Recycling waste into something useful is good in itself, but what if margins in doing so are better than using non-waste raw material? That seems to be the case with Ganesha Ecosphere which uses discarded PET bottles to produce polyester staple fibre (PSE).
So, the next time you have a soft drink and throw away the empty bottle you need not necessarily feel guilty about adding to non-bio-degradable waste. That is provided, you are near an urban centre where roving ragpickers collecting all kinds of processable waste are a routine sight.
The used plastic or PET bottles they collect go through an elaborate process of aggregation, up a supply chain of bigger and bigger traders and eventually land up quite possibly at the doorsteps of one of the 25 collection centres of Ganesha Ecosphere to be converted into PSF used in the manufacture of textile fabrics and a lot else.
Ganesha Ecosphere, which clocked a turnover of Rs 385 crore in 2012 and a bottom line of Rs 20.6 crore, has been around for nearly two decades, and next year will add over a third to its capacity to reach 78,600 tonnes of annual PSF capacity. They will, thereby, maintain their leading position in this niche reprocessing industry, accounting for over a quarter of its total installed capacity, according to Gopal Agarwal, chief financial officer.
The business was promoted by chairman and managing director S S Sharma in 1995 who initially began with the Birlas and then in 1989 went into yarn processing.
It is also examining processing other kinds of plastic waste like the ubiquitous plastic bags whose use is being sought to be curtailed. This can lead to setting up a plant to use discarded bags and the caps of PET bottles to produce polypropylene, which is widely used as a packaging material. So, as long as the economy grows, the use of plastics increases, as also the demand to recycle waste, Ganesha Ecosphere plans to grow profitably.
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Its biggest challenge is collecting and processing of raw material. While an informal raw material supply chain is in place all over the country, cleaning and sorting out the material, which can be used is onerous. The ragpicker gets Rs 20-22 per kilo of material that he hands in to the trader. After sorting, cleaning and compressing, the material is shipped to one of Ganesha’s two plants at Kanpur and Rudrapur, where at the factory gate the cost comes to Rs 35 per kilo. To meet any raw material shortage, Ganesha also has a licence to import (as this is a waste its import is regulated).
Raw material transportation is costly but setting up plants at collection centres is limited by the fact that the technology makes for viability at an annual capacity of at least 18,000 tonnes.
Ramesh Chauhan of Bisleri fame, whose work is Mumbai based, is in the same business of helping aggregate plastic waste, which is eventually passed on to Reliance Industries. But Agarwal sees him driven in part by an agenda of corporate social responsibility whereas “for us waste recycling is a wholly commercial exercise.”
Not only is this recycling of one kind of waste profitable, the margins in this operation are better than those earned by PSF manufacturers who use PTA and MEG as raw materials. (Reliance is of course way ahead in margins as it strides the entire value chain right from the cracking of hydrocarbon onwards.
The conversion process that Ganesha uses has from early this year qualified for earning carbon credit, but that has not yet been sought as such credits are currently slated for sunset at the end of the year with the end of the enabling Kyoto protocol. As and when it is renewed and there is a market again for carbon credit which commands a decent price, Ganesha’s margins will improve further.
Ganesha treats the water it discharges and sells the waste that it generates like bottle caps. So its manufacturing process does not add its bit of industrial pollution. The manufacturing plants run on electricity and considering the power situation in Uttar Pradesh and Uttarakhand, there is a backup of diesel generators.