From currency of great denomination to the plywood factory: Where the demonetised notes went
After being verified, sorted, shredded, recycled, they were sent to Kerala's North Malabar region– where it was further pressed into pulp to produce something charged with 28 percent GST–hardboard.
Ever wondered what happened to the 18 billion notes worth more than Rs 14 lakh crore, accounting for about 86 percent of country’s total money in circulation, which was nullified following last year’s demonetisation?
Well, here is your answer. After being verified, sorted, shredded and recycled, they were sent to a factory in North Malabar region of Kerala – where it was further pressed into pulp to produce something charged with 28 percent GST – hardboard.
Conventional methods of currency disposal include charring by incineration and using it in landfills. However, taking into account the drastic environmental effects of these methods, governments started looking for alternate solutions for the safe dumping of old notes.
The Thiruvananthapuram unit of the Reserve Bank of India that housed one among the 27 shredding offices opened by the central banking institution had one of the finest ideas in the whole country on what to do with the soiled cash. They struck a deal with Western India Plywood Limited (WIPL) in Kannur district, who agreed to use the demonetised currencies of Rs 500 and Rs 1000 for their daily production of hardboard and soft board.
“Our association with the RBI is not connected with note ban. We decided to experiment with currency notes and applied for a tender with the bank. We had our first load in October last year, even before demonetisation,” a spokesperson of WIPL told Newindianexpress.com.
The shredded notes were first handed to recycling dealers who converted them into ‘briquettes’ before returning them to the RBI. Briquette is the general term used to describe a compressed block of any combustible biomass material, mostly cylindrical in shape. The currency briquettes were then transported to the yards of WIPL at the expense of the bank.
Made from compressed wood fibre, hardboard is largely used in construction and furniture industries. Though plywood is the major product of WIPL, they also have a separate section for hardboard and soft board.
The tender issued to the factory one month prior to demonetisation apparently rescued the bank from dealing with heaps of Rs 500 and Rs 1000 notes.
Generally, wood chips are pressed to pulp for the production of factory hardboard, and currency briquettes could be added to the process. Due to the high-quality of paper with which they are made, Indian currency notes are generally thick and this provides strength to the output. However, because of the same reason, only a small proportion of the briquettes can be used in the production or else the pulp will get ruined.
General Manager of WIPL’s Hardboard section Sudhakaran Nair said the company gets about 900 metric tonnes of notes under the year-long annual tender.
“On a normal week, we receive one to three loads of currency. One load means 10 tonnes, and not more than 20 tonnes get left out at the end of monthly bulk production,” he said.
He clarified that the company is happy with the output from the notes, and is looking forward to extending the deal with the bank through a renewed tender.
Earlier media reports had said that WIPL pays Rs 250 to RBI for every metric tonne of stock they receive. The GM chose not to comment on this.
Compared to the wooden raw materials, the soiled notes take more time to get compressed. Sudhakaran Nair said though he cannot elaborate on the technical details, no additional equipment apart from the existing ones in the factory were needed for processing the demonetised currency notes.
Established in 1945, Western India is one of the biggest wood-based industrial integrated complexes in South-East Asia with an employee strength of 1,200.