ENTREPRENEURSHIP DEVELOPMENT

BUSINESS PLAN

GOLD SCRAP
‘Creating Wealth from Waste’

Group-
Nidhi Yadav
Rishav Jindal
Ruhi Gupta
Shifali Jindal

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Table of Contents
EXECUTIVE SUMMARY .................................................................................................................................. 3
I. WASTE MANAGEMENT INDUSTRY ............................................................................................................. 4
I.I The Company and the concept ............................................................................................................. 5
I.II The product and service....................................................................................................................... 5
I.III Entry and growth strategy .................................................................................................................. 5
II. MARKET RESEARCH AND ANALYSIS .......................................................................................................... 6
II.I Macro market trends ........................................................................................................................... 6
II.II Micro Market ...................................................................................................................................... 6
II.III Competition ....................................................................................................................................... 6
II.IV Competitive edge............................................................................................................................... 6
II.V Estimated market share and sales ...................................................................................................... 7
III. ECONOMICS OF THE BUSINESS ................................................................................................................ 7
IV. MARKETING PLAN .................................................................................................................................... 8
IV.I Channels ............................................................................................................................................. 9
IV.II Pricing and Packaging ........................................................................................................................ 9
V. DESIGN AND DEVELOPMENT PLANS......................................................................................................... 9
V.I Difficulties and Risks ............................................................................................................................ 9
V.II Product improvement and New Products .......................................................................................... 9
VI. OPERATIONS PLAN................................................................................................................................... 9
VI.I Operational Cycle................................................................................................................................ 9
VI.II Geographical Location ..................................................................................................................... 10
VI.III Facilities and improvements ........................................................................................................... 10
VII. MANAGEMENT TEAM ........................................................................................................................... 10
VII.I Organization..................................................................................................................................... 10
VII.II Management Compensation & Ownership .................................................................................... 10
VII.III Key Stakeholders ........................................................................................................................... 10
VIII. FINANCIAL PLAN .................................................................................................................................. 11

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EXECUTIVE SUMMARY
The unorganized nature of Indian waste management industry creates a big business opportunity.
Based on the same idea, Gold Scrap is dedicated to managing waste of households by collecting
it and sourcing it to recycling mills.

Waste Management industry in India is highly unorganized where collection of wastes is

dominated by numerous local ‘kabadiwallas’ and waste dealers. Customers have to struggle
really hard to negotiate for the price of the waste and weights used by the ‘kabadiwallas’. Also,
as these ‘kabadiwallas’ and scrap dealers are mostly unskilled and don’t have knowledge about
proper segregation of waste and grading of paper waste, recycling mills have to struggle a lot for
such tasks.

Gold Scrap provides the service of door-to-door timely collection and segregation of wastes.
Since, paper, plastic and glass are major component of the total wastes collected i.e. 50%, 14%
and 6% respectively, our focus is on collection of paper and bottles waste.

Major Benefits -

 Collection of waste at regular intervals

 Providing standardized rates & weighing measures for the waste.

 Segregatingof waste

 Grading of paper waste

Our target market is housing societies of Banjara Hills, Hitech City and Madhapur areas of
Hyderabad which has a combined population of 7 lakhs i.e 1.75 lakhs households. We estimate
our market share to be 1% of these households in first year of operation and moving forward
targeting 3% and 5% in next 2 years. Therefore, our expected sales from our services are Rs
42.74 lacs per annum for first year of operations.

The major costs for the company would be capital expenditures on warehouse, equipments
(dustbins, machine, etc.), vehicles and wages of human capital.

The Management team is highly motivated, experienced and well qualified. Gold Scrap is lead
by a committed management team of four, who hold 100% of the equity.

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I. WASTE MANAGEMENT INDUSTRY
 The total urban population in India as per 2011 Census is 377.1 million, which accounts
for about 31.2% of India’s population.
 Assuming that there are 4 persons in a normal household, the number of households in
the urban areas would be about 94 million.
 It is estimated that a household consisting of 4 persons generates about 2.5 kilograms of
garbage per day, which includes 30% or 750 grams of recyclables. In other words, each
household generates about 274 kilograms of recyclables per annum. 4. 94 million
households in urban areas would, therefore, generate about 26.0 million tonnes of
recyclables per annum.
 From the recyclables analysis, following is the break-up of various components:

Component Fraction Quantity (million tonne)

Paper * 50% 13.0
Plastic 14% 3.6
Metal 1.5% 0.4
Glass 6% 1.6
Wood 3% 0.8
Textile 5% 1.3
Total Recyclables per annum 20.7**
* This includes newspapers & magazines also. ** This excludes residual wastes and moisture.

