Institute: IIM Bangalore Pranay Das | Sandeep Kumar Singh

Let’s Create “A Cleaner World”

Background

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Economic Growth Waste Growth

Case Study: Waste Market in Bangalore

Waste Junction

NGOs Housing Societies

Seller

Industries Recyclers

Buyer

Scrap Dealer: Khwaja Enterprises Bangalore, Contact: +91-9731113386 Scrap Dealer: Diamond Enterprises Bangalore, Contact: +91-9141855123 Data Collection: Jolly Mohalla Waste Wholesaler Market, KR Market in Bangalore Social Venture Owner to understand the market mechanism, categories & size

Field Study: Household Plastic Waste, Bangalore, Market Size Estimate

Plastic Waste Categories Include PET, HDPE, PVC, LDPE, Mixed Road Waste Total Volume of Waste Generated in Bangalore City Annually: 0.1 Million Tones Estimated Scrap Dealer Market: Rs. 254.1 Cr., Wholesaler Market: Rs. 292.9 Cr.

Metal Waste Categories Include Ferrous (Mild Steel MS) and Non-Ferrous (Brass, Copper, Aluminum, Zinc & Lead Total Volume of Waste Generated in Bangalore City Annually: 0.5 Million Tones Estimated Scrap Dealer Market: Rs. 2526 Cr., Wholesaler Market: Rs. 2944.5 Cr.

Seller Scrap Dealer Wholesaler Buyer Main Dealer

Traditional Model for Selling and Buying Waste

Paper Waste Categories Include Craft Box, Notebook, Wastage, Newspaper Total Volume of Waste Generated in Bangalore City Annually: 0.13 Million Tones Estimated Scrap Dealer Market: Rs. 70.65 Cr., Wholesaler Market: Rs. 95.63 Cr.

Glass Waste Categories Include Pharmacy, Liquor, Food, Total Volume of Waste Generated in Bangalore City Annually: 0.3 Million Tones Estimated Scrap Dealer Market: Rs. 103.65 Cr., Wholesaler Market: Rs. 140.62 Cr.

Possible Solution: Waste Junction

Pay out Payment - Commission – Transportation charges

The Exchange will guarantee the following four deliverables for Buyers and Sellers: Price : Additional profit for buyers & sellers through disintermediation | Better price discovery through auction Quality & Quantity: Verification through external agents followed by packing, weighing and sealing Delivery: Guaranteed delivery within 2 – 3 days through third party logistics

Industry

SELLERS

Housing Societies

IT Parks

Hospitals

NGOs

Technical Team Posting Notification Auction Execution

Waste Classification Team Analysis Agent assignment

Request for sale

Agents

Quality & Quantity verification

W A S T E J U N C T I O N BUYERS

Industries

Recyclers Resellers NGO

Online Payment

Third Party Logistics

Hotels

Packing , Weighing & Sealing Evaluation

Report

Online form

Certified waste Deal

Closure Invoicing

Transportation notification & Charges

Commission

Benefits, Values & Functionality

Core Benefit Platform for disposal and reuse of waste

Generic Product Matching prospective buyers and sellers

Expected Product Maximizing seller’s profit while ensuring quality for the buyer

Augmented Product Value added waste consultancy Potential Product One stop solution for waste Waste

Junction

Value appropriation by easy disposal of waste at a premium

Value appropriation by consuming waste as an alternate inexpensive raw material

Reduced disposal costs (environmental cost, social cost etc.)

