With the rising population and ever increasing penetration of information technology, disposal of used electronic items is fast turning out to be an unmanageable menace. In 2007, two brothers had the gumption to look at waste management as a business opportunity which led to Attero, which means waste in Latin. From a power point presentation in 2007 to a 1 lakh sq feet spread company in 2009, Attero Recycling has scaled the heights briskly and achieved milestones such as a funding from the World Bank and IT-stalwart Kiran Karnik on board.
In a chat with DNA, the chief executive officer and co-founder of Attero Recycling, Nitin Gupta shares his experiences, concerns and the state of industry. Excerpts:
How did it start and what were the major milestones?
Ideation started three years ago when my brother Rohan wanted to dispose off his old laptop. Then, it was more of a concern on what to do and how to dispose it off. Later on, we figured out that there was a viable business opportunity that can be explored and if done well, could be rewarding.
On the first day itself, we realised that a lot of background work was required, such as market research and other things. Subsequently, we raised first round of capital from two leading venture capital funds—-NEA-IndoUS Ventures and Draper Fisher Jurvetson—-in the same year. We raised around $6.3 million totally on power point presentation as we did not have a registered company.
Then we established our integrated end-to-end electronic waste recycling plant at Roorkee which was inaugurated by A P J Abdul Kalam. Later, we raised another round of capital from Granite Hill Capital Ventures. We have recently closed another round of funding from the World Bank through the International Finance Corporation (IFC), which is a total of $8.3 million.
Today, we have more than 300-odd clients including top companies such as Infosys, Wipro and HCL.
That seems a lot of work already done in terms of creating a team and building a substantial capital base. How many years did you actually take to come to this level?
The idea came in the end of 2007. In the next two years, we were able to set up the plant. We raised the first round of capital in May 2008 and the plant was operational at Roorkee in January 2009.
You were able to rope in funding for the plant in a very short span. Was it really as easy going as it sounds?
It looks easy but each and every milestone had its own challenges. Right from coming back to India from the US to setting up an operational plant, getting the electricity connection, acquiring the land, getting the first round of capital and getting all the clearances that are required, all of these were major challenges.
Can you share a brief on the background of the founders?
I am an electrical graduate with a bachelor’s degree from IIT Delhi. After working for a few years, I did my MBA from Stern School of Business, New York University, and later came back to India to start this company. Rohan, the chief operating officer and co-founder, is a chemical engineer from REC Jaipur. Before joining Attero, he worked at SAP.
What was the rationale behind setting up a plant in Roorkee?
There are four regions (Uttarakhand, Himachal Pradesh, Jammu & Kashmir and the North-Eastern states) in India which provide tax benefits for setting up manufacturing facilities. We zeroed in on Roorkee because it is closer to Delhi and we can also avail the benefits offered by Uttarakhand.
What is your business model?
The electronic wastes are of two types—-profitable and non-profitable. The profitable to recycle means the output value is more than the input logistics and processing cost. For examples, printed circuit boards, the cellphones etc.
The non-profitable to recycle are products such as televisions, refrigerators, computer monitors as these contain bulky items like glass.
From a business model perspective, we have a couple of revenue streams. One of them is by extracting pure metals from e-waste that comes to the plant. We extract 99.99% pure gold, 99.99% pure silver, copper, lead, tin and other metals and then sell it in the market at the MCX rate.
Then there are companies that pay us for recycling products which, as I said, are not profitable to recycle.
What is the growth rate of the e-waste industry?
E-waste is anything and everything that runs on electricity. Last year, India generated close to half a million tonne of e-waste and it is growing at a rate of 20-25%.
If you take bottoms up approach, in India, every month 5-10 million cellphones, 10 million computers, 80 million television sets and 10 million DVD players are sold. All of these products have a certain lifespan. So that gives an idea of the quantum of e-waste and at what rate is it growing.
So why should you and I be concerned about it?
These products are hazardous in nature as they contain cadmium, mercury and lead which needs to be handled in an environment-friendly manner. For example, if you give an electronic device to a scrap dealer in an unorganised sector, for a small amount of gold that is there, they will take the printed circuit board (PCB) out and dip it in a pond of cyanide and sulphuric acid. Some gold would flow to the top which is collected and the remaining cyanide and sulphuric acid solution is dumped in the nearby water stream. This is extremely harmful for the people working in the industry and living in the vicinity.
What are the other reasons which makes e-waste a business opportunity?
Even in India, electronic waste is under the hazardous waste management rules and any producer should recycle it with authorised e-waste recyclers like Attero. From January 2012, a new rule is going to be implemented which is similar to the extended producer responsibility in Europe. Now, this new rule will direct more and more of e-waste to the organised sector.
Also, there is a lot of data which are present in cellphones, desktops and other such data storage devices which should not be compromised when the electronic item is disposed off.
How are your margins and how profitable is Attero?
We cannot disclose our margins as we are a private limited company but to give you an idea, an electronic waste item is a richer and a cheaper source of metal. So it contains in small amounts precious metals such as platinum, gold, silver and palladium and base metals such as copper, zinc, aluminium and nickel. For example, the amount of energy required to extract one gram of copper from electronic waste is 77% less than the amount of energy required to extract one gram of copper from a virgin mine.
Currently, what is your capacity and utilisation level?
At present, our capacity is around 36,000 tonne per annum and our utilisation level is between 10 and 20%.
Isn’t the utilisation level too low?
The awareness level on electronic waste in India is low. Besides, unfortunately there are certain companies in India which are comfortable on just dumping the e-waste into the unorganised sector just because they can make some money out of it.
Lot of companies have an electronic waste recycling policy in the US and Europe and they actually take back and recycle the products but in India they are okay and cover it up and say that we are happy giving it to the unorganised sector.
This is what I have always been a proponent of that if they actually have a policy of recycling e-waste overseas, then they should do the same in India and not wait for the legislation to happen.
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