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RAGS- TO-RICHES BUSINESS

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Pastiwala's the wastepaper tiger
Vishal Dutta
AHMEDABAD

FORTY-Srx-YEAR-OLD Sheikh vendor) for the been a raddiwala (wastepaper Mehaboob AIlast 31 years, collecting old newspapers from Vadodara households and reselling them at a tiny margin. living in a shanty with wife and three children, a decent living was a far-fetched dream for AIlaudin. But four months back, his world changed for the better. Allaudin started earning a monthly salary of Rs 8,000 - with a Rs 21akh mediclaim and acddeht insurance - and the family moved to a rented house. Today, he goes about the same business, but in a blue uniform. And that's all thanks to Paresh Parekh. Parekh, who has spent 13 years in the waste man-

laudin looks much older than his age. He has

agement business in the UK co-owning a waste management company, Total Waste, has brought the likes of Allaudin into the organised umbrella. His Vadodara-based start-up called Pastiwala.com (Pasti is a

Gujarati word for wastepaper), employs Allaudin and ',,' nine other radiwallas and sells directly to the paper re~! ';; cycling mills, elimipating middlemen. ,\:-'~ . AIlaudin is today an assodate collector at 50rt In:';,' dia Enviro Solutions Pvt Ltd, the holding company of Pastiwala.com. "The business model would probably revolutionise the more-than- 300~yearold unorganised wastepaper business in India. The business is still highly unorganised, unregulated and has unaccountable human exploitation," says 35-year-old Parekh. While the US recycles 70% of its wastepaper - Germany recycles 73%, and Japan 60% - India manages to reuse only 20% of its wastepaper, says R Narayan Moorthy of Indian Paper Manufacturers' Association,
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A viable business model
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Almost 50% of the country's wastepaper requirement is today met through imports, and Parekh is moving into this gap. Parekh says his model has clicked in the Rs 25,000-crore Indian paper industry that depends on three major raw materials - wood, pulp and wastepaper. The vendors lack a proper collection mechanism and a sorting and grading system, and the company's expertise comes handy here. Pastiwala.comhas developed a network of wastepaper collection centres and has employed collectors who go door to door for collection. The strategy is to enter into tie-ups with companies as well as households at prices higher than what offered by other raddiwalas. The benefits of scale percolates to the households too. Against the Rs 8-9 per kg offered by a regul:lrraddiwala, Pastiwala.com's collectors offer Rs 12-13, depending on the international and domestic market prices. Parekh has now earmarked Rs 16lakh for advertisements on private radio stations, to inform the public about the company's.collection centres .. Pradeep Dhoble, CEO of lTC's paperboards & specialty papers division, says Pastiwala.com's is a viable business provided there is a'close check on costs related to collection, sorting (value addition), baling and logistics. Recycled fibre plays an important role in Indian paper industry where demand for paper is growing at 8-10% per annum across segments. lTC's paperboards and specialty paper division uses close to 1,65,000 mt of wastepaper per'annum, slated to go up by another 50,000 mt by end of 20 11. Parekh wants to scale up his wastepaper collection network to 300 shops throughout Gujarat, from 40 tonnes today to 2,000 tormes a day: The next goal is to make Pastiwala pan-Indian. "There is ever rising demand and supply gap in paper industry. In India, the per capita usage of paper is in the region of 4 to 5 kg. This is expected to rise as the economy grows so does the packaging industry and use of packaged items," he says. Taking the local wastepaper collection business to the international level, the company has recently entered into agreement with a South-east Asian country and would probably be the first to exPort wastenaner.