The report presents 5 different case studies of social enterprises working in the Municipal Solid Waste (MSW) sector, with focus on the collection and treatment of plastic.
The study will analyse and compare the following companies:
• Zanrec (Tanzania)
• EcoPost (Kenya)
• Wecyclers (Nigeria)
• Proplast (Senegal)
• Taka Taka Solutions (Kenya)
The study will highlight the key elements that contribute to the effectiveness and sustainability of the selected initiatives; the analysis will specifically focus on the:
• story of the company and stage of development
• operating model
• business model
• key partnerships
• impact/inclusion of vulnerable groups
• key results and key challenges
• strategy to move forward
2. During the preparation of the present report, ACRA-CCS interacted with the five social enterprises analysed in
the document to gather the necessary information.
ACRA-CCS acted in good faith, and bears no responsibility for any potential misrepresentation of the data
provided by the companies themselves.
Fondazione ACRA-CCS
Edited by Stefano Barazzetta
Funded by:
Partners:
5. 5
Table of Contents
Introduction 6
Contents and Objectives of the report 6
The State of Waste Management in Africa 6
Case studies 9
Zanrec 10
EcoPost 14
Wecyclers 18
Proplast 22
Taka Taka Solutions 26
Comparative Analysis and Conclusions 30
Comparative Analysis 30
Conclusions 37
6. 6
The present report was elaborated in the
framework of the project “Exploiting the value
of Municipal Solid Waste in Zanzibar: social
enterprises for the improvement of the plastic
value-chain”1
,co-fundedbyFondazioneCariplo
and Regione Lombardia, and implemented by
Fondazione ACRA-CCS.
The challenge for social enterprises is
establishing the social outcomes and objectives
which represent their moral commitment and,
most difficult of all, measuring them.
Measuringtheirsocialperformanceallowthem
to evaluate what works and what doesn’t, and
also consents them to be accountable to their
commitment with investors, funders, local
authorities and communities.
Contents and Objectives of the
report
The report presents 5 different case studies
of social enterprises working in the Municipal
Solid Waste (MSW) sector, with focus on the
collection and treatment of plastic.
The study will analyse and compare the
following companies:
• Zanrec (Tanzania)
• EcoPost (Kenya)
• Wecyclers (Nigeria)
• Proplast (Senegal)
• Taka Taka Solutions (Kenya)
The study will highlight the key elements
that contribute to the effectiveness and
sustainability of the selected initiatives; the
analysis will specifically focus on the:
• story of the company and stage of
development
• operating model
• business model
• key partnerships
• impact/inclusion of vulnerable groups
• key results and key challenges
• strategy to move forward
The chapter Case Studiesdescribes the social
enterprises individually, while the last chapter
Comparative Analysis and Conclusions
outlines the lessons learnt from the companies’
activities.
The State of Waste
Management in Africa
Today, one of the major concerns of many
African authorities responsible for overseeing
publichealthandsanitationisthemanagement
of Municipal Solid Waste (MSW).
Increased urbanization coupled with
inadequate infrastructure, limited financing
and lack of clear roles and responsibilities of
local authorities have made the task even more
difficult. On the other hand, due to uncollected
waste in the urban areas and uncontrolled
disposal of waste at the city boundaries and
suburbs, public health and sanitation are
threatened in several growing African cities.
Improper waste disposal in Africa has resulted
in poor hygiene and lack of access to clean
water and sanitation by the urban poor.
Consequently, most of the countries in the
region may not be able to meet the Millennium
Development Goal target of reducing by half
the proportion of people without sustainable
access to safe drinking water and basic
sanitation by 2015.
Introduction
1. At the heart of the project (July 2011 – 2014) is the support to the social enterprise Zanrec Platic Ltd. in enhancing
its plastic waste recycling activity in Zanzibar, creating long-lasting positive social and environmental impact. The project
supported Zanrec with technical assistance in better structuring its plastic-buying partnerships with local communities, by
funding the acquisition of part of the hardware equipment, and implementing an environmental awareness campaign in
Zanzibar and Italy.
7. 7
In contrast with what happens in the western world, most of the municipal solid waste generated in
Africa is made by organic waste.
Household waste in Africa mostly contains food waste (such as biodegradable/compostable materials),
sand,gravel,paper,plastic,metals(e.g.aluminium)andglass.Batteriesandspraycansarefoundinsmall
- but increasing - quantities.
Exhibit 1 - Links between Millennium Development Goal and Solid Waste Management
Millennium Development Goals (MDGs) Role of Solid Waste Management in achieving MDGs
Goal 1: Eradicate extreme poverty and hunger Employment Creation
Goal 2: Achieve universal primary education No direct link
Goal 3: Promote gender equality and empower
women
Employment opportunities for women in the waste
sorting phase
Goal 4: Reduce child mortality Improvement of hygienic conditions, reduction of child
diseases
Goal 5: Improve maternal health Improvement of hygienic conditions, reduction of
childbirth deaths
Goal 6: Combat HIV/AIDS, malaria and other diseases Improvement of hygienic conditions, reduction of
diseases. Risks for people working in the sector.
