Banyan Sustainable  Recycling  Solutions  

 

Banyan  is  an  informal  sector  inclusive  recycling  venture  that  aims  to  root  out  inefficiencies  in  India’s  recycling  value  chain  through  technology  innovations.  

www.banyannation.com  Hyderabad,  India  

mvajipey@banyannation.com  +91  95814  94878  

What  we  do  ?  

Banyan   currently   generates   revenue   by   selling   high   quality   recyclates   (plastic   flakes   and  granules)  to  reprocessors  and  producers  in  high  volumes  at  competitive  market  prices.  

II.  Process  collected  materials  into  high  quality  products  -­‐  such  as  resin  &  color  sorted  plastics  granules  &  flakes    

III.  Sell  recycled  plastic  granules  to  plastic  manufacturers  

I.    Procure  discarded  recyclable  plastics  from  Banyan’s  informal  

sector  recycling  partners  

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The  Problem  ?  Unscientific  recycling  processes  Undesirable    

Even  though  India’s  informal  sectors  appears  to  be  low  cost  and  “employs”  millions  of  people  it  comes  at  a  huge  environmental  and  human  health  cost  to  the  society  at  large.  

Uncontrolled  burning  

Indiscriminate  discharge  of  effluents  into  open  drains  

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Layer   1:   Responsible   for   keeping   recyclates   out   of   India’s   landfills   by  recovering  almost  5  millions  tons  annually  !  Solve  a  huge  last  mile  collection  challenge.    (~25000  in  Hyderabad)  

Layer   2:   Ubiquitous   but   ‘invisible’   stationary   neighborhood  recyclers  serve    as  vital  aggregation  points  in  the  value  chain    (~2500  in  Hyderabad)    

Layer  4  :  Recyclers  run  small  scale  backyard  workshops  (<1  Ton  a  day),  low  tech,      keep  costs  low  –  no  worker  safety,  no  min  wages,  no  PCB  norms,  no  taxes.    (~200  operate  in  Hyderabad)  

Layer   3   :   Aggregators   and   traders   who   are   territorial,  control   market   via   loan   advances,   don’t   pay   fair   market  values   squeezing  margins   at   both   ends   taking   advantage  of  information  asymmetry.    

Local  plastic  manufacturers  are  forced  to  depend  on  dozens  of  middlemen  for  a  reliable  supply  of  plastic  granules  Highly  inefficient,  fragmented  value  chain  with  severe  volume,  quality  and  price  volatility  !  

The  Problem  ?  

I.  Informal  Sector  Inclusion  (achieve  control  over  supplies)  

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Banyan  Solution  

Using  android  based  mobile  applications,  Banyan  has  mapped  and  built  relationships  with  over  1500  stationary  recyclers  and  actively  trades  recyclates  with  ~250  of  them  in  Hyderabad  alone.    

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II.  Production  of  high  quality  recyclates  at  Banyan’s  materials  recovery  facility  (higher  price,  repeat  customers  and  secure  larger  contracts)    Spectroscopic  finger  printing  allows  the  sorting  team  to  positively  identify  various  plastic  resins  (including  contaminations)  and  helps  achieve  over  99%  accuracy  in  plastic  segregation      The  informal  sector  resorts  to  unscientific  methods  such  as  burning,  bending,  twisting  etc.  to  identify  resins.    Currently  Banyan  produces  the  best  quality  recyclable  granules  in  the  city  of  Hyderabad.    

Banyan  Solution  

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III.  Leveraging  mobile  technology  to  improve  operational  efficiencies    Banyan’s  proprietary  software  platform  gives  it  competitive  advantage  by  allowing  it  to  map  all  recyclers,   identify  and  nurture  progressive  recyclers  from  the  informal  sector.      GPS  Truck   routing  platform,  materials  manager,   sales   lead  manager  and  waste  analytics  engine  give   the  company  complete  control  over  operations  to  optimize,  iterate  and  improve  performance  on  a  day-­‐to-­‐day  basis.    