Access to numerous buyers & sellers of industrial waste

Category wise, industry wise and geography wise search facility

Instant notification of waste availability for sale or purchase

Waste producing & consuming entities gain an environmentally conscious image

Value Proposition

Functionalities

Revenue Proposition Sellers & Buyers will not be charged for Listing Seller & buyer: Accept contractual T&C before Auction starts Seller/Buyer arrange for delivery Buyer pays seller after delivery: Online transfer or Demand Draft Seller pays Waste Junction: Online transfer or Demand Draft, 5% of transaction value as commission

Economic Benefits for Buyer & Seller R

even

ue

R

s./t

on

/yea

r

Rs. 252800

Rs. 306800

Rs. 337430

Rs. 371173

Additional Revenue - Rs. 50700

Additional Revenue - Rs. 79500

Additional Revenue - Rs. 111300

Seller Scrap Dealer Wholeseller Main Dealer Buyer

Level 1 disintermediation

Level 2 disintermediation

Level 3 disintermediation

Category Profit On Sellers Side Rs./ton/year Savings On Buyer side Rs./ton/year

Glass 5900 – 26400 11200 – 26400

Papers 25700 – 38200 4440 – 38200

Metals 60000 – 134000 33000 – 134000

Plastic 50700 – 111200 31700 – 111200

Total 178000 – 309800 100300 – 309800

Rs. 306800

Rs. 337430

Rs. 371173

Rs.371100

Additional savings - Rs. 31700

Additional Savings - Rs. 60500

Additional Savings - Rs. 111300

Seller Scrap Dealer Wholeseller Main Dealer Buyer

Level 1 disintermediation

Level 2 disintermediation

Level 3 disintermediation

Rev

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/to

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ear

Per capita Plastic Waste generation 36 grams/day Plastic waste generation per family 180 grams/day Mid size apartment has 200 flats Plastic waste generation for mid size apartment 34 kg./day or 1.03 Tons/month Selling price of each intermediary has been identified

Illustration for city of Bangalore

Risk Identification & Mitigation

Potential Large number of Household and Industrial Buyers & Sellers Better price discovery through Auction Mechanism No established player especially in industrial sector Zero waste & Environmental conscious image - pull customers Less intermediaries & lower cycle time for sale closure

Threat of potentially bypassing website once players are identified Threat of governance especially in household cases Threat from NGOs specially in the household segment Physical transportation is still a bottleneck between players Requirement of skilled Waste analysis & sales team

Favorable Factors

Unfavorable Factors

Risk Mitigation

Contingency Plan

Threat of Bypass (A)

Well designed Auction leading to higher prices, Anonymity of

buyer & Seller

Threat of Governance (B)

Players can enter a bidding only after signing a legal contract

Threat from NGOs (C)

NGOs collecting household waste can be convinced to sell through

the portal

Physical Transportation

(D)

3PL logistics would be provided and cost would be based on

contractual terms

Need for Skilled Labor

(E)

Can be done through outsources agencies expert in the field

Analysis of Business by Market Characteristics

Market-related Criteria Poor Fair Good V Good Excellent

Market demand for product •

Uniqueness relative to competitors

•

Ability to explain product •

Ability to demonstrate product •

Customer acceptance of product •

Competitive advantage •

BIGGEST RISK

Severity of Effect

Pro

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f O

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Low

High

High

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D

C E

Industry Analysis

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Plastic Consumption in India, in Million Metric Tones

Rivalry among existing firms: High

(+)Large no of players

(+)Presence of Non profit

organisation

(+) Threat of undercutting

Threat of new entrants: Low-Med

•(+)Low entry Barrier •(-)Requirement of skilled staff •(-)High Governance Cost

Threat of substitutes: Low

(-) No clear substitute could be

identified for the Waste Industry

Bargaining power of Supplier: Med

(+)Switching Cost low

(+)Low Importance of the product

(-)Ease of doing business

Bargaining power of Buyer: Low

(+) Switching Cost low

(-)High Importance of the product

(-)Ease of doing business

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Waste Generation in India

Overall Industry Attractiveness:

Medium

Estimated Waste Volume (Bangalore) Plastic – 960000 Tons/yr Metal - 243000 Tons/yr

Estimated Waste Value (Bangalore) Plastic – INR 354 Cr/yr Metal – INR 1245 Cr/yr