Waste Paper Business | Energy & Environment | Opportunities

Written by Aswathi Muralidharan

Tuesday, 01 December 2009 00:00

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 de-inked, 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 types—wood-pulp-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 Thailand’s 45 percent, China’s 38 percent, and Germany’s 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 wholesaler—before 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 dealer’s 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 skills—the 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 wholesalers—there 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 bags—one for wet waste and the other for dry waste. Jogarao Bhamidipati, Vice President, Commercial of ITC’s 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

Organized paper collection from homes and offices

Scientific collection and grading centers

There are several other companies mushrooming in this sector—one such being GreenOBin, which was started in 2009. The organization classifies their clients in three different ways—small 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 recycling—the paper becomes brittle and yellow—thus 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.

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waste paper separation business
written by Muhtukumar, July 24, 2010

We are interested in doing paper segregation business. Kindly advice us the opportunity available in this. And also advice major players who are involved in this business.....

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written by gopal, July 21, 2010

wanted waste paper
if any body want to sale waste paper call me 9989555111

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Business Scope
written by Shelly, July 13, 2010

I'm interested in Waste Paper Business. Please guide me, i need information about this type of Business and initial capital for this business .

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start new business
written by kacha dhaval, June 30, 2010

i have seen this all process and now i think that meterial of paper waste didn't stop and paper will never end so right now i am thinking to start paper scrapp business but suggest me how i start? i am from rajkot and i am working as a operator in angel broking channel partner ferm.

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Want to Know more about this
written by Mohan, June 16, 2010

Dear sir please send the information in detail.who is the local area dealer in Lodhi Road. Thanks

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LUBINGHUA
written by MBT shoes sale, June 05, 2010

It's the first time i ran through your site and I found it very informative and interesting. "Informative and interesting"

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Waste Paper Opportunity
written by Gaurav Sharma - Waste Paper Opportunity, June 04, 2010

Hi All, I have an opportunity of export waste paper to China approximately 300 containers per year. If anyone is interested please reply with you capacity to export American 8 Newsprint and American 10 Cardboard and other waste paper qualities as well; with CIF price in US Dollars. Thanks. Please reply on: er_gauravsharma@hotmail.com

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Business with Waste Paper
written by sonia, May 25, 2010

I'm interested in Waste Paper Business. Please guide me, i need information about this type of Business, grades of waste Paper, how to differtiate grades, initial capital for this business etc.

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Business Scope
written by Shamshad, May 24, 2010

Please Guide as i am very much interested in small business like , waste paper. I would like to do it but need more information on segregation and varieties in bundling + how to approach the Mills,what capital would be required etc. .

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Looking for Unsold/Over Issued News Papers in Bundles
written by Younus Abbasi, May 18, 2010

We are Pakistan based commercial importers and are now looking for Over Issued News Papers in Bundles regularly on Monthly basis on CFR Karachi Port for long terms basis.

Please do let us know your capacity to export to us on regular basis. For more details and specification you can visit our web site www.unitedsalescorporation.com.

Regards

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...
written by anil texconindia, May 17, 2010

SELLER SELLER

We are seller of used Paper, magzine and Old News Paper
we need buyer with good financial record at what price do you buy
email:. texconindia@gmail.com

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written by anil texconindia, May 17, 2010

SELLER

We are seller of used Paper, magzine and Old News Paper
we need buyer with good financial record at what price do you buy
texconindia@gmail.com

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written by Russell Rozario, May 13, 2010

Interesting business opportunity. Would be interested in knowing the wholesale buyers of scrap paper in Mumbai.

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request to a local old newspaper dealer in mumbai at nallasopara
written by raju.mudaliar, April 23, 2010

i am opening a scrap shop at nallasopara (west) at civic center
so i need details of local old newspaper buyer at kilo quantity
i had a finance and a shop too also but i don't have idea about
local scrap/old newspaper dealer/buyer no one is giving me the idea
for this problem yet i not open the shop. please help me and give me
local scrap/newspaper dealer name and address and too contact no
thankyou

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Buyer
written by Anup Jani, April 09, 2010

My company is into the waste paper business since 1969.
Services offered by us are:
• Collection of waste paper and paper products on as it is where it is basis.
• Only shredding of all kinds of paper and paper products.
• Shredding and collection of the shredded material.
(Above services are offered on one time or contract basis.)

