Executive Summary
VSD provides a business solution to e-waste in Bangalore, by having a proper e-waste disposing technology & unique business concept’s. We will specifically focus on reputed companies in Bangalore who have the need to change to ‘Green Companies”. We will help them to dispose their e-waste in a proper way and add more value providing by proper data destruction, product destruction, asset recovery & reverse Logistics. The business needs more startup cost but it can generate higher revenue compared to any other business.
1.1 Business Opportunity
E-waste (electronic waste) includes computers, entertainment electronics, mobile phones and other items that have been discarded by their original users.
Bangalore does not have enough systematic e-waste recovery facility to cover the need of the city. A proper e-waste recycling facility will produce revenue of 60000- 70000 INR (Rs) per 1tonn of e-waste. A proper facility can range the production from 1 to 5 tons/day.
1.2 Business Objective
To be the best business solution for growing e- waste issue in Bangalore and India and being the unique service provider of e-waste recovery Management by providing a smart business solutions and protecting the environment and people from hazardous waste.
E-waste recovery management is a concept of recycling 98% of the e-waste and disposes them in the proper manner with out polluting the environment. The unique thing about this service is that, the right technology can give you a contribution margin up to 90% .The systematic process and back end service can give a competitive edge.
The e-waste is bought from the dealers and dismantled and extracted those precious metals and other parts and sold to the right manufacturing companies. VSD will be providing not only the e-recycling facility, but also some other unique service like product destruction and data destruction which any of the primary competitors is not doing at the moment.
1.4 Financial Potential
Revenues of $ 975,000 are expected in the 1st financial year and the growth rate can reach up to 6 to 10%.The potential success of VSD is that, the technology and capacity of 2tonnes / day recycling. The contribution margin from each service, ranges around 80% to 88% .The break even point will be reached with in a year time.
The start up cost and asset needed can reached up to $ 791,250.00, and we will be investing $ 350,000.00 for technology sharing for e-waste recycle which can boost the capacity from 1tonn/day to 2 tones /day. These assumptions are mentioned in the Appendix. The main assumption is that, 1 ton of e-waste can generate income up to 60000 – 70000 Indian rupees, which is $1500 to $1750.
2. Service Description
VSD Offers customized as well as integrated services for Software and Hardware Manufactures, Retailers, Corporations, Government and Private agencies and Educational Organizations.
2.1 Services Overview
2.2 Competitive Analysis
The competitive edge that makes VSD unique from other service providers is that, VSD offers a range of five different services with a higher standard. Data destruction process is a very important and demanding service that only VSD is providing among the recyclers’ in Bangalore.
Services like Electronic Recycling and Asset recovery will help the company generate revenue to a remarkable extend. Thus VSD will be able to isolate itself from other competitors in the market and can have a steady growth along the run.
2.3 Research & Development
The company can provide all the above mentioned services throughout its operation and after a while, a detailed market research can be done. By continuing the services, VSD will be able to analyze the marker from its customers and make further enhancements and improvements for the company.
By conducting such a research it will be easy to understand the kind of services that they look for in the future. As the company advances over time, it will be keenly looking forward to implement and acquire the latest technologies that suit the progression of the company. Thus VSD will be able to upgrade and maintain the good name among customers and also to be a dominant in this market.
VSD will take a higher advantage of the rapidly growing e-waste pollution in Bangalore. The unique service we offer will highly appeal for MNCs in Bangalore and the capacity of our plant can recycle up to 2 to 6 tons/day. The target market for VSD covers all kind of IT related companies, including financial, software & manufacturing. The following section will cover all expect of market & competition.
Bangalore's Rs 260,260 crore (USD 60.5 billion) economy (2002–03 Net District Income) makes it a major economic centre in India. Indeed, Bangalore is India's fourth largest and fastest growing market. Bangalore's per capita income of Rs. .49,000 (US$ 1,160) is the highest for any Indian city. The city is the third-largest hub for high net worth individuals after Mumbai and Delhi. Bangalore is home to over 10,000 individual dollar millionaires and around 60,000 super-rich people who have an invest able surplus of Rs. 4.5 crore and Rs. 50 lakh respectively.