Banyan  Solution  

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Banyan  Solution  IV.  Ensure  and  protect  worker  health  and  safety  

Banyan  gainfully  employs  over  30  workers,  pays  above  minimum  wages,  and  offers  them  safe  &  sanitary  working  conditions  in  addition  to  providing  them  benefits  such  as  insurance  coverage  and  provident  fund.    

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Current  facility  

Key  Statistics  

35        total  Employees  

20  Tons      current  monthly  plastic  granule  production  &  sale  

72  Tons      average  monthly  production  capacity  at  current  facility  

800+                registered  informal  sector  suppliers  

250        active  informal  sector  suppliers  

15        active  granule  customers  

INR  8  lakhs      revenue  in  the  month  of  October  

7      months  since  the  opening  of  recycling  facility    

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Progress  to  date  

Feb  2014  

 Seed  Capital  

(~100K)    

March  2014  

Hiring  of  key  personnel  &  facility  

scouting  

April  2014  

Facility  Lease,  Technology  

Deployment  &  Training  

May  2014  

Informal  Sector  Mapping,  

Relationship  Establishment  &  

Truck  Lease  

June  2014  

Plastic  waste  collection  from  Informal  Sector,  grinding  machine  installation,  sorting  

line  setup  

Aug  2014  

Washing  Line  Installation,  Granule  Machine  Purchase  &  

Installation  

Sep  2014  

Granule  Production  kick  start,  setting  up  labor  policies,  registrations  for  VAT,  CST,  PT  etc.  

Oct  2014  

Granule  Sales  begin,  fine  tuning  factory  operations  for  cost  cutting,  establishing  

plastics  manufacturers  relationships  

Development  of  industrial  plastics  purchase  strategies,  building  

relationships  with  COKE,  P&G,  Unilever  etc.  for  improved  margins  +  

working  capital  optimization  +  plastic  ops  

scale  up  begins      

Approached  by  IFC  &  Attero  for  E-­‐Waste  

partnership  +  Interest  from  local  investor  community  

 

E-­‐Waste  market  research,  business    model  development  

begin  

Facility  re-­‐org  for  E-­‐Waste  

Revenue  Generation    Average  Rev./Month  –  INR  7  Lakhs  (~$12K)  

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Key  financial  and  operational  trends  

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Supply  composition  

Banyan’s   improved  market   understanding  on  prices   and  recyclate  quality  and  its  expanding  supplier  network  have  resulted    in  better  control  over  supplies.      Banyan  now  has  greater  control  over  market  prices  and  is  evolving  into  rate  setter      Unit   operational   costs   are   on   a   downward   trend  with   a  goal  of  achieving  unit  costs  of  under  INR  15/Kg  in  2015.        Supply   volumes   are   on   a   upward   trail   with   a   goal   of  achieving  ~50Tons  by  March  2015.    

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Apr+14" May+14" Jun+14" Jul+14" Aug+14" Sep+14" Oct+14" Nov+14"

Tons%

Monthly%Plas-cs%Recycling%(Tons)%

!INR!%!!!!

!INR!10.00!!

!INR!20.00!!

!INR!30.00!!

!INR!40.00!!

!INR!50.00!!

!INR!60.00!!

May%14! Jun%14! Jul%14! Aug%14! Sep%14! Oct%14! Nov%14! Dec%14! Jan%15!

