REQUIREMENTS TO SET UP AN ENTREPRENEUR IN RECYCLING

INTRODUCTION

For any Entrepreneur to venture into recycling, he has to do the following:
• Analyse the potential market in terms of volumes available and geographic spread
• Consider the operational requirements
• Find a suitable site and equipment
• Do a cost analysis / business case study
If the above is done properly then the chances of success are far greater.

VARIOUS FACTORS TO CONSIDER WHEN SETTING UP A RECYCLING STATION
RECYCLING VOLUMES
The geographical location of a recycling station is always a consideration as transport is required to collect the recyclables and to assist the collectors in selling their products.
A collector generally does not have the means and capacity to move his collected recyclables more than 2km, therefore the Entrepreneur will have to buy the recyclables and transport them to his site for processing.

Requirements:
One flat bed 1 ton capacity vehicle with a 1 ton capacity trailer, both equipped with a cage to enable volume transportation of recyclables.
Estimated cost: approx R200 000

A scale is required (to be operating on the vehicle) so that the collected recyclables can be weighed and payment made to the collector.  The collector must be paid cash to supplement his daily living costs (food)
Estimated cost: approx R600

SITE / OPERATING REQUIREMENTS
The site must be geographically and correctly situated to ensure that recyclables can be optimally collected, processed and transported to be sold to a large volume recycler.
Requirements:
Land – approx 1500 square meters
Securely fenced approx 160 meter x R100 / month = R16 000
Shed approx 220 square meters x R1 500 = R330 000
Electrical supply
Sewage / toilet
Office approx 20 square meters x R2500 = R 50 000
Scale with 2 tons capacity = R50 000
Baler (static) = R105 000
IT equipment (PCs etc) = R15 000
Personnel x 2 = R7 000 p/m
Admin costs (telephone etc) = R1 000 p/m
NOTE: If the site is within a 120km radius of a Collect-a-Can branch only the vehicle and scale will be required as the recyclables can be transported directly to the depot for processing.

OPERATIONAL COST ANALYSIS
To ensure cost effective operation, the following must be taken into consideration:
Cost of site development
Cost of land / rental
Cost of fencing
Cost of staff (1 x assistant on truck and 1 x office assistant)
Municipal rates and taxes
Admin cost (telephone)
Insurance
Recovery cost - diesel / maintenance R3.50 per km x 2500km per month = R8 750 p/m
Income to be generated from collectables (cans only): 2 ton of cans per day = R1 600 per day x 20 days per month = R32 000 per month

CONCLUSION
The capex required to set up such a recycling centre must be made available, preferably at no cost to the entrepreneur or as a long term loan, to enable him to operate economically.

It is very important that the vehicle must be insured and replaced after a maximum period of 5 years.

Alternatively, the entrepreneur can have only the vehicle and scale and deliver the recyclables directly to a branch to save on the infrastructure cost.