An estimated 30,000 computers become obsolete every year from the IT industry in Bangalore alone. An extremely high obsolescence rate of 30% per year is the main reason. Almost 50% of the PC's sold in India are products from the secondary market and are re-assembled on old components. The remaining market share is covered by multinational manufacturers (30%) and Indian brands (22%) [Source: annual report 2003, MAIT]
When computer companies receive Customs exemptions for software, they are bound to dispose of the products in certain pre-determined ways: they, store the e-waste, or destroy it in front of Customs officers or donate it. Most computer companies give it to agencies to dispose of, but while promising to fulfill these conditions, the agencies give it to scrap dealers who in turn pass it on to e-recyclers working in the unorganized industry. Over 8,000 tons of e-waste generated in Bangalore each year comes to these small-scale recyclers; mostly computers which contain precious metals that can be salvaged.
No other companies are focusing into this niche market by providing unique services such as product destruction, data destruction and reverse Logistics. Major computer companies are already facing the blame from media for improper disposal. VSD can take advantage of this need and provide the unique business solution to all kind of companies that look for this service.
Brief look into Competitors
Recyclers
Formal e-waste recyclers are in a nascent stage, with the first ones being established in Bangalore. Currently, the collection, dismantling and recovery are done entirely by a well established network in the informal sector. Even though the sector creates substantial value add, especially by collecting and repairing disused equipment, some recovery process employed is extremely dangerous.
Relevant organizations: E-Parisara, Bangalore
Bangalore, the undoubted center of the IT industry in India, was the first city in India to have sent a WEEE wake-up call. Two workshops aptly titled 'WEEE* Care!' hosted by the Goethe Institute in collaboration with the KSPCB and the Indo-German-Swiss e-waste Initiative brought the issue to the fore and forced all stakeholders to collaborate to find solutions to a looming problem.
Subsequently the E-Waste Agency (EWA) was founded in 2005, a think tank to devise strategies for an improved e-waste management in Bangalore. At the same time formal as well as informal e-waste recyclers were supported with training to gain an authorized status, thus be allowed to recycle e-waste. Presently large consumers and producers such as IT companies have started to work on a code of conduct regarding e-waste management, which will be used to operate a clean e-waste Channel in the Electronics City.
*WEEE: Waste Electrical and Electronic Equipment.
VSD offer this unique service that the market has a need of .the growth of electronic companies and growth of Indian economy will be generating a big amount of e-waste into the city area. The legislation in India is not powerful enough to control the pollution. The government is working on the legislation and the legislation will make a boost in e-waste recovery business and there is higher possibility that lot of international companies can invest in this business concept.
Graph showing the growth in Electronic companies.
As the Indian economy has accelerated in recent years, consumers have been upgrading cell phones, computers, televisions, audio equipment, printers and refrigerators, annually churning out 146,180 tons of e-waste laden with chemicals, according to the International Resources Group based in Washington, D.C.
These machines contain more than a thousand toxins, including beryllium in computer motherboards, cadmium in semiconductors, chromium in floppy disks, lead in batteries and computer monitors, and mercury in alkaline batteries and fluorescent lamps, according to Greenpeace. India is expected to triple its e-waste production within the next five years.
Graph showing the reducing life span of e- products
Conclusion
Data extracted from: 2004 EPA USA.
The market has a higher growth with the economy & electronic company growth. The researches show that the Bangalore will be having more manufacturing coming in next 5 years, which can produce a highest waste to the city. The big companies like Wipro are following a trend of disposing the e-waste in a proper manner. This will have an advantage in the market by providing a sustainable technology, and unique service .This will make the business sustainable in the long run, and since there are no big players in the market, we will have higher advantage, in this growing issue.
The e-waste growth
India, by 2008, should achieve a PC penetration of 65 per 1,000 from the existing 14 per 1,000 (MAIT). At present, India has 15 million computers. The target is 75 million computers by 2010. Over 2 million old PCs ready for disposal in India. Life of a computer reduced from 7 years to 3-5 years.
Over 75 million current mobile users, expected to increase to 200 million by 2007 end. Memory devices, MP3 players, I Pods etc. are the newer additions. Preliminary estimates suggest that total WEEE generation in India is approximately 1, 46,000 tones per year. Three categories of WEEE account for almost 90% of the generation:
Large Household appliances:42.1%
Information and communications:33.9%
Consumer Electronics:13.7% Source: http://www.e-waste.in/about
VSD’s overall marketing strategy is to have a join venture with existing medium level e-recycling company and use their resources and existing customers to capture a strong market share. The technology and the new handling method will be used to protect the people from the hazardous waste.
4.1 Market entry
VSD’s main aim would be to safely reduce the amount of e waste Hazards disposed in India, which would be able to preserve the environment and natural resources by the use of technologies to handle different needs of our clients in e waste system.
