NTADBM-Group11

7/31/2019 NTADBM-Group11

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Table of Contents

Introduction ............................................................................................................................................ 2

Current Scenario ..................................................................................................................................... 2

Types of e-waste ..................................................................................................................................... 3

Business Model ....................................................................................................................................... 4

Value Proposition .................................................................................................................................... 5

To the end customers ......................................................................................................................... 5

Reuse .................................................................................................................................................. 5

Recycle ................................................................................................................................................ 5

Know More ......................................................................................................................................... 5

To the Supporting Partners ................................................................................................................. 6

Platform/Interface .................................................................................................................................. 6

Resources and Partners ........................................................................................................................ 11

Promotions ............................................................................................................................................ 12

Financials ............................................................................................................................................... 12

Assumptions .......................................................................................................................................... 19

Ad Revenue ....................................................................................................................................... 19

Advertisement .................................................................................................................................. 19Furniture, Machinery and Equipments and its Depreciation ........................................................... 20

Maintenance & Repairs .................................................................................................................... 20

Rent ................................................................................................................................................... 20

Salary and Wages .............................................................................................................................. 20

Other Assumptions ........................................................................................................................... 20

Bibliography .......................................................................................................................................... 21


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IntroductionElectronic waste, E-waste, waste electrical and electronic equipment (WEEE) are terms

which refer to the electronic products nearing the end of their useful life. It can be

discarded computers, office electronic equipment, entertainment device electronics,

mobile, television sets and refrigerators. This definition also includes used electronics which

can be reused, resold, salvaged, recycled, or disposed. The term is applied broadly to

refurbishing industries and also to product that cannot be used for its intended purpose.

Over the years, the term has been applied to all surplus electronics and electrical

equipment. Due to rapid changes in technology, changes in media (tapes, software, MP3),

falling prices, and planned obsolescence, the amount of surplus electronics has been

increased at an ever increasing pace.

Current ScenarioA new era of electronic world has emerged due to the rapid

product innovation especially in IT and telecom sector.

People across the world are upgrading their computers,

buying technically advanced cell phones, televisions, audio

players and printers more frequently than ever before.

Presently the biggest problem is caused by cell phones and

computers as these products are replaced most often and

hence the number of discarded electrical and electronic

waste is piling up to millions.

According to researchers, the uncertainty of how to manage old electronic products leads to

nearly 75% of the waste being dumped into storage. Although many of these discarded

materials can be refurbished, reused or reused but they are not and as a result the e-waste

is the fastest growing segment of worlds waste stream.

At present e-waste makes up 5% of the total municipal solid waste worldwide which is equal

to the waste generated by all plastic packaging material. According to the reports, Asias

contribution towards e-waste generation has been estimated to be 12 million tons each

year. Efforts to regulate or recycle these e-wastes are being developed at a very slow pace.


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As per a report published by UN, by 2020 e-waste from old computers in South Africa and

China will have jumped by 200-400% and by 500% in India as compared to 2010 levels. It

also states that by 2020 e-waste from discarded cell phones will be increased to 7 times

than 2010 in China and 18 times in India.

Types of e-wasteBased on two different criteria e-waste has been classified as follows:

Criterion 1: Based on the electrical products:

1. Computer2. Television3. Cell phones4. Some more e-wastes

Criterion 2: Based on their reasons of being waste

1. Type 1: Those electronic products which are working but because of the arrival ofnew technology, the older product are turned into waste.

2. Type 2: Those products which do not possess any function anymore and are actuallywaste.

3. Type 3: Those products which are partially defective and have been discarded.


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Business ModelIn this section, we would describe our business logic in a comprehensive manner. Having

identified the need for our product and the target segment, we would describe how our

product provides a unique value to our customers and how they are believed/expected to

value it. The business model also focuses on the mediums to reach the requisite customer

base. We will also try to look at how the generation of monetary wealth and sustainability of

our business proposition. The following are the basic building blocks of our business model.

Each of the blocks has been further explained.

Business ModelPromotions

Platform/Interf

ace

ValueProposition

Resources and

Partners

Financials


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Value Proposition

To the end customers

The customer segment that is under consideration has a latent desire to do their bit in

environment conservation. Our Business model and application provides them a systematic,

easy and non-tedious way of doing it. The e-waste, which they would have otherwise

discarded away, is now being properly channelized so that it does not cause any harm to the

environment.

