From Waste to Wealth – How to build a profitable business out of Africa’s huge waste market

culled from:smallstarter.com

According to the World Bank, Africa generates nearly 70 million tonnes of waste every year. As the income and spending power of the average African continues to rise, more goods will be consumed leading to even more waste. The volume of waste generated on our continent is expected to double in the coming years as Africa’s economy becomes more prosperous and the size and population of its cities explode. A few smart entrepreneurs are turning the huge waste we produce every day into money-making products. It’s such a brilliant idea that profits your pockets and the environment at the same time! Let’s explore the interesting world of waste and how you can turn this ignored and overlooked commodity into wealth…


What exactly is waste?
waste to wealth 2Waste is anything that people do not value anymore and would love to throw away. Waste is the empty box that contained the new television set you just got or the paper bag you used to carry the stuff you bought at the supermarket. These things are now waste because you have no further need for them and would like to dispose them. However, as you will soon find out in this article, waste isn’t entirely useless because there are people and businesses who’ll pay to have them.



Waste will remain a part of our lives for as long as we exist. While some people may produce more waste than others, everybody produces it every day as leftover food, dirty water or garbage.



We shall only be considering the solid forms of waste in this article because they appear to be more reusable than liquid waste. The most common types of solid waste in Africa are: domestic waste (garbage and rubbish produced by individuals and households), commercial waste (solid waste coming from business places such as stores, markets, office buildings, restaurants, shops, bars, etc.), and industrial waste (produced by factories and processing plants. Other forms of waste are agricultural waste, hazardous waste, health care waste and electronic waste. (photo credit: loyaltylab.com)



Why is the volume of waste generated in Africa increasing?
According to recent estimates, the average African individual generates half a kilogram of waste every day while businesses can produce up to two kilograms of waste every single day! However, the amount of waste generated on the continent is estimated to grow very fast over the coming years. The reasons for this are as follows:



1. A fast growing population –
Africa pictureSince waste is a product of human existence, it follows that the more humans we have on the continent, the more waste that is produced. Africa has one of the fastest growing populations in the world with an annual population growth rate of nearly 3 per cent over the last 20 years. With the world’s highest birth rate, its current population of nearly one billion people is predicted to more than double in 40 years to 2.3 billion, accounting for nearly half of projected global growth over that period. For this growth to be sustainable in a world that has become obsessed with environmental friendliness, intensive waste management is bound to play a huge role in Africa’s future.



2. Rapid economic development and urbanization –
More waste is generated in cities and towns than in rural villages. Recent studies show that the higher the rate of economic development and urbanization, the greater the volume of waste produced. Africa is home to some of the fastest growing economies in the world and the number of people moving to the cities is growing at a staggering rate. It is estimated that up to 500 million Africans will live in the continent’s cities by 2030.



With its current rate of urbanization at 38 percent, Africa is now more urbanized than India (30 percent) and nearly as urbanized as China (45 percent). Currently, 52 African cities have a population of more than one million people. By 2016, the number of cities with more than one million people will reach 65. This outcome will definitely lead to an explosion in the volume of waste generated on the continent.



3. Rising levels of disposable income -
waste to wealth 4As the continent’s economy continues to prosper and more Africans find better-paying jobs in the cities, most people will earn more money with a little extra to spend. They will spend on, and consume, more goods and services which lead to higher volumes of waste. This is exactly the same principle that led to the explosion of waste produced in China. Due to Chinese consumption, the country currently produces more than 70 percent of the 270 million tonnes of waste generated in the whole of East Asia! As Africa’s consumption expands, so will the size of the waste we produce.



Success stories - Some African entrepreneurs who make money from waste
While it may not be one of the most popular business ideas out there, a few smart Africans are already building wealth from waste and creating jobs for hundreds of Africans. The success of these inspiring entrepreneurs proves that there can be profitable business ideas in very unlikely and niche parts of African society.



The video below is a three-minute documentary about a local Ghanaian company that partnered a waste management company in the Netherlands to build wealth from the huge volumes of plastic waste generated in Ghana.



Cyclus - located in Elmina, a coastal town south of Accra, the country’s capital - collects, processes and recycles waste from households, hotels, restaurants and industries. The end product is supplied to different manufacturers who use it to make jeans, carpets, tennis balls and several other stuff that find their way back to our markets as new products.





 Short Documentary - How a local Ghanaian business is building wealth from Accra's huge waste.



waste to wealth 5Another inspiring and successful African waste entrepreneur is Kenya’s Lorna Rutto who left a comfortable banking job to start a company that manufactures fencing posts from recycled plastic waste. Today, her business employs more than 300 Kenyans (directly and indirectly) and her plastic posts have become a favourite alternative to timber. Her innovative idea of converting plastic waste to a useful material is estimated to have saved nearly 250 hectares of Kenya’s forests which would have been destroyed to produce timber.



As you would see from her short video documentary below, Lorna used the huge volumes of plastic waste generated from her environment to build a viable and successful business. She has won several local and international awards for this amazing initiative and seeks to replicate her success in other parts of the continent. You should read her full story here.





