The State-run metal scrap trading firm of India, MSTC has signed a Joint Venture today, on August 9, 2016 with Mahindra Intertrade to set up India’s very own first auto shredding and recycling plant with a huge investment of Rs. 120 crores. It is a matter of proud as before this India had none auto-scrap plant and the need of annual scrap was met through imports.
The basic idea behind forming this Joint Venture is to satisfy India’s annual scrap requirement of 5-6 million tons (MT), with a market of $1.8 billion (about Rs 12,000 crores).
The Steel Ministry of India stated that, “The total investment for setting up the shredding plant having a capacity of 1 lakh tonnes per annum and the collection centers is expected to be about Rs 120 crores”. The Ministry also said that the plant will have a capacity of 1 lakh TPA.
Mahindra Intertrade is a sister concern of the Mahindra Partners Division of $17.8 billion hugely diversified Mahindra Group, whereas the mini-ratna Public Sector Undertaking (PSU) deals in the export of ferrous scrap.
After signing the agreement, the MSTC CMD B B Singh responded to reporters that, “Demand for vehicles was 23.34 million in 2015. It brings to force the issue relating to scrapping of end of life vehicles (ELVs) and when you consider these, the JV has immense potential for further growth in India.”
India imports an estimated 5-6 MT of scrap annually, which in turn reiterates the need of setting up a shredding plant in India. Presently the JV is starting at single unit but it is also looking for a pan-India presence as specified by Singh.
“It is a first-of-its-kind auto shredding facility with automotive recycling capability for ELVs from collection, compaction, transportation, depollution, dismantling, shredding, recycling, and disposal,” Mahindra Intertrade Managing Director Sumit Issar said. “We will set up one plant now that is likely to come up in a location in Gujarat or Maharashtra. Its capacity will be about 1-1.5 lakh tones depending on the product mix and will begin commercial production by March 2018,” he added.
The agreement was signed in presence of Steel Minister Chaudhary Birender Singh and Steel Secretary Aruna Sharma. The Steel Minister is of the view that this agreement will give a boost to the ‘Make in India’ campaign through providing specialized steel.
“He said there is need for zoning of collection centers in the country and more such plants can be set up in the country in future,” the Ministry said quoting the Minister. On investments, Issar said: “It is a sizeable one. We will start with one, but will later scale up to a lot of plants.”
“Locally available scrap would help reduce the cost of production of secondary steel makers, while hi-tech shredding using better technology and machinery would help the country significantly reduce pollution,” Issar added.
This plant will scrap old vehicles and help in recover huge amounts of steel scrap, aluminum scrap, plastic and rubber. Other than vehicles, the plant will also scrap goods like, refrigerators and air-conditioners, which become unserviceable after usage for a long period and could not be further used.
The shredded scrap will help the secondary steel sector fulfilling its raw material requirements resulting in reduced dependence on imports.
