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E-waste: Opportunity or Burden?

India is expected to be one of the largest consumer electronic markets in the world. By 2012,
India is expected to have 600 mn mobile subscribers, 60 mn PCs and 143 mn TVs. This will lead
to significant amount of e-waste. With regulatory intervention likely, there is opportunity for the
emergence and growth of organized players in e-waste management as well as major
compliance commitments for various industry players says K.Raman of Tata Strategic
Management Group.

India is expected to have an 11% share in the global consumer electronic market by 2015. By 2012, India is
expected to have 600 mn mobile subscribers, 60 mn PCs and 143 mn TVs.

Exhibit 1:

Mobile Subscribe rs (Mn) PCs (Mn) Televisions (Mn)

600 143
60 134
450 119
44 105
261 32
21
103

2006 2008 2010F 2012F 2006 2008 2010F 2012F 2006 2008 2010F 2012F

Source : Tata Strategic Analysis, IDC, Crisil, KPMG

The average lifespan of most electronic gadgets has been constantly reducing. This fast obsolescence of electronic
gadgets results in generation of e-waste. E-waste is a term used to categorize electronic items which have reached
end-of-life for their current users. Such items often contain materials that have economic value but can pose
environmental risks if they are land filled or incinerated.

Substances in electronic components

Valuable Hazardous
Gold Brominated Flame Retardants (BFR)
Silver Lead, Cadmium
Platinum Mercury
Aluminum Phthalate Plasticize

In 2012, 7.1 mn computers, 16 mn TV sets and ~190 mn mobile handsets are expected to be a part of the e-waste
pool in India. This would translate into 1 mn tons of e-waste in 2012.

Exhibit 2:

Pote ntial Desktop units e- Potential TV units e-waste Potential Mobile e-waste (Mn)
waste (Mn) (Mn) 188
7.1 6% p.a 16
18%p.a. 13
33% p.a.
3.1
45

2007 2012 2007 2012F 2007 2012

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Global Scenario:
Advanced countries like USA, UK, France & Germany generate 1.5 to 3 million tons of e-waste annually and are
among the largest generators of e-waste. But these countries also have standardized e-waste management
processes in place.

Proper e-waste management, from efficient sourcing and collection right upto extraction and disposal of material,
has ensured that this huge pile of junk turns into a lucrative business opportunity.

E-Waste Manangement

Sourcing of E- Aggregation Segregation & Recycling Hazardous

waste Dismantling material disposal

• Collection of E- • Sorting material • Dismantling • Breaking • Disposing

waste form into 3 parts for: into individual down CRTs hazardous
Business users ­ Reselling components for glass material
and Residents ­ Repairing & like PCB, extraction
Reselling Monitors & • Valuable
­ Recycling Hard Disks material
recovery
• Extracting
metals

Exhibit 3:
A number of major companies around the world have evolved to cash on the potential of e-waste.

Australia based Sims e-Recycling is a part of the recycling solution of the USD 2,900 Mn
(FY06) Sims group which is a leading end to end recycler having 120 sites across 4 continents
and has presence in metal, plastic, glass and e-waste recycling. E-waste recycling accounts for
USD 130 Mn in revenues.

The USD 15 Mn Centillion Environmental & Recycling, a Singapore based e-waste recycler,
has extensive operations in Singapore, China, UK & Malaysia.
Some of the other prominent companies in e-waste recycling include TES-AMM, Cimelia and Citiraya
among others.

Some of the policies in place globally for effectively managing e-waste are summarized in Exhibit 4

Exhibit 4:
Regulatory Models in Place for
Producer Responsibility Government Responsibility

Model • Commonly Known as Extended Producer • End consumer taxed a recycling fee on the
Responsibility (EPR) purchased product
• Manufacturers financially responsible beyond • This Tax / Annual recycling fee (ARF) is used to
point of sale fund the ewaste collection & recycling activity
• Manufacturers required to take back e-waste & • Government is responsible to administer and
recycle them upto a defined percentage. collect e-waste
• The funding model for this activity varies from
company to company
Current
examples European Union, Japan, South Korea, Taiwan Switzerland, California (USA)

Likely • Pressure on manufacturers to design toxic free • No incentive for manufacturer to create cleaner
Implication electronics requiring lesser recycling effort designs
• E-waste not likely to reduce as manufacturers do
not have any liability

Source : Business Press, UNEP, Central Pollution Control Board

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The lessons we can draw from these policies are:

Regulation enables e-waste management procedures and the emergence of organized players

There is a cost to the consumer or producer to enable efficient e-waste management procedures

Exhibit 5:

Manufacturer responses to e-waste legislation: International Examples

Electronic Manufacturers Recycling Company: A JV formed by Panasonic, Sharp and Toshiba to
manage e-waste. The JV aims to provide cost effective collection and recycling services to enable
manufacturers meet the e-waste legislative requirements

Nokia, in Europe, has ensured accessibility of take back channels through take back bins and
collection points. The old devices dropped off by consumers are sent to the nearest Nokia
approved recycling companies

Domestic Scenario:
In India, while recycling of goods is prevalent, it is primarily undertaken by unorganized players / family
workshops who collect e-waste through bicycle bound scrap collectors. These players utilize the cheapest way to
recycle and do not follow safe and standard material disposal procedures. The few organized players in this market
include InfoTrek, Trishyiraya, e-Parisara, Ultrust Solutions and Ramky. They have large overhead costs which
make it difficult for them to compete with the unorganized players.

Implication:
With India expected to be one of the largest consumer electronic markets in the world, the high levels of e-waste
should attract regulatory attention and one can expect legislation for e-waste very soon. The Central Pollution
Control Board has already come out with broad guidelines on e-waste handling and a formal legislation cannot be
far ahead. Going by recent trends, it is likely that the e-waste regulations on the lines of Extended Producer
Responsibility model as in the EU will be implemented in India. E-waste recycling revenues have a potential to
touch INR 1,520 Cr annually by 2012.
Exhibit 6:

E-Waste Recycling Reve nue Pote ntial (INR Cr)

1520

390
CAGR 16%
730 660
190
380
470
160

2007 2012F

Computers TV Others

Source : Tata Strategic Analysis

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When manufacturers are expected to play a role in e-waste management there are challenges they would need to
address like
• Efficient collection and management of e-waste
• Develop approved recyclers who conform with regulatory requirements for labour and hazardous
substance handling
• Manage the additional costs expected to arise due to compliance efforts without impacting
competitiveness
As manufacturers go about addressing these challenges we could see the emergence of stronger organized
companies in e-waste management. Companies looking to leverage the opportunity early would need to focus on
building the right capabilities related to collection, aggregation and re-cycling of e-waste that would be needed for
providing solutions to manufacturers and hence build scale in e-waste management.

Effective e-waste management as we have seen internationally will need manufacturers to develop new
capabilities and alliances. This can also be a powerful tool to demonstrate one’s responsibility to the environment.
It would be important for organizations to have a well directed strategy for e-waste management.

Manufacturers and e-waste management companies who are ready will find e-waste as an opportunity for further
growth.

Ⓒ Tata Strategic Management Group. No part of it may be circulated or reproduced for distribution without prior
written approval from Tata Strategic Management Group.

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