Dear Shri Gadkariji,
Many thanks for your recent announcement re: VEHICLE SCRAPPAGE POLICY
in Lok Sabha, when you said ,
“ The scrapping policy
will lead to a new investment of around Rs 10,000 crore and create 35,000
jobs “
Quite likely you based your estimates on :
Ø A
vehicle scrap recycling plant having a capacity to process 1 lakh vehicles / year , could easily cost Rs 500 crore
Ø Hence,
20 such plants could cost Rs 10,000 crore
My following analysis suggests that :
Ø Instead
of processing only 20 lakh ( 2 million ) vehicles per year, we have a business
opportunity to process 200 lakh ( 20 million ) vehicles / year , requiring an
investment of Rs 1
Lakh* crore
Ø Employment
potential could be 3
Milllion jobs
There is nothing “ disguising “ about your policy, although
not everyone can/ will, see the “ not so apparent “ opportunity !
With regards,
Hemen Parekh / hcp@recruitguru.com / 22
March 2021
=================================================
Context :
Scrappage
policy ; Firms forge ahead to steel scrap
/ Business Line
/ 22 Mar 2021
Extract :
It’s not only automobile
companies that are looking to gain from the new scrappage policy; steel
companies, including Tata Steel, JSW
Steel and Liberty
group, are also gearing up to produce more steel by recycling scrap.
Tata Steel has already set up a scrap-based steel plant with an annual
capacity of 5 lakh tonnes at Rohtak in Haryana. The company sources
scrap by procuring old vehicles……….
India spends around ₹24,500
crore a year on steel scrap
imports to meet the shortfall in domestic supply.
Currently, India
generates 25 million
tonnes of steel scrap and imports
about 6.5 mt a year.
Vehicle scrapping can
generate about 70-75 per cent ferrous (steel) scrap, 6-8 per cent non-ferrous
metal scrap, besides miscellaneous rubber and plastic scrap.
===================================================
Question ?
How many OLD vehicles will need to be scrapped in next 2
years ?
Answer :
Light Motor Vehicles
#
Older
than 20 years…………………………………………. ……51 lakhs
# Older than
15 years( but less than 20 years ).………34 lakhs
Medium and Heavy Commercial Vehicles
# Older than
15 years without any valid FITNESS certificate…17 lakhs
===============================================
TOTAL…………………………………………………………………………102 lakh [ 10.2 million ]
( source : Vehicle Scrapping Policy : Most Questions Answered / 18 Mar
2021 )
Although, only a few months back, Transport Ministry was talking of 28 million OLD vehicles to be scrapped
============================================================
Question ?
How much recycled Steel Scrap will these provide
? How much Foreign Exchange will that save ?
Answer :
Assuming ave. ( for LMV and Heavy ) of 1 ton
per vehicle, these would give 10.2 million
tons
Our current steel scrap import of 6.5 million
ton costs us Rs 24,500 crore ( ie: approx. Rs 37,692 / ton )
So, 10.2 million ton ( recycled from
10.2 million vehicles ) would save foreign exchange valued at :
Ø
Rs 37,692 x 10,200,000
Kgs = Rs 38,445 crore
------------------------------------------------------------------------------------
Question ?
How many Vehicle
Scraping plants will be required to take care of these 10.2 million vehicles ?
Answer :
About 20 plants of the size of TATA STEEL plant ( 0.5
million tons / year )
Mahindra
Accelo vehicle recycling plant has capacity to process 25,000 – 30,000
vehicles per year and it is in the process of scaling up to 1 lakh vehicles /
year. It is also planning to set up 25 plants all around the country . Hence,
in 2 years time, Mahindra Accelo may have a capacity to process 25 lakh ( 2.5
million ) vehicles / year
( sources :
Mahindra Accelo keen to prove its mettle in vehicle scrappage era / 10 Feb 2021 )
Mahindra
Accelo : Saluting a pioneer ……………………………………….[ 19 June 2018 ]
Question ?
