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IARC 24

Rosmerta’s Road to 75% Vehicle Recycling Capacity by 2026

Rosmerta Technologies, headquartered in Gurugram, India, is strategically positioning itself to capitalise on the burgeoning demand for vehicle recycling services. With its first vehicle recycling and scrapping facility (RVSF) established in Manesar in October 2023, the company is eyeing up to 75% capacity utilisation by fiscal year 2026. This optimistic outlook is driven by the impending implementation of Extended Producer Responsibility (EPR) norms, which will hold Original Equipment Manufacturers (OEMs) accountable for the proper dismantling, recycling, and scrapping of end-of-life vehicles (ELVs).

 

Rosmerta's Road to 75% Vehicle Recycling Capacity by 2026 p

At present, Rosmerta Recycling, the RVSF business vertical of Rosmerta Technologies, is operating at a capacity utilisation of around 12-15% at its Manesar facility. However, the company aims to ramp up this figure to 40% by fiscal year 2025 and ultimately achieve the 75% mark by fiscal year 2026, thereby attaining break-even status. Kartick Nagpal, President of Rosmerta Technologies, emphasises the company’s impressive growth trajectory, with utilisation doubling every quarter in fiscal year 2024.

The imminent surge in demand for vehicle recycling is anticipated to coincide with the enforcement of EPR norms, according to Nagpal. Rosmerta Technologies has allocated a capital expenditure of Rs 200 crore to expand its footprint to 10 centres by the end of the calendar year 2025. While the initial investment in the Manesar facility amounted to Rs 10 crore, the company foresees potential cost reductions with the establishment of smaller centres in the future.

Nagpal underscores the current lack of substantial return on investment (RoI) in the industry due to its nascent stage. However, he remains optimistic about the growing emphasis on sustainability across the automotive value chain, coupled with the prospective benefits of EPR norms and Certificate of Destruction (CoD) incentives. The company aims to achieve break-even on its investments at both centre-wise and group levels within the next two to three years.

Rosmerta Recycling is poised for significant expansion, with plans to establish centres in Himachal Pradesh, Gujarat, and Bengaluru in the fiscal year 2024, followed by six additional centres in the fiscal year 2026 across markets like Maharashtra. Nagpal emphasises a strategic approach based on policy implementation and the size of the ELV parc in each market.

Moreover, the company aims to forge partnerships with OEMs to assist them in meeting their EPR targets. Currently, direct customers constitute 25% of the company’s recycling volumes, while 35% originates from new and used car dealers. Other channels contributing to inbound ELVs for recycling include ELV auctions and enforcement drives.

Despite the promising growth prospects, the organised vehicle recycling sector in India faces challenges from the entrenched unorganised industry. Nagpal highlights the need for stricter enforcement of laws against unorganised players and underscores the importance of collaboration among stakeholders, including the government, the Society of Indian Automobile Manufacturers (SIAM), and RVSFs, to ensure the viability of the sector.

Nagpal asserts that vehicle scrapping presents a significant growth opportunity for India, positioning it as a sunrise sector with robust potential over the next 15-20 years. Rosmerta Technologies is poised to play a pivotal role in driving the transition toward organised vehicle recycling, leveraging policy reforms and strategic partnerships to capitalise on this burgeoning market.

Source www.autocarpro.in

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