Investment needed to create sustainable recycling industry

Paper recycling

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

According to John Hunt, managing director at Mpact Recycling, this will allow the approximately 100,000 people – from factory employees, informal collectors and small business owners who rely on constant volumes of recycled material – to earn a living. “At the same time, recycling decreases pressure on South Africa’s strained landfill sites and helps to reduce municipal expenditure and the need for major capital investment,” he says.

Last year, 1.4 million tonnes of recyclable paper and paper packaging was diverted from landfill, and while South Africa’s annual paper recovery rate of 68.4% puts it well ahead of the global rate of 58%, the momentum can only be maintained if 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 investment. A recent example is Mpact’s liquid packaging recycling plant launched in Springs in July,” he says.

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, from large operators to kerbside collectors.

The plastics recycling industry has witnessed massive demand for polyethylene terephthalate (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.

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

“The opposite is true when demand for material disappears,” says Hunt who sites low density polyethylene utilised for irrigation pipes and plastic bags as an example. When a large factory recently closed, demand disappeared and prices crashed. People making a living from collecting this material stopped because it was no longer viable.

And there’s the rub: without continuous investment in sustainable industrial manufacturing capacity, there will be a limit to how much people are able to recycle and no-one will want to 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 may argue that there is a global market for many of the recyclable materials we have available, and 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,” says Hunt.

In addition, exporting material means operators need to be able to fill 25-tonne containers. Collecting, buying, storing and packing requires infrastructure of a reasonable size and systems to buy from smaller dealers who ultimately buy from 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,” he concludes.