These Business Enthusiasts are Cash-in On The Trash
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Cut the crap! What bullshit! What a waste! If only we could use these phrases in a positive context. Changing the dictionary meaning, these business enthusiasts are capitalizing on our trash and we still think our waste is going to the Bermuda triangle, never to return. Want to know what’s in the waste for us? Let’s do some ‘trash-talk’!
The more the garbage, the better is our profit,” says Sachin Sharma, CEO of Gem Enviro Management. Getting into a business with an unknown market was a difficult task for Sharma. He recalls, “The challenge was not how to operate as we already had a plan in place. The challenge was who to hire.” This packaging waste management company facilitates recycling of waste material such as PET bottles, scrap and paper from companies like Coca Cola, Bisleri, Pepsi, Google etc. For every business, tapping on the right client is a major hassle.
“It was very challenging but interesting. After several meetings and multiple proposals, it took Coca Cola a year to seal the deal with us,” chuckles Sharma. It's a simple model to follow wherein they collect waste material from these organizations and then get it recycled into stationary and products that could be gifted to the employees or used by the company itself.
“Very few companies in India give you end-to-end waste management solution by collecting your waste, recycling it and give you finished goods. We are one of them,” says Sharma. Similar business model is followed by Jaagruti, a company that solely deals in paper recycling and management. Vivek Mehta, Co-founder of Jaagruti, says, “As an environment conscious individual, I hated paper wastage that happened rampantly at the office where I was working previously. So I thought why don’t I recycle paper and manufacture finished stationary to sell.”
For Mehta, the idea was always to re-use, if that’s a possibility. “We took the waste paper to a mill where it would be recycled and then we again sell it to our client That is how the loop closes,” said Vivek Mehta, Co-founder of Jaagruti. Unlike end-to-end buy and sell model, Sampurn(e) arth Environment Solutions is working with the informal sector such as scrap-dealers and rag-pickers.
Debartha Banerjee, Co-founder of Sampurn(e)arth recalls, “I, along with three of my batch-mates, had decided to do a business around this sector when we were pursuing our Master’s degree together in social entrepreneurship. We did our in-depth research in those two years, engaged with the informal sector, talked to various NGOs and collected as much information as possible.” According to World Health Organisation, in every city in a developing country, one-two per cent of the population works in the solid waste management sector.
“Approximately 12 million people live in Mumbai and more than 150,000 people work only in the solid waste management industry. It can be a profitable model, if we keep them on our payroll, generating employment and cleaning the city as well,” adds Banerjee. While talking about the waste management sector, environmentalist and founder of Swechha (an NGO) also pointed out similar concerns. “It’s good to monetize on the waste, but our focus should also be on keeping our surroundings clean. And of course, incinerating waste is not a solution,” opines Jha.
Waste management is the by-product of generating too much waste to be accommodated by a country. When Gaurav Joshi, Founder of Greentooth Technology (ExtraCarbon) was in UK, he realized people were far more aware and environment conscious there. “I remember they never called it waste management. They always called it ‘material’ management. For a successful waste management system, we also need to consider our garbage and trash as material that could be re-used.” ExtraCarbon, a vertical of Greentooth Technologies, raised its first fund in 2011 from family friends. And since then, there has been no stopping.
“Year after year we received funding from angel investors, so money has never been an issue. In 2016, we received 30 million (300 lacs) from different angel investors, including Bennett and Coleman,” tells Joshi. ExtraCarbon follows a very interesting business model. It buys dry waste from individuals and small organizations, and charges for the collection of wet waste from big business giants like Philips and Mobikwik according to a rate list and quantity, and sells it to the recyclers.
Selling the scrap to ExtraCarbon earns the customer reward points which they can redeem on Jhoomley, a shopping site (another vertical) of the Greentooth Technologies. Growing at a rate of 60 per cent per annum, the company has generated a whopping revenue of 20 million in the last quarter.
As the sector grows, it starts facing numerous hurdles as well. Irregular and unorganized industry or the informal sector is the major concern of the exponentially growing waste management industry. The sector largely operates like a pyramid. At the bottom of the structure are rag-pickers, constituting 15 to 20 per cent of the waste management sector of a developing country.
Then there are small businesses and stock-holders, wholesalers and retailers. The trade becomes specialized and recognized somewhere above in the pyramid, leaving the informal sector over-worked, under-paid and unrecognized. “We recycle paper which is highly inflammable. We cannot afford to work with the informal sector. Some of them smoke bidis which could be problematic for us,” opines Jaagruti founder. However, not every waste management vertical is hesitant to involve the informal sector.
Sampurn(e) arth works in close association with the informal sector through an NGO called Stree Mukti Sangathana, an organization constituting the waste pickers in Mumbai, whereas ExtraCarbon engages with ragpickers and scrap-dealers. However, one issue that has plagued even the informal waste management sector is no source segregation. Bifurcating the waste where it is generated is the first thing that has to be done towards waste management. “The two bin concept by the Government of India is very novel. Source segregation is an issue because if the waste is mixed, even the rag-pickers on payroll find it difficult to separate biodegradable waste from non-biodegradable waste,” says Sharma.
"Awareness needs to be created around waste segregation before putting a system that will support waste segregation," adds Banerjee. The increasing level of waste has, no doubt, opened doors for millions of job opportunities for people in the country. Vineet Rai, the CEO and Chairman of Aavishkar Intellecap group says, “It’s becoming a huge industry with every passing day. We have helped big companies like Let’s Recycle-Nepra to raise $7 million funding in 2014.” The industry is huge and it will be more than $13 billion industry by 2025, as estimated by the business conglomerates.
Banerjee thinks, “$13 billion is currently calculated by the figures that municipalities are spending and getting from waste disposal. Once we start processing waste and begin cradle to cradle process, instead of cradle-to-grave system, it will make sure that there are other revenue generation that are built along with waste management.” There is an untapped market even in the collection and recycling air-tight cardboard containers, usually referred as tetra pak.
“We have a Tetra Pak recycling system as well. We have put collection bins in 'Sahakari Bhandar' and Reliance Fresh outlets in Mumbai. But it is a task to recycle as it is expensive. Therefore, we need a gap funding for the same. And Tetra Pak provides us with that gap funding. So we have partners for every product that we are recycling. There are different mechanisms in the waste management industry where the market could be tapped," chuckles Banerjee.
MAKING INNOVATION MAINSTREAM
After source segregation, business lies in decentralizing waste management. Decentralizing means building a disposal system inside the premise that is generating waste. “A letter is being circulated by the CM of Maharashtra, Devendra Fadnavis, in all the municipalities that every organization that generates more than 100 kg of bio-degradable waste is liable to build a biogas plant inside the premise for its treatment,” adds Debartha. The changing industry norms, traffic issues, the recent GST bill and labour laws have created hurdles for the sector. But these problems emerge as the sector expands. Thus, it is a good indication after all. The country is seeing a highly estimated growth rate regarding waste management industry.
“The growth aspect and scalability is humongous. There is a requirement of in-depth research and development. We need to explore this sector for cutting-edge innovations,” opines Joshi. “In Scandanavian countries, they have attached commercial value to the waste to make people work for a clean country, simultaneously rewarding them. Swachh Bharat Abhiyan is great concept but mostly focuses on waste collection. Our job starts post waste collection. And soon, I hope, waste treatment would be government's main focus,” concludes Sharma.
(This article was first published in the August issue of Entrepreneur Magazine. To subscribe, click here)