 Short Documentary - How Lorna Rutto became East Africa's most innovative waste management entrepreneur

The opportunities – How smart Africans can start making money from waste
There are a number of opportunities entrepreneurs can exploit in Africa’s large and growing waste market. We shall at all the interesting but under-tapped segments of this market and how you can start taking advantage of them…



#1 - Waste collection –

waste to wealth 6Many individuals, households and businesses are very willing to pay waste and refuse collectors to get rid of their full (and often overflowing) garbage bins and cans. Most collectors charge a flat monthly fee for the service or charge customers every time a collection is made. The common way of collecting solid waste from neighbourhoods or business premises is to use a waste collection vehicle like a garbage truck (or dustbin lorry).



waste to wealth 7Unlike in the past when most people found it easy and convenient to dump their garbage in authorized dumpsites which end up blocking drains and causing environmental hazards, some African countries are becoming more environmentally responsible. Due to stronger health, hygiene and sanitation laws in many African cities, the illegal dumping of refuse has become much harder for most people. More households are now willing to pay local waste collectors to get rid of their garbage. (photo credit: jalopnik.com; outsapop.com)



To start a waste collection service would most likely require registration with the local authorities and an investment in a durable second-hand (used) vehicle for collecting the waste. The key to success in the waste collection business is to get a lot of clients to sign up. Some easy targets include: Households, offices, bars, restaurants, hotels, workshops, construction sites, industries/factories, shops and markets. The waste collected can be dumped at approved landfills or waste processing facilities.



#2 - Inorganic Waste processing –

Waste that cannot decay and be reused by nature is considered inorganic. This includes plastics, rubber, glass, metal and textiles. Most of the domestic and commercial waste collected by garbage trucks is sent to a land fill (where they are buried in the ground) or to a waste processing facility. At these facilities, all the waste collected is sorted, cleaned, processed and recycled into some form of final or semi-final end product.

The most popular recyclable materials that are highly sought after by manufacturers and industrial processors include:



waste to wealth 8Paper – This usually makes up a large portion of the waste collected. Waste paper (like newspapers, magazines, cardboard and old books) can be used to make paper bags, cardboard and carton boxes for new electronic equipment. With many African cities banning the use of plastic and nylon bags, recycled paper is becoming the top choice for producing biodegradable paper bags used for shopping. Potential buyers of processed waste paper are: pulp and paper mill, market vendors, paper dealers and middlemen.


Plastic – This is arguably one of the most common forms of waste in African cities.  Waste plastic such as plastic bottles, used plastic tins and containers and shopping bags can be melted and formed into an amazing range of new and reusable products. Potential buyers of processed plastic include: plastic product manufacturers, industries, and middlemen.


Metal - Scrap metal, auto wrecks, aluminum (beverage) cans, used copper wires and used metal sheets can be melted to produce new metal products. Potential buyers of scrap metal include aluminum and metal Industries, scrap dealers and foundries.


Rubber – Used tyres, old rubber shoes and other waste material made of rubber can be sold to home industries that make shoes, sandals, mats and carpets. Tyre making factories (like Dunlop), and industries that use boilers (like cement makers) are also top buyers of rubber waste.


Textiles - Old clothes can be recycled and used for the production of doormats, cushions, mattresses, children’s underwear, homemade caps and duster coats, stuffing dolls and several other products. Textiles are also used in the production of high quality paper.


While sorting and cleaning collected waste may require significant labour, processing the waste materials will require an investment in machines and processing equipment such as hoppers, extruders, aggregators and rollers. Most of these machines can be fabricated locally or imported from China or India.



waste to wealth 9
Typical example of an integrated plastic waste recycling unit (photo credit: made-in-china.com)



#3 - Organic waste processing (Composting)

Most of the waste collected from households, restaurants, bars and hotels are organic and biodegradable (can decay) such as kitchen waste and leftover food. Other forms of organic waste include: yard waste, vegetable market waste, grass, plants and animal waste.



waste to wealth 10Composting is the natural process of converting organic waste into a stable product (compost) under controlled conditions. Compost is a natural product that is rich in several essentials nutrients which makes it a great and widely popular organic fertilizer. It contains huge amounts of humus (the stuff that remains when organic things fully decay) which is great for growing plants. Compost is considered a much cheaper alternative to common but expensive inorganic fertilizer.



Compost is also preferred by vegetable and flower farmers because it allows the soil to breathe (more air) and hold more water. This makes it a favourite in hot and humid climates (like Africa’s) where the rate of decay can be really fast.



The composting process takes between 21-28 days to complete during which a heap of organic waste is turned and wet with water every 5 days. As soon as the compost is mature, it can be packaged and sold as organic fertilizer. Most people in the compost business often use worms, heat and moisture regulators to speed up the process. For a step-by-step guide on making compost, you should use this very detailed resource



Note: Although there is a huge demand for compost manure, it only makes business sense that you study the needs of your local market before you start thinking of producing compost in commercial quantities.



Putting it all together…
The number of entrepreneurs and businesses involved in waste management will increase quite rapidly in the future. As resources like wood become scarcer and climate change remains a strong global challenge, Africans will need to reduce waste and recycle more. Waste is everywhere; it only requires a bit of creativity and hardwork to create wealth out of it.



If you believe this type of business will work for you, start working on a business plan and take action as soon as possible. You could also choose from many more amazing business ideas in the Browse ideas section of this website.


 
We would love to hear from you about your successes, challenges, advice and questions. Do not forget to leave a comment in the section below and share this opportunity with your friends.



To your financial success!