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Plastics Recycling Survey

Plastics Recycling Survey

Introduction

Eco-friendly – Environment - Greener options – Reduced Carbon footprint...  Companies are under continuous pressure to improve the triple bottom line.  One method of measuring the environmental impact of the plastics industry, and in particular the plastics packaging industry is to track the recycling rate of its products.  Over the last few decades, Plastics|SA measured the recycling rate of plastics in South Africa.  The last comprehensive and complete survey was done for 2009.  Annual updates are done to measure the trends in recycling.  This report is for the recycling rates of 2012. 

Production data for the period has been collected from 59 recyclers representing 54% of the tonnages recorded in 2011.  The recyclers ranged from very large to medium to small with regards annual tonnages.  The 2012 figures in this report were arrived at by:

    -using the actual data from the recyclers who took part in the survey;
  • -calculating an average growth rate for these recyclers; and
  • -extrapolating the growth for the rest of the recyclers. 

The PETCO published figure for 2012 has been used for PET.

It is estimated that there were more than 210 recyclers active in 2012.  Nineteen companies recorded in 2011 were no longer operational.  Thirty two recyclers entered the recycling industry just before, or during 2012, the bulk of which are waste management companies and collectors that have vertically integrated with granulators and pelletising extruders, with or without wash lines.

Tonnages recycled and recovered

2009

2010

2011

2012

Total tons converted

1 280 000

1 312 700

1 300 000

1 370 000

Total tons recycled

228 057

241 853

245 696

268 548

Recycling rate

17.8%

18.4%

18.9%

19.6%

Waste exported

5 575

9 054

9 758

14 744

Total tons diverted from landfill

233 632

250 907

255 454

283292

Recovery rate

18.3%

19.1%

19.7%

20.7%

Table 1:  Plastics Recycling and Recovery rates for 2009 to 2012
There was a 9.3% increase in the tonnages recycled to a total of 268 548 tons in 2012.  The

consumption of virgin polymer grew 5.4% in the same period to a total of 1370 ktons.  It was noted that the export of waste plastics increased to 14 744 tons during the same period and if this is also taken into account, the total tonnages of plastics waste diverted from landfill equals 20.7% of all plastics manufactured in 2012.  The local recycling rate was 19.6%.

Plastics Recycling Survey
Figure 1: Tonnages recovered and recycled in South Africa from 2009 to 2012


Packaging

Plastics packaging is contributing to visible litter and the plastics industry participated with other packaging role players in submitting the Paper and Packaging Industry Waste Management Plan to the Department of Environmental Affairs in 2011.  In 2012, a total of 204 400 tons of packaging was recycled.  This is an increase of 8.5% from 2011.  Exports of plastics packaging waste increased more than 51% from 8 294 tons in 2011 to 12 532 tons in 2012.  Therefore, plastics packaging waste diverted from landfill totalled 216 932 tons in 2012.

The plastics industry is slightly ahead of the estimated tonnages as well as the recovery rate, as per the Industry Waste Management Plan.  The total plastics packaging in the waste stream for 2012 was 647 244 tons and the packaging recovery rate is 33.5% versus the 31.9% in the Waste Plan. 

Plastics packaging includes products made from PE-LD, PE-LLD, PE-HD, PP, PET and PS with small volumes made from rigid and flexible PVC, ABS and E/VAL.  Some bottle closures have inserts of E/VAL which is recycled.

The small growth in PS is very conservative and not a true reflection of the activities in the industry.  Take away food containers, punnets and bread tags are recycled but not through the conventional recyclers (those who took part in this survey).  These packaging materials are collected and sold directly to the end-users for extruding or injection moulding into end products.  The manufacturing of building panels and the various “re-use” projects recover increasing amounts of polystyrene waste from the waste stream.  These value chains need to be surveyed and included in future for more accurate recycling rates of PS and PS-E.

According to BMI Research

Plastics Recycling Survey
Figure 2: Paper and packaging Industry Waste Management Plan recovery rates

Note:      Recovery refers to the total tonnages diverted from landfill and includes exported packaging waste versus
Recycling that only refers to material that is mechanically recycled locally.

