Why Plastic Recycling Business Is Hot Right Now bySuccessDigest

In many countries, recycling has boosted Gross Domestic Products (GDP), helped in job creation and the setting up of several new businesses and the expansion of already existing businesses.
Waste that can be recycled range from plastic bottles, nylon bags, cans, paper, metals, etc. In this edition of SucessDigest, we would be exposing you to the wealth in plastic bottles recycling and several ways by which you can make money from it.

Recycling Plastic Waste
Mrs.  Matilda Taiwo, MD/CEO, Goodware Stitches Ltd, a waste recycling outfit, says, “When talking about plastic waste recycling, you are talking about thrown away products – plastic bottles, sachet water nylons -  with a view to converting them into another [a new] product”.

Mr. Chilaka Osuagwu, Head, Antwork Services (another recycling outfit) says, “Recycling business is so vast with very huge opportunities. So many people are presently doing it. People say it is “waste wealth”, the business is huge, and it is an international business. In South Africa the business of recycling is even much bigger than we have in Europe. Many things are being put back to use through recycling”.

Why Go Into Recycling Business
Mr. Ashwin V. Suthar, General Manager, Alkem Nigeria Limited, says, “We started recycling basically to get fibre materials which are raw materials for our polyester products. The waste plastic bottles which are also called (PET bottles) are basically fibre’s raw materials of a higher quality.

“The PET bottles are converted to flakes and from flakes to chips which forms part of our raw materials for making the fibre. We produce polyester fibre. Recycling of waste not only ensures that the environment is clean, it also creating businesses and jobs. So, recycling should be encouraged”.

What does it take to start this business?

Osuagwu says, “The very first thing I will advice is to do a feasibility study of what you want to do. With small capital you can find yourself in the line, because it is a chain business. You can start by sourcing the raw materials, that is, picking the plastic bottles on the streets and dumpsites or you buy from those who pick and take them to the recyclers. You can be in the business without being the major recycler.

“The Hausa boys that push carts around don’t have anything. The only thing they do is get small money to hire that cart they push around and they are on the street and the dumpsites everyday scavenging for plastic bottles and other recycling materials. They are the forerunners, the foot soldiers of this business and once they have gathered enough, they take them to the dumpsites where the big guys come to buy them.

“So, you see you might not need a very huge amount of money to start; all you need is your ability to identify what you want to do, and the market that is available in your neighborhood. People like us started from going to the dustbins to pick and sell, after trekking for 2-3miles everyday picking plastic and other recycling materials to sell and I was able to encourage some other people to join me and we were able to raise some money to start. Despite all I read and my qualification as a certified marine engineer, I was very determined that I will make it.
“Your ability to find yourself in the line and be determined to succeed is what matters, but if you have the money without understanding the business you will lose that money, because so many things are involved.

“The big guys, the Indians and the Asians that are coming into the country are doing it big time… those guys have very deep pockets that can swallow anything. But we don’t have that kind of money, so we have to start small, start to pick from your street, from your compound and sell; from there you can take off. Now let’s say you have N50, 000 –N100, 000 that is quite some money, you can locate where you belong in the chain, but if you want to go mega, that is having all the machines you will need at the various stages, then N100, 000 is far too small.
“But like I said, I had only N25, 000 that was raised in the proceeds of picking which was reinvested into the business. The money you have does not really matter - what matters is your ability to do what is right from where you are, that is, with what you have.

“There are some people in the popular Idumota Market in Lagos Island, that are millionaires by all standard but they don’t own a single shop.  What do they do? They know where whatever it is you want to buy or sell is and they are experts in that market. So when you come to them, they simply act as middlemen to get you what you want and they are paid for that and that is how they make their money. For me, the most important thing is to know the business in and out.

