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Automated Vehicle Scrapping and Recycling Unit

Capacity 0 Plant and Machinery cost 0.00 Lakhs
Working Capital 0.00 Rate of Return (ROR) 0.00 %
Break Even Point (BEP) 0.00 % TCI 0.00 Lakhs
Cost of Project 0.00Lakhs


Automated Vehicle Scrapping and Recycling Unit

What is Auto Shredding?

The scrapping of cars and large household equipment is a method where the components fed into it are grinded to fist-size bits by a hammer mill. A combination of ferrous material, non-ferrous metal (e.g. copper and aluminium alloys), and shredding scrap, called vehicle shredder remnants of automotive shredder residue, resulted in the shredding of vehicles (ASR). ASR is made up of glass, fabric, rubber, liquids for vehicles, plastics, and soil. Often ASR is divided into dust and shredder in small proportion. These leftover materials are considered 'Car-fluff' occasionally.

Related Projects: - Waste Management and Recycling

At such a time when different economies run solely on recycled car scrap, India, the’s greatest economy, has consumed an excessive amount of time to enter the market. Not only is scrap production a big-buck making industry from car recycling, but it also coincides with the additional advantage of being environmentally sustainable by getting the old polluting cars off the roads. Nevertheless, it has become evident, despite the odd regulation, that India is firmly interested in making attempts to mitigate air pollution and preserve the environment.

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Scrap Import in India Overview

At 60.6 kg per capita, India's demand for steel is increasing, relative to over 400 kg per capita in developing countries. The need for steel is key to various urban/rural infrastructure projects implemented by the government and private sectors. The Indian steel sector contributes 50 percent of the share of secondary steel.

 As ferrous scrap is one of the major raw materials for secondary steel production units, India's steel scrap demand is around 16-18 mnt pa. Of this necessity, it imports around 1/3rd of the content. In India, scrap imports have seen a gradual rise in the last few years India's FY16 scrap supply stood at 6.2 mnt, a rise of 12.7% from 5.5 mnt of material imported in FY15.

With the Make in India project eyeing 300 mnt steel capacity, raw material requirements are likely to expand. The inclusion of indigenous scrap from auto-shredding would place Indian producers in a position of benefit, considering the existing demand for scrap in India. In recent times, India witnessed its 18th bulk scrap shipments in 2016. The demand for raw materials is increasing gradually.

Scrap Metal Recycling Business Possibility:

Waste metals consist of many metals, with the exception of precious metals, such as iron, steel, copper, brass, aluminium, alloy, nickel, bronze, and many more. After multiple applications, such as in processing factories that produce utensils, frames, and various items utilizing these metals, these materials are left untouched as waste. Such metal waste arrives in big quantities and is very beneficial. Compared to some other recycling firm, what allows the metal recycling industry so much in popularity is the returns it provides.

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You need to consider what you're going to recycle before you begin the business. To know precisely what is like to be in this market, it is therefore important to perform a viability study test. There are several benefits and drawbacks of this business, certain problems, and problems that fall in between that one wants to get an understanding about. Here's a short, thorough business strategy for metal recycling.

What is needed to start the Business of Recycling?

·         Recycling plant: You need to have a factory which you build your recycling plant after deciding what kind of metal you are going to recycle and at what level. Consequently, since you recycle metal, you require an open area that is fairly large to construct the recycling facility, stock scrap metal, tools, machinery, and finished goods. Recycling metal is called a heavy industry task, so you must have a space-like warehouse.


Projects: - Project Reports & Profiles


·         Infrastructure: To help your business, you ought to provide some decent infrastructure A locked area where the computers are going to work. The location in which you are going to bring your recycled products, the area where you are going to separate metals, disinfect them, and so on. You will need a vented room that suits a typical factory layout. Build the infrastructure for security concerns to the requirements of a factory.



