
Government efforts appear to be prompting a boost in end-of-life vehicle (ELV) recycling efforts in India, according to metals industry and recycling sector observers in that nation.
According to the Mumbai-based SteelMint organization, India’s government is expected to introduce new laws on scrapping ELVs soon, and some India-based corporations are already investing to claim their share of the market.
Mahindra MSTC Recycling Pvt. Ltd., a joint venture between Mahindra Group and state-owned MSTC Ltd., set up a plant in northern India last year and has stated it plans to open as many as 30 facilities by 2022. Tata Steel Ltd has announced plans for a similar ELV recycling venture.
“Recycling is going to be a big thing,” Sumit Issar, managing director of Mahindra Intertrade Ltd., tells SteelMint. “I would say in the next four to five years there is going to be a struggle in the sector,” he adds, referring to competition among leading players.
“We would like to bring some change in the way recycling is done in India,” continues Issar, referring to automated shredding and sorting and adding, “That’s what we are focusing on.”
Saying it will use foreign technology and equipment, Mahindra MSTC has authorization from the government and is processing automobiles and household appliances in what it calls an environmentally friendly way, preparing ferrous shred for steelmaking furnaces.
Tata Steel is planning to build an initial scrap processing facility in northern India and additional facilities in other regions, Tata Steel disclosed in a 2018 media report.
“We are currently exploring this space and would be in a position to share once our plans are firmed up,” a spokesperson from Tata Steel said in reply to a SteelMint email seeking further details.
The demand for ferrous scrap in India sits at some 30 million metric tons, SteelMint says, while domestic generation currently sits at 25 million metric tons, leaving 5 million metric tons to be imported.
That is “small as compared to India’s steel production of around 100 million metric tons” adds SteelMint, which says supply is likely to increase in part because of government policies, rapid urbanization and expected economic activity.
Nonetheless, “Recycling is unlikely to be a cakewalk for these large corporations,” says SteelMint. “The massive unorganized and fragmented market is seen continuing to dominate the business and be a hard bargain for the corporate recyclers who would have to struggle to break even,” adds the organization.
“The challenge is that the informal sector is so big across the country that very little comes into the organized sector,” Mahindra MSTC Issar’s acknowledges.
Other companies being named as likely entrants to the ELV recycling business in India are Maruti Suzuki India Ltd. and Toyota Kirloskar Motor Pvt Ltd. A spokesperson of Maruti said the company didn’t wish to comment while one for Toyota Kirloskar said there were no such plans at the moment.
The future shape of the Indian auto recycling sector will be one of the topics of discussion at the 4th Steel Scrap, Billet & DRI Trade Summit. That even, organized and hosted by SteelMint Events, takes place in Bangkok, Aug. 27-29.
SteelMint says the event is expected to attract more than 500 delegates from the ferrous scrap processing and trading and steelmaking sectors.
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