Indian E-Waste: Manage, Make it Profitable, Save the World

I’m a big technology fan. However, looking at the speed at which electronic products become outdated got me really thinking about my purchases.

India is the absolute leader in e-waste “growth”; the UN expects a 500% increase from 2007 to 2020! China and South Africa are just behind India with a predicted growth of 200-400%.

Where Money can be made in E-Waste Management

The issue has two sides which are complementary from a business stand-point:

  1. Problem: It curbs health issues, especially to people surrounded by e-waste directly as well as the emission of large quantities of greenhouse gases.
  2. Opportunity: Better recycling and waste management could steam-line sourcing for specialized companies and create many new jobs as well as lower material prices given higher supply.

It has also a synergetic effect, as the old saying states: “One person’s trash is the other person’s treasure” – hence all added value rather than detrimental business competition. Modern electronics contain up to 60 different elements, many of them are economically valuable, some are hazardous, while some are both.

As an illustrative example the material content of a random Nokia mobile phone:

Despite being a big problem it’s still a recycling process with a chain, quite simple to understand:

Source: Umicore

Collection and dismantling are the easiest parts of the chain to get in to as they require the least in technology and investments. The two first steps basically boil down logistics and simple equipment for dismantling as well as simple operations. As entry barriers become lower, so do profits.

Processing and material recovery are different animals altogether. Both steps require a skilled workforce and investments of up to 100 million EUR. Given the right skills and competences, a strong business plan and funding skills, those are very interesting activities as they are much harder to replicate and compete against.

The reality and opportunities of Indian Electronic Waste

Let’s start with growth development, as mentioned above, according to the UN, there will be a 500% growth in 13 years. Here is the development graph according the Indian government:

Almost 50% of that e-waste is generated in Delhi and Mumbai as seen on the graph below:

 

Don’t be fooled by the numbers though. It’s not just the bigger markets that are interesting. Don’t forget that we are talking about a population of a billion people. The best way to pick a market would be accessing competition by geographic area.

The profit-margins in collection and dismantling are, as mentioned, lower. However there is still enough money to be made. Lots of business and individuals in that part of the chain work with very limited and inefficient capabilities. Also they often work under horrible conditions stripping-off and burning out parts of e-waste leading to negative health effects as, for example, through the inhalation of hazardous gases as seen on the video below:

Building and growing a business at the beginning of the chain might not be as profitable as on the end, but still good business can be achieved while giving the entrepreneur the possibility to improve the working conditions of the local population.

According to the UNEP the market potential in India for pre-processing and post-processing technologies is very high. Below is a breakdown of the relevant technologies in both areas:

Pre-processing

  • Manual dismantling/sorting of fractions
  • De-gassing CFC, HCFC
  • Semi-automatic CRT  cut and cleaning

End-processing

  • Integrated smelter for non-ferrous (pyromettalurty)
  • Aluminium remelter/refiner

The main electronics in the e-waste market are:

  • Personal Computers & Notebooks
  • Printers
  • Mobile Phones
  • Televisions
  • Refrigerators

As the pre-processing and end-processing stage are quite technical we’ll leave out the details. The good news is that because this is also an environmental issue there is plenty of free information put together by various organizations.

According to the UNEP the main barriers to expect in the Indian market, especially for technologically sophisticated solutions, are:

  • Lack of legal framework and unclear legislation
  • Corruption and inefficient law enforcement
  • Lacking of formal definitions of roles and responsibilities of stakeholders
  • Logistics
  • Costs are all covered by the recyclers: collection, transport and disposal of hazardous fractions

Despite all difficulties, it’s a huge market growing at a crazy rate. Those bold and smart enough to face it and overcome the obstacles will get their cash-off.
Should that opportunity be of interest to you, you’d just have to ensure your access to the two following things:

  1. Risk aversion (pre and end-processing are higher risk, higher profit businesses)
  2. Technical ability (if you don’t understand chemistry and operational management you better stay away from pre and end-processing)

About Guilherme Italo Nunes Alves da Silva

Specialized in consumer goods marketing I also have work experience in the financial, tourism, entertainment and construction industry. I hold a Swiss degree in International Management with a Major in Marketing. Given my journey, I am fluent in Portuguese, German, French, English and Spanish and have learned the basics of Italian and Mandarin.

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