·         Metal Scrap: Join forces with scrap pickers, scrap dealers, landowners, and their likes to have the sum of metal scrap needed. Test it with independent scrap laborers as they can supply you with the scrap at a very low rate relative to a regular scrap dealer. If the need is immense, you should approach wholesalers selling metal waste.


·         Equipment: You must have all the requisite recycling equipment, such as tanks, compressors, grinders, refiners, heating tools, etc. It would be safer if you got the new equipment since the modern equipment will be extremely efficient, and not traditional.


·         Machinery Required: You ought to get the recycling system that is needed. There is usually no particular disposal machine for metal fragments since it is performed in separate phases. For instance, a separation machine, cleaner, melting machine, grinding machine, container forming, cooling field, etc. are needed.


·         Man Power: You do need human energy to function in your factory while being surrounded by so many robots. First, you ought to employ a specialist to guide your recycling venture since he would be well acquainted with the recycling work. You need any labor besides him, depending on the necessity. You will need to provide them with previous scrap metal plant experience.


·         Utilities: You require simple infrastructure like power link, water supply, transit system to convey recycled materials, better highways, plant at a required and chosen spot, and so on, much like every other plant. There could be other requirements that you might just have to look into in a scrap metal business cantered on the location wherever you want to operate your business.

Market Research: - Market Research Report

·         Documents and permission: You are going to begin a company for metal recycling that can be further used by producers. You therefore ought to get licenses from various agencies. First of all, you ought to have a document for a metal recycling facility where you must even state which kind of material you are trying to reuse.


Private Company Involvement

Although MSTC's change is a positive step, it might not be a smart option to route every scrap supply into MSTC solely. Private sector engagement must be promoted. A combination of competition-based private and public sector employees would be more effective.

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In the end, the automotive recycling industry in India portrays a tremendous opportunity for scrap production in the face of all the commitments and challenges. The use of scrap in steelmaking would lead to the steel cycle economy. India, as a developing world wants long-term opportunities to plug into such renewable, productive industries.

India's Auto Shredding Kick Start-MSTC and Mahindra Intertrade JV

In the freshly drafted MoU, MSTC Limited, a Mini Ratna Category-I PSU underneath the administrative jurisdiction of the Ministry of Steel, the Government of India, and Mahindra Intertrade Limited (MIL), combined forces to established India's first auto shredding factory.

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The plant would be the first in the world to construct such auto shredding units in the series. In the Make in India initiative, India's foraying into the car shredding market is also a generation ahead.

Can car recycling in India, become the next US, Europe, or China?

The US, Europe, and China are the world's biggest and most mature auto-recycling industries. From as far back as the 1970s, as in the situation of the US, these nations have been destroying old cars. It is very well known that these are industries focused on waste and the justification for this is auto recycling.

In the US, vehicle recycling dates back to the 1970s, while in the 2000s, Europe and Japan started recycling, followed by China in 2012. In developing countries, the overall industry value of car scraping is about 30+ million vehicles, producing about 27 million tonnes of waste.

Vehicle Recycling Scope in India

As India is the world's third-largest steelmaker, there is a tremendous opportunity for auto-recycling. India's car recycling will bring various advantages to the nation, ranging from a drive to fuel-saving and job growth in the automotive field.

25 percent (7 million vehicles) of the estimated cars that may originally be scrapped are projected to produce roughly USD 2.9 billion (analogous to ~INR 190 billion) in business. Such statistics are expected to rise with time.

A car weights 1,400-1,600 kg on average. It contains 65-70% steel scrap, 7-8% aluminium scrap, 1-1.5% copper scrap and 15-20% rubber and plastic scrap upon recycle. A recycled car will earn approximately INR 30.000-35.000 at existing scrap rates (USD 380-455).

It has the capacity to produce about 6 million tonnes (mnt) of waste, ~150,000 mt of copper scrap, ~0.8 mnt of aluminum scrap, and ~1.8 mnt of plastic and rubber scrap, considering 20-25% of vehicles are discarded in the first year. It is predicted that statistics will rise in the years ahead.

