Indian cities are crumbling under waste, India generates almost 130 million tonnes of waste per day of which only 12 % is being processed and treated.
Hence, lies the opportunity for entrants in waste management services, where the service provider can tie up with the waste generators to manage their waste by treating/processing it on site. This opportunity exists in number of sectors including food waste, poultry waste, agri waste, and dairy farm waste. This blog focuses on managing food waste.
What is the opportunity?
The business opportunity is to offer waste management services to the large food waste generators, such as hotels, big institutions with canteen facility, hospitals, and engineering colleges by setting up a biogas plant in their premises. The kitchen waste can be converted to either biogas or electricity, which can be consumed by the user.
This service would also be useful to large apartment complexes (with 1000 flats or more) and schools that offer meal to their students.
As can be seen below, biogas plant is an attractive investment for its buyer, he can recover his investment in four years.
Further, the use is entitled to a subsidy of Rs. 40,000 per KWH of power generated or 40% of the project cost. After accounting for subsidy, the payback period would only be three years.
How does one start biogas plant manufacturing unit
In order to offer Biogas plant fabrication service, one needs to have detailed understanding of the processes involved in manufacturing, selling, installing and operating of the Bio-gas plant. There are Biogas Development & Training Centres set up by respective state governments, which impart training in operations of biogas plant.
Typically, most of the companies who are in the business have at least one member who is a micro-biologist/ bio-technologist with a bachelor’s or master’s degree.
The capital requirements are not large, as it is a skill intensive business. One does not need to set up a manufacturing unit, the plant is typically fabricated at the client site and client pays up to 50 per cent of the price in advance. The cost of fabrication of a (up to 2 tonne per day) plant usually is less than15 lakhs. Assuming that one starts with one order, the capital required for setting up this business would be within 20 lakhs.
- Waste management is a new concept in India, and people are not used to paying to manage their waste. It can take several meetings/follow ups to convince a customer about utility of investing in waste management. However this issue will be eased with stricter environment laws going forward.
- The waste for the plant needs to be homogeneous, requiring the waste to be segregated into organic and inorganic waste at source. The segregation of waste can be challenging for a housing apartment complex, where residents are not used to segregating their waste.
- The biogas produced in the plant has to be used the very same day as transporting and bottling it is not viable. Hence, biogas as a cooking option is feasible only for institutions that have one large kitchen (hotel/ hospitals) and not apartment complexes.
How can we help?
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 Source: Status report (2001-13)Pollution control board.
 The subsidy is available only for plants which convert the gas into electricity and the calculation is based on the KWH of the electricity generated. The subsidy is calculated as Rs 40,000 / KWH (kilo watt hour) or the 40% of the total cost of plant construction whichever is less.
Picture Source: Livemint.com