Gravita India Ltd., India’s largest battery recycling company, is entering the electric vehicle battery recycling business, CEO Yogesh Malhotra told Moneycontrol.
Gravita India has identified a few potential companies that could provide the technology for recycling lithium-ion batteries and talks are at an advanced stage with one firm based in Europe, Malhotra said.
Demand for recycling lithium batteries is expected to become viable in six to seven years, by when Gravita India will be ready for the market.
Currently, 87 percent of Gravita India’s business comes from recycling lead batteries and the rest is from other segments including plastic and aluminium recycling. It plans to increase business from segments other than lead to about 25 percent.
According to the International Energy Agency, 100-120 GWh of electric vehicle batteries will be retired by 2030, a volume roughly equivalent to current annual battery production. Without effective measures to address such volumes, this can become a significant environmental liability, it said. Spent batteries can be channelled to second-use or recycling with the aid of policies that help to steer these markets towards sustainable end-of-life practices, the IEA said.
Malhotra said the government’s focus on recycling has helped to improve the availability of domestic raw material, which was hard to obtain earlier. With the implementation of the Battery Waste Management Rules, battery companies have increased their share of recycling through authorised recyclers and this has significantly boosted the availability of raw material in the domestic market.
“We have tie-ups with major battery companies including Amara Raja Batteries and HBL Power. Now, we are sourcing increased raw material domestically. Currently, organised recyclers in India are recycling 40-50 percent of the domestic scrap and this is expected to increase to 75-80 percent over the next three years,” he said.
Reliance on imported scrap is easing and over the next few years, the ratio of scrap from imports to domestically recycled material will be 30:70, from the current levels of 70:30. The reduction in scrap imports will improve the company’s working capital, which stands at Rs 200 crore at present.
Gravita India is setting up a recycling plant in Mundra in Gujarat, which will become operational by August 2021. Smelting and refinery facilities for battery recycling will be available at this plant.
“We already have recycling facilities in Jaipur, Jammu, Gandhidham and Chittoor in Andhra Pradesh. After the establishment of this plant, imported raw material will be recycled in Mundra and will be exported back from there,” Malhotra said. “Scrap from Africa, which was earlier imported to India, will now be consumed by our four African recycling facilities in Ghana, Tanzania, Senegal and Mozambique, resulting in further savings in logistic costs and reduction of the working capital cycle.”
On the company’s borrowings, Malhotra said that Rs 17 crore had been paid last year and debt will be further decreased over the next few years. Part of the company’s short-term working capital loan of Rs 200 crore is hedged against client orders.
“We are not worried about this loan amount. As I said before, as we will get more raw material in India, this loan requirement will automatically come down,” Malhotra said.
The company’s long-term debt is Rs 57 crore, which is at a comfortable level as profit after tax has been increasing at 35 percent per year.
The company plans to enter other recycling segments such as copper, paper and e-waste.
“We will also expand our plastic recycling division from the existing level. Along with this, a pilot project for rubber recycling is coming up shortly in Ghana,” Malhotra said.
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