“But if you have the money, you can go and source for the machines and start to recycle. It will still boil down to having to know which type of materials you want to recycle because not all waste plastic bottles are used for the same purpose. So you need to know the type of machine to buy, because not all machines are used for recycling all types of plastic bottle waste”.
Taiwo says, “Well, you must first have passion for the business before thinking of what it takes, because if you are looking at the monetary aspect alone without having the passion, you may not succeed. But the basic truth is that you must have passion, before we can now talk about the entrepreneurship training. This is very important for everybody - not in recycling business alone, but in any business - you just have to go for entrepreneurial training. After the passion, take for instance, my case, I was able to write my business plan on waste recycling. There is no business you are going into that you do without a business plan, which tells you that you know what you are doing. Another thing is that, the business plan is not to obtain loan from the bank, but it is like a guide for you to actually know what you are doing. When you are making mistake, your business plan will check you”.

Do I then need to be trained before I can do this business?

Osuagwu says, “You need training but it depends on your level of entry. Do you need training to go to the streets, parties and dumpsites to pick waste? No. Do you need training to have N50, 000 and go to dumpsites to buy waste that you will supply to factories that need the plastic bottles? No. But at some point when you must have been doing the business, you will then see the need to want to get more knowledge or carry out research on what you can further turn this waste into. I am currently researching on how bad or rotten wood can be reused.

“You can attend world class trainings on waste management, because here in Nigeria we are just playing, I mean we are still scratching the surface of this business. There is virtually nothing in this world that cannot be recycled and be used for something else or returned to its original state. There is nothing like waste. 

Everything can be recycled. There are some people who only pick all manner of things, empty can drinks, iron, plastic, bottles, used cloths, wood, foam, aluminum, waste cartons, used paper, etc., and send to the dumpsite to sell, while some just stay on the dumpsites and wait for the pickers to bring them there. They sort them out and when they buy enough, they take them [the waste materials] to the factories to sell.

“At some point I took a special personal study to see how I can recycle used tires because at some point it was becoming a menace in our society. At the time I wanted to really go into it but I discovered that the Lagos State Government was about doing something in that direction, so I stopped. So you have to always be on top of your game.
“And of course those trainings are not cheap, so if you are starting out, the best bet for you is to locate those who are already doing the business and learn from them. Not everybody is willing to let go of information, but by the time you visit 5-10 dumpsites, you will see someone who is willing to train you even for free.

“You could also go to factories where these waste are being converted and work there for some time and see how things are being done. You will then have an idea of what is needed for you to start on your own. You could also find a way to spend the little money or time that you have on researching the type of plastic or other waste that sells the most, or the type of locally fabricated machine that sells the most at various chains, then see how you can make your money from there.

“Two things attracted me to the business. First, I wanted to make sure we have a clean environment and two, to make money. Picking waste was something that was naturally not an issue for me, because I had love to keep my environment clean, so when I also knew that I could sell the waste and make money, I dived in. I was focused and determined to do the business and succeed.
“Pick up an interest, study how that raw material will be used, who needs the end product from these raw materials? Is the end product on demand? Do I need some level of certification? What am I expected to pay before I can start? These are some of the questions you must find answers to before you know where to start”.

How do you get the wastes?

Taiwo says, “We buy them from people (scavengers) who supply to us. We also visit the sachet water factories or at times they supply us their wastes. We actually buy in kilos. We give them the category of the sachet waste nylon we need. There are different prizes for clean ones and the dirty ones. The beauty of the whole thing is that nothing is wasted in this industry”.

Are the wastes enough or in shortfall?

Taiwo says, “They are not in shortfall in the sense that we have about 160 million Nigerians and as long as they generate waste, we will continue to have enough wastes to recycle. So, we have and we can get waste from all over Nigeria”.

What Recycled Plastics Are Turned Into
Suthar says, “Pillow and mattress are made from the fibre we get from PET bottles. They are also used in furniture making. The fibre is used in place of foam in furniture making (foam for settees and office furniture). It is good because fibre is fire resistant. Fibre is also used for several other purposes of which ceiling board is one of them”.
Taiwo says, “In my own case, we are into sachet water nylon, plastics and PET bottles and we convert them into waste disposable bags, polythene bags, medical waste bags for hospitals, cash bags for banks and the next level we are going into is converting the PET bottles into fibre fills. Fibre fills can be used to produce shirts, leather bags, car accessories and you can also export it. So, there are lots of things we can produce from waste PET bottles”.