For the first time, there is a negative growth rate in the packaging not recycled: the amount of packaging sent to landfill in 2012 was 0.6% less than in 2011.  With Separation at Source projects developing in the major metropolitan areas, this reduction in packaging waste to landfill can be maintained only where domestic solid waste can be accessed. 

Material

2010

2011

2012

Packaging

Non-Packaging

Packaging

Non-Packaging

Packaging

Non-Packaging

PE-LD/LLD

90 149

11 305

89 493

6 359

93 464

5 507

PET

39 855

46 276

50 280

PE-HD

27 907

11 825

27 108

11 871

36316

9 633

PP

20 869

17 744

21 549

18 734

21 716

25 365

PVC

798

15 032

587

16 117

631

16 181

PS & PS-E

2 038

1 218

1 636

1 578

1 621

1 774

ABS

376

805

550

605

311

644

Other

40

1 891

1 267

1 967

60

5 045

Waste tonnages exported

7 696

1 358

8 294

1 464

12 532

2 212

Total tons recovered

189 728

61 178

196 760

58 695

216932

66 360

Total plastics packaging

605 000

629 570

647 244

Packaging recovery rate

30.1%

29.9%

33.5%


Table 2:          Packaging and non-packaging tonnages recovered inSouth Africa from 2010 to 2012

Polymers recycled

Low density polyethylene

Recycling tonnages and recycling rates for PE-LD
Figure 3: Recycling tonnages and recycling rates
for PE-LD
Market applications for PE-LD recyclate
Figure 4: Market applications for PE-LD
recyclate

The total tonnage recycled is made up of a number of different materials, i.e. different polymer groups.  The largest group is PE-LD and PE-LLD.  They are grouped together for recycling statistics as only a handful of recyclers separate them prior to recycling and then only where it is applicable to factory waste.  A total of 98 971 tons of PE-LD were recycled in 2012.  This is made up of film waste and a much smaller quantity of irrigation pipe waste.  Recycled PE-LD waste is sold back into the film industry, i.e. 66.5%, with 14% into the irrigation pipe market.  The “other” portion is made up of some exports, masterbatch manufacturing, fencing droppers and rotational moulding powders.

Polyethylene terephthalate

Recycling tonnages and recycling rates for PET
Figure 5:     Recycling tonnages and recycling rates for PET
PET beverage bottles make up the bulk of the 50 280 tons recycled in 2012.  PETCO has major initiatives in place to grow the tonnage of PET recycled and this is evident in the growth of the last four years.  Recycled PET is used for tapes and fibres for the home textile, apparel- and industrial fibre markets.  A largeportion is recycled back into food contact packaging markets.  Other PET packaging like trays are not currently recycled.  There are collectors and recyclers that bale and export PET trays.  They are not reflected separately in a specific HS code, but are grouped under “Other” in HS 39 15 90 90.



Polypropylene

Figure 6:	Recycling tonnages and recycling rates for PP
Figure 6: Recycling tonnages and recycling rates for PP

Market applications for PP recyclate
Figure 7: Market applications for PP recyclate















Of all the materials, PP showed the largest growth in the last year.  PP recycling grew with 17% to a total of 47 080 tons in 2012.  The PP waste is sourced from injection and thermoformed packaging like closures, yogurt-and margarine tubs.  The demand for non-packaging recyclable waste like garden furniture and automotive bumpers is growing.  A few years ago, woven bags and metallised film were regarded as non-recyclable.  Today there are more than 10 recyclers nationally that recycle these PP film grades with large success. 

Recycled PP is mainly (83%) sold into the injection moulding market with chairs being the most popular single item.  Exports make up a large portion of the PP recyclate as well.  The relative small trader market for recyclate PP is popular amongst the very small recyclers as they pay cash and can blend poor quality material with better material to ensure customer satisfaction.

