Start a Plastic Recycling Company

Plastic recycling is the process of recovering scrap or waste plastic and reprocessing it into either a raw material or product that can be resold.

Plastic recycling is one of the few recycling businesses that small businesses can get into where they can operate across the entire recycling cycle (collect, processing and manufacturing into new products).

How is plastic recycled

The plastic is collected, sorted and cleaned.

The plastic is then shredded into flakes and sometimes melted and extruded into pellets to produce a raw material to make other products.

Now the manufacturing of a product is not part of traditional recycling. But in plastic recycling, you can take the processed plastic (shredded or pellets) and manufacture products that you can resell.

Business Model

For those of you unfamiliar with traditional recycling whether metal, glass, paper or plastic, is that the people collecting or buying it rarely ever process it further than crushing or baling it and then reselling it.

If you’ve been to an industrial area you might have seen a recycling company operating, you will often see people (often homeless) with trolleys coming and going. Now let’s say I am in the paper manufacturing business, my factory uses only recycled paper. I have no desire to deal with hundreds of people coming in every day, weighing their paper and then paying them. For that, I need premises, staff, scales and cash on hand. Remember I am in the paper business not the recycling business so I will buy my paper from a recycler.

What will happen is that the recycler will buy the paper by the kilo (let’s say 15c) and I will buy it from the recycler (let’s say for 45c). That 30c is the recyclers profit. That is the “traditional” model in SA “recyclers” are more collection points. If you’ve ever been inside one of those recycling companies you will see the equipment, it’s just for weighing and packaging the scrap. Remember the traditional model as I will get back to it later on.

I mentioned at the beginning that in this business it is possible as a small business to operate across the plastic recycling loop. But how does that look like? And is it really the best model for small businesses?

What does 3-in1 plastic recycling business look like

No discussion about small business plastic recycling is complete without mentioning the fantastic work that Dave Hakkens and his team at Precious Plastic have done. Let’s have a closer look:

Plastic Recycling Machines | © Precious Plastic

From left to right, you have a 1. shredder machine,  2. extrusion machine, 3. injection machine, 4. compression machine.

Now, in reality, you only need two of the above machines to start a 3-in-1 (collect, process, manufacture) business. You need number 1 and either 2, 3 or 4.

Let me explain to you what each machine does and you will see for yourself.

Once you have collected, sorted and cleaned (any labels or other dirt) the plastic is put into
Machine 1: Shredder and shredded into flakes. Here is how the process looks:

Shredder Machine | ©Precious Plastic

Here is flakes that have been sorted:

Shredded Recycled Plastic Flakes | ©Precious Plastic

Now once you have the plastic flakes you can put it into any machine 2, 3 or 4 to create a product.

Machine 2: Extrusion machine

Extrusion Machine | ©Precious Plastics

This machine takes the plastic flakes into the hopper (the silver thing that looks like a chimney) and feeds through the barrel this is where the plastic gets heated (it uses heating elements) and compressed and is then “pooped out” (Dave’s words) through a nozzle. This creates a thin line of plastic that looks like icing coming out of a piping bag. You can either break it off into pieces to create plastic pellets or granules (which can then be resold) or you can roll it into a spool which can be sold as 3D printer filament or used for further processing. This nozzle can be as thin or thick as you choose, you can also adjust the speed of how fast it churns. This machine can run continuously for as long as you have flakes to feed it.

Machine 3:  Injection machine

Injection Machine | ©Precious Plastic

This machine heats and melts the plastic flakes created using machine 1 and “injects” it into a mould. This and machine 4 are most commonly used to manufacture end products while machine 2 above creates more raw materials that need to be further processed into products. This machine is quick and is well suited for creating small objects repeatedly. Those of you familiar with injection moulding will instantly know what is going on here. This machine can be used to create various plastic objects using moulds. Now with this machine, it is important to make a product that will sell and that will sell wholesale like combs, toys, cellphone cases or something like that. This machine is more for smaller objects while the next machine is for larger objects.

Machine 4: Compression machine

Compression Machine | ©Precious Plastic

The compression machine consists of an electric oven to heat the plastic and a car jack to apply pressure to the mould. The process is slower than the other machines but it allows for bigger objects to be made. This machine can be used to make larger items such as bowls or plastic sheets (raw material) which can be sold to be further processed or even cutting boards. The plastic (flakes or pellets/granules) goes in a mould, the mould goes in the oven which is then slowly heated and pressed until the final shape comes out.

These machines are designed to be modular with widely available parts so they can easily be upgraded, repaired or customised. And they can all fit into a 9-meter container.

Plastic Recycling Container | © Precious Plastic

What is the best small business model

Now I have gone over the Precious Plastic model (four machines in a shipping container) but is this the best way for a small business owner wanting to get into this business? As a collector should you be processing? And as a processor should you be manufacturing? And as a manufacturer should you even be processing?