 Assuming that the following values are realizable for various dry recyclables after sorting
and baling, the total revenue generation would be:

Component Value in Rs ( million) /annum

Paper Rs. 10000 per tonne X 13000000 130000
Plastic Rs.8000 per tonne X 3640000 29120
Metal Rs. 12000 per tonne X 390000 4680
Glass Rs. 3000 per tonne X 1560000 4680
Wood & Textile Rs. 1500 per tonne X 2080000 3120
Total Value ……………………………. (A) 171600
Realised

 Based on current data, actual cost of collection, segregation and baling per tonne of dry
recyclables works out to about Rs.6000/-.

Therefore, the total cost for collection of dry recyclables in the urban areas will be: 26 million
tonnes X Rs.6000 = Rs. 156000 million per annum .......... (B)

 Savings on account of reduced landfill, handling and logistics costs by source segregation
of recyclables is illustrated by the following example:

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The Hyderabad Municipal Corporation spends Rs 170 million per month towards collection,
handling and transport of 4300 tonnes municipal solid waste per day for a population of 7.0
million. If 30% recyclables are separated through source segregation these costs would come
down by Rs. 51 million per month.

Taking this figure as the basis, the total savings for a population of 377 million works out to be
Rs 32960.6 million per annum ............. (C)

Thus the Gross Realisation will be: Rs. 48560.6 million per annum......... (A+C - B).

This figure amounts to about 31.1% of cost of collection of waste.

The value addition would go up substantially through integrated municipal solid waste
management and installation of recycling facilities, similar to the Hyderabad model.

I.I The Company and the concept

Gold Scrap is a waste management company which is dedicated to managing waste of
households by collecting it and sourcing it to recycling mills. Since, paper, plastic and glass are
major component of the total wastes collected i.e. 50%, 14% and 6% respectively, our focus is
on collection of paper and bottles waste.

I.II The product and service

We are going to start with door-to-door timely service for collection of waste from housing
societies of Banjara Hills, Hi-tech city and Madhapur areas of Hyderabad City. After the
collection of waste, we would segregate the waste which would be sold to the recycling mills

As for our expansion plans, after segregation we would like to introduce another step of grading
the waste paper. Paper grading is still a new concept is India and is a famous topic of research in
this area.

I.III Entry and growth strategy

Our primary focus at the time of entry is on bulk collection of waste from housing societies as
there is no such organized player in this segment. Our next step would be to expand our reach to
offices (public and private) and educational institutes.

As part of our growth strategy we would like to introduce the grading of waste paper.

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II. MARKET RESEARCH AND ANALYSIS

II.I Macro market trends

The weekend hawkers collect around 2 million tonnes per annum from households, contractors
collect 0.25 million tonnes per annum from publishers & convertors and around 0.5 million
tonnes per annum from industries, offices & libraries.1

Paper has the maximum fraction of 50% as the recyclable component out of the total recyclable
waste.2 From post consumer, only 20%, 20%, 50% and 30% is collected of copier paper, cream
wove, packaging paper and newspaper respectively (different grades of Paper). 3 It has been seen
that a household with 4 persons generate 2.5 kgs of garbage per annum that include 750 gms of
recyclables which means they generate 274 kgms of recyclables per annum.

II.II Micro Market

The target micro market is urban Hyderabad households. Hyderabad has a population of 7.75
million (2011 census) considering 4 persons per household. It means 1.93 million households.

 274 kg of recyclable waste pa means 530,829 tonnes of waste from urban Hyderabad
households. 50%, 14% and 6% of which is paper, plastic and glass respectively.

 Total revenue generation pa from paper, plastic and glass is Rs.10,000, Rs.8000 and
Rs.3000 per tonne. Therefore, the total revenue from Hyderabad households becomes
3.35 billion pa.4

II.III Competition
ITC- ‘Wealth out of waste’ program which is based out of Hyderabad is into the same stream of
business which mainly focuses on collection of wastes from IT offices and houses of IT
employees.

II.IV Competitive edge

 By collecting the waste at regular intervals and providing standardized rates for the
waste.

ITC-WOW, Aug. 2011

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2
Indian Recycled Paper Mills Association (IRPMA), 2011

Indian Recycled Paper Mills Association (IRPMA), 2011

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  By segregating the waste and grading the paper waste, the task could be made easier for
the recycling mills.

 To households, at your door-step service at regular intervals and standardized rates of the
waste will be provided and to recycling mills, segregated waste and grading of paper
waste would be offered.

II.V Estimated market share and sales

We plan to focus on the Banjara Hills and Jubliee Hills localities of Hyderabad which has a
combined population of 5 lakhs i.e 1.25 lakhs households. We estimate our market share to be
2% of these households. Therefore, our expected sales from the three products are Rs 3.35 crores
per annum.