The demand for PP is exceeding the supply by magnitudes but the customers and potential customers do not want to pay more than roughly50% of virgin prices for recycled PP.  There are various possible reasons for the recyclate price ceiling:

  • Recyclate markets have been developed that have no relation to virgin material markets, e.g. black chairs;
  • Technical expertise amongst the smaller recyclers is limited and the quality of the recyclate is often very poor which leads to mistrust in recycled PP;
  • Contamination levels are very high in PP waste due to the container nature of the waste which catches high levels of dirt and high residual contents levels – all potential quality challenges; and
  • Lack of sorting skills to differentiate between PP and other materials in consumer packaging.

Market related, i.e. demand related, prices will have to be paid for quality PP recyclate to encourage more PP recycling. 

High density polyethylene

Recycling tonnages and recycling rates for 	PE-HD
Figure 8: Recycling tonnages and recycling rates for PE-HD
Market applications for PE-HD
Figure 9: Market applications for PE-HD













PE-HD comes in five distinct classes, film-, pipe-, injection (crate)-, bottle- and chemical container grade.  Recyclers often won’t recycle more than one or two PE-HD grades.  For this report, all PE-HD was grouped together.

A total of 45 950 tons of PE-HD was recycled in 2012.  PE-HD crates are a good example of closed-loop recycling in South Africa where at least 3 of the large crate producers have their own in-house recycling facilities for damaged and obsolete post-consumer crates.

The environmental drive by brand owners has developed into a strong demand for bottle- and film grade PE-HD.  The small amount of available recycled film waste is supplemented with bottle grade, specifically white milk bottles, to meet the demand for carrier bags. 

This resulted in a shortage of bottle grade and the recyclers have developed collection systems for chemical containers as a result.  The recyclate can only be used for non-human contact applications and currently agricultural products like fencing droppers, poles and diamond mesh are made from recycled chemical containers sourced from farms.  The logistics and residual content make this a challenging waste source.

Other materials

The materials in Figure 10 not listed individually include the smaller families, i.e. PVC-U, PVC-P, PMMA, E/VAL, PA, PC, ABS and multi-layers.

Market applications for “Other” include injection moulded products, blow moulding applications like toys and multi-layer chemical containers, compression moulding and a small trader market.

Note:      The market applications listed above are only for the 59 recyclers surveyed and not for the complete 210 recyclers’ markets.

Materials recycled in South Africa from 2000 to 2012

Figure 10:      Materials recycled in South Africa from 2000 to 2012 Source of waste materials

Recyclers are still of the opinion that the largest growth in recycling would be in post-consumer recyclables.  Smaller quantities of recyclables - 58.5% -were sourced from landfill and other post-consumer sources in 2012 versus the 70% in 2011.  This could have been as a direct result of the increased electricity spending that impacted on wash plant recycling processes.  The transport strike in June 2012 was also listed as a reason as mainly post-consumer recyclable waste is sourced from outlying areas.  It specifically impacted on PE-LD.  The material obtained from theSeparation at Source projects in the larger metropolitan areas is in high demand because of the lower contamination levels.

Toll and in-house materials are not generally included in the recycling figures.  The 6.7% shown here is where the recyclers cannot differentiate between operating costs of toll tonnage and normal recycling. 

Source of recyclable waste in South Africa from 2010 to 2012
Figure 11: Source of recyclable waste in South Africa from 2010 to 2012

Employment


Formal employment in the plastics recycling sectordecreased by 0.3%, to 5047 formal jobs since 2011.  Of these, only 8.4% are contract workers who are involved in sorting incoming materials for the recyclers on a full time basis and usually on site.  These workers are paid for their output rather than for the time spent on the job.  It is estimated that 44 100 informal jobs were created in the same period in the collection industry.  These collectors collect all materials and are not only working with plastics.  (The figures are based on 60 kg of plastics waste handled per person per day and 200 good collection days per annum.)

