Traverse any locality in south and east Delhi and you’d come across dusty old cars lining the roads, often taking away half of the available space for motoring. Many of them may not belong to the area and have been trafficked or abandoned. The story is much the same in some of the Mumbai suburbs such as Andheri where some of these abandoned four-wheelers are used to dump whiskey bottles or end up as storage space for street-dwellers or hawkers.
Absence of a cogent scrapping or recycling policy for vehicles is touted as the main reason for this mess. Statistics shared by German thinktank GIZ, the Central Pollution Control Board and an NGO Chintan says that by 2025, India could have as many as 22 million obsolete vehicles. The only solution that the group had to tackle this menace was governmental regulation of the sector. RePower India caught up with Sumit Issar, Managing Director at Mahindra Accelo, among the first organized auto-recycling companies in India. Excerpts from the chat:
RP: Mahindira CERO is the first ELV recycling unit in the country, isn’t it? Or at least the first privately owned one.
SI: Yes, it’s a private-public partnership kind of thing; a 50-50 joint venture between Mahindra and Government of India’s Ministry of Steel. We set up the first plant one and half years ago in Greater Noida, and we’ll be starting the next plant either this month or next month (November or December) in Chennai. It’s already there, fully ready- we’re just waiting for the operational certificate- everything is done.
RP: Since you’re waiting on certification, I thought we could start on that. The Indian ELV recycling sector’s always been quite disorganised- Mayapuri in Delhi is one market I’ve heard of, and there is one in Bombay as well- but there are no certifications, no set policies that they follow, and no standardisation of techniques. So right at the start, what, according to you was the biggest challenge that you had to deal with?
SI: The challenge still continues- we thought, like in many countries, auto recycling needs to be done properly. In India today, 95 to 97% is totally unorganised. We thought that the way it was being done was not good from a sustainability point of view, and we saw this as a great opportunity, since we are in the same space. So that’s when we started this project.
We saw that the competition was mostly unorganised players who were carrying out the work in a very hazardous manner- everything is manual, not process-driven but driven by people, and the manner in which they were recycling or dismantling vehicles was… not good. So we decided that we would bring the latest technology into the country; equipment would be state-of-the-art, fully automatic, not people-dependent, and risk-free.
RP: Do you, in any way, work with or integrate the existing disorganised sector and the players there, into the working of the CERO facility?
SI: We are trying to do that. We are looking at how to create value-they have some skillsets that are very good, they have been in this business for a long time so they know more than us, and we have the technology, so we’ve been looking at ways to integrate.
RP: How has the reception been from their side? Technology and a big corporation coming in… they might see it as taking their jobs.
SI: First reaction is that people are sceptical, but we also found that some people understood that this is the way forward. So today, we have a good response coming in from some parts- so I would say: still early days, and they need a lot of persuasion, but I think that by integrating, we can create much more value for both.
They know the business better than us- we are in the early stages, so there’s a lot of learning that we can give and that they can give us, also.
RP: When you recycle a vehicle, are there any parts that are far too damaged to be recycled? How do you dispose of them in a safe way?
SI: There are many parts that we don’t recycle- too damaged, or unable to be recycled as per global norms. There are ways and means of disposing of them- steel parts have scrap value, and there are other ways… But the idea is not to sell sub-standard parts in the markets.
RP: How much power does the recycling process take? Is there any way you can leverage Mahindra Susten’s offerings, as an in-house brand, to use solar power in the CERO facility?
SI: As operations grow, we are open to using other forms of energy. We are waiting for operations and volumes to scale up. Once they do, that’s the next step for us.
RP: A few days ago, the steel scrap policy was amended. Are you happy with the changes that have been made? What other policy changes would you like to see in the sector?
SI: We’re happy that there’s a policy giving some sort of framework- till now there was no policy, so it was free-for-all. This is a great step forward.
We need scrap to remain in the country and be used in a proper, organised way. It can be recycled to create more products, jobs, value- if we can melt our steel scrap and feed it back into the steel industry, it saves scrap imports, saving foreign imports in a big way- India imports about 7-8 million tons of scrap… in the next five years, that number is expected to go up to 30 million… using our own scrap could help save foreign exchange; the automotive industry also gains, since they’ll be able to look at increasing sales and come out of the slump.
The customer gains because often he doesn’t know where to dispose of the vehicle, so it’s just sitting there with no value or use. So it’s a win-win for all, and I think this will bring about a big change in the industry.