From bags to riches: the recycling project which starts in India's rubbish tips

Using recycled plastic, the rag pickers of an Indian slum are making highly desirable handbags for the boutiques of London and New York. Justin Huggler reports on a lucrative conservation project

It may sound hard to believe, but handbags for sale in some of London's fashionable boutiques started out as used plastic bags scavenged from the rubbish tips of Delhi. They are the product of a cottage industry run out of the living rooms of a handful of houses in a Delhi slum. The plastic bags are ferreted out by the rag-pickers, the poorest of Delhi's poor, who make their living hunting for scraps in the rubbish of their richer neighbours.

They are then moulded together into single sheets of thick, durable plastic in the homes of a few rag-pickers, stitched into handbags with bright, colourful designs, and sent off to boutiques in Britain, the US, France, Spain and othercountries.

It is all the result of an environmental and development project dreamed up four years ago by an Indian couple, Shalabh and Anita Ahuja, who run their own non-governmental organisation (NGO), Conserve. But they admit they never dreamed that what was envisaged as a small-scale project for a single slum would turn into such a profitable enterprise, exporting all over the world and with an annual turnover of about £100,000.

"People tell us it's so successful we should turn it into a business, but we don't want to," says Ms Ahuja. "Development was the father and mother of this project. When you start something like this you make a lot of promises. And we feel we have to fulfil our obligations." Every penny Conserve makes is ploughed back into the organisation's development work in India and Ms Ahuja thinks that is part of the bags' appeal. "The fact that we're a non-profit-making organisation has made us a brand internationally," she says. "That's part of what makes people want to buy the bags."

Native by Native, which sells the bags in the UK, promotes them on its website as environmentally friendly. The India Shop, another UK supplier, even carries a picture of the waste bags the handbags are made of on its website, and promotes them as "addressing environmental and social issues".

However, there have been no compromises on quality. To look at Conserve's handbags, you would never imagine they were made from recycled plastic bags. At first sight, they look like leather; it is only on touching the bags you realise they are made of plastic at all - and even then it is thick, high-quality plastic.

Since it's the first of its kind, the project has developed its own rules on quality control. The bags use colourful designs, but Ms Ahuja has a strict rule that no dyes are allowed. The colours are all the original colours of the plastic bags used in making the handbags. Pieces of different coloured plastic bags are carefully stitched together to make the patterns, then they are heat-pressed to form what appears to be a single sheet of plastic.

Ms Ahuja is a short, enthusiastic woman, brimful with energy. She is a writer and has produced a book on one of India's most controversial topics: the dispute over a religious site in Ayodhya, where Hindu extremists demolished a 16th-century mosque. "The publishers made money from my book, but I got very little," she complains, jokingly. Her husband, Shalabh, is an engineer who spent much of his life working in the construction industry. He made enough for the couple to live on, and in middle age they decided to found their own NGO.

"My wife was more into the development side," says Mr Ahuja. "As an engineer I got interested in energy efficiency, so I was more into that." The couple concentrated on waste management. It was when they were in Delhi's slums, working on a project to make compost from rubbish and sell it, that they stumbled upon the remarkable idea of the handbags.

Conserve was working in the slums where Delhi's rag-pickers live. The rag-pickers are one of India's most disadvantaged communities. Already a huge business revolves around rubbish in Delhi, with thousands of people making their livelihood from scavenging amid the trash for anything that can be re-used or sold to the recycling industry. The rag-pickers are the people at the bottom of this industry, who spend their days picking through the huge mounds of rubbish at Delhi's municipal dumps.

The Ahujas were already committed to finding a way of funding themselves. It is a growing phenomenon in India. More and more NGOs are moving away from the traditional model of being entirely reliant on donors and trying to come up with projects that will generate profits to fund their work.

"I believe every NGO should have one market-driven project," says Ms Ahuja. "Being completely dependent on outside funding is very difficult, always having to go to donors and sell them the project. Often they're only interested in numbers. You want to do a project for, say, 800 households, and they won't fund it unless you expand it to 1,500, but you can only do it properly for 800."

Conserve's original idea of making compost wasn't working, but then they started thinking about using the plastic bags that they were discarding from the rubbish. Their original idea was to press them into sheets to sell as cheap night shelters.