Unit%Opera+onal%Costs%(INR/Kg)%

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Income  Statements  Oct' 14 Nov' 14 Dec' 14 Jan' 15

Revenue 803,102.00INR 615,735.00INR 597,438.00INR 889,737.00INR COGS 532,199.00INR 750,968.00INR 428,574.00INR 324,087.00INR Gross Margin 270,903.00INR 135,233.00-INR 168,864.00INR 565,650.00INR

SG&A 121,898.00INR 127,721.00INR 135,700.00INR 135,700.00INR Collection & Transportation 111,154.00INR 105,909.00INR 110,644.00INR 101,543.00INR Processing 295,890.00INR 295,745.00INR 312,257.00INR 312,257.00INR EBIT 258,039.00-INR 664,608.00-INR 389,737.00-INR 16,150.00INR

Interest ExpenseTaxes

Net Income 258,039.00-INR 664,608.00-INR 389,737.00-INR 16,150.00INR

Unit  Economics  at  Scale  Sale Tons/Month 15 50 75Revenue 71.81INR 72.00INR 72.00INR COGS 42.16INR 42.00INR 42.00INR Gross Margin 29.65INR 30.00INR 30.00INR

SG&A 12.42INR 9.65INR 6.43INR Collection & Transportation 4.67INR 2.37INR 2.14INR Processing 26.62INR 13.87INR 10.55INR EBIT 14.07-INR 4.11INR 10.88INR

Interest ExpenseTaxes -INR 1.13INR 3.60INR

Net Income 14.07-INR 2.98INR 7.28INR

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Market  Opportunity  City Tons/Day INR/Day Annual

Hyderabad 300 21,000,000.00INR 7,665,000,000.00INR Bengaluru 300 21,000,000.00INR 7,665,000,000.00INR Chennai 300 21,000,000.00INR 7,665,000,000.00INR Visakhapatnam 100 7,000,000.00INR 2,555,000,000.00INR Market Size (INR) 70,000,000.00INR 25,550,000,000.00INR Market Size ($) 1,166,666.67$ 425,833,333.33$

Tier  1  City  like  Hyderabad  trades  about  300  Tons  of  plastic  granules  a  day.      Banyan’s   target   markets   in   the   next   3   years   include  Hyderabad,  Bengaluru,  Chennai  and  Vizag.    Estimated  annual  market  size  @  an  average  price  of  INR  70/Kg  is  ~$425  million  in  just  these  4  cities.    In   the   next   3   years,   Banyan’s   scalable   and   replicable  model  will  enable   it  to  handle  30  Tons  of  plastics   /day   in  each  of  these  cities.      

City Tons/Day INR/Day AnnualHyderabad 30 2,100,000.00INR 766,500,000.00INR Bengaluru 30 2,100,000.00INR 766,500,000.00INR Chennai 30 2,100,000.00INR 766,500,000.00INR Visakhapatnam 10 700,000.00INR 255,500,000.00INR Market Size (INR) 7,000,000.00INR 2,555,000,000.00INR Market Size ($) 116,666.67$ 42,583,333.33$

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Banyan  Advantage  

       

       

Technology driven ethos•  Use  of  mobile  technology  to  consolidate  a  fragment  chain  and  achieve  tight  control  over  supplies  •  Use  of  spectrometers  and  chemical  analysis  to  improve  overall  product  quality  •  Data  driven  business  model  with  operational  cost  cutting  at  every  touch  point  

Delighted, repeat customers •  Direct  interaction  with  customers  to  satisfy  granule  quality  and  price  requirements    Focus on Scale, Growth and Higher-Margins•  Pursuing  a  aggressive  growth  strategy  to  achieve  greater  bargaining  power  and  market  control  •  Repeatable  scalable  model  •  Easy  diversification  into  other  higher  margin  recycling  verticals  such  as  3D-­‐Printing  and  E-­‐Waste  recycling    Very strong executive and operations team•  Well  rounded  team  with  management,  technology,  operations  and  BoP  experience

 Around  200  small  scale  recyclers  (granule  manufacturers)  operate  in  a  city  like  Hyderabad  often  engaging  in  price  wars  with  each  other  and  mostly  buy  and  sell  from  the  local  market.  Small  scale  recyclers  are  territorial  and  do  not  have  a  wide  supplier  base.  They  are  in  constant  credit  crunch,  depend  heavily  on  middlemen  on  supply  and  demand  sides  and  do  not  have  the  quality  nor  volumes  to  fulfill  demand  for  granules   in  other  cities  &  states.  Traders  and  middlemen  withhold  market  information  on  the  supply  and  demand  sides  controlling  market  prices  and  volumes.    In   the  end,   customers   (local   plastic  manufacturers   and   large   companies  who   service  giants   such   as  COKE,  NIKE,  Unilever,  P&G  etc.)  struggle  with  price,  volume  and  quality  volatility.  