Osuagwu says, “The PET (poly ethylene), the plastic bottles that we see regularly for instance, are products of textile materials. If you try to cut that plastic at some point, you will find some whitish substance as you cut – that’s fiber and the fiber can be extracted and reused. The furniture guys or those into upholstery use fiber sometimes instead of the regular foam for their furniture works. That same fiber is also used for pillow cases, and throw pillows and you can wash it and it dries very fast unlike foam, so that is an alternative to foam from this same plastic.
“For some people who cannot afford to buy new plastic bottles, they go about picking those plastic bottles waste, wash them and use them for repackaging things like locally made liquid soap, local “Zobo” drink, local “Kunu” drink to sell, palm oil and groundnut oil, and put their own label.

“In fact, right now the demand is very high because some Asian companies have entered into the business. They have jacked up the price: they want to pay for those plastic bottles so that they can get more bottles, and they are even exporting them to their countries to be used for other things.
“PET can also be used for producing lagging materials, used to prevent heat or noise from penetrating. It can also be used to produce cloth.
“It can also be used to produce rope or thread. Also, depending on your level of technology, you can take it back to its original state that is the bottle, again.
“Like I said a very high level of technology is required, so that you are able to separate the materials very well so that they can be reused. But NAFDAC will not allow that because of the high level of technology involved, but if you can, why not”.

How then are the plastic bottles produced?
Osuagwu says, “They are produced from a petroleum product and that is why they are inflammable. In some countries, you use it [the petroleum product] to produce power, you use it to produce fuel that can power your generator to produce power. The petroleum product is known or referred to as virgin product, because it has not been used for anything before. They come in bags, in chips, in rice-like form”.

Are there other chemicals that are added to the waste? 
Osuagwu says, “Yes there are, but I cannot specifically tell you their names now, because I am not in the finish product line. There are chemicals that dissolve those plastic materials before they are further reused. There are chemicals that are added to make them harder or lighter to make other things. These chemicals are generally called adhesives”.
Which recycled product sells the most?
Osuagwu says, “It depends on what you want to focus on. For instance, some people use waste nylon materials to reproduce nylon again and sell, there are so many end products. I just told you of fiber which is what people are in need of in the furniture making industry. Normal rubber is made from plastic waste. What about the different types of PVCs - the toilet pipes - the demand for these products is very high.

“This is why it is very important to know what raw material is available and who needs it? The answer to this question puts you in business. You don’t go looking for the impossibility, what is available is what you will sell and make more money from”.

Taiwo says, “Basically now, we are selling the waste disposable bags and the household polythene bags. Every household needs to containerize their wastes and also our bags are for general purpose - so the agric people can use it for packaging; textile industry and laundry people can use it as well”.

Recycling Machines

Osuagwu says, “There is what we call (LDP) Low Density Polyethylene machine. We have (HDP) High Density Polyethylene machine and we have (PP) Poly Poplin machine, and we have (PVC) machines.

“All the products are produced by different machines. Depending on what product you have found market for, that is the one you will go for the appropriate machinery. Two things are important here; your source and your market, that is, where you buy from and where you sell to. If you have the source, you go and look for the market, but if you have both the better.
“The machines are there for anyone to import or fabricate, but like I said, you need to know the area you want to focus on and do it profitably. Still talking about the machines, the sorting machine we talked about earlier, there are different types of sorting machines, the one that removes the cap of the plastic bottle is different from the one that sorts out the various plastics. To the lay man, all plastic out there are the same but I know that not all the plastic are the same, so also the machines are different.