Let me be blunt, I don’t like the 3-in-1 business model and I’ll tell you why. To me, it is a bit of a novelty and might not be sustainable if you two or three people in this business, yes you might be able to make it work as one person small scale. If you are two or three friends or partners working together then each one is better off focussing on one stage independently. You have to remember that I look at things from a business perspective our main objective is to earn a living and feed our family not to show people that we are recycling.

Here is a model based on three people working together

Person 1: Collection (this person may need a bailing machine depending on volumes)
You need a lot of plastic, you can’t just park a shipping container and hope people are going to bring you plastic, they will but it will be one bag now and then, you need to get yourself out there put your collection bins in schools, in malls etc. And then you need space for all that plastic and to sort it and clean it. This is a full-time job for one person and a shipping container might be too small for this person. (Now you see why the traditional recycling companies operate the way they do). This person also needs to be familiar with various plastic types merely by looking at the item:

Plastic identification codes | ©Wikipedia

Person 2: Processing (Machine 1: Shredder)
Once person 1 has collected, cleaned and sorted all the plastic, the plastic is then sold to person 2, the plastic is then shredded into flakes and packaged and sold to person 3. This person also needs his own space to store the plastic that comes in but not as much as person 1 as the plastic will be ground down into flakes that can be easily packaged, stored and transported.

Person 3: Manufacturing (Machine 2, 3, 4)
So person 2 delivers the packaged flakes to person 3, the manufacturer. Now maybe you rolling your eyes thinking “too many middlemen”, I don’t agree. Manufacturing is a different discipline than collection or processing (yes, he can do the processing he just needs one machine). But Person 1 and Person 2 success depends on Person 3. Person 3 needs to spend as much time as possible to find a market for their products otherwise they all go hungry, yes Person 2 can sell his raw material somewhere else but he will probably won’t sell as much or get much less for his product and it won’t be sustainable. Besides marketing person 3 also needs to focus on product development, and perfecting the manufacturing process. He also needs to produce moulds for every product.

Most importantly this separate model can be easily be scaled; person 1 can branch out his collection area by hiring another person to pick up, Person 2 can add more shredders and Person 3 can diversify his product range. Shipping containers are not easy to scale you will get buried in plastic waste and everyone will be falling over each other as not a lot of plastic waste can fit into a 9m container when you need space for machines as well, a 9x3m container gives each person an average space of 3x3m. Not to mention the cost of the shipping container.

I would also look at producing more expensive and useful products such as “recycled plastic lumber” used to create benches or playground equipment (the machine can be modified to create longer beams). Check here three grand for this from Makro:

Recycled Plastic Bench | © Makro

Or this basic bench from Furniture Warehouse:

Recycled Plastic Bench | © Furniture Warehouse

Looking at these benches and weight – benches start at 30 to over 100kg – (amount of plastic) the bill of materials to produce them is a small fraction of the retail cost (far cheaper than wood). With most of the cost being the labour in the manufacturing process.

Some claim that “plastic lumber” will last over 400 years and the bench above has a 25-year limited warranty, I assume the limited means damage like from fire but even then plastic lumber has a higher flash point than wood.

This separate model to me is a better option, it does not have to be exactly so, because person 1 can do the shredding and person 2 can create raw materials (filament, granules/pellets which he can sell to other people besides person 3) but I don’t think Person 3 the manufacturer should involve himself earlier as he has his own unique problems. Don’t get me wrong the 3-in-1 container is nice exhibition and educational to show off the recycling process. But is it profitable? Is it sustainable?

To me the 3-in-1 is more a European solution, it is more pretentious than profitable as it does not scale very well. It might work in other African countries where the cost of living is lower. This is South Africa the cost of doing business and cost of living is high,  we need to adapt it to suit our needs, we need functional solutions, not cosmetics.

Anyway, I am writing a novel now, but let me finish off by saying that I have covered a nice primer in plastic recycling and manufacturing. Even larger, industrial machines use an identical process than what I have covered here. I also want to say that if you are manufacturing you need to make products that have a large market such as plastic lumber. Other options include:

PET bottle recycling (polyethylene terephthalate)
The most common local example of the PET bottle is the 2 liter carbonated drinks or bottled water (this type of plastic has a 1 printed at the bottom, see identification code below).

This material can be used to create carpets and plastic food containers.  To me, the most potential here is to create high-grade fibers. One of the most popular being recycled polyester. Yes, the same bottle that you drink spring water out of can be recycled and spun into thread and woven into fabric that can be used to manufacture clothing.

Turning bottles into clothing | ©Reactions

Chemically they are identical:

Chemical composition | ©Reactions

Another thing I want to mention but I will look at another day is waste plastic pyrolysis to fuel oil, like tyres plastic can be used to create fuel using pyrolysis (plastic to oil) processing.

Main image credit: International Committee of the Red Cross

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