Category: Business Strategy

Making markets Work: A Step towards Responsible e-waste Recycling

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What do we do when we see a heap of waste lying around on the roads or see water from the drains directly entering some of our holy rivers. Most of us turn a Neilson’s eye towards it citing helplessness. Now this is the problem most of us face- We all want to save our environment but we do not know how to go about it. But here’s an organisation which is not merely making a business, but also making us support the community and protect the environment through their business. Bingo!!

This organisation, however took on something which most of us do not even consider as a waste(maybe they don’t look ugly or smell bad) and they are e-waste. Discarded phones, old computers, laptops are things which do not directly go into our dustbin but most of these find their way into the unorganised market, where the metal is extracted using environmentally hazardous ways and everything else is dumped in water bodies and landfills,ultimately harming the environment. Statistics say that on an average, an American replaces his phone every 2 years(though i struggled to find similar study in India, but i think the number will be same for a salaried person in India).By 2020, electronic waste in India is set to reach 1.72 million metric tonnes.

So what makes this organisation different?  Albert Einstein once said – We cannot solve the problem with the same level of thinking that caused it. With the same mindset did Nitin and Rohan Gupta started Attero Recycling eight years ago to provide end to end electronic waste recycling through their patented technology. Little they knew then that this uncharted territory will be pumping today a monthly revenue of  nearly 12 crore by selling extracted metals to industrial and private consumers at commodity market prices .

So what worked for them?

  •        A Home-Grown Formula for metal extraction
  •         Single Player(It is the only company to undertake precious metal refining in the country)
  •         The growing consumer electronics market (estimated to be around $35 bn at 17% annual growth)
  •         Stringent e-waste disposal rules in India; amended in May 2012 (it is now mandatory for consumers to hand over electronic waste to designated collectors for proper disposal, while producers are required to take back e-waste for recycling)

The Blue Ocean Strategy

STREAMLINING THE SUPPLY CHAIN : HUB-AND-SPOKE MODEL

Attero is currently working with hundreds of manufacturers such as Samsung, Wipro, Voltas, outsourcing companies like Genpac and Infosys and several OEMs for recycling  their e-waste, which forms approximately two thirds of e-waste received by Attero. As Attero realized that most of the IT Giants are located in Bangalore, the company decided to set up a recycling hub in Bangalore to cater to the IT-heavy South India including Chennai, Mumbai and Pune. At this 3000 TPA(tonnes per annum) facility, e-waste is collected(the “spoke”), segregated and dismantled and later set to Roorkee plant(the “hub”) for recycling of precious metals. This saves their freight cost and help in cutting down on carbon footprint.

Much of the remaining third comes from India’s “informal sector,” who collect and pick through trash. Attero buys printed circuit boards from these collectors at a higher price than the collectors would have earned if they stripped metals from the boards using toxic chemicals themselves.

The e-waste, mainly mobiles, tablets and laptops are collected from consumers through their online marketplace AtteroBay; where the customer can sell their mobiles using the inbuilt designed software determines product prices on the basis of set metrics such as age, wear and tear, and market demand. The electronics is then picked from the consumer’s address and paid accordingly.This model of collection is established across 25 states of India and in 2012 alone, Atterobay collected 250,000 mobile phones.

INTEGRATING ENVIRONMENTAL PRINCIPLES

Promote Reuse before Recycling

The electronic items that haven’t reached their end-of-life phase are refurbished at Attero’s refurbishing facility, where they are reworked on and restored to ‘as-good-as-new’ condition. These goods are then sold to consumers at heavy discounts with assured warranty, which helps promote their reuse.

Outcome: Affordable phones for everyone

Sustainability in perpetual motion

While those electronics which cannot be refurbished, precious metals are extracted. According to Attero, the cost of extraction of gold from e-waste is at least 40% less than the lowest-cost gold mine in the world and the technology is less carbon intensive. These metals are further sold to metal dealers and since this process does not degrade the quality of the metals extracted, the precious metals in the electronic products can be recycled again and again.