“There is also another machine that does the washing. But one can wash manually. There is another machine for crushing the plastic bottles and there are yet machines that bail them in such a way that you can compress 2, 000 plastic bottles in a bundle, like a carton, so it is easy to carry. Another machine will pelletize it like groundnuts. That one goes through a heat treatment process. So different people stop at different stages to allow others in the chain, but there are mega machines that can do all the things at a go. Where you want to stop is determined by how much you have.
“It still goes back to the fact that you need to know what you really want to do and how you intend to do in the industry profitably”.

Are the machines at various stages locally available or imported?

Osuagwu says, “Yes, there are both locally fabricated and imported machines available. It is your choice, and based on your budget you should be able to get what you want. For instance, the sorting, it can be done manually or by machine and every machine that is imported can also be locally fabricated. Some people use the locally fabricated ones, while some also use imported ones and they are all available everywhere for purchase.

“If you are very conversant with the use of your Google search engine, you will find so many of them that the Chinese have and are selling and they will also teach you how to use them. So you can’t make mistake, provided you have done your feasibility studies to determine what you want. It’s a matter of interest”.

Major Source Of Raw Materials (PET Bottles)

Suthar says, “We have so many people who are collecting the bottles from the dumpsites. Most of our materials come from the dumps. We also get some from eateries”. 

Classification Of Bottles

Suthar says, “For the bottles, we have the pre-consumer and the post-consumer. The pre-consumer are the ones that come from manufacturing companies, that are factory rejects. They are unused but they are not enough. That is why we depend mostly on the post-consumer bottles. The post-consumers are the soft drinks and water bottles that people have consumed the content and the bottles are now waste. The post-consumer bottles are available in large supply”.

Collection Centres
Suthar says, “The collection centres compress the bottles. The bottles are voluminous and they could be heavy. And it is not easy transporting these bottles so it is better to compress the bottles at the collection centres. At the collection centres, we remove the labels on the bottles and the caps and then shred them. After shredding, they bail, before we send our truck for pick up”.

Locations Of Collection Centres

Suthar says, “Most of our collection centres are in Lagos. We also have centres at Kano, Abuja, Owerri, Port-Harcourt, Onitsha and Warri”
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Exporting The Recycled Product

Suthar says, “Yes, the fibre is sold here in Nigeria but larger quantities of them are exported”.

Ways To Make Money From Recycling

Suthar says, “You can supply us with PET bottles and you collect money in exchange. We pay per kilo”.

Are there challenges in doing this business?

Suthar says, “The major challenge is power supply. The machines cannot run without power supply. So, we have to provide generating set at all our collection centres which is used in powering the machines that are used in compressing the bottles. Another challenge is awareness. People are not aware that they can collect these PET bottles and bring them to our office and collect money for them”.

Osuagwu says, “One of the major challenges is power: recently we discovered that if you must run a recycling factory successfully, power is a major issue and when the power comes it is very low in the area where my factory is. There is epileptic supply of light and it cannot even power the machines. So I have to use my generator, which is what I do every time I have plastics to crush.
“So I schedule the use of the generator for the number of hours I have jobs or I whenever have the financial power to run the gen. But if you don’t know how to schedule and be able to manage your diesel, you will just discover that you will be running at a loss.

“Also our infrastructures are bad; the roads that lead to our factories are not in good shape. The vehicles we get to move this waste are usually not in good condition. Many of the persons providing this service in the chain are just managing to survive in the harsh economy, and oftentimes, these vehicles are checked and arrested by law enforcement agencies that are too many on the road looking for you to get you arrested and make you pay unnecessarily.

“But in some countries where this business really thrives, the government waives off some taxes and levies so that the operators can add to the lives of their families from the small proceeds they get. Some are even aided, and I think our government can begin to look at this direction, because we are doing a lot in keeping our environment clean.

“Also the government can make sure that the various regulatory bodies we have come in to do their work very well, carry out the proper trainings that are required for all the players in the industry; and they should also put measures in place to prevent health hazards and promote safety, because in the dumps you get all manner of things that you will be wondering what they are.
“For instance, medical waste: these kinds of waste should not be allowed to go to the same place other kinds of waste go to, because there you will find syringes that maybe have been used for patients with HIV and other infectious diseases. If they are not properly disposed of, they could infect others. So to avoid any infection, there must be regulations on how these wastes are disposed of.


