Business Setup For e-Waste Recycling

The information and communication technology sector has witnessed unprecedented growth in the last decade across the world. Increased penetration of electronics in everyday products and increased adoption of electronics products by people have fueled this tremendous growth. Increased consumer demand has also resulted in increased investment in product innovation, leading to shorter life-cycle of products. Over time, this has resulted in the rapid generation of a voluminous amount of electronic waste (e-waste).

E-waste is now the fastest growing waste stream, with computer equipment accounting for almost 70 per cent of it, followed by telecommunication equipment (12 per cent), electrical equipment (8 per cent) and medical equipment (7 per cent).

E-waste, needless to say, represents an enormous environmental hazard. However, it also presents huge opportunities for entrepreneurs willing to take the plunge. According to a recent study by Assocham-Ckinetics, India is the fifth largest e-waste producer and its e-waste generation is expected to annually grow at 30 per cent to touch 5.2 million metric tonnes (MT) per annum by 2020 as against the present level of 1.8 million metric tonnes. This, in turn, represents a huge business opportunity in e-waste recycling.

This project report provides a brief overview of e-waste recycling business requirements.

E-waste recycling process

E-waste recycling is highly labour-intensive and involves several steps starting from waste collection to final material processing (Fig. 1) in order to obtain the desired recycled products or raw materials for reuse.

Different types of e-waste materials and processes used for their management are laid out in Table I. The different valuable metals obtained after processing are given in Table II.

 

Business economics

e-waste business models include:

1. Franchisee-based operation: Waste management as a franchise unit of an already established e-waste management company

2. Self-owned operation: Waste management through purchase of waste from various sources

The franchisee model is suitable for investors who are looking for a business opportunity with low investment threshold. In this model, the franchisee unit could benefit from some of the parent company’s infrastructure. Hence the capex and opex requirement is lower than for the self-owned business model. In the self-owned business model, the entrepreneur needs to bear the entire investment cost himself.

It’s not possible to provide economic analysis of the franchisee model as it depends on the terms of agreement. However, typical requirements for starting a franchisee unit with a capacity to mobilise 60MT e-waste products per annum are:

1. Investment: ₹ 700,000-800,000

2. Area: 93-139sq.m (1000–1500sq.ft)

Under the self-owned model, a business unit capable of revenue generation to the tune of 6.0-7.5 million rupees per month (that is, processing of at least 500kg e-waste per day) are given below:

Capital expenses

1. Land: 1858sq.m (20,000sq. ft) to start with

2. Plant and machinery: 3.5 million rupees

Operational expenses

Approximately 4 million rupees per month

Operational expenses include:

1. Human resource cost

2. Cost of scrap

3. Expenses on utilities such as electricity and water

4. Logistics expenses

5. Marketing expenses

6. Spares and consumables

7. Contingency expenses

Detailed business economics, including estimated value against the above-mentioned cost heads and other probable cost heads, along with profit analysis and breakeven point (BEP) calculation can be worked out based on the desired scale of operation.

Revenue calculation for recycling of 1-tonne personal computer (PC) e-waste

1. PC e-waste: 1 tonne

2. Number of PCs: 38 (assuming that each PC weighs 28kg)

Scenario 1: Complete PGM recovery

Recovery of the precious platinum-group metals (PGMs) from PCBs is the main recycling revenue generator (refer Table III).

 

PCB constitutes almost 4 per cent of a personal computer (PC).

Amount of PCBs recovered from one tonne of PC waste=Around 40kg (0.04 tonne)

Therefore, revenue generated from one tonne of PC waste= ₹ 1,463,379×0.04= ₹ 58,535

Revenue generated per kg of PC waste=Around ₹ 58

Scenario 2: Partial PGM recovery and repair to resell

Thirty-five per cent of the waste PC units are repaired and resold at the rate of ₹ 2500 per PC. Both these assumptions are conservative. The remaining 65 per cent is recycled as mentioned in Scenario 1.

Therefore the number of units repaired=13 (35 per cent of total number of units)

Total resale price= ₹ 2500×13= ₹ 32,500

Total value of PGM recovered from 65 per cent recycling= ₹ 38,047

Total revenue from one-tonne PC e-waste= ₹ 32,500+ ₹ 38,047= ₹ 70,547

Revenue generated per kg of PC waste=Around ₹ 70

Therefore repair-and-resale model earns around 22 per cent higher revenue.

---