Also, for the people in the target segment, who value creativity, would get an opportunity to

satisfy their creative hunger by using the application. The application would inform them

about ways in which they could creatively utilize the e-waste. They could also post any new

creative ideas to utilize the waste with the help of the application. So, the application also

provides the customers a platform to showcase their creative talents in the field of e-waste

management. For the customers, it also means publicity among the people having similar

interests and earning the redeemable points which can be later redeemed for an offer,

coupon, etc.

Based on the type and volume of the e-waste the customers want to give for recycling, they

would be awarded with redeemable points. There would be a few initial points for

registration and also points for sending an interesting and creative idea for reuse (as

explained in the previous section). The customers can redeem these coupons in a variety of

ways. They can get discounts at certain famous restaurants, spas, saloons, fast food jointssuch as Dominos, McDonalds, in shopping malls, apparels shops, etc. The offers that the

customer would get will depend on the type of arrangements we have with the respective

service provider. The core element of this strategy is similar to the business model followed

by coupon and deal sites like Snapdeal.com.

Another important attribute that the customers gain from the application is relevant

information about e-wastes, current trends, awareness and happenings in the world of e-


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waste management. This would appeal to the environment conscious people within the

target segment.

To the Supporting Partners

The supporting partners would include restaurants, saloons, spas, apparels stores, fast food

joints like Dominos, McDonalds, etc. The customers redeemable points would be redeemed

at these partners end. For each of these, the discount rates equivalent to the redeemable

points can be decided and used further. The partners would get increased sales pus an

opportunity to touch base a large number of our customers. The customer information that

we have can be used by these partners for advertising their own products/stores, etc. They

can also project it as a help they are providing for strengthening e-waste management and

proper disposal.

Platform/Interface

We would adopt an easy to use interface for the application which guides the user through

the steps in a simple manner. The home screen would be the first screen that would be

visible to the user as soon as the application is opened.


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The second screen is as follows:

It provides the guest users to register themselves on the application. The option of getting

more information about e-waste management is available to all users at this screen. The

existing users have three options: reuse, recycle and the option to see the accumulated

redeemable points.

If the option reuse is clicked,


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The customer here can select from an existing set of option or enter a new category. Based

on this information, the application would search its database and bring out a list of creative

ideas that can be applied to the type of e-waste that the customer has entered.

If the customer chooses the recycle option,

The application asks for the type and quantity of e-waste and the pick-up point. For existing

customers, the address would be stored unless they want to enter a new address. A

customer can give multiple pick up point addresses.

Once the customers fill out the requisite information, a screen for final confirmation

appears. It reflects the date, time and address of the pick-up.


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A new customer has to first before the reuse and recycle options can be availed.

The registration form is as follows:

The customer would be asked for general details such as mobile number, e mail id, address.

Etc. The customer here has the option to enter multiple pick up point addresses.


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For the existing users, there are option to check their points and the offers from our

supporting partners. The offers could be made location specific and would also be used by

the partners for advertising their offerings to the customers.

In the know more section, the user is provided more information and is kept updated about

the latest happenings in the world of e-waste. The screenshot is as follows:


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Resources and Partners

The value chain requires presence of customers who are willing to give away their e-waste

for disposal. It also requires companies/manufacturing units willing to buy the e-waste. For

the redeemable point incentive to work, the supporting partners who are willing to offer

some discounts or coupons on the redeemable points must also be in sync. The chain is

diagrammatically represented as follows:

As can be seen, the supporting partners play a significant role in the overall functioning of

the business model. The resources required would include a mechanism for point to point

collection of the e-waste and a facility to temporarily store the collected material. Also, a

mechanism to sort the materials as per the requisite industry needs would have to be in

place for efficient functioning.

EW !

Supporting

Partners

Customers

Manufacturing

units

Provide e-waste products,

any new innovative ideas

on reuse

Provide Redeemable

Points

Advertising Support,

Sales O ortunities

Provide Recyclable

e-waste


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Promotions

The promotions would be focussed on creating awareness about e-waste, the current

scenario and its dangerous effects and how the application can solve it. The primary

objective would be to evoke and appeal to the environment conscious nature of the target

segment empowering them to do their bit in saving the environment without the

requirement of a tiresome effort. The redeemable point based incentive system would be

projected as an additional advantage of the application.

Financials

The actual data on the amount of e-waste in India is hard to determine. The sector is highly

disorganised with multiple layers which makes it even harder to determine the exact market

size. Several agencies, both government and non government have tried to get an exact

estimate of the amount of e-waste that the country generates. The agencies mostly base

their studies on a model which takes into account the obsolescence of electronic products,

which is also validated with the field data.