Interested people and companies can contact me on my mail id anup.jani@yahoo.co.in

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written by anoop singh kanwar, April 02, 2010

hi,I m in Australia and looking for a buyer for waste paper in India and Bangladesh,plz get me all the details with your offer at F.O.P

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mr
written by ramesh, March 17, 2010

i too want more details abt business, kindly inform me
in this regard.

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NOT ENOGH
written by RAMESH, March 16, 2010

http://notenoughindia.blogspot...nough.html

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written by Mathews, March 15, 2010

Yes, waste paper business is really interesting. I would like to do it but need more information on segregation and varieties in bundling + how to approach the Mills, etc. Pls guide.

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Where do we stand in comparison to other developing Contries for using "Waste Paper".
written by NP Singh, March 15, 2010

The thoughts are NICE....It is a matter of organising the Throughts & put them in place....I think It is workable...

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small business
written by amardeep singh, March 13, 2010

I want to know the initial capital required for this business as i am interested in small business. please forward me all the details regarding this business to be start in small town of Punjab.

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Greenobin: Home, Waste Pickup, Audit, Recycling Bins
written by Greenobin Company, March 03, 2010

Recycling Services India,Greenobin provide a complete range of independent recycling and waste management facilities."

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...
written by parthasarathy sundararajan, March 01, 2010

excellent business oppertunity.would like to have more details as i have sufficient space and manpower to go about the business.i am based in mumbai.thanks,partha

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written by Mahesh Pawar, February 26, 2010

I am working on this proposal, pls. contact for further details at email: maheshpanwardj@gmail.com
contact no. 09999311991
Thanks

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waste paper business
written by krishnamurthi, January 23, 2010

Dear miss aswathi,

this is very good business, i want to tell thanks to you, THAKS
FOR YR ARTICLE
i want to know more about this business, kindly give me the mail id of 'green Obin'
i am in south india

once again thanks
regds
krishnamurthi

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Mr Junaith
written by junaith, January 21, 2010

i am going to start this in Muscat .............i checked the price in dubai it is 3000 dhs per tonne.Gr8 opputunity.junaithk@hotmail.com

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written by rajneet singh, January 20, 2010

I am interseted in this bussines , please give me the more detail , there is any scope in export.

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Excellent idea
written by Gaurav Behl, January 16, 2010

Mr.Sanjay Goyal we are interested in this business.We can be ur associate frm Faridabad.

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excellent buisness opportunity
written by dhiren patel, January 14, 2010

This is a wecomable business which is so far not reached by many persons . as i am interested in this business i want more details about where to contact, whom and how to deal with it, minimum quantity can be supplied and the rates ect. kindly email me .

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Waste Paper business
written by sanjay goyal, January 09, 2010

I am thinking of starting the same in NCR in noida and greater noida area. Anybody wishes to join me, can write me an mail at sanjayindia2006@yahoo.co.in

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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

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Business Scope
written by Santhosh kumar, January 02, 2010

Its really a gud business offer indeed an there are many paper mills in our area. So am interested in this business. How about the scope for this business in North-West Tamil Nadu.Can u send me further more details about the current demand on sope of this business in tamil nadu.

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written by NIKHIL, January 01, 2010

how do i go abt starting it ?

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intrested
written by NIKHIL, January 01, 2010

looks intresting . can i get details about how do i go about starting it ... are there companies already established looking for dealers/franchisee?

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Intrested
written by NIKHIL CHAUHAN, January 01, 2010

this looks intresting ... can i also get details about how do i start , whether companies already in business offer franchiseedealership ??

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interested to know more
written by Bipin , December 29, 2009

i am very much interested n this business and would like to know more about this in detail.how to start this business in a place like bangalore and how much we need to invest initially.

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