Family Firm Builds Solid Foundation for India’s Wastepaper Recycling Needs

 

This past week The Financial Express, New Delhi, India, reported on wastepaper and how it is big business in developed countries. Paper mills require enormous amounts of wastepaper to recycle. A Chennai-based company, Global Waste Recyclers Ltd (GWRL) is convinced there is a huge opportunity waiting to be tapped. "There is wealth in waste," says Bharat Pujara, managing director, GWRL. It is the largest and the only organized player in this line of business in the country.

There are 750 pulp and paper mills in India producing many kinds of paper. The installed capacity is 12.70 million metric tpy and production is around 10 million metric tpy. Forest-based raw materials contribute around 3.1 million metric tpy, agro-based raw materials about 2.2 million metric tpy, and recycled wastepaper some 4.7 million metric tpy, all towards papermaking. Wastepaper as raw material is environmentally-friendly, reducing solid waste. Demand for paper is expected to go up to 22 million metric tpy by the year 2025.

However, the present recovery and use of wastepaper and waste materials in paper mills in India is considerably lower than in many other countries. Currently, it is only 20% of the total paper and paper board consumed. In Germany, it is 73%, Japan 60%, Western Europe 56%, the U.S. 49%, and Italy 42%. 

India actually imports wastepaper as its own paper waste gets recycled so many times that the original fiber strength becomes permanently lost. But Indian mills have come to rely heavily on imported paper waste. The import bill has increased significantly from $5.1 million in 1980 to $1 billion in 2011. The Indian paper industry imports 4 million metric tpy of wastepaper annually—about 57% of its raw material requirements. "Proper and effective recycling will reduce the import bill considerably," says Pujara.

In India only 20% of wastepaper is collected and the rest goes for landfill. Out of 100 kilos of paper used, only 30% comes back for recycling.

How did the Pujara family get into the paper-recycling business? The family has lived in Chennai for several generations. In 1962, a grand-uncle of Bharat Pujara got into waste-cotton trading. This used to be collected from the mills. His father was exporting cotton waste until it was stopped by the government. 

It was then that the family turned to dealing in wastepaper. "Wastepaper is generated from households, commercial establishments, offices, printing presses, publishing houses, and paper converters. It is collected by rag-pickers, hawkers, and middle-level traders and passed on to us. In Chennai alone, we have a vendor base of 200. Packing and baling is done in our plants. We then grade them and dispatch them to our customers according to their requirements, who would then recycle this material," Pujara notes.

In 1981, the Pujaras invested in vertical hydraulic baling machines with capacities of 5 and 10 metric tpy. Until that time, manual baling (pressing and compressing the paper) had to be done, which wasn’t a very productive process. This was a semi-automated process. By 2004, the small family enterprise got a new name and changed itself to a professionally-managed unit to explore the potential. Today, GWRL has Swedish machinery it uses to recycle 150 metric tons of paper in one shift. 

While demand is growing, some key problems remain. Tamil Nadu Newsprint and Papers Ltd. (TNPL), a state government PSU, is willing to buy 10,000 metric tpy of recycled paper from the company. "We are able to give them only 1,000 metric tons. Collection is the problem. Not selling," Pujara says.

There are many grey areas in waste collecting in India. There is a lack of collection mechanism in the offices and the households.

Newspaper is used for wrapping and packing. Municipalities do not play an active role in solid waste collection. There are very few paper recycling firms that have warehouses for sorting and bailing wastepaper like GWRL does. According to an article in the trade paper, Paper Mart, waste management is not taken seriously in the country. There is no storage of waste at source. Only partial segregation of recyclable waste is carried out. There is no system of primary collection of waste at the doorstep. Solid waste is not segregated. Waste is transported in open trucks and waste treatment remains an unknown concept—and waste continues to get dumped in open grounds.

In most of the developed countries, waste collection itself is in the organized sector. They have a wide range of legislation for packaging waste. India needs to implement a system for collection, sorting, grading, and utilization of wastepaper to stop imports and reduce raw material costs. "Municipal bodies attempt segregation of various wastes. But nobody follows the rules," Pujara explains.

Today, GWRL collects waste from the region within a 75-km-radius with Chennai as the center. Pujara says it is difficult to operate in other cities as each city has its own system of collecting waste. He and his brother Umesh Pujara have plans to expand. "We want to start document shredding operations. When sensitive documents have to be got rid of, we will send mobile units that will have shredders. These papers will be destroyed in a secure environment in the presence of the customers."

In spite of constraints, the company has seen good growth in the past five years, ending up with a turnover of R43 crore last year. It hopes to reach R200 crore in a couple of years. "With costs going up and demand for paper increasing, waste paper recycling is a good business to be in. We are working out different options for raising funds for capacity expansion, which requires investment in machinery, infrastructure, and storage space," the Pujaras point out.