When Vadodara native Paresh Parekh was working in Brussels, Belgium, after obtaining an MBA degree there, he discovered that, unlike in India, people in Europe had to pay for waste disposal from their shops or offices. Sensing a market opportunity, Parekh then studied the waste collection, disposal and recycling set-up at municipal bodies there and how some of those in business used to export this waste.
Soon, Parekh set up a company in the UK. However, a chance meeting with telecom tsar Sam Pitroda in Belgium some time later drove him to return to India and initiate his unique business of waste management in Vadodara in 2008. “At a function in Brussels, Pitroda spotted me and discovered that I was a fellow Gujarati. When he found what I did, he advised me to set up the business in India,” he says. This led to the foundation of the business brand, Pastiwala.com, in January 2010, owned by his company Sort India Enviro Solutions.
Pastiwala.com, which is operational in seven cities of Gujarat, directly contacts garbage collectors to remove the middlemen. It advertises on local radio networks about the services and rates it offers. Till today, the company has created about 500 direct and indirect jobs, and owns 25 big trucks and 35 other vehicles. It has warehouses and five recycling facilities as well.
Similarly, the idea for Gurugram-based ExtraCarbon came about when Gaurav Joshi, one of its co-founders, was studying in the UK. “I observed how well western countries were managing their waste. In 2011, when I came back to India, there were few takers for this idea, but I found very strong supporter in Anant Avinash (the co-founder). Like me, Anant had also quit his high-paying job to dedicate his life for his vision of seeing a cleaner India,” says the University of Wales alumnus.
Thus was born Greentooth Technologies, the company behind ExtraCarbon. The waste management company allows users to recycle their waste, sell second-hand items and make eco-friendly choices on a daily basis.
In order to encourage more and more people to pass on their garbage or old furniture and other household items to ExtraCarbon, the company gives customers either cash or reward points that they can accumulate on the website’s dashboard. The points may later be redeemed on Jhoomley.com, a separate reward platform of the company on which customers can buy appliances, groceries, personal care and beauty products, etc.
In a country grappling with a burgeoning population and large volumes of waste that it produces, start-ups like Pastiwala and ExtraCarbon are showing the way to deal with this pressing issue in a manner that is profitable not only to the business establishment, but also to the environment at large.
“The present scenario of waste management is inadequate, with poorly-controlled open dumps and defragmented and unorganised industry practices… this prompted us to start ExtraCarbon,” says Joshi.
ExtraCarbon’s business model is simple: it sells all the collected and sorted waste material to recyclers. To do this, it has set up a network of local waste collectors, or kabadiwallas, and organises them into a team of ‘Green Super Heroes’. They collect recyclable waste material from users and sell it to ExtraCarbon for better margins. “They are not on our payroll. In total, about 261 of them are associated with us. We have an inclusive model, where both parties can co-exist. We have introduced ‘Jhoomley credits’ (JC), which is a mode of payment to the user. JC can be redeemed on Jhoomley.com or transferred to one’s Paytm account,” explains Joshi.
ExtraCarbon is currently operational in Delhi, Ghaziabad, Gurugram, Noida, Ludhiana, Patiala and Lucknow, with about 43,000 users. “We have a team size of 39 people. Last year, we achieved a revenue of `1.71 crore with a profit of `2.21 lakh before tax,” says Joshi.
The market potential
India, being one of the most populated countries in the world, as well as one of the most rapidly developing ones, is the source of humongous amounts of waste every year, be it municipal solid waste, hazardous waste, biomedical waste or e-waste. As per the Central Pollution Control Board (CPCB), the average solid waste generated in India ranges from 0.21 to 0.5 kg per capita per day.
So naturally, the market potential for waste management is huge. As per a report, titled Waste Management Market in India 2014-2025, released by Bengaluru-based market research firm NOVONOUS in 2014, the waste management market in India is expected to reach $13.62 billion by 2025. While the Indian municipal solid waste (MSW) management market is expected to grow at a CAGR of 7.14% by 2025, the e-waste management market is expected to grow at a CAGR of 10.03% during the same period, the report said. “India has planned to achieve a capacity of 2.9 million hospital beds by 2025, which will help the bio-medical waste management market to grow at a CAGR of 8.41%,” the report added.
“The market potential of the unorganised sector of waste/scrap management is immense. We are wasting so much of useful material that can be reused, that can be useful to some needy person. On an average, every day, about 62 tonnes of garbage is being generated by people, especially in urban India. Around 60% of this scrap is recyclable,” says Anurag Asati, co-founder of The Kabadiwala, a doorstep service that helps people sell household junk such as old newspapers, etc.
“We want to spread awareness among people about the benefits of proper disposal of waste materials that can create an impact not just on their lives, but also on the environment,” adds Asati.
The Kabadiwala collects recyclable waste material from users and stores it in designated warehouses, where segregation takes place. The segregated waste is then sold to recycling companies. Starting out with Bhopal in 2013, The Kabadiwala has now expanded to Indore and Ahmedabad, recording over 25,000 registered users so far.
Growing by innovation
In the waste management business, innovation is key. However, as Joshi of ExtraCarbon would like to put it, this innovation isn’t happening with the product, but with the process itself. “ExtraCarbon is inspired by the cradle-to-cradle approach to build a loop business model in which all the material, post consumption, should go back to industries for fresh production. Our waste collectors buy recyclable waste from customers and sell it to us for a better margin. After the collection, we send all the recyclable material to the respective industries for further production. We are trying to transform the entire recyclable waste sector, starting from the pick-up process to collection, logistics, recycling and reducing the landfill,” he adds.
As per Parekh of Pastiwala, the real value addition is done at the very bottom of the pyramid, where the work of waste collectors begins. “The middlemen above them are mere financiers who charge 10% interest on a daily basis. Thus garbage collectors are the backbone of this business,” he explains.
Kunal Doley is a freelancer