What
happens after the current population of OLD ( > 15 years ) 10.2 million
vehicle gets scrapped / re-cycled ?
Answer :
It will
take ( may be ) 4 years for TATA ( 5 lakh vehicles ) + Mahindra Accelo ( 25
lakh vehicles ) , totaling 30 lakh vehicles / year capacity to become fully
operational
By that
time, our total Vehicle Population will reach 300 million. So, we can expect
some 3 million (10 % ) to become eligible for scrapping, each year – keeping all
these plants busy , round the clock
Apart from
these “Local “ vehicles , other countries of the world, are currently scrapping
some 30 million vehicles each year
( source :
Car
Grave-Yard of World ? / 14 Feb 2018 )
Currently,
total number of ( mostly ICE ) vehicles world-wide is estimated at around 1.5
billion ( 1,500 million ) and growing at the rate of about 100 million / year
, and expected to reach 2.8 billion by 2036
During the
course of last year ( 2020 ), most developed countries of the world ( USA-UK –
EU – Russia – Japan – China etc ) have announced complete switch-over to EV ,
by 2035
That would
require scrapping ( possibly ) 2 billion ( 2,000 million ) ICE vehicles in the next 15 years
THAT IS, MORE THAN 133 MILLION VEHICLES NEEDING TO
BE SCRAPPED EACH YEAR !
Question ?
Does this
not present a huge “ VEHICLE SCRAPPING BUSINESS OPPORTUNITY “
for India ?
Answer :
You bet
! It is an unprecedented business
opportunity which we MUST exploit as explained in my following e-mail to Cabinet
Ministers :
Ø
Car
Grave-Yard of World ? ………………………………[
14 Feb 2018 ]
Question ?
Did you
follow this up with the Policy Makers ?
Answer :
Yes. I sent an e-mail reminder as follows :
Ø
Alang
: Junkyard ? Scrapyard ? SaveYard ? ………..[ 12 Dec 2020 ]
Question ?
IS THERE ANY
POSITIVE RESPONSE TO YOUR SUGGESTIONS ?
Answer :
Indeed !
Government
has recently announced its policy as mentioned in following news report :
Alang set to become the junkyard of old vehicles,
too { Business Line – 12 Dec 2020 }
Extract :
Ø Alang, where
ships finally call to be broken up, may soon become the hub for scrapping old vehicles, too. The
government is weighing a plan to dismantle and
recycle end-of-life vehicles at this port town in
Gujarat’s Bhavnagar district.
Ø The move comes
as steelmakers such as Tata Steel and the Liberty
Group are looking to enter the scrap recycling segment. Tata Steel has
already set up a recycling plant in Rohtak, Haryana
Ø The Ship Recycling Industries Association (SRIA) has backed the plan as this can double the steel scrap output to 5 million light displacement tonnage (LDT) from the present 2 million LDT.
Ø The association has made two suggestions to overcome the limitation of the small size of ship recycling plots.
“Every plot
holder should be allotted a backyard
plot of 10,000 sq metres at nominal cost on a 99-year
“If the backyard plot is
allotted, we will set up shredders and other
Ø Second, the
association wants the recycling
yards to be converted into an autonomous body under the National Authority for Recycling of
Ships set up by the Shipping Ministry. This will solve the problem of multiple
agencies operating at Alang which delays finalisation of issues relating to the
industry, the SRIA official said.
Ø The Central
Pollution Control Board issued guidelines in April 2019 for environmentally
sound management of collection, dismantling and
shredding end-of-life vehicles
===================================================
CC :
Shri Nitin Gadkariji { Transport
Minister / nitin.gadkari@nic.in / email@nitingadkari.org }
Shri Mansukh Mandaviya { Shipping Minister / minister-shipping@gov.in }
Dr Sanjeev Ranjan { Secretary – Shipping
/ secyship@nic.in }
dharwadkar.shubhada@mahindra.com