Outcome

  •  Saving on foreign exchange by cutting down gold and silver imports( One tonne of cell phone contains around 100 kg of metals like gold and copper)
  •         Earning Carbon Credits*(When IT organizations recycle their e-waste with Attero, they help to reduce energy consumption and lower GHG emissions and thus earn carbon credits)
  •         Less pressure on mines for virgin metals

ASSIMILATING THE E-WASTE RAGPICKERS INTO THE ORGANISED SECTOR

According to a recent study by the Associated Chambers of Commerce and Industry of India (ASSOCHAM), over 35,000-45,000 child labourers between the age group of 10-14 years are estimated to be working in collection, segregation, and distribution of e-waste without adequate protection, in Delhi alone. The company has collaborated with IFC, a member of the World Bank Group to launch Clean e-India Initiative . Through this, it is roping in ragpickers for proper disposal of electronic waste, by training them on eco-friendly recycling techniques and making them part of its supply chain through their consumer take back program.The program has provided employment opportunities to the informal recyclers and helped them earn a better living.

RAISING PUBLIC AWARENESS

Through their Clean e-India initiative, which has been successful in Hyderabad, Ahmedabad and Delhi, Attero ran awareness campaigns through print and electronic media,to enable consumers to give away their old and used electronic items.

Business Lessons

WORKING ON THE PRINCIPLE OF ‘DO WELL BY DOING GOOD’: STRIKING THE EMOTIONAL CHORD

This motto(typically tried by most companies) was not forced to adoption but rather seamlessly integrated in their organisation’s DNA. The whole idea of sustainable recycling began when the founders found that that is there no market for safe disposal of e-waste in India. Besides this, their initiatives like supplying refurbished electronic items to schools and non-government organisations (NGOs), saving ragpickers from the health hazards , has led the organisation receive investment from the likes of World bank and catapulted it to pinnacles of success.

INCENTIVISING FOR SELLING DISCARDED ELECTRONICS

Customers tend to dispose e-waste irresponsibly even though it causes adverse health and environmental impact.Atterobay allows convenience of selling smartphone at best rates with a pick up facility; so customer stays away from travelling to the second hand marketplace to avail the best price of their old phone.

 

As I draw the curtain close on my post, the environmental engineer in me would like to play a devil’s advocate. Here’s my take on them.Though they have pioneered the art of creating wealth from waste and have done stellar job in managing the growing e-waste problem in India, there is still a need to create a strong buzz among the customers about the e-waste disposal. My experience as an Environmental Consultant speaks that most of the time consumers do not know the implications of irresponsible disposing and even if they know, most of the them do not send their waste to the rightful owner( authorised recyclers).The goal of completely removing the middlemen who continue to use environmentally harsh methods to extract valuable metals in their backyard workshops can only be achieved when the message of ownership of your waste reaches masses, enabling them to dispose waste responsibly.

Disclosure: My post is based purely on my readings on Attero Recycling, while i have no experience working with the organisation or had any direct interaction with the Attero team. I would request the readers to share their experience if any & contribute to this conversation.

 

*Carbon Credit is a generic term that refers to any tradable certificate or permit representing the right to emit one tonne of Carbon Dioxide or an equivalent amount of any other Greenhouse Gas (GHG). An organization can manage its Carbon Credits by reducing its overall carbon and GHG emissions into the environment. So if an entity has reduced carbon dioxide emissions by 1 ton it receives 1 carbon credit.



How Swasth India is making a revolution in health innovation market by promoting health equity

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In India, approximately 80 million people live in urban areas on incomes that are below the poverty line and in Mumbai, 54% live in urban slums with inadequate access to clean water, sanitation and health facilities. They say, sickness is a great equalizer; it hits the poor and the rich uniformly, but the poor are disproportionately affected by health inequities. According to WHO estimates in 2010, approximately 71% of all spending in health care was private, but about 86% of this spending was out of pocket, which risks pushing the poor further into poverty.