“Also, how to get the raw materials to feed the machine day after day: we don’t put on our machine everyday because I don’t get enough waste to crush on daily basis, except in a few cases when I have contract to work for some companies that bring large volumes of plastic for us to crush.
“Another challenge for some people could be the sourcing and the market; that raw material you are picking, who takes it up from you? How and where do you get the raw materials to the people that need it? Like some of us do, we go outside Lagos to source for some of these materials, where they are gotten cheaper than anywhere else. But if you don’t know where to go and get some of these wastes it becomes a challenge for you”.

Taiwo says, “Well, it is like in other businesses: there are lots of challenges, but with the passion you have for the business, you can overcome those challenges. If you are talking about those challenges, you are basically talking about funding as the number one and major challenge - to fund waste recycling business is very expensive. The other major challenge is the work space - we don't experience that. This is because we acquired an acre of land from the Ogun State Government, basically for this waste recycling and we have been given the C of O. It is just for us to set up the factory. We also have one at Industrial Development Centre, Ikorodu, where the Federal Government gave us a work space - here, we have built our factory.

“Very soon, we are going into research work to go into other areas. We have been able to pencil down about 1,000 products that small business owners can stay at the balcony of their houses and do. In actual fact, I am a woman who is SME friendly - if you are not, you can't be my friend. It is my belief that this nation must be fully industrialized. If I must say, the business is not capital intensive, it just depends on the level you want to take your recycling business to. Like mine for instance, I have invested close to N25 million - building of factory, getting equipment through a leasing company from a subsidiary of Bank of Industry; we are also looking at Zenith Bank giving us the working capital”.

How lucrative is plastic recycling?

Osuagwu says, “The profitability depends on how you run it: take for instance you got supply of waste plastic bottles to buy at N30 per kilo whereas in the open market it is bought for N20 per kilo, and this was as a result of your not knowing where and how to buy, you are already running at a loss. So, it goes back to what I have been saying that you must know what works in this business before you put your money down.

“Also the way I use generator to power my machines is very strategic but if you don’t know how, you will run at a loss”.
Taiwo says, “It is very lucrative; looking at it from a world-wide perspective. But people are running away from it now because the business is capital intensive. Of utmost note, the business is SME friendly, but most of these banks are not ready to assist the SMEs. So, to me, it is a very lucrative business”.

Advice To Any Interested Entrepreneurs
Osuagwu says, “Before you go into any business, not just waste recycling business, you must be trained; either formally or informally, and be convinced that you want to do the business and succeed. It is not a try-your-luck kind of business. You must be thorough about what you want to do before you dive in so that you don’t lose all your resources after you have started the business.
“Finally, I don’t like saying this, but most people believe that finance is a challenge, but I say this with a very loud voice; ‘Finance cannot be a challenge to any serious minded individual who wants to succeed in any business’”.

“Your mindset to do the business and succeed is very important, you keep studying to be ahead of your competitors in terms of what is new in the industry; till date I still make trips outside the country to do research and study new ways of recycling or new discoveries on what can be recycled”.

Taiwo says, “My first advice is that they must be very truthful and honest in their recycling business. Then, they must go for entrepreneurship training and most importantly, they must have passion - this is because without passion, they can not succeed”.

Do you buy on credit or pay on delivery?

Osuagwu says, “Well, if you have very good customer relations with your suppliers, you could get them to supply you and after an agreed period of time you then payback. You could also decide that your supply must be paid for on delivery, payments are made per kilo”.

Does it require any form of registration?
Taiwo says, “Not really; if you are set, you can start, but the only thing is that you must come for training - entrepreneurship training as I have earlier said. You must know the nitty gritty of the business before going into it. So, we do training for people and also contract manufacturing. By this, I mean there are some who can't go into waste recycling business - they just come to us to produce for them to go and sell”.