Banyan: An endeavour for gold standard in recycled plastic3 min read . Updated: 23 Jun 2015, 01:36 AM IST
The Hyderabad-based firm is using Android apps to bring transparency to the unglamorous world of recycling
The bustling metropolis of Hyderabad generates about 4,500 tonnes of solid waste every day. Contrary to popular perception, as much as 70% of the waste is recycled in India, thanks in large part to a network of ragpickers, who scavenge heaps of trash everyday to pick products that can be recycled.
Banyan Sustainable Waste Management Pvt. Ltd, a year-old start-up founded by two software engineers, is trying to bring transparency to the unglamorous world of recycling.
A layer of industrial units has existed for around 30 years to recycle the waste our cities generate. These units are largely unorganized and make recycled material of unreliable quality. Another layer of resellers keeps the pricing opaque, affecting the economics of companies buying recycled plastic.
Banyan uses technology to tackle some of these issues, setting it apart from roughly 200 peers in Hyderabad. The founders—Mani Vajipey and Raj Madangopal—devised Android applications to map stationary recyclers within a 15km radius of their plant in Balanagar Industrial Estate in Hyderabad.
The kabadiwalahs, as stationary recyclers are known locally, are crucial to Banyan’s supply chain as they feed them with the raw material—in this case, plastic scrap. The data gathered on stationary recyclers allow Banyan to gain insights into the business of kabadiwalahs and select the best suppliers to work with. It also helps it optimize operations to build a sustainable business that can be scaled across multiple cities.
Banyan recycles two types of plastic: polyproplene (used in chairs, mugs and buckets) and polyethelene (shampoo bottles).
Starting a unit to recycle plastic wasn’t on the minds of Vajipey and Madangopal when they quit their jobs in the US in June 2013. Vajipey, who did an executive MBA from Columbia Business School and University of California Berkeley, prepared a business plan to convert biogas to electricity, and shared it with Madangopal in 2012.
The duo successfully bid for a biogas-to-electricity plant at a public sector unit in Odisha but the company kept changing plans, and eventually, by December 2013, informed them the project was not going ahead.
When they went back to the drawing board, they decided to focus on recycling plastic. They pooled in $100,000 from friends and family, added another $50,000 between the two of them and started the venture in April 2014. Even as they hired a small team with experience in working at the bottom of the pyramid, the duo built two phone applications. The Sales Lead Manager application maps the location of a kabadiwalah, collects data on the types of waste collected, the quantity, frequency of supply, and income, through which the team identifies potential suppliers. After mapping 250-300 stationary recyclers initially, they identified 20-30 to work with.
After formalizing relationships, Banyan’s team schedules pick-ups, devises optimal truck routing, and negotiates prices using another Android application, Waste Collection Manager. Unlike competitors who typically take material on credit, Banyan pays kabadiwalahs on the spot.
The firm purchased rudimentary recycling equipment that would convert plastic chairs and mugs of the same colour into tiny pellets that, in turn, are used by industries to make recycled plastic. The initial capacity of 1 tonne a day was good enough for them to test out the space. Because they didn’t have adequate capital, they leased trucks. The operations began in October.
The two founders also decided to bypass traders who sell recycled plastic pellets to plastic manufacturers. Apart from normalizing quality, interacting directly with the manufacturers also meant Banyan could get direct feedback from end-users. “It helps in building that gold standard in plastics," says Madangopal.
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