1. Tula 0: Getting rid of landfills,
cutting costs and getting green
Made by Benchmark Company exclusively for CL Cup Moscow’12 >>
24 November 2012

2. Zeroing all
waste sent to
landfills
Strategy steps Description and key initiatives
Cutting costs
and reducing
environmen-
tal impact
-$6.8M costs in 2013-2015
+$84M in cost savings 2016-2020
Quick switch from landfills usage to greener
options without significant cost increase
 Incinerate floating foam, recycle remainder
 Invest in waste sorting, employee motivation
Transition to more cost-efficient ways that
allow to reduce environmental impact
 Build a small facility for paper and
cardboard recycling
 Imply initiatives that expand reuse
options and lower packaging amount
To achieve sustainable goals Tula factory should firstly switch from
landfills usage to greener options and then concentrate on cost reduction
2Source: Benchmark Company analysis, case data.
Goals Approach Cutting costsZeroing Landfills Results

3. 3
We will consider 3R + Incineration for Landfills Switching and take into
account different facilities to recycle and reduce waste for cost cutting
Source: Benchmark Company analysis, case data
Landfills
Switching
Reduce*
Reuse/Eliminate*
Incinerate
Recycle
Cost
cutting
Reduce costs
Reduce volume of
waste
Chosen option Can’t useNot an option
Goals Approach Cutting costsZeroing Landfills Results
Build a small
facility
Build mid-sized
JV facility
Cut current
contractors costs
Change facilities
Build large joint
venture facility
Increase recycling
efficiency
Full recycling
Split between
available options
Full incineration
* Unfortunately, there is no opportunity to reuse or reduce waste that is sent to landfills due to its nature
Switch from foam
incineration

4. 4
The best possible way to get rid of landfills is to use both incineration and
recycling facilities in Moscow district for different types of waste
Source: Benchmark Company analysis, case data, Cleandex, see “Landfill effect” in Excel attachment
Full incineration
Send all types of waste to
1 of 4 Moscow incinerators
Full recycling
Send all types of waste to
Moscow recycling facilities
Incinerate foam,
recycle remainder*
Since there is no recycling
facilities to recycle foam
0,1
3,1
1,7
4,8
3,4
9,9
0,5
12,0
3,4
1,7
4,9
3,4
0,3
6,8
1,8
Goals Approach Cutting costsZeroing Landfills Results
Fees
Transpor-
tation
Cost
savings
Total
costs
Invest-
ments***
Contractors
availability
Environment
impact**
* Based on our market analysis there is no facilities that currently recycle flotation foam in Russia, but all other types of waste that
are currently sent to landfills can be recycled (garbage, ice-cream waste, some metal)
** In this case the environment effect for each option is compared to other options since we can’t adequately evaluate that impact
*** Investment costs = Containers costs + Employee Motivation Program costs (see more detailed analysis in excel file)
In mln of rub, compound effect for 2013-2015, discounted to 2012
Switching option

5. 5
The factory will benefit from building its own small facility since it
provides the best operation cost savings and low investment costs
Source: Benchmark Company analysis, case data , see “Recycle effect” in Excel attachment
Goals Approach Cutting costsZeroing Landfills Results
Transport.
savings
Recycle
Earnings
Invest-
ments
Total
savings
Overall
Risks
Own land
usage
Recyclable
materialsSwitching option
Own small factory
Build own small-sized facility that
recycles our paper and cardboard
and some 3rd parties’ waste to
use the spare land*
Own middle factory
Build a mid-sized facility with
diversified product line using our
own land**
Large JV factory
Cooperate with the government
company (e.g. Rostechnologies) to
build a huge factory for multiple
types of waste***
4,6
5,0
41,4
41,0
35,7
20,0
5,3 21,0
15,8
0,0
4,0
19,8
Paper
Cardboard
+ Plastic
+ Glass
+ Metal
+ Others
* Since the highest transportation cost are caused by paper and cardboard wastes, it is more efficient to capture these types of
wastes by our own recycling
** The capacities allow a few companies to recycle their waste on this factory, so the investment costs will be divided between them
*** All investment costs will be carried by the government due to the significant initial investments required to build such capacities
In mln of rub, compound effect for 2013-2015, discounted to 2012

6. * In mln of rub, compound effect for 2013-2015
** 10% of polyethylene waste, cardboard and stained wrapping are supposed to be reduced
*** By using less packaging materials costs for recycled plastic and paper decreases by 10%
**** Price for sorted black metal increases by 20%, for aluminum scrap – by 25% due to pre-recycling sorting process
6
Finding ways to reuse waste to maximum extent, metal sorting and
packaging reduction will allow to save up to 43M in costs
Source: Benchmark Company analysis, case data, see “Reuse calculation”, “Recycling” in Excel attachment
Goals Approach Cutting costsZeroing Landfills Results
Reuse materials in
a good condition**
Give a second life to some well-
preserved plastic/paper wastes
that are currently fully recycled
Increase recycling
efficiency***
Decrease the production of
packaging wastes, on-the-factory
sorting of metal scrap into its
parts to increase the price
 Order merchandise in bulk
 Use returnable containers
 Switch on durable boxes
 Sort metal scrap before recycling****
 Reuse polyethylene waste
 Use gently used cardboard for storage
 Clean and reuse stained wrapping
Strategies Key initiatives Cost savings*
8
13
16
1,0
1,0
1,5
2,5
Total: 43M

7. 7
The proposed strategy will provide 77M in cost savings with immediate
switching from landfills and long-term reducing and recycling measures
Source: Benchmark Company analysis
1. Landfills switching 2. Cost-cutting
2013 2016 2020
3 years
Goals Approach Cutting costsZeroing Landfills Results
5 years
 Incinerate flotation foam
and recycle remainder
 Invest in waste sorting,
employee motivation
 Build a small facility for paper and
cardboard recycling
 Imply initiatives that expand reuse
options and lower packaging amount
Environmental impact:
 Landfill will be reduced to 0% during first year
 Switch to more environmental friendly types
of dealing with waste
 New job places creation through new facility
Cost effect
 Quick switching from landfills: 7M in costs
 Own facility: 41M in cost savings
 Cost efficiency measures: 43M in cost savings
No landfills
77M cost savings

8. Benchmark Company
high-experienced team of fellows with strong
spirit that study and work together for 4 years
Mark
Khlynov
Maria
Kochmola
Sergey
Slutskiy
Elizaveta
Ivakhnenko
Great case cracking track
 Semifinal of McKinsey BD’12
 3rd place at Microsoft Case
Competition’11
 Semifinal of CL Cup Russia’11
Excellent academic study
 High achievers of Finance
University, 5% of course rating
 Grants from Russian Economy
Fund, Potanin Foundation, Lukoil,
Gazprombank, Vozrozhdenie
Unique working experience
 Worked in PwC, JTI, MCG
 Organized of Fincontest’12,
Russian Innovation Convention’11
 Participated in student consulting
project with BCG ad-hoc support
8