Waste Paper Business

TUESDAY, 01 DECEMBER 2009 00:00 ASWATHI MURALIDHARAN OPPORTUNITIES - ENERGY & ENVIRONMENT

User Rating:

/ 95
Rate
vote com_content 2386 http://w w w .dare

Poor Best Waste paper is not waste after all. It is a flourishing business that is now attracting big players

Be it newspapers, magazines, bills, memos, diaries or notebooks, they all land with the scrap dealer after being used. But what happens after that? Well, after that the waste paper changes several hands before reaching the recycling mills. The paper is then deinked, made into pulp and again into paper, before it reaches the market as recycled paper. In this story, DARE tracks down the route that waste paper takes before reaching the paper recycling mills, which could be a lucrative business opportunity. The industry landscape The operating capacity of the Indian pulp and paper industry has been estimated to be 8.5 million tons by the Indian Agro and Recycling Paper Mills Association (IARPMA). Paper mills can be broadly divided into three typeswoodpulp-based mills, agro-residue-based mills (non-wood-based segment) and waste-paper-based mills. According to the IARPMA, waste-paper-based mills account for almost one third of the industry at approximately 40 percent, whereas the wood-based mills account for 29 percent and the agro-residue-based mills comprise 31 percent of the total industry pie. Despite the fact that more than one third of the industry is dependent on waste paper, waste paper recovery is very low. In fact, according to available figures, only 2 million tons of the paper finally finds its way to the recycle mills. This means that nearly 6.5 million tons of paper reaches landfills and is lost forever.

It has been estimated that the recovery rate of paper in India is only 26 percent, compared to Thailands 45 percent, Chinas 38 percent, and Germanys 80 percent. This is mainly due to low awareness among people as well as the unorganized nature of the business. In India, waste paper collection is mainly done by rag pickers and kabariwallahs (scrap dealers), who collect waste in a crude manner. This makes India highly dependent on waste paper imports from countries like Canada, the USA, the European Union and Middle East. Within India, waste paper is mostly collected from the western region that comprises 39 percent, followed by northern region at 28 percent, southern region at 23 percent and eastern region at just 10 percent. The business model As mentioned above, waste paper collection in India is very low compared to other countries, and whatever paper is collected passes through several hands before reaching the paper mill. Briefly, it passes through three middle men the scrap dealer, the local area dealer and the wholesalerbefore it is converted back to reusable paper. Nitin Goel of GreenOBin, an organized player in this sector says, A street raddiwala cannot directly go and sell to the recycler due to the limitation on the collection amount. Any paper mill based on waste paper as their raw material has got a daily requirements in tons and the street raddiwala cannot cater the same daily. The cost escalation during this process is twice the amount when compared from a street scrap dealer to the paper recycler.

Availability of Waste Paper by Geography

The first link to the chain starts with the scrap dealer, also known as the kabariwallah, who collects waste from homes. The scrap dealers major cost heads are a cycle, a weighing scale and some sacks. This dealer collects all kinds of waste from homes like old newspapers, magazines, loose paper, old bottles, metal waste, and so on. He does a basic level segregation and sells his goods to the local dealer. In terms of paper waste, newspapers are what hold the key to his profits because of large quantity compared to magazines, old books and loose paper. A scrap dealer tells us that these days a number of households generally get at least two papers and moreover, the weight of the newspaper is also more because a number of add-on supplement papers and content. He buys the newspaper at approximately Rs 5.50 per kg from the households and sells it to the local dealer at Rs 7, whereas magazines go at approximately a rupee less because of the glossy paper used. Ultimately, his profits depend on his negotiating skillsthe better his negotiating power the more profit he earns. After collecting all the waste, the scrap dealer sells his goods to the local area dealer. The major cost heads of this local area dealer is space to store different kinds of waste, a weighing scale, and manpower to segregate the waste. This local dealer has several scrap dealers working for him. For example, Mohammad Irfan, a local area scrap dealer in Delhi, has 25 scrap dealers working for him. These scrap dealers sell all their waste, be it paper, bottles, or metal, at the end of each day. After collecting the waste from the dealers, another level of basic segregation happens at this level. In case of newspaper waste, each newspaper has to be straightened, sorted and bundled neatly before it can be sold further. These dealers work with different wholesalersthere are separate wholesalers for different kinds of waste. In the case of newspaper waste, he buys it from the scrap dealer at Rs 7 (the current rate) and sells it to the wholesaler at approximately Rs 7.20 (a ballpark figure). This is when the transportation is taken care of by the wholesaler. This price fluctuates and depends on the demand and supply of paper in the market.

The wholesaler, on the other hand, is a larger player who has several dealers working under him. Transportation from the dealer to the godown as well as from the godown to the paper recycling mills is generally his responsibility. The mill price at which he sells to the paper mills is also highly fluctuating. As the quantity of paper re-collected is fairly low, a major part of their waste paper supply comes from imports. The price at which paper is imported, which in turn is dependent on paper availability at that point of time, has a direct impact on the price of waste paper in the domestic market.