III. ECONOMICS OF THE BUSINESS

The key assumptions of our business financials are as follow-

Based on the above assumptions, highlights of our financials are as follow-

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Details of our financial projections can be found in Financial Projections Sheet.

IV. MARKETING PLAN

 Direct Marketing- We will visit housing societies and other institutions where we would
set up a kiosk to hand out flyers to inform them about our company and our services. Set-
up our custom made paper collecting bins inside the housing society.

 Social Media-Set up an online website for people to join at no cost. On the website,
viewer can fix a time as per his/her convenience for the waste paper to be collected from
their house. The site would be informative in terms of news updates, blogs and videos etc
for people to read and become more aware of our company. Make our presence felt on
other social networking websites as well.

 Publicity-Conduct demonstrations at schools, colleges, housing societies for children

where they would be educated on various aspects of paper recycle such as how to
differentiate between recyclable and non-recyclable waste.

 We would also run print ads in magazines and newspaper for mass marketing.

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IV.I Channels
Customers will be reached through an online portal where they would be registered. Wastes
would be collected directly from the households (‘at-your-doorstep’ service). We plan to
organize the ‘kabadiwallas’ to work with us as the collectors. For the paper grading technology,
we plan to associate ourselves with Central Pulp & Paper Research Institute, Saharanpur.

IV.II Pricing and Packaging

Paper waste- (Buy@Rs.6, Sell@Rs.14/kg)

Plastic Bottles- (Buy@Rs.4, Sell@Rs.10/kg)

Glass Bottles (Buy@Rs.3.5, Sell@Rs.8/kg)

Waste would be collected weekly and sourced to recycling mills fortnightly, thus revenue
collection will happen fortnightly. Since, the households would be registered with us benefits to
them would be given on a monthly basis.

V. DESIGN AND DEVELOPMENT PLANS

V.I Difficulties and Risks

 Our foremost difficulty is to convince the ‘kabadiwallas’ to come and work for us.
 The risk in our business can be the cooperation from the household’s societies.
 Spreading awareness amongst people on the importance of segregation of waste.
 Getting people to switch from their local ‘kabadiwalla’ to an organized waste collection
company.

V.II Product improvement and New Products

 We would expand our product portfolio by including not only variants of dry waste but
also food waste.
 We would expand our geographic presence by moving beyond our starting location.
 And we would like to introduce the technology of grading waste paper.

VI. OPERATIONS PLAN

VI.I Operational Cycle

Provide an Online Provide latest news Train local paper
Portal with Free and Information on collectors and employ
membership and various aspects of them, train them on.
other incentives paper waste
management

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 Sell it to the paper Collect the paper waste Door to Door Service of
mills at a reasonable and segregate them as paper collection by
margin. per industry standards trained people.
and requirement.

VI.II Geographical Location

Our geographical location is Banjara Hills, Hi-Tech city & Madhapur localities of Hyderabad
city.

VI.III Facilities and improvements

Facilities and improvements are warehouse, Office, Utility Vehicle, dustbins and paper grading
machineries.

VII. MANAGEMENT TEAM

VII.I Organization
CEO & MD – Shifali Jindal: Managing the whole business and designing the strategies for the
future.

COO – Nidhi Yadav: Managing the whole operations and supply chain.

CFO – Rishav Jindal: Managing the finances of the business like fund raising, etc.

Sales & Marketing Head – Ruhi Gupta: Managing marketing, promotions, and advertising and
distribution channels for the business.

VII.II Management Compensation & Ownership

Ownership is divided as per the contribution to share capital. Compensation is as per the
financial plan.

VII.III Key Stakeholders

The key stakeholders of our business are as follows-

 Households, Society Owners & Recycling Mills: As the wastes would be collected from
and sourced to these players

 Suppliers: This would include our equipment, warehouse and vehicles suppliers

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  ‘Kabadiwallas’: Since, we are directly replacing these players; they would be hugely
impacted by our business.

 Competitors (ITC, Dealers): Other competitors like ITC and scrap dealers would also be
impacted by our business.

 Employees: Our workforce team would be directly impacted by the business.

 Management Team: The management team would be responsible for all the decisions and
operations of the company

 Investors: The debt providers and other investors would also be a stakeholder

 Government: Since this company is serving to the society, Government becomes an

important stakeholder.

 Environment: Last but not the least, our waste management business would hugely
decrease the waste thrown and not recycled. Thus, we would be impacting the
environment directly by preserving it.

VIII. FINANCIAL PLAN

Our financial plan can be found in Financial Plan Sheet.

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