Competition  

Easily  Replicable  and  Scalable  Model  

•  Decentralized,  local,  hub  and  spoke  business  model  driven  by  data  driven  decision  making,  technology  innovations  that  leverage  local  last  mile  collectors  and  aid  in  the  production  of  granules  that  fetch  price  premium  

•  Low  capital  expense  requirements  (for  example:  to  achieve  breakeven/profitability  ~50  Tons/month  overall  investment  CapEx+  OpEx  requirement  is  ~$250K  per  city)  

•  Team  with  significant  BoP  experience  and  a  passion  for  sustainability  –  ability  to  establish  and  maintain  deep  relationships  with  informal  sector  recyclers  

Procure,  Process  and  sell  50  tons  of  plastics  in  6  –  8  months  and  hitting  break-­‐even  with  ~$250K  investment  in  any  city    •  Mapping  out  informal  sector  recyclers  and  establish  trading  relationships  using  Banyan  technology  platform  –  1  

month  for  any  large  city  •  Identifying  centrally  located  facility  for  lease  •  Solicit  government  support  for  single  window  clearance  for  industry  establishment  (including  pollution  control  

board  certifications)  •  Secure  supplies  +  hire  labor  +  begin  operations  (3  months)  •  Scale  operations  via  lean  startup  methodologies  and  install  machinery  contingent  on  hitting  key  milestones  (2  

months)  •  Conveyer  Belt  •  Baling  Press  •  Grinding  machine  •  Washing  Line  •  Extruder  

Step  by  Step  Process    

Who  are  we  ?  

Mani Vajipeyajula, Founder and CEOv  Leads overall company vision, strategy and operations.v  Dual MBAs from UC Berkeley (Haas) and Columbia Business Schools v  BS/MS, Electrical Engineering (NIT, Warangal and University of Delaware)v  Spent ~9 years at Qualcomm building and managing large cross-functional teams in the design, development,

and commercialization of 3G/4G mobile technologies including chipsets for Apple iPad3 and iPhone4s/5.v  Lives in Hyderabad working full time on Banyan.

Raj Madangopal, Co-Founder and CIOv  Leads design and delivery of Banyan’s backbone technology platform. v  BS/MS, Mechanical Engineering (VTU and University of Delaware)v  Spent 7 years at Voltari designing and building large-scale mobile portals and marketplaces for mobile operators

across the globev  Has a vast network in Indian politics (family has been in public service as Mayors, Congressmen, Police

Commissioners for the last 6 decades) and business (Founders/CEOs- real estate, healthcare and technology).v  Lives in Hyderabad working full time on Banyan.

Venkata Krishna Vaka, Head of Salesv  Leads Informal Sector Inclusion, Supplier Relationships and Sales v  PGPABM, IIM Ahmedabad and BSc, Agri Achrarya N G Ranga Agricultural University, Hyderabadv  Spent 5 years at SKS Microfinance working directly with Vikram Akula leading strategy and new initiatives of

non-financial products aimed at bottom of the pyramid. v  Developed and led B2B working capital non cash loans model with Metro Cash and Carry benefitting over

5000 Kirana stores in Hyderabad.

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Pan-­‐India  recognition  for  social  impact  and  

technology  inclusive  business  model  

Thank  You!  Contact  

mvajipey@banyannation.com  rajmadangopal@banyannation.com