In the midst of these trends, many non and for-profit healthcare organizations are testing new models to meet the health needs of its large and diverse population. One such is, Swasth India; a brainchild of IIT Bombay alumni which was started with the motive of providing affordable healthcare to working poor.

Swasth India are “Service Integrators”, as they call themselves, who work with different service providers across the health value chain of doctors, labs, pharmacies, hospitals, nursing homes, drug companies, insurance companies and bring them on a common platform to deliver quality services to low income households.

Since its launch in 2008, Swasth has 100,000 patient visits till date with cumulative direct savings of more than USD 1 million to patients

Key Program components

Innovative operational processes

  • Swasth’s services are delivered through a network of self-sustaining health centres located in slums that provides one-stop solution for 5D services (doctor, diagnostics, drugs, daycare and dental). The service is currently achieved through their 15 health centres at 50% of the market rate with 90% user satisfaction.
  • The prescription drugs are sourced directly from top pharma manufacturers; thereby completely removing the supply chain; enabling them to avail medicines at lower cost.

The right partnership

Partnership is a widely used strategy by inclusive businesses. Swasth is in tie-up with well-known hospitals across Mumbai, where patient requiring secondary/tertiary care (radiology tests, inpatient treatment, specialist consultation) are referred and treatment is provided at discounted rates. Swasth also plans to partner with VisionSpring, a pioneer in low cost eye health checkups across India, to conduct vision screening and sell low-cost eyeglasses at their centres.

Using ICT and leveraging loyalty

Through the Integrated Health IT system of Swasth, each family enrolling with Swasth gets a unique identity card which helps Swasth track patient and his family data in electronic health records and relay the information to specialist medical professionals in their empanelled hospitals.

These incentives encourage them to access the services.

Customizing the model for the Working Poor in Urban India

Most informal medical facilities are open during morning hours making it inconvenient for the working poor to avail treatment. Swasth leveraged this opportunity by providing consultation during both morning and evening hours. As per Swasth, approximately 70% of the patients avail evening consultation.

Empowering Women to become Change-makers

Two thirds of Swasth’s staff are women; who are recruited from the community which is being served. In addition to the monetary benefits, Swasth supports formal education of these women and also trains them in English speaking, use of computers, undertaking diagnostic tests etc.

Fostering Behaviour Change through Community Outreach / School Health Programmes

Swasth also runs a Community Outreach Program that is staffed entirely by women belonging to communities served by them. Swasth’s data reveals that these women, trained as health workers spread knowledge about good health practices and each women worker is capable of impacting approximately 10,000 other women in their village.

Business Lessons for us 

Don’t start from scratch. Leverage existing capabilities

Swasth India has partnered actively with community-based organizations (e.g. NGOs, micro finance institutions, co-operatives, and employers) that have the access and trust of the community at the grassroots level. This helped them to leverage work done by these organizations and overcome challenges related to distribution, access in remote areas, technical assistance, workforce etc.

Understanding customer pain points through tools like behaviour science and ethnography

It is important to understand decision-making patterns in BoP markets. Swasth found that setting up the health clinics inside slums prevented families from the neighbouring slums to visit the centre due to territorial and cultural divisions, and it was not sustainable to cater to only limited families of one particular slum. Thus taking into consideration people’s needs and preference, the clinics were shifted to public places like market areas.

Building a relationship of trust with consumers

For low-income communities, a cheap product or service may not be enough of an incentive to make a purchase. It is imperative that they feel they are getting the best quality for their money. By enabling consultation from highly qualified doctors, sale of pre-packed medicines from pharmaceuticals at discounted rates, use of state of the art devices and diagnostics, Swasth ensures that no compromise in quality is made.

Driving profits by volume

Quoting Dr. C.K. Prahalad, father of the term bottom of the pyramid, “BoP is not a market that allows for the traditional pursuit of margins; instead, profits are driven by volume. In a typical business model offering service to BoP segment, margins are likely to be low; however, if the model has potential to scale, it is likely to attract investments to spread its wings of social development to other parts of the country.