Ramky Enviro taps opportunity in waste management

Ramky Enviro taps opportunity in waste management
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First Published: Sun, Nov 01 2009. 08 50 PM IST

Overcoming hurdles: Ramky Enviro Engineers’ executive director M. Goutham Reddy. Hemant Mishra / Mint
Overcoming hurdles: Ramky Enviro Engineers’ executive director M. Goutham Reddy. Hemant Mishra / Mint
Updated: Sun, Nov 01 2009. 08 50 PM IST
Bangalore: It’s not that Ramky Enviro Engineers Ltd (REEL) courts controversy.
It’s just that controversy follows the solid waste management company nearly everywhere it sets up a waste disposal facility.
“This doesn’t bother us,” says M. Goutham Reddy, executive director, REEL, part of the Rs2,500 crore Hyderad-based Ramky Group.
Overcoming hurdles: Ramky Enviro Engineers’ executive director M. Goutham Reddy. Hemant Mishra / Mint
“It’s human psychology; no one wants a dustbin in front of the gate but if the bin is placed at the end of the road, people can bear it,” he says. “Nobody thinks about the house at the end of the road in that case.” he argues.
Protests by citizens and environment groups have surrounded Ramky’s landfills and hazardous waste facilities in many of the 32 locations in which it operates. The protesters alleged that the landfills weren’t being operated in a sufficiently scientific and sanitary manner. 
In a country where less than 5% of the solid waste is scientifically treated, Ramky was one of the first few firms to realize that the massive amount of solid waste generated in the country—175,000-200,000 tonnes per day—needs to be treated, and treated in a way that adds value.
Reddy gives credit for Ramky’s growth to its participation in a bilateral programme between India and Australia for converting municipal and industrial waste to energy. “That helped us build our initial research and development capacity as well as infrastructure,” he says.
Today its waste management facilities treat biomedical, hazardous and municipal waste. Earlier this year it won Rs897 crore integrated solid waste management project for Hyderabad under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM).
To fund the rapidly expanding business, in June it raised Rs200 crore in private equity investment led by IL&FS Investment Managers Ltd (IIML) and others including Standard Chartered IL&FS Asia Infrastructure Growth Fund (Singapore), Tara India Holding A Ltd (Mauritius), Tara India Fund III Domestic Trust (Mumbai) and Tara India Fund III Trust (Mumbai).
Now, the business is on a roll. “We manage 1 million tonnes (mt) of waste per year but we’ll extend it to 10 mt in two-three years,” said Reddy. The firm has already secured contracts for 4 mt per year and expects its current revenue of Rs270 crore to more than double by March to Rs600 crore.
The sector, though, witnesses recurrent storms over contractors violating scientific norms. “But somebody has to make a start,” says P. Parthasarthy, founder of E-Parisara Pvt. Ltd, India’s first scientific electronic waste management company, started in August 2005. “Dealing with the government for raw materials (municipal wastes), where there’s a close nexus between local officials and contractors, is not easy,” he adds.
Parthasarthy’s pessimism isn’t unfounded. His facility in Bangalore, after more than four years in existence, manages to recycle only three tonnes of electronic waste per day when the city generates about 40 tonnes per day. The reason, he says, is that E-Parisara is only getting waste from the industry, not from the municipal corporation which is supposed to collect and segregate electronic waste.
Experts agree but seem sanguine about the future as government policy, following a Supreme Court directive in 2000, and market dynamics are expected to drive the business.
So far the waste to energy technologies, which are driving the sector in other markets, have been hard to implement in India as its waste, due to its unscientific segregation, is low in calorific value, says Kumar Ramesh, industry analyst, environment and building technologies, South Asia and Middle East, at Frost and Sullivan.
Now, with joint ventures being formed between regional and multinational companies who are entering India, such as Australia’s Remondis AG and Co. KG, France’s Veolia Environnement and Suez SA, there’s both technology and funding available.
Though the JNNURM, since its launch in 2005 has some funding for solid waste management, that’s not sufficient, says Ramesh.
In an October report, Frost and Sullivan estimated solid waste generation to register 5-6% growth which, due to less penetration, will nudge the market towards “comprehensive and integrated waste management”.
Indeed, Ramky is rolling out new recycling plants that would cover ferrous and non-ferrous metal recycling, oil recovery, e-waste, plastic to fuel and several others.
In Hyderabad, REEL has to commence operation by the year-end and in two years, establish all scientific processes, from composting to power production to reclamation of existing dump sites.
Once some of these projects start showing results, other states will follow, says Parthasarthy.
Estimating the market currently at $8 billion (around Rs37,600 crore), REEL not only has the advantage of an early entry and scale, but also of logistical networking which it intends to exploit for rural penetration. “People want to dispose of waste; it’s ultimately a toss between the willingness and the ability to pay, after all good waste management comes with a price,” says Reddy.
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First Published: Sun, Nov 01 2009. 08 50 PM IST