2009

2010

2011

2012

Tonnages recycled

228 057

241 853

245 696

268548

Total Employees

4 841

4 812

5 062

5 047

Informal employment

34 500

36 600

40 950

44 100

Table 3:  Employment figures


Processing costs

If a recycling operation is compared with other plastics converting operations that are doing a similar tonnage per annum, the recycler has higher operating costs with regards:

  • water and electricity,
  • wages,
  • transport, and
  • repairs and maintenance on plants and equipment.


Figure 12:      Average operating cost in 2012 of recyclers that granulate, wash and pelletise

The actual operating costs of the 39 recyclers surveyed that granulate, wash and pelletisewere taken into account to calculate operating costs for 2012, as illustrated in Figure 12.  When compared to 2011, total operating costs increased by 36.5%.Although the cost of electricity increased dramatically in the last 24 months, the portion of the overall operation costs stayed more or less the same. This is due to considerable measures taken by recyclers to contain the energy costs in their factories.

The calculated average cost of repairs and maintenance doubled since 2011.  This could be due to the huge price increases of steel in the last 12 months.

Another change to note is the cost of financing which increased by 389%.  The reason could be that it is still challenging to access incentives and grants for recycling and recyclers have been financing their investments through the usual financial institution channels.  It could also be that not all financing costs were recorded in 2011 and as the trust in the survey process increased, the figures are more realistically reflected.

The historic buying and selling prices of the most popular grade of the three main plastics were recorded for May 2013 (when the data was collected).  The average historical prices are recorded here.

PE-LD smokey

PE-HD mixed and coloured bottle grade

PP mixed and coloured injection grade

Buying prince

Selling price

Buying prince

Selling price

Buying prince

Selling price

2009

R2.99

R7.47

R3.12

R6.87

R2.72

R6.57

2010

R2.87

R6.83

R2.97

R6.35

R2.89

R6.81

2011

R4.33

R7.85

2012

R3.11

R7.69

R2.68

R7.05

R2.75

R7.13

2013

R3.08

R8.13

R2.74

R7.01

R3.23

R7.52

Table 4: Historical buying and selling prices of the three most popular grades, calculated averages only

The selling prices do not reflect the increase in operating costs.  The calculated average margin only increased 2% versus the 36.5% increase in operating costs from 2011 to 2012.  Recyclers are locked in with selling prices and will have to change their tactics and business models if they would like to continue operations in the near future.  There are only three recyclers that have managed to keep selling prices aligned with operating costs and to keep track of virgin polymer prices.  The bulk of the recyclers are trapped in a decreasing operating window.

Capital investment

The capital replacement value of plant and equipment is calculated at R5 384 per ton recycled in 2012 for recyclers that granulate, wash and pelletise.  This is 11.5% more than the recorded figures of 2011 where the capital investment was R4 828 per ton recycled.  (The 2011 published figure of R3 250 invested per ton recycled included recyclers that only granulate. The figure was subsequently amended to reflect recyclers who granulate, wash and pelletise.)

The recyclers interviewed invested 6.3% of their capital in 2012 vs. 12.1% in 2011.  This investment can now be seen in the higher capital per tonnage.  Recyclers are of the opinion that it is difficult to invest in operations if the supply of recyclable waste cannot be guaranteed.

 

BBBEE status

BBBEE status of the recyclers in 2012Most recyclers are owner businesses and don’t do any direct business with state-owned companies.  The need for a BEE rating is therefore not perceived as critical.  Recyclers surveyed in 2013 predominantly don’t know their BEE status.  This however, can be a stumbling block if government funding is to be accessed.

Discussion

Although only 59 of the recyclers were contacted for detailed information, the author is familiar with the plastics recycling industry and has regular contact with the larger as well as the small recyclers.

Retail and brand owners are starting to see the importance of recycled content and are instructing their suppliers (the plastics product manufacturers) to source recyclate.  The demand for cheap recyclate still exceeds the supply.  Plastics recyclers will have to market themselves and their products totally differently to enable them to sell at market related prices.  Recyclers are accustomed to customers contacting them for material at a specific price.  They are not used to hard selling of neither their products nor its advantages.

