The Recycling Sector in India Will Evolve In the Next 5 Years

  • By Sri Ram A.N.

During World War II, when the availability of alloy steels from abroad was poor, attempts were made to establish makeshift indigenous production. Although the manufacturing of alloy steels in India began as far back as 1930, no progress has been made towards the development of sound and stable production lines. However, in 2023, the situation has changed. With today’s technology, aluminium and its alloys can be melted and recast repeatedly without any loss in quality. The recycling of high-quality aluminium scrap into new ingots now occurs with an energy-saving of 95% compared to the energy required for producing the same weight of aluminium through the primary smelter route.

During a chat for CMR, C. Pradeep, Founder & Managing Director of JC Groups in Coimbatore, shared numerous insights about the industry, their journey, and much more. Excerpts from his talks:

Q1. Can you share about you & your business journey?

Ans. “Our recycling business was started humbly by my father in the 1970s, along with his 5 brothers in Dindigul in Tamil Nadu, buying ferrous and non-ferrous & selling it.  During the 1990s, we set up a cycling unit at Mangalore collecting a good quantity of scrap.   In 2006, we started our first lead recycling unit Jayachandran Alloys P Ltd, which paved the way for JC Groups.   Apart from the scrap business, we were also trading with spare parts of Lead Batteries.   In an expansion mode, we started a Plastic Recycling unit in 2008, followed by our own Battery Manufacturing unit in 2009 as well.  

When more people joined hands with us, we were able to expand our wings by opening one more Lead Recycling Unit at Mangalore, plastic recycling, lead recycling, e-waste, and aluminium, which resulted in a massive increase in the capacity of recycling more than 10,000 tonnes a month (ie)  1 lakh metric tones per year and we are now a 1,200 crores turnover company.  More than 1,600 employees are working with us currently.   We sell batteries, lead alloys, lead oxides, and plastic granules – which are all utilized in the automobile industry.  We have establishments in Coimbatore, SIPCOT Perundurai, Karnataka & SIPCOT Gummudipoondi. 

Q2. People are talking about sustainability; what are your viewpoints?

Ans. Sustainability is going to be the “mantra”.  We are into Circular Economy.   In G20, there are 3 segments which have been seriously discussed in which Sustainability is the top priority.  Manufacturing should be sustainable.  When you manufacture something we should understand that huge energy is being used behind it & huge carbon emission is happening.  For each and every product an individual uses – carbon emission is behind.  We do things which are not in Europe & US.  How do we manufacture?  How we bring back to the economy and how it is profitably utilized – is the question. 

Q3. Govt says No to Plastic;  is it possible to proceed without plastic?

Ans. On plastics, we may say no to plastic today and use paper. This is simply ignorance. How can we avoid plastic when we still use fuel? For every litre of fuel we use, 1 kg of plastic is released into the environment because it is a by-product of the fuel. During the manufacturing of crude oil, various plastic crudes are generated, which cannot be dumped in a well or the sea. They have to be transformed into a product, and that product is plastic in various forms such as polypropylene, nylon, APS, etc. Once it is produced, it does not decay, and we cannot destroy it. We have to keep using it. However, if we properly segregate it and handle it perfectly, by recycling it, the entire material can be reused. This is how we can avoid deforestation, landfilling, marine pollution, and much more. Today, the problems related to oceans and landfills can only be solved through proper sustainability, and our government has already taken numerous initiatives.

Q4. Recycling is a word pronounced by the Government very often.  What is your opinion on this?

Ans. Even in India, our government was very strict on collections in GST and Income Tax, but they never pressured entrepreneurs on whether they are recycling all the waste properly.  Any product we use like a pet bottle, car, light etc., always has End of Life (EOL).  Mobile phones particularly are with huge toxic metals.  Most of us don’t know how they are recycled.  Once the utility is over we just throw it off and are least bothered about what has happened to that. 

Any Government for that matter – instead of tie-ups and collaborations, give us a set of policies which supports sustainability.   Our Government has created a concept called EPR – Extended Producer Responsibility. If a product is manufactured, it should get recycled and reused properly & it is the responsibility of the manufacturer.  For example, if you manufacture a pen, there is polypropylene, there is polycarbonate, and in the nib there is lead.  This pen has end-of-life.  The Brand owner is responsible for the disposal and recycling of this product.   There will be a penalty of 300% if any company didn’t follow this EPR system. The government has enacted a  system linked with GST Invoicing.  

The government has given norms according to the product, according to the brand and mainly for the flexibility of packaging in plastics.   They have first given to the packaging where 90% should be recycled.  The entire automobile industry and food industry should compulsorily use 30% recycled products and it has now become mandatory.   Now, a company is recognized as socially responsible only if they use recycled products.  

This is going to be the revolution in the next 5 to 10 years.  Like the medical field in the past – the recycling field will also become an era.  A need will come for recycled products like never before. The government has made it mandatory for a manufacturer to get a certificate from a recycler.

Q5. How GST norms are impacting the business?

Ans. On GST norms – currently, there is an 18% tax on scraps. It would be better if they reduce it to 5%. The issue is that both the purchase and sale of scrap are subject to the same 18% tax. We do not have any additional costs or burdens. However, with the 18% GST, there is a problem with bill traders who exploit this by creating fake invoices. If GST collection is only made on the end product and not on the collection of scrap for recycling-related businesses, the entire GST collection money will go to the government. Alternatively, they should implement the Reverse Charge Mechanism (RCM). Additionally, it is crucial to remove the cash withdrawal limit. Only then can everything be organized and accounted for, and it will be possible to curb black money.

Q6. How will be the future of the Recycling Segment?  

Ans. India still has a high illiteracy rate and still, we have a high parallel economy.  There will be phenomenal growth in the market particularly for the people who want to operate in an organized way.  If you go to Europe or the UK, the recycling market is not like ours.  The US is a big country, but we cannot see more than 5 to 6 recycling units, whereas India has more than 700 units – out of which hardly 10 will be complying with full norms. The automobile industry is growing.  If you see  Electric Vehicles they are replacing steel with aluminum and plastics to reduce the weight. 

Now there is a lot of awareness among the public.  They don’t want to give their land for landfilling.  State to State anti-dumping is also there.  For recycling waste, there are solutions available, but there is an investment.   The Government can give an interest-free loan for this, have proper monitoring and make wonders.