Then one of their friends, Nandita Shaunik, a fashion designer, saw the plastic sheets and decided to make a few handbags out of it, just to see how they turned out. Everyone was amazed at the results. The Ahujas took 15 of them along to a trade fair at one of Delhi's Western embassies and they sold out in minutes. The Ahujas realised they had stumbled, almost by accident, on to a winner.

Today, Conserve's handbags contribute to the livelihoods of more than 300 people, from the rag-pickers who are paid for collecting the plastic bags, to the skilled labourers who sew the handbags. The NGO employs eight rag-pickers directly as its core team, but buys plastic bags from a far larger number. There is already a trade in plastic bags, with Delhi's recycling industry willing to pay for them. Conserve's policy is to pay slightly over the market rate - not for charitable reasons, but because it needs to ensure it gets the best of the waste plastic bags to make its handbags.

In particular, it wants to get hold of rare and striking colours it can use to make more dramatic designs. "Training the rag-pickers has been difficult," says Ms Ahuja. "In particular it has been hard to get them to understand the importance of sorting out different colours separately."

Ms Ahuja's original plan was to employ only women, and only from the rag-picking community. But, she says, the charity has had to adapt. "Sewing handbags is a complex job for which you need certain skills. There are three different types of sewing machines you need to use to make a single bag, so it would have been impossible to train the rag-pickers to do it well. We knew if we didn't make a quality product it wouldn't sell." So the handbags are sewn by skilled labourers. But Ms Ahuja emphasises that, though they are skilled, they are all from low-income groups, and used to work in Delhi's cheap handbag factories, not for some glamorous label.

Employing only women did not work out either. "We found that wasn't what the rag-pickers wanted. In their community, the women were much happier if their husband had a job than if they were bringing in all the money. That just served to create tension. So we employ and buy from a lot of couples."

And the rag-pickers do more than just collect old plastic bags. They wash the plastic bags, using machines given to them by Conserve. Then a few trained rag-pickers sew the various different coloured pieces of plastic together to designs given to them by Conserve and press the finished material together into a single sheet using a heat press given by the charity. Only then do the skilled labourers take the materials and stitch them together to make handbags.

The charity tries to use as much recycled material as possible, but had to use commercially made artificial leather for its handles, because its own material was not suitable.

Conserve initially trains rag-pickers to wash and make the material and employs them itself. Then it provides them with machines and helps them set up on their own, buying the material they make back from them. "We work with them for a while and once they're confident we set them up with a machine," says Ms Ahuja. "We monitor them closely to make sure they're doing it properly, and we don't allow any child labour."

This means a lot of the work of manufacturing the bags is carried out in basic one-room households. The family sleeps in the room by night, but by day it is transformed into a workshop.

At first Conserve worked entirely within the slum, setting up its own main workshops in a similar neighbourhood house, but the Ahujas found many buyers were nervous about venturing into the slums to see the product, so it has a showroom in industrial east Delhi, complete with its own workshop so customers can see how the bags are made.

Setting up a successful business has meant Conserve needed skills it couldn't find among rag-pickers or the poor labourers it could afford to employ. In that it was fortunate in attracting a number of young Western volunteers to help. A British volunteer, who had worked in the private sector, helped set Conserve up as an export business. Several Westerners who have worked in the fashion industry worked as volunteer designers, creating its original designs. They have been funded by international development agencies and donor NGOs.

The Ahujas' project has become such a successful enterprise that it is now financially self-sustaining and able to branch into other projects.

Claudia von Hansemann, a German designer, is trying to take Conserve in a new direction by developing designs for jewellery made from leftover plastic after the bags are made. Ms Ahuja hopes that these will be easier to make than the handbags, and that the rag-pickers will be able to learn to make them. Already Conserve has started making shoes from the same plastic it makes its bags from.

The handbags have been such a success that the Ahujas have started being approached by NGOs from other countries asking for advice on similar projects. "We never thought it would be this big," says Ms Ahuja. "Now they want to start it up in Brazil and Africa. In my heart I feel we have to spread what we have started in this country. Who knows what is next?"