The polyolefin recyclers are also looking towards the newly formed PolyCo to assist with telling the story in aggressive marketing campaigns.  Despite all the efforts of the industry as a whole, the general public, brand owners and even players in the field, still don’t know the magnitude of the recycling industry in South Africa.

Alternative recycling methods, such as “energy from waste” and liquid fuels will have to be researched and developed into operational plants to grow the recycling rates to levels where zero waste to landfill at least looks like a possibility. 

The plastics recycling industry is growing and new entrants are joining the industry on a monthly basis.  It is, however, only the long-standing recyclers that have the tenacity and stamina to continue year in and year out with small increases in efficiencies that grow the recycling tonnages in small increments.

One standard concern for all recyclers is the availability of incoming recyclable waste.  Truckloads of baled material arebought by agents that shipwaste outside the country.  Waste pickers at ground level consider alternative income generating activities such as fruit picking and fishing – especially in the Western Cape.  Larger collectors look for markets elsewhere.

In Europe, the plastics industry states that the maximum economic recycling rate for plastics is about 35%.  South Africa has a few advantages, for example availability of cheaper sorters.  We are also far ahead of Europe with the recycling of thin film.  We are developing a stronger non-packaging recycling industry for the polyolefins.  South Africa will probably be able to reach a 40% recycling rate with the following factors in place:

  • Access to the solid waste stream is essential.  Separation at Source to be implemented in all the larger metropolitan areas.
  • All plastics recyclers to comply with the laws of the country to allow SAPRO to raise the standard and visibility of all recyclers.
  • Simple, straightforward and consistent cost of energy to allow for forward planning of cost-of-sales.
  • Realistic selling prices of recyclate linked to demand and quality of material.
  • Recycled content to be specified by brand owners, i.e. green procurement.
  • Development of the collection of recyclable waste in outlying areas.
  • Consolidation of all the different but similar organisations.

The plastics industry will have to work together with one voice if it is to convince government, retail and the public that we mean business with recycling and are professional and credible in what we recycle.

 


 

Acronyms

Symbols for polymers commonly recycled according to ISO 1043:

ABS  Acrylonitrile/butadiene/styrene
PA Polyamide; commonly known as nylon
PC  Polycarbonate
PE-HD High density polyethylene
PE-LD  Low density polyethylene
PE-LLD Linear low density polyethylene
PET  Poly(ethylene terephthalate)
PMMA  Poly(methyl methacrylate); commonly known as acrylics
POM Polyoxymethylene; commonly known as acetal
PP  Polypropylene
PS     Polystyrene; commonly known as GP for general purpose
PS-E Expanded polystyrene
PVC-P Plasticised or flexible Poly(vinyl chloride)
PVC-U   Unplasticised or rigid Poly(vinyl chloride)
Other abbreviations used in this report:
IWMP   Industry Waste Management Plan
PETCO PET Recycling Company
POLYCO Polyolefin Recycling Company
PSPC Polystyrene Packaging Council
SAVA South African Vinyls Association

 

List of Tables

  • Plastics Recycling and Recovery rates in South Africa from 2009 to 2012
  • Packaging and non-packaging tonnages recovered in South Africa from 2010 to 2012
  • Employment figures
  • Historical buying and selling prices of the three most popular grades, calculated averages only

List of Figures

  • Tonnages recovered and recycled in South Africa from 2009 to 2012
  • Paper and packaging Industry Waste Management Plan recovery rates
  • Recycling tonnages and recycling rates for PE-LD
  • Market applications for PE-LD recyclate
  • Recycling tonnages and recycling rates for PET
  • Recycling tonnages and recycling rates for PP
  • Market applications for PP recyclate
  • Recycling tonnages and recycling rates for PE-HD
  • Market applications for PE-HD
  • Materials recycled in South Africa from 2000 to 2012
  • Source of recyclable waste in South Africa from 2010 to 2012
  • Average operating cost in 2012 of recyclers that granulate, wash and pelletise
  • BBBEE status of the recyclers surveyed in 2012