US investors go after recyclables

BY CAMILO THAME Business Co-ordinator

Friday, September 21, 2012

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SALE of Jamaica's recyclable materials could be worth well past US$10 million ($890 million) a year. But the low level of used plastics, old corrugated cardboard and newspapers exported last year, totalling just US$2.4 million, suggests there is a gaping hole waiting to be filled.

This relatively large, untapped potential has interested US investors, who have set up Jamaica Recycles to go after a sizable chunk of the market starting next month.

"We estimate anywhere between 6,000 to 10,000 tonnes of recyclables are generated each month in the greater Kingston area," said Dennis Soriano, president of the start-up.

Less than 20 per cent of the recyclable paper materials are being collected now, while 90 to 95 per cent of PET (clear plastic) bottles are not being collected, he estimates.

Jamaica Recycles' new plant on Spanish Town Road, near to the Kingston port, has the capacity to collect, compress and pack 5,000 tonnes a month.

The company figures its high-density baling equipment, which will improve the average earnings from a 40-foot shipping container by up to 50 per cent, as well as, the price it can pay for the waste materials, will set it apart from any competition.

"The cost of a container is the same despite the weight," said Soriano. The baler can compress 20 to 22 tonnes of the material to fit into a single container, compared to 14 tonnes if it's just squeezed in.

"It means we can pass along a good part of the higher price to customers that bring the material."

Presently, the new recycle company's main competition will come from Nulife Recycling, which focuses on newspaper material; and Jamaica Environment Trust (JET), which has a 10-year-old recycling depot for PET and HDPE (cloudy or coloured plastic typically used for bleach and detergents) bottles and works with Pepsi Jamaica.

JET doesn't pay for the used bottles, but One Jamaica Recycling, an operation that exports cardboard and said it pays contractors $7 per pound for plastic.

Prices are currently low, said Soriano. "Old corrugated cardboard is now at around US$100 a tonne."

But newspaper typically carries a higher price, while plastics sell on the secondary commodity market for as much as four to five times per tonne.

Soriano believes that, once it has established a consistent market, his company will pay the most competitive prices for materials.

Jamaica Recycles is initially focusing on the greater Kingston area, and will have invested US$400,000, all told, by the time it finishes setting up in the capital.

It is currently making the rounds to businesses and other organisations — such as a large high school in the Corporate Area that churns out 7,500 used plastic bottles a week — to make arrangements for a first point of collection.

But it also plans to go to the Riverton landfill and operate a depot at its Three Miles location for walk-ins.

"If successful, we hope to go to the north coast, in Montego Bay," said Soriano.

All recyclables are packed in containers for sale to the secondary commodities market overseas.

Jamaica Recycles is focusing on shipping to the Pacific Rim, namely China, India, Indonesia, and Japan.

"China has the most modern paper mills and buys a lot of newspaper and corrugated cardboard," said Soriano.




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