The amount of e-waste generated by the country is poised to grow at a very healthy rate.

The West Bengal Pollution Control Board has determined that the growth of e-waste has

been at a Cumulative Accumulated Growth Rate (CAGR) of 6% 2007 onwards and is likely to

remain same going forward. According to a document on e-waste released by the

Department of Information Technology, the growth in the amount of e-waste in India has

been predicted as follows:


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The graph above clearly shows the existing and potential exponential growth in the amount

of e-waste that is likely to be generated in the future.

There is great inequity among the states and the cities in the country in the generation of e-

waste. A few states, namely, Maharashtra, Tamil Nadu, Madhya Pradesh, Gujarat,

Karnataka, Delhi, West Bengal, Andhra Pradesh and Uttar Pradesh, generate about 70% of

the countrys e-waste.


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The reason for this can be attributed to the rapid rise in the economic levels of these cities,

increase in the disposable income and increased tech-suaveness. Even, within the states, a

majority of contribution towards e-waste comes from the cities. A few major cities generate

more than 60% of the total e-waste in the country. A distribution to that effect is shown

below:

This again can be attributed to the rapid growth and increase in living standards in these

cities.

These cities would be used as the target for the business, i.e., the business would start off

and soon cover these cities before it is expanded to other places. The total e-waste in 2013

would be 589893 MT. Assuming that these cities account for 60% of the countrys total e-

waste, the e-waste generated in these cities would be 353936 MT. Almost all the e-waste in

the country id contributed by various major categories, namely, Television, Mobiles,

Notebooks, Printers, Refrigerators, CDs/DVDs and Desktops. There is significant variation in

the amount contributed by these categories. The chart below shows a relative contribution

among the various categories.


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The sale value of each of these categories would be different. Hence, it becomes

increasingly important to be aware of the relative contribution of these categories in the

overall e-waste generation.

Our clients would include recyclers authorised by the Central Pollution Control Board. They

are mostly situated in Bangalore, Chennai and Thane. The tentative list is as follows:

E-Parisara Pvt. Ltd ASH Recyclers SIMS Recycling Solutions TESSAM Recyclers AER Worldwide Ultrust Solutions INAA Enterprises Attero Recycling Ecorecycling Ltd Polygenta ESPL Waste Re-Energy EarthSense Recycling Greenscape Eco Management MGA & Associates TiC Group Ramky Group IL&FS Waste Management

The revenue side of the business would include the revenue generated from the sale of the

products in these categories. The advertising fees collected from our partner firms would

form another chain of revenue streams.

The expense side would include the advertising cost, the commission and employee benefit

given to the employees, the collecting mechanism such as vehicles, etc., warehouse

expense, salaries, wages, inventory cost of storing the collected products, office expenses,

etc.


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The financial analysis has been done for the next five years 2013-17. The rate per kg for

each product category has been determined using a primary study of the market and

informal discussions with the personnel in the current e-waste distribution channels. The

table below shows the year wise tonnage segregated category wise.

Assuming that the profit margins are 10% of the sale value on each category:

Since the current focus is only on a few selected cities which would accumulate for 60% of

the total e-waste, the market size available for us is shown below:

Cumulative amount of e-waste (Metric Tonne) 589893 651831.5 713770 788716 863662

Rate

2013 2014 2015 2016 2017

Desktop 50 128656 184533 255601 309177 403244

Notebook 500 6607 8539 10350 13724 17791

Printers 100 7610 6127 5924 6152 5959

TV 100 321492 326046 316843 332602 319728

Mobile 100 2831 3520 4068 4180 4750

Refrigerator 25 87658 93668 91934 92280 82048

CDs/DVDs 10 35099 29463 29050 30523 30142

Tonnage

Desktop 5

Notebook 50

Printers 10

TV 10

Mobile 10

Refrigerator 2.5

CDs/DVDs 1


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In value terms, the revenue that can be generated, based on the assumed rate, is given

below:

Assuming that we are initially able to penetrate only 5% of the market and that the

penetration increases by 1% each year till 2017 thereby giving us a 9% market share. The

revenue projections are as follows:

Here, we have assumed a national rollout plan in 10 cities, namely, Delhi, Mumbai, Kolkata,

Chennai, Ahmedabad, Surat, Nagpur, Bangalore, Hyderabad and Pune. The estimated

income statement for the 5 years and the Net Present Value for the project are as follows:

