By Anil Mathews (ScrapMonster Author)

August 11, 2016 09:12:00 AM

NEW DELHI (Scrap Monster): The state-run MSTC Ltd has entered into an agreement with Mahindra Intertrade to set up India’s first auto shredding and recycling plant.

The new plant is expected to commence commercial production by March 2018 and will have a capacity to process 100,000 to 150,000 tonnes. The proposed plant will have automotive recycling capabilities including collection, compaction, transportation, depollution, dismantling, shredding, recycling and disposal. The facility will be equipped to scrap ships and machines too. The joint venture will initially set up its first plant either in the state of Gujarat or Maharashtra. It intends to open similar shredder facilities across the country, in future.

Sumit Issar, Mahindra Intertrade's managing director stated that the project requires huge investment. Although exact investment plans were not disclosed, it is estimated that the scrapping equipment alone would cost around $15 million. Issar declined to provide approximate estimates on land and construction costs as the location to build the facility is yet to be finalized.

According to Zhooben Bhiwandiwala of Mahindra Group, the facility will revolutionize the way automotive scrap is recycled in the country. Currently, the country has no organized facility to treat dismantled vehicles. Most dismantling activities are carried out by small workshops that don’t follow proper recycling techniques and procedures. As per rough estimates, there are over 30 million vehicles on roads that are older than 25 years. In addition, demand for vehicles reported strong growth in 2015 to touch 23.34 million during the entire year 2015.Considering the fact that vehicles in India are licensed to run for 15 years, there is immense potential for recycling of end-of-life vehicles in the country. The government move to enforce stricter emission rules would also work in favor of the planned facility. The proposed plant will be capable of handling around 100,000 units per year, he added.

The country currently depends on imports to meet its ferrous scrap requirements. The country imports approximately 5 million to 6 million tonnes of ferrous scrap every year, which are valued at approximately $1.8 billion. The shredder facility, upon achieving full capacity, will be able to meet all or part of the country’s scrap requirement. Incidentally, the country’s scrap requirement is projected to touch nearly 20 million tonnes by 2025.

Dr Aruna Sharma, Secretary Steel noted that recycling of steel from auto shredding could save millions in terms of raw materials. Nearly 100,000 crores worth of raw materials could be saved by recycling 90 million tonnes of steel. This could lead to drastic reduction in imported steel volumes, she added. According to Ministry of Steel, the proposed plant could replace imported scrap and thereby help the country to cut foreign exchange outflows.

Meantime, MSTC is in the process of making a draft Scrap Policy in India which will cover generation, storage, recycling and utilization of ferrous and non-ferrous scrap materials including handling, recycling & disposal of hazardous related materials/e-waste. This will help enact a first time National Policy on the unorganized Indian scrap market and acceptable standards shall be laid down for ferrous and non-ferrous scraps.

MSTC Limited is a Mini Ratna Category-I PSU under the administrative control of the Ministry of Steel, Government of India.

Mahindra Intertrade is a wholly owned subsidiary of Mahindra & Mahindra Limited and operates India’s largest network of steel service centres across Automotive, Power and Home Appliance verticals.