most of this waste is either thrown into landfill, 26% is found on the roads and only 12% is recycled. Owing to increasing urbanization, high quantities of waste is being generated. We will act as a single vendor to meet all the requirements when it comes to collection, segregation, transportation, recycling, treatment and landfill (only inert waste) of domestic solid waste whose collection would be done through rag pickers and through collection points such as malls and cinema theatres. The collected waste is then segregated into vegetable waste (23%) and others such as paper (30%), plastic (4%), glass (10%) and metal (9%). Vegetable waste thus collected is recycled into Compost and Biogas, where as the others are sold to recyclers. Compost and Biogas have a huge market in India which is used as manure for farms and for running vehicles respectively. Compost and Biogas sell for as much as Rs 10/Kg and Rs 31.2/L respectively. Implications on the society The key benefits of this service are as follows: 1. An organized mode of waste collection and disposal 2. Conversion of waste into energy and other useful products like bio gas and manure 3. Reduction in expenses for the government in terms of manpower and costs 4. Social benefits coupled with an economically viable proposition to benefit society B-Plan Statement of the initiative: Waste management in India is confined to picking up waste from residential and industrial areas and dumping it at landfill sites. Our company will operate in this market and provide cleaner and greener solution to the customers. This business initiative will help environment and society significantly. Execution Plan: Urban India produces 42mn tonnes of solid waste annually and 72.5% of waste is produced by 423 class-1 cities, hence we are going to target class-1 cities where we can easily locate our target customers and companies. Waste management will be implemented by targeting a specific locality which would cover about 1000 households in the pilot phase. A government tie-up for waste collection would also ensure a steady supply of revenue as a compensation for the work done on their behalf. Waste collection will be done by a team of workers who would collect domestic waste from the specified households each day. We will also partner with local dealers and directly with rag pickers for collection of waste. Bins would be placed in public places like Malls, cinema halls, schools and hotels. The waste collected will be sorted at source site and transported to our Waste Treatment Site. Paper, metal, plastic and glass will be sold to the recyclers at market prices whereas vegetable and other organic waste would be recycled in-house to produce product methane gas and organic manure. The by-product produced would be marketed and sold to organic farming firms which are in need of organic manure for their farms. In order to increase the environmental awareness, we will partner with various Malls, Schools and others to organize Recycling Drives, Awareness Campaigns, Environment Weeks and Workshops to reach the people and spread our message of Clean Cities and Sustainable Living.

Feasibility and sustainability of the idea: Waste management in India is yet to take off in a big way. Most of waste management today encompasses activities like collection and dumping in landfills rather than recycling. The idea is to collect such waste and reuse it as biogas and manure after recycling. We see a great potential if efficiencies be achieved in the waste collection aspect. The business would take about 13 months to attain break even considering the high cost of waste collection in the initial phases. The return on Investment (ROI) on an investment of 16.5 Lakhs is about 20.2% by a year of operation. The total capital required for starting up the waste management venture would be 38.6 Lakhs. There is a fixed cost of operation for purchasing land and trucks for transport which is close to 16.5 lakhs. Variable cost of operations for a year is 22.7 lakhs per year. We plan to obtain this using a bank loan to the tune of 30 lakhs. We are also looking at rising funding through government incentive scheme to the tune of 5 lakhs and the rest would be funded by self and family as an equity share. The other variable costs of operations are 1. Procurement of vegetable waste: 2. Personnel costs (Sales, factory, collections): 3. Factory rental and maintenance: 4. Miscellaneous (Power, telephone etc):

26% 53% 11% 9%

The primary sources of revenue for the business would be Compensation provided by the government for waste collection and disposal = Rs.10,000/month Sale of decompose and biogas produced by the recycling = Rs.155,900/month Sale of segregated waste material sold to various recyclers = Rs.51,300/month The major short term goals would be to establish the waste management process in a smoother cycle of operation. The next goal would be to establish tie-ups with various stakeholders in the ecosystem to leverage the benefits of the business. The next goal would be to venture into profitable recycling opportunities other than vegetable waste. Magnitude of impacts on society This business creates measurable environmental and social benefits. The various benefits include the amount spent by city municipalities in cleaning up the cities on a regular basis. This not only reduces waste out in the city streets but also teaches the importance of waste sensitization to the Indian households. The reduction in waste also reduces the propagation of diseases hence saving on the clean up drives. The value add to the business is by a possibility of various tie ups given the environmental benefit that this business generates like tie- up with corporate who participate in CSR for clean city initiatives. How is initiative unique? In the existing scenario, waste management in most of the cities with the exception of some of the major metros such as Bangalore and Mumbai / Delhi is managed directly by the government or the urban development authority. Rag pickers are active around these circuits who deliver the product to the scrap who in turn act as the middleman for the recyclers in various kinds of waste. The competitive advantage of our business lies in the fact that the emphasis is on collection and segregation of waste at the domestic level. The advantage of the business lies in the fact that the byproduct generated by producing biogas would further be used to produce organic manure. The initiative can be replicable.

Appendix Costs Fixed Costs Cost of buying Mini Trucks (2 No.s) Land for decomposition Machine Costs (20) Variable Costs Driver Annual Salary Helper Annual Salary Fuel Costs Factory on Rent Collection Agents (10) Machine Handling Employees(5) Sales team (5) Management Personnel(1) Machine Maintenance Cost Electricity Cost Telephone Cost Other expenses Vegetable waste from dealers Total Amount 1000000 350000 200000 54,000 42,000 45000 240000 360000 300000 360000 120000 20000 120000 12000 60000 600000 3283000 Revenues Selling Manure Selling Methane Selling Recycle Material Government Revenues Total Revenues Amount 67800 88140 51300 10000 217240

% of Total Monthly waste waste waste collected collected in tons Price/kg Revenue Paper/Cardboard 30% 9000 2.5 22500 Plastic 4% 1200 7 8400 Glass 10% 3000 2 6000 Metal 9% 2700 4 10800 Others 12% 3600 1 3600 vegetable waste Methane Gas Manure 21% 11300 2825 6780

31.2 10

88140 67800