Plastic Recycling Companies: How to start your own
Plastic recycling companies are in high demand, with a growing global market for plastic and consumer numbers we are facing recycling problems. Plastic recycling is the process of recovering scrap or waste plastic and reprocessing it into either 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?
Collection
The plastic is collected, sorted and cleaned.
Processing
The plastic is then shredded into flakes and sometimes melted and extruded into pellets to produce a raw material to make other products.
Manufacturing
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 companies 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:
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:
Here are flakes that have been sorted:
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
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
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, cell phone cases or something like that. This machine is more for smaller objects while the next machine is for larger objects.
Machine 4: Compression machine
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. These plastic recycling companies that are tun-key and ready to start making money.
Article by Ken of Khoi Capital
In the next article, we will look at the Recycling Business Model.
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