Since this link or segment of waste paper chain is highly dependent on transportation, another major factor impacting this trade is the price of oil. Roughly estimating, this price comes out to be approximately Rs 8 per kg (a ballpark figure). These wholesalers are also directly in touch with several media companies, publishing houses, printing presses, etc, whose paper waste is considered to be good in quality compared to the others that passes through several hands. This waste fetches a higher price for these wholesalers in the market. For example, Cybermedia, which sells its paper waste twice or thrice a year, sells approximately 6,000-7,000 kg of waste in a singly deal. So, for these wholesalers this kind of a deal becomes much more profitable. Organized waste paper collection Given the huge demand for waste paper in India, several companies have started to enter this space. Business conglomerate ITC was one of the first to tap this segment with its Wealth out of Waste (WOW) program. Under the program, ITC collects waste from households, segregates waste paper and sends it to its paper mills for recycling. For this purpose, ITC provides households with two paper bagsone for wet waste and the other for dry waste. Jogarao Bhamidipati, Vice President, Commercial of ITCs Paperboards & Specialty Papers Division (PSPD) explains, Waste paper bought from households and commercial areas at Rs 4 per kg, would reach the sorting facility, where it gets sorted into different grades and gets baled. Here the costs could be Rs 1.5 to 2 per kg. Baled material gets sold to mills at an average price of Rs 8 per kg. According to market sources, ITC collects 400 tons of dry waste per month and is expected to hit 2,000 tons a month in the next six months.

Opportunities Worth Exploring

There are several other companies Organized paper collection from homes and offices mushrooming in this sectorone such being GreenOBin, which was started in 2009. The Scientific collection and grading centers organization classifies their clients in three different wayssmall company (50-200 employees), medium company (200-500 employees) and large company (500 & above employees). Nitin explains, We offer three different categories of membership to which different services are attached accordingly. Major services that GreenOBin provides are waste pickup, waste audit, training and awareness programs, security shredding and source segregation bins. After collecting the cash, the company offers recycled paper office stationery products to the corporate instead of paying them back in cash. Challenges In India, as there is no proper mechanism for segregating paper waste as there are several challenges faced by the paper industry, thus making it highly dependent on waste paper imports. The collection of waste paper is not done in a scientific manner, therefore, all the different kinds of paper waste get mixed and go to the paper mill, which may have a lower capacity of paper production. Explains Narayana Moorty, Secretary General of Indian Paper Mills Association (IPMA), Abroad, all the paper is scientifically collected and segregated according to different grades. This does not happen here and all types of paper are mixed with each other. Paper has got 2000+ varieties, but in India a layman calls it all paper. Moreover, a paper can be recycled only for a fixed number of times as the paper fiber becomes shorter and hence looses strength. However, in India, there is no mechanism to determine it in terms of usage. Unless a paper is graded and segregated in terms of what has been the first usage of paper, the secondary fiber all becomes mixed. This becomes a problem because after the quality of the paper depreciates with subsequent recyclingthe paper becomes brittle and yellowthus affecting the final paper quality. Explains Moorthy, In other countries, there are dedicated collection centers where the grading takes place properly, if it comes out of a book it is of a different variety, if it comes from the packaging it is different, if it comes from a magazine it is different. There is a grading system, so when the paper is graded, bailed and made ready for sale, it is priced accordingly. This does not happen here. Therefore, the larger paper mills, which are quality conscious, import paper in large quantities for their use. Besides these, there are other issues such as habits of people, lack of infrastructure, lack of legislation and penalty for non-source segregation of recyclables, and lack of awareness on environment-related issues.

Waste paper recycling -2011

written by K P Bikal, April 23, 2011

Dear All Hello!!! You may ne aware that we are dealing with waste paper recycling program since last fifteen years and have been able to desiged the sustainable, effecient and cist eefective system for waste paper recycling at various scales, which are suitable for schools, colleges, universities, corporates, PSUs, Community organisation and individuals level. Any boy want into waspe paper recycling we can assist in the terms od supplying of quality paper making equipments , technology, training in paper making and commisioning etc. Thanks !!! K P BIKAL ADVISOR (TECHNICAL) GREEN TECHNOLOGIES MOBILE-91-9818052767 Email--sustainable@sify.com
Votes: +4

Waste paper recycling

written by K P Bikal, April 23, 2011

Dearv All, Hello!! We are dealing with waste paper recycling programm since last fifteen years and have been able to designed the complete efficient and cost effective system for waste paper recycling at various scales, which are suitable for schools, colleges, universities, community organisation, corporates, PSUs and at individuals level. Any body want into this bussiness and program ,we can assist in the terms of supplying the quality paper recyclin equipments, technology ,training in paper making and commissioning etc. Thanks !!! K P BIKAL ADVISOR (TECHNICAL) GREEN TECHNOLOGIES INDIA MOBILE-91-9818052767

Suppy of waste paper

written by Vijay Puri, January 03, 2010

I can manage supply of bulk waste paper from SDaudi. Is anytereted in usinss ? Vjay 09858500083