Car Recycling Market Prospects

In both the automobile and steel sectors, the car recycling market is a large sector with a strong market for End of Life Vehicles (ELV). The CEO of the Association of Automotive Recyclers (ARA), Michael E. Wilson, claims that both the prospects and the value of the automotive recycling market are increasing rapidly. These days, there are different opportunities for junk vehicle owners to sell their junk cars for money. On Craigslist, eBay and even directly to scrap yards and vehicle dealers, they will market their scrap vehicles.

Scrap yards and car dealers bid at the very same time for EOL vehicles sold on Craigslist, eBay, or directly from holders of scrap cars. Businesses ought to guarantee that they are fitted with the newest equipment in the industry and meet ARA-specified requirements for auto reuse activities

Voluntary scrapping of old cars is proposed by Union Budget 2021-22

It is focused on health tests for personal vehicles over 20 years and for commercial vehicles over 15 years. For the automotive industry that has been waiting for a 'Scrappage Scheme' for the past decade, this is a welcome change.

Constructing every industry from zero is a challenging job, and before actually achieving profitability, it must forehead different obstacles. For every country, when an initiative of this size is hired to work, the position of its people is vital.

Whereas the government can take this step to grow the business, the people of the country who want to make deliberate attempts to protect and preserve the ecosystem by giving up their old vehicles are still a major part of the obligation.

Union Minister Nitin Gadkari said the strategy would contribute to approximately 10,000 crores of new investment and generate as many as 50,000 jobs. It is projected that such cars cause 10-12 times greater emissions than the new vehicles.

Highlighting the policy's advantages, Gadkari said it would lead to scrap metal recycling, better protection, reduced air pollution, lower oil imports due to higher fuel consumption of existing vehicles, and encourage investment.

Recycled content from old cars would further lower costs, adding that the turnover of the automotive sector, which is Rs. 4.5 lakh crore with exports of Rs. 1.45 lakh crore, will have a lift.

Bottom Line

The scrapping strategy would improve car purchases in the country as a fresh one will certainly be purchased by the one scrapping the vehicle. All in all, the Scrappage Program aims to help incorporate Rs 10,000 crore worth of fresh investment and generate 50,000 new employment options. The Scrappage Program would improve car purchases in the nation as a fresh one will definitely be purchased by the one scrapping the vehicle.

Overall, with the green flagging off the “Scrappage Policy”, the business is likely to hike up in the coming days and the business investment is not going to let anyone down. Voluntary car scrapping scheme to drive out old and obsolete cars, not only helping to curb emissions, but also reducing the fuel import bills of India. All in, the Scrappage Program aims to help incorporate Rs 10,000 crore worth of fresh expenditure and add 50,000 new work prospects.

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Ø  Introduction

·         Project Introduction

·         Project Objective and Strategy

·         Concise History of the Product

·         Properties

·         BIS (Bureau of Indian Standards) Provision & Specification

·         Uses & Applications


Ø  Market Study and Assessment

·         Current Indian Market Scenario

·         Present Market Demand and Supply

·         Estimated Future Market Demand and Forecast

·         Statistics of Import & Export

·         Names & Addresses of Existing Units (Present Players)

·         Market Opportunity


Ø  Raw Material

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·         Properties of Raw Materials

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·         List of Suppliers and Manufacturers


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Ø  Plant and Machinery

·         List of Plant & Machinery

·         Miscellaneous Items

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·         Laboratory Equipments & Accessories

·         Electrification

·         Electric Load & Water

·         Maintenance Cost

·         Sources of Plant & Machinery (Suppliers and Manufacturers)


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·         Construction Schedule

·         Plant Layout and Requirement of Utilities


Project at a Glance

Along with financial details as under:


  •     Assumptions for Profitability workings

  •    Plant Economics

  •    Production Schedule

  •    Land & Building

            Factory Land & Building

            Site Development Expenses

  •    Plant & Machinery

             Indigenous Machineries

            Other Machineries (Miscellaneous, Laboratory etc.)

