NTADBM

A report submitted to Prof. Rakesh Basant Prof. Deval Kartik Prof Bhavin Kothari Prof. Jignesh Khakhar

Group 11: Akshat Verma Ankit Thavale Prabhakar Kumar Samina Rahman

Table of Contents
Introduction: ........................................................................................................................................... 3 Current Scenario: .................................................................................................................................... 3 Types of e-waste: .................................................................................................................................... 4 Business Model: ...................................................................................................................................... 5 Value Proposition:................................................................................................................................... 6 To the end customers: ........................................................................................................................ 6 Reuse:.................................................................................................................................................. 6 Recycle: ............................................................................................................................................... 6 Info: ..................................................................................................................................................... 6 To the Supporting Partners: ................................................................................................................ 7 Platform/Interface: ................................................................................................................................. 7 Resources and Partners: ....................................................................................................................... 12 Promotions:........................................................................................................................................... 13 Financials:.............................................................................................................................................. 14 Assumptions:......................................................................................................................................... 21 Ad Revenue: ...................................................................................................................................... 21 Advertisement: ................................................................................................................................. 21 Furniture, Machinery and Equipments and its Depreciation: .......................................................... 21 Maintenance & Repairs: ................................................................................................................... 21 Rent: .................................................................................................................................................. 21 Salary and Wages: ............................................................................................................................. 21 Other Assumptions: .......................................................................................................................... 22 Bibliography .......................................................................................................................................... 22

Introduction:
Electronic 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 Scenario:
A 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. 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
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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-waste:
Based on two different criteria e-waste has been classified as follows: Criterion 1: Based on the electrical products: 1. Computer 2. Television 3. Cell phones 4. 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 of new technology, the older product are turned into waste. 2. Type 2: Those products which do not possess any function anymore and are actually waste. 3. Type 3: Those products which are partially defective and have been discarded.

Business Model:
In 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.

Value Proposition

Platform/Interf ace

Business Model

Promotions

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.

Reuse:
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.

Recycle:
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 joints such 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.

Info:
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-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,

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,

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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.

A new customer has to first register 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. 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.

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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:

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:

Provide e-waste products, any new innovative ideas on reuse

EW !

Provide Recyclable e-waste

Manufacturing units
Provide Redeemable Points

Customers

Advertising Support, Sales Opportunities

Supporting Partners

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.

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.
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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:

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 ewaste. 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.

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:

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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.

This relative contribution is likely to change over time. A rapid rise in the sale of desktops, notebooks and mobiles is likely to increase their share over the years. The West Bengal Pollution Control Board, in its report on e-waste, predicts the relative contribution of these categories to change as follows:

Percentage Contribution of Various Categories to E-Waste Categories 11-12 Desktop Notebook Printers TV Mobile Refrigerator CDs/DVDs 25.97 0.82 1.19 52.57 0.59 13.59 5.27 12-13 21.81 1.12 1.29 54.50 0.48 14.86 5.95 Years 13-14 28.31 1.31 0.94 50.02 0.54 14.37 4.52 14-15 35.81 1.45 0.83 44.39 0.57 12.88 4.07 15-16 39.20 1.74 0.78 42.17 0.53 11.70 3.87 16-17 46.69 2.06 0.69 37.02 0.55 9.50 3.49

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: -Parisara Pvt. Ltd

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-Energy EarthSense Recycling

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. 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.

Cumulative amount of e-waste (Metric Tonne) Rate

589893 2013

651831.5 2014

713770 Tonnage 2015

788716 2016

863662 2017

Desktop Notebook Printers TV Mobile Refrigerator CDs/DVDs

50 500 100 100 100 25 10

128656 6607 7610 321492 2831 87658 35099

184533 8539 6127 326046 3520 93668 29463

255601 10350 5924 316843 4068 91934 29050

309177 13724 6152 332602 4180 92280 30523

403244 17791 5959 319728 4750 82048 30142

Assuming that the profit margins are 10% of the sale value on each category:
Desktop Notebook Printers TV Mobile Refrigerator CDs/DVDs
5 50 10 10 10 2.5 1

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) 353971 2013 391138 2014 428262 Tonnage 2015 473182 2016 518197 2017

Desktop Notebook Printers TV Mobile Refrigerator CDs/DVDs

77193 110720 153361 185506 241946 3964 5123 6210 8234 10675 4566 3676 3555 3691 3576 192895 195628 190106 199561 191837 1699 2112 2441 2508 2850 52595 56201 55160 55368 49229 21059 17678 17430 18314 18085

In value terms, the revenue that can be generated, based on the assumed rate, is given below:
Cumulative amount of e-waste (Metric Tonne) 2728314 2013 2982110 2014 3193635 3553576 Value (Rs '000) 2015 2016 3867254 2017

Desktop Notebook Printers TV Mobile Refrigerator CDs/DVDs

385967 198204 45658 1928950 16989 131487 21059

553600 256170 36763 1956277 21119 140502 17678

766803 310490 35546 1901055 24411 137900 17430

927530 411710 36912 1995609 25081 138420 18314

1209731 533743 35756 1918366 28501 123072 18085

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:

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Year Market Size (Rs. '000) Penetration Revenue realised (Rs.)

2013 2014 2015 2016 2017 2728314 2982110 3193635 3553576 3867254 5.0% 6.0% 7.0% 8.0% 9.0% 136415706 178926573.5 223554477 284286057 348052850

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:
Year Revenue Sales Revenue Ad Revenue Total Revenue Expense Advertising Web Hosting, Domain & Server Depreciation/Amortisation Equipment Depreciation Salaries and Wages Maintenance and Repair Office Supplies Rent Other Total Expenses Profit Before Taxes Tax @ 35% Profit After Tax Ap Development Cost Furniture and Equipment Free Cash Flow Discount Rate NPV 54566282 2000000 20000 20000000 10000000 16857500 500000 12000000 6820785 122764568 17251138 6037898 11213240 100000 100000000 -68866760 12% Rs. 23,83,28,589 54566282 2100000 20000 20000000 10500000 16857500 500000 12000000 8946329 125490111 57216462 20025762 37190701 54566282 2205000 20000 20000000 11025000 16857500 500000 12000000 11177724 128351506 99171971 34710190 64461781 54566282 2315250 20000 20000000 11576250 16857500 500000 12000000 14214303 132049585 156403922 54741373 101662549 54566282 2431013 20000 20000000 12155063 16857500 500000 12000000 17402642 135932500 216496172 75773660 140722512 2013 2014 2015 2016 2017

136415706 3600000 140015706

178926573 3780000 182706573

223554477 3969000 227523477

284286057 4167450 288453507

348052850 4375823 352428672

57210701

84481781

121682549

160742512

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 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.

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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%.

Bibliography
Chatterjee, D. S. (2011, September). Electronic Waste and India. Retrieved August 13, 2012, from deity.gov.in: http://deity.gov.in/sites/upload_files/dit/files/EWaste_Sep11_892011.pdf International, I. (2010, April). E-waste Assessment in Kolkata Metropolitan Area. Retrieved August 13, 2012, from www.wbpcb.gov.in/: http://www.wbpcb.gov.in/html/downloads/Ewaste_AssessReport_ICC.pdf Vivek Khattar, J. K. (2007, November). e-Waste Assessment in India. Retrieved August 13, 2012, from www.weeerecycle.in: http://www.weeerecycle.in/publications/reports/GTZ_MAIT_Ewaste_Assessment_Report.pdf