Cumulative amount of e-waste (Metric Tonne) 353971 391138 428262 473182 518197

2013 2014 2015 2016 2017

Desktop 77193 110720 153361 185506 241946

Notebook 3964 5123 6210 8234 10675Printers 4566 3676 3555 3691 3576

TV 192895 195628 190106 199561 191837

Mobile 1699 2112 2441 2508 2850

Refrigerator 52595 56201 55160 55368 49229

CDs/DVDs 21059 17678 17430 18314 18085

Tonnage

Cumulative amount of e-waste (Metric Tonne) 2728314 2982110 3193635 3553576 3867254

2013 2014 2015 2016 2017

Desktop 385967 553600 766803 927530 1209731

Notebook 198204 256170 310490 411710 533743

Printers 45658 36763 35546 36912 35756

TV 1928950 1956277 1901055 1995609 1918366

Mobile 16989 21119 24411 25081 28501Refrigerator 131487 140502 137900 138420 123072

CDs/DVDs 21059 17678 17430 18314 18085

Value (Rs '000)

Year 2013 2014 2015 2016 2017

Market Size (Rs. '000) 2728314 2982110 3193635 3553576 3867254

Penetration 5.0% 6.0% 7.0% 8.0% 9.0%

Revenue realised (Rs.) 136415706 178926573.5 223554477 284286057 348052850


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Assumptions

Ad Revenue

There are approximately 30mn Smartphone users in these 10 cities. Out of these, we

estimate a conservative user base of 1 lakh users (approx.). If 10% of these use the app per

day, we have 10,000 per day users. Assuming 1 paisa per user, our daily revenue would be

Rs. 1000.

Advertisement

Educating the customer would be required for the application to succeed. Aggressive

marketing campaigns would be needed to promote the concept and services. Hence, we

Year 2013 2014 2015 2016 2017

Revenue

Sales Revenue 136415706 178926573 223554477 284286057 348052850

Ad Revenue 3600000 3780000 3969000 4167450 4375823

Total Revenue 140015706 182706573 227523477 288453507 352428672

Expense

Advertising 54566282 54566282 54566282 54566282 54566282

Web Hosting, Domain & Server 2000000 2100000 2205000 2315250 2431013

Depreciation/Amortisation 20000 20000 20000 20000 20000

Equipment Depreciation 20000000 20000000 20000000 20000000 20000000

Salaries and Wages 10000000 10500000 11025000 11576250 12155063

Maintenance and Repair 16857500 16857500 16857500 16857500 16857500

Office Supplies 500000 500000 500000 500000 500000

Rent 12000000 12000000 12000000 12000000 12000000

Other 6820785 8946329 11177724 14214303 17402642

Total Expenses 122764568 125490111 128351506 132049585 135932500

Profit Before Taxes 17251138 57216462 99171971 156403922 216496172

Tax @ 35% 6037898 20025762 34710190 54741373 75773660

Profit After Tax 11213240 37190701 64461781 101662549 140722512

Ap Development Cost 100000

Furniture and Equipment 100000000

Free Cash Flow -68866760 57210701 84481781 121682549 160742512

Discount Rate 12%

NPV Rs. 23,83,28,589


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have taken the advertisement and promotion cost to be 40% of the revenue in the initial

year and constant thereafter.

Furniture, Machinery and Equipments and its Depreciation

In each of the 10 cities, we have assumed that we would require 5 trucks/trolleys each, the

cost of each of which is estimated to be Rs. 20,00,000 inclusive of all charges. The

depreciation is assumed to follow a straight line method with nil salvage value at the end of

5 years.

Maintenance & Repairs

Each vehicle is estimated to travel approximately 85 km/day and Diesel charges have been

assumed to be Rs. 45/litre and a mileage of 4 km/litre and maintenance charges of Rs.

50,000 per annum.

Rent

In 2013, we would be handling an annual tonnage of 3539.71 MT, which are approximately

300 MT per month and 30 MT/month/city. Since TV is the most voluminous product that we

may have to handle, to remain conservative, we take TV as the basis for the area

requirement calculation. Assuming a conservative average space requirement of 6Sq. ft.,

and a weight of 20kg, we will have to fit approx. 1500 TVs which require a space of 10,000

sq. ft. And rent of Rs. 1,00,000.

Salary and Wages

Each city would have 2 senior level managers, 4 middle level managers and 4 other office

employees for handling technical aspects, accounting, office administration, etc.

Other Assumptions

The corporate tax rate is assumed to be 35%. The app development cost is to be amortized

over 5 years with a nil salvage value. Other expenses have been assumed to be equal to 5%

of the revenues in the respective years. The discount rate is assumed to be 12%.


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