Investment needed to create sustainable recycling industry

Investment needed to create sustainable recycling industry

Long-term sustainable recycling in South Africa requires long-term sustainable investment in the country’s recycling capacity. This means investing in recycling facilities such as paper and plastic mills that create a market for recyclable materials.

Mpact Recycling managing director, John Hunt says, “this will allow the approximately 100,000 people who rely on constant volumes of recycled material to earn a sustainable living, from the factory employees to the entrepreneurs and small business owners.”

“In addition, recycling decreases the pressure on South Africa’s strained landfill sites and helps to reduce municipal expenditure and the need for major capital investment.”

Last year 1.4 million tonnes of recyclable paper and paper packaging was diverted from landfill. While South Africa’s annual paper recovery rate of 68.4% positions the country well ahead of the global recovery rate of 58%, the momentum of the industry can only be maintained if the demand for recyclables continues to grow.

“There is a significant correlation between how much can be recycled and the type of investment that is made. Mechanical paper and plastic recycling is only economically viable in large volumes, which requires large capital investments. A recent example is Mpact’s liquid packaging recycling plant, which was launched in Springs in July 2017,” continues.

The paper recycling industry has enjoyed substantial investment in recent years with several new entrants to the market. This has resulted in increased demand for material.

Another boost for the industry is a robust global demand for recyclables. This kind of pull for materials creates markets for everyone collecting in the industry, from the large operators to the kerbside collectors.

The plastics recycling industry has witnessed a massive demand for PET at healthy prices. There is probably a greater demand for plastic than material available, a scenario that drives the collection structure and allows people to earn a living.

There has also been substantial investment in new capacity in the polyethylene terephthalate (PET) recycling industry over the past 30 years. This includes Mpact’s R350 million PET recycling facility in Wadeville, which produces recycled PET (rPET) plastic for food grade packaging. The operation has increased the amount of PET bottles collected for recycling by 29,000 tonnes a year since its launch in May 2016.

“The opposite is true when demand for material disappears such as another plastic, low density polyethylene, which is used to make irrigation pipes and plastic bags, amongst others. When a large factory in Bronkhorstspruit closed recently demand disappeared and prices crashed. People making a living from collecting the material stopped because it was no longer viable.

“And there’s the rub: if there is not continuous investment sustainable industrial manufacturing capacity in South Africa, there will be a limit as to how much people are able to recycle. No-one will want to wake up in the morning and collect material that cannot be sold.

“To sustain the market, there needs to be someone who’s going to buy the material – here in South Africa. Some argue that there is a global market for many of the recyclable materials. While this may be true, it is a volatile market. Consider the recent decision by China to stop buying mixed-grade material. When the largest buyer in the world stops buying, the impact on price, volume and movement is massive.” Adds Hunt.

In addition, exporting material means operators need to be able to fill 250-tonne containers with recyclables. The collection, buying, storing and packing of the material requires a reasonable sized infrastructure as well as a system in place to buy from smaller dealers, who ultimately buy from the collectors.

“For the entire chain of people involved in the recycling industry to survive, mills need to operate 24/7 and raw materials need to be purchased every day. This allows enterprising people to get up in the morning, collect material and get paid for it. And do the same thing the next day,” concludes Hunt.