VSD is planning to do the large scale business through joining venture with medium scale existing company in Bangalore. VSD would maintain the existing customers of the company (existing), and increase the number of potential customers by value added services; data and product destruction. It will target IT based MNC companies & other IT related other companies in Bangalore which are interested in disposing their waste in highly secured process and to destroy confidential data, of which would be their great concern.
4.2 Competitive Advantage
With increasing duplication of data into market it is vital to curb these activities, MNC competitor companies are providing the service of data and product destruction, done in a highly secured level. Due to the partnership to contracts the company has lower risk level in advertising and investment and more benefits.
Through the technology sharing, the responsibilities of organizations relating to confidential data have become more stringent since the implementation of the Data Protection Act 1998
Certified in ISO Standards Company doing the process in highly confidential ways. (On process)
4.3 Promotional Plan
Promoting awareness about e-waste for MNCs companies and gradually increased effect on workers & environment due to the hazards.
Online website
Regular updates on the link about services provided by the company and the statistical reports showing the improvement of employers and the amount of e waste reduced.
Public relation
Campaign that will attempt to gain the image of the company to alert the people of dumping hazards material.
Media
Newspapers - advertise about the company’s services and reports showing the effect.
Television - commercials on to show insights of e waste and the alarming situation.
4.4. Pricing
Researches show that, there is no companies that provide unique services like us .That give us the advantage to decide the pricing for all our unique services. The researches indicate that 1 ton of e-waste can provide revenue up to $1500 to 1750.The below table shows the assumptions.
Data extracted from TOXICS Link 2005.
VSD will offer the following services:
Product Destruction
Data Destruction
Reverse Logistics
Reverse Logistics
4.5 Customer Feedback
VSD will always listen to customer feedback and look into how we can improve and provide customized solutions for all kind of e-waste .we will use our capacity to suits to all kind of needs. We will operate different ways for corporate clients and normal customers. The feedbacks will be useful on how we can expand our business & financial success.
5.1 Location
VSD wants to locate itself at Bangalore because of the back up from several reasons. Bangalore produces over 4000 tonnes of e-waste every year and it is getting increased every year. They don’t have a proper channel to dispose the e-waste.
So, the companies are disposing their e-waste in an un-environmenal friendly manner. This widens the chance of entrance to the city’s e-waste market.As per statistical data, there are 200 over branded companies (both Foreign and Local) located at Bangalore.
The services provided like data destruction and all can be well utilised be all these highly reputed companies. Besides these, there are 1000 over software companies and 40 over Hardware manufacturing companies in Bangalore. Our main target customers would be the Foreign software sompanies that are located in Bangalore. This increases the chance of making profits and doing a good business down there in the long run.
5.2 Facility
The facility and capacity will reach up to 3 to 6 tonns/day .The assumed capacity is 2 tonn/day. Current no company in India is able to recycle more than half percentage. VSD hopes to reach 95% by using the new technogy used in the market.
There will be complex technology used in this business .The brief information will be shown below.
The process
5.4 Personnel Plan
At this moment, VSD will have to hire employees from other companies in the market who are dealing with the same. For collecting the waste from the disposal ground and basic recycling, VSD will be hiring people coming from an economically backward communities. The higher level of the hierarchy will be composed of technicians who are well trained to operate with the machines for recycling purposes. The details of the Employee Hierarchy is shows in the Financial Projection of the Business Plan.
5.5 General Operation
Monday to Friday : 9 am to 6 pm ; Saturday and Sunday : 9 am to 3 pm
VSD’s plan is to work all the days a week to meet all the needs and requirements of all its clients and thus to be more dedicated and play an instrumental role in this market. We will operatate minimum 25 days a month.
VSD will be the first company providing the unique business solution in Bangalore in term of product destruction and data destruction and asset recovery .we will target all kind of IT related companies. The creative strategy behind VSD is that use the resource from join ventured company .The existing employees will be trained and will start to work in proper conditions. The existing customer base will be upgraded with unique services.
VSD’s business goals are as follows:
The financial success will come from proper market entry and technology sharing in the businesses will share the technology from right companies in order to have proper disposal system and back end services.
VSD will organize campaigns and will get the media coverage; at the starting of business .the reputation will lead the company into proper agreements with MNCs.
No other business is looking into this niche market at this moment .This will be a competitive advantage to VSD .The large scale recycling can create a higher revenue every year and once the Indian government Laws are passed , the company revenue will grow in a rapid way. The join venture with a medium level operating company can give a sustainable advantage to VSD.
VSD has number of future plans.