  •    Other Fixed Assets

            Furniture & Fixtures

            Pre-operative and Preliminary Expenses

            Technical Knowhow

            Provision of Contingencies

  •   Working Capital Requirement Per Month

             Raw Material

            Packing Material

            Lab & ETP Chemical Cost

           Consumable Store

  •   Overheads Required Per Month And Per Annum

         Utilities & Overheads (Power, Water and Fuel Expenses etc.)

             Royalty and Other Charges

            Selling and Distribution Expenses

  •    Salary and Wages

  •    Turnover Per Annum

  •   Share Capital

            Equity Capital

            Preference Share Capital


  •    Annexure 1:: Cost of Project and Means of Finance

  •    Annexure 2::  Profitability and Net Cash Accruals


                Expenses/Cost of Products/Services/Items

                Gross Profit

                Financial Charges     

                Total Cost of Sales

                Net Profit After Taxes

                Net Cash Accruals

  •   Annexure 3 :: Assessment of Working Capital requirements

                Current Assets

                Gross Working. Capital

                Current Liabilities

                Net Working Capital

                Working Note for Calculation of Work-in-process

  •    Annexure 4 :: Sources and Disposition of Funds

  •    Annexure 5 :: Projected Balance Sheets

                ROI (Average of Fixed Assets)

                RONW (Average of Share Capital)

                ROI (Average of Total Assets)

  •    Annexure 6 :: Profitability ratios


                Earnings Per Share (EPS)


             Debt Equity Ratio

        Annexure 7   :: Break-Even Analysis

                Variable Cost & Expenses

                Semi-Var./Semi-Fixed Exp.

                Profit Volume Ratio (PVR)

                Fixed Expenses / Cost 


  •   Annexure 8 to 11:: Sensitivity Analysis-Price/Volume

            Resultant N.P.B.T

            Resultant D.S.C.R

   Resultant PV Ratio

   Resultant DER

  Resultant ROI

          Resultant BEP

  •    Annexure 12 :: Shareholding Pattern and Stake Status

        Equity Capital

        Preference Share Capital

  •   Annexure 13 :: Quantitative Details-Output/Sales/Stocks

        Determined Capacity P.A of Products/Services

        Achievable Efficiency/Yield % of Products/Services/Items 

        Net Usable Load/Capacity of Products/Services/Items   

       Expected Sales/ Revenue/ Income of Products/ Services/ Items   

  •    Annexure 14 :: Product wise domestic Sales Realisation

  •    Annexure 15 :: Total Raw Material Cost

  •    Annexure 16 :: Raw Material Cost per unit

  •    Annexure 17 :: Total Lab & ETP Chemical Cost

  •    Annexure 18  :: Consumables, Store etc.,

  •    Annexure 19  :: Packing Material Cost

  •    Annexure 20  :: Packing Material Cost Per Unit

  •    Annexure 21 :: Employees Expenses

  •    Annexure 22 :: Fuel Expenses

  •    Annexure 23 :: Power/Electricity Expenses

  •    Annexure 24 :: Royalty & Other Charges

  •    Annexure 25 :: Repairs & Maintenance Exp.

  •    Annexure 26 :: Other Mfg. Expenses

  •    Annexure 27 :: Administration Expenses

  •    Annexure 28 :: Selling Expenses

  •    Annexure 29 :: Depreciation Charges – as per Books (Total)

  •   Annexure 30   :: Depreciation Charges – as per Books (P & M)

  •   Annexure 31   :: Depreciation Charges - As per IT Act WDV (Total)

  •   Annexure 32   :: Depreciation Charges - As per IT Act WDV (P & M)

  •   Annexure 33   :: Interest and Repayment - Term Loans

  •   Annexure 34   :: Tax on Profits

  •   Annexure 35   ::Projected Pay-Back Period And IRR