Maruti Suzuki India Limited BalaMurali Krishna July 20,2012

Challenges related to ELV Collection & Dismantling in India

Agenda 1. “Recycling” – Perspective in India

2. Recycling in India – an established business

3. Disposal of a Old vehicle – Comparison of practices

4. Automotive Industry – Growth in India

5. Spread of Major ELV Industry in India

6. Example – ELV Market in Delhi

7. Current System of vehicle scrapping at Mayapuri

8. Few examples of Recycling in Mayapuri

9. Challenges : Collection & Dismantling

10. Current Provisions in Rules

11. SIAM & MOHI Initiative

12. Conclusion

1.“Recycling” – Perspective in India

Daily Newspaper Can fetch you Rs. 10 / kg

Transformed into

Pack in which you can enjoy Channa

Newspaper bags

Even a simple item such as Old News paper has

Positive value for its maximum use..

Plastic

Ship

Transformed into

Transformed into

Alang – Gujarat Largest Ship Recycling yard in the world Capacity – 4 Mil Ton / year

2.Recycling in India – an established business.

Mayapuri - Delhi Biggest scrap yard in Asia Estimated Output = 1200 Mil $ pa

Okhla- Delhi - Waste to Energy Power Plant Established in Jan-2012 - Plan to establish 2nd Plant

Dharavi-Mumbai Has nearly 250,000 members working in Recycling business and has nearly 15000 shops Estimated output = 700 Mil Pounds pa.

- 50 to 80% of E waste from US is sent to India & China. -Cost of E waste recycling of PC - India - 2 $ - US – 20 $ Considered as Hub of E waste recycling

India as Metal Steel scrap buyer - 0.98 Mil Ton from US - 2.13 Mil Tone from EU - 0.45 Mil Ton from South Africa -(Source World Steel Recycling 2006-2010)

Few examples to name …

3.Disposal of ELV – Comparison of practices

ELV -Disposal

Even totally immobile vehicle Fetches average Rs.10,000 ~ 25,000 (Cheapest New Car in India = Rs.125,000)

First Owner

Last Owner

Recycling Cess

No money for handing over ELV

No Cess No Cess

Expects positive Value for ELV

Car is still a Luxury in India. Hence, it has high value even if it is Old.

4.Automotive Industry – Growth in India

Market growth is bringing challenges & opportunities

to be prepared to handle huge volume of old vehicles.

0

10000

20000

30000

40000

50000

2004 2005 2006 2007 2008 2009 2010 2011 2015 2020

Vehicle Sales in India (1000s)

Passenger Vehicles

Commercial Vehicles

Total - 2/3 Wheelers

Estimated Growth : 2 times in next 5 Years

14939

28620

40810

(E) (E)

Source: SIAM EY

5.Spread of Major ELV Industry in India

Clustered Vehicle market

Clustered ELV Market

List of few big ELV markets in India:

1) Mayapuri, Delhi

2) Meerut

3) Dharavi-Mumbai

4) Karunakar, Andhra Pradesh

5) Shivaji Nagar, Bangalore

6) Pudhupet, Chennai

1

Lead to formation of

- Typically, these markets are source of :

i) raw material for other industries such as ferrous, non

ferrous metal, plastic etc

ii) grey aftermarket spare parts (Re use, stolen vehicles etc).

2

3

4

5

6

6.Example – ELV Market in Delhi

- Approx 3,500 vehicle scrap units are in operation. - More than 1,00,000 people, are dependant on this business for living-hood - Profits margins realized in this market is as high as 200%.

Location of Mayapuri – biggest ELV market in Asia

7.Current System of vehicle scrapping at Mayapuri

Plating Unit

Extruder

Body Parts Fasteners Engine

Used Parts Market @ Mayapuri

Plastic Parts Suspension

Last Vehicle Owner General

Scrap Dealers at Mayapuri

Value to Last Owner = Rs.10000 ~ 25000 / vehicle

(depending upon their condition)

Govt. Vehicles

Auction

Weld Cutting

Press Unit

Removal of

Chassis Plate and handover

to Last Owner

Smelting Plant

Raw Material

Re usable parts

Based on study by Maruti

- Vehicle scrapping is handled by indigenous ways - This market generates a business of 1200 Mil. $ / yr

i) Old Vehicles

ii) Stolen Vehicles

Vehicles from Army Such as Gypsy, Tractors etc Old accident / police custody vehicles

Input to industry

8.Few pictures of Mayapuri

8.Few examples of Recycling in Mayapuri

Recycling in Overseas plant

9.Challenges : Collection & Dismantling

Current Vehicle ELV Business in India:

- Already Established - Profitable

To establish a Systematic flow of ELVs so that sustained ELV business is created.

To establish mechanisms to check fit / unfit parts entering reuse market .

To ensure clean Environment

Prioritize Human health & Safety

- Rules to be modified to fix the age of vehicles. - Enforcement should be strengthened

10.Current Provisions in Rules

Current Rules in CMVR: Inspection And Maintenance

Rules for Disposal by Govt.

Disposal (Environmental Protection Act, 1986)

Hazardous waste management rules,2008

E-waste Management Rule,2011

Commercial Vehicles

1) Emission

2) Safety

1 Year 2 Year

Every Six Months

Private Vehicles

15 Year

1) Emission

2) Safety

Every Six Months

Every Year

Re Registration

11.SIAM & MOHI Initiative SIAM taskforce on recycling.

Regulation Proposal Drafted •Alpha : Accreditation • Beta1 : Heavy metal Ban • Beta2 : RRR Approval

ELV Demo Unit

Vehicles for Demo Project - 25 (4 Wheel vehicles) - 100 (2 Wheelers)

Ministry of Heavy Industries (MoHI)

Demo Unit Location: GARC Chennai

- Funds - Land - Manpower

12.Conclusion

• Recycling is established Business in India and has grown based on its own approach.

• Challenge is to ensure compliance to environment, health and safety needs of society.

Thank You!