How to start Tyre Recycling Business?

tyre recycling business

The tyre recycling business is the fastest growing business right now. In our country recycling plants are not as many as they should be.

Indian Government is also supporting this type of business a lot and is coming up with many schemes.

By recycling waste tyre you can produce products like Carbon black powder, Steel wire and Pyrolysis fuel oil etc.

In this article, we will talk about how to start a tyre recycling business in India, which includes a business plan, the investment required, profit margin, space required, licenses, and documents required, etc.

Tyre business plan

Before starting a plant you need to do proper research on this business like, how many rubber recycling plants are already present in your location, how much raw material you can collect and how much you can sell. Based on this you need to plan the size of your rubber recycling plant.

The plant setting steps include,

  • Deciding factory size and Location
  • Getting required licenses and registrations
  • Arranging Finance / Bank Loan
  • Purchasing machinery
  • Marketing your products

In this your raw material will be the old tyres, be it 4 wheeler vehicle, 2 wheeler, trucks, tractor, which belongs to any vehicle, they will be used in this process.

You can collect tyres from tyre dealers, work shops, scrap shops, puncture shops etc.

  • Carbon black powder –> used for Highway construction, tyre manufacturers, footwear companies
  • Steel wire –> used in steel plant, steel manufacturer
  • Pyrolysis fuel oil –> used in cement plant, glass plant, bricks factory, steel plant

The number of labors required to start this business depends on your plant size. You can start with 2 to 7 labors.

Licenses and Registrations Required

This business is a very profitable business if you start it properly. You should start this business with proper permissions/licenses and machinery.

If you do this business in a completely legal way and invest some money in this business, then you will be able to earn good profits in it and will be able to run this business properly.

You require following licenses and registrations to start a tyre recycling business in India.

  • MSME Registration: Register your business under the Ministry of micro, small, and medium scale enterprises. This will help you in getting business loans and government benefits.
  • Factory License – from the state government
  • Pollution Certificate: You can get it from the local pollution Board office
  • Business Registration – Sole Proprietorship
  • GST Registration
  • Labor License
  • N.O.C (No objection Certificate) from the municipality
  • N.O.C from Fire and Electricity Board
  • N.O.C from Town and country planning department

Any local CA or agency can help you in getting these documents.

Arranging Finance for the Business

If you are planning a small plant that costs around 20 to 25 lakhs, then you can apply for a loan using the Pradhan Mantri Employment Generation scheme.

Since this is a recycling project, you can get up to 90% of your investment loan and up to 15% subsidy.
To get this loan you need to provide necessary documents to the bank and you should have a proper business plan report to submit to the bank.

Space required and Location

Even if you start with a small plant, you should have at least 3000 square feet to 4000 square feet space.

Location will play an important role in this. Try it if you are close to the city, then the cost of transport will be saved.

Machinery Required

To start a semi-automatic rubber recycling plant, you need to have below machineries in your factory.

  • Ring cutter machine –> to cut the sidewall of the tyre.
  • Strip cutter –> converts tyre into a strip
  • Steel separator –> removes steel wire from the tyre
  • Tyre slice cutter –> to cut the strip into small pieces
  • Rubber powder machine –> coverts rubber pieces into rubber powder

To start a fully automatic tyre recycling plant you can install a Pyrolysis plant. You will get pyrolysis oil as the end product from this plant.

You can find dealers for these machines from websites like indiamart.com.

Tyre Recycling Plant Cost

It depends on how big you are going to build your plant. The main investment required is to purchase machinery and construct a factory. If you do not own the place then you need to consider a security deposit for the factory.

To start a small-scale tyre recycling plant, you need an investment of 18 lakh to 20 lakh rupees. In this only Machinery like ring cutter machine, strip cutter machine, steel separator, etc going to cost you around 10 to 12 lakh rupees.

To start a fully automatic tyre recycling plant you need an investment of 30 lakh to 35 lakhs. The automatic machine going to cost you 15 to 20 lakh rupees.

The working capital for this business include, purchasing raw materials, labor salary, utility bills, factory rent etc

Profit Margin in tyre business

If you sell your products directly to the company instead of dealers, then you can expect high profit margin.

To directly deal with company’s you need big plant and large production, to reach their demand.
You will be earning income by selling carbon black powder, steel, and pyrolysis oil.

You can expect a profit margin of 20% from this business.

If you tie up with more raw material suppliers and more dealers/companies, you can earn more income.

I hope this article has resolved many of your doubts related to starting a tyre recycling business in India. If you have any suggestions feel free to mention them in the comment box below. If you like this article kindly share it with your friends.

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