Goal 7: Ensure environmental sustainability Improved energy efficiency, reduced CO2 emissions,
reduced risk of water contamination, improved
sanitation, reduced deforestation
Goal 8: Develop a Global Partnership for Development Opportunities for decent and productive relationships
between private and public stakeholders
Exhibit 2 - Waste Composition in key African and European cities2
Composition
(% by weight)
Accra
(Ghana)
Kampala
(Uganda)
Lagos
(Nigeria)
Nairobi
(Kenya)
Dakar
(Senegal)
Milan
(Italy)
London
(UK)
Organic 85% 82% 64% 59% 53% 31% 32%
Plastic 3% 2% 6% 16% 9% 13% 10%
Glass 2% 1% 8% 2% 1% 9% 7%
Metal 3% 3% 10% 2% 2% 3% 4%
Paper 5% 5% 6% 12% 7% 24% 23%
Other 2% 6% 6% 10% 18% 20% 24%
2. “Africa review report on waste management”, United Nations Economic and Social Council – Economic Commission for
Africa (2009); “London’s wasted resource – the Mayor’s municipal waste management strategy”, Mayor of London (2011);
“Municipal waste management in Italy”, Antonio Massarutto, Ciriec Working Paper (2010)
Waste management problems in Africa are varied and complex, with infrastructure, political,
technical, social/economic, organisational/management, regulatory and legal issues and challenges
to be addressed.
8. 8
In Africa waste is typically disposed without
consideration for environmental and human
health impact, leading to its accumulation
in cities, towns and uncontrolled dumpsites.
Co-disposal of non-hazardous with hazardous
waste3
without segregation is common
practice.
Municipal Solid Waste (MSW) is typically
disposed in uncontrolled dumpsites, lacking
any waterproofing system. Most of the waste
is burnt, with a significant production of CO2
and of other hazardous composts that are not
adequately treated, with serious threats for
the human health and for the environment in
general.
Furthermore, the continuous growth in the use
ofplastic,whichissubstitutingwoodandmetal,
is worsening the situation. When plastics have
norecyclingvalue,itendsupinlandfillsorinthe
street, in rivers and waterways and becomes a
major issue as it damages the environment,
clogs drains and causes flooding in the rainy
season. Moreover, plastic degradation time is
among the longest.
MSW management has become an intractable
problem in recent times, beyond the capacity
of most municipal/state governments. This has
resulted in refuse heaps being dumped in the
urban landscape in heavily populated cities,
as typically only about 40 to 50% of waste is
reportedly being collected by official waste-
management companies4
.
Waste management in the region suffers from
limited technological resources as well as poor
funding that collectively result in low standards
of waste management. This is exacerbated by
the public perception that waste disposal is a
welfare service and hence the reluctance to
pay for waste disposal services.
Rapid urbanisation exacerbates these
difficulties: over a third of Africa’s 1 billion
inhabitants currently live in urban areas, but
by 2030 that proportion will have risen to a
half. Dar es Salaam (Tanzania), Nairobi (Kenya),
Kinshasa (DR Congo), Luanda (Angola),
Addis Ababa (Ethiopia) will all increase their
population by more than 50% by 2025, adding
millions of inhabitants to their already over-
populated neighbourhoods.
3. Hazardous waste is waste that poses potential threats to public health or the environment. In particular, it is corrosive, toxic
or flammable material. A number of businesses generate hazardous waste, such as dry cleaners, automobile repair shops,
hospitals and photo processing centres or larger companies such as chemical manufacturers, electroplating companies, and
oil refineries.
4. Africa review report on waste management”, United Nations Economic and Social Council – Economic Commission for
Africa (2009)
Exhibit 3 - Waste degradation time
Item Degradation time
Glass bottle 1 million years
Plastic bottle 450 years
Disposable diapers 450 years
Aluminium can 80-200 years
Rubbed-boot sole 50-80 years
Leather 50 years
Plastic bag 10-20 years
Cigarette butt 1-5 years
Milk carton 3 months
Apple core 2 months
Newspaper 6 weeks
Paper towel 2-4 weeks
Source: U.S. National Park Service
9. 9
All in all, across Africa the framework for an
environmentally sound management of waste
is either lacking or inadequate: the region
urgently needs infrastructural, institutional,
legal reforms and changes in attitude.
The present report is going to explore how
small but growing private initiatives, but
with a social mission, are trying to tackle the
Municipal Solid Waste problem. As we will see,
Social Enterprises are experimenting new and
creative models to address the African waste
challenge.
Case studies
The case studies present five African social
enterprises dealing with municipal waste
management. The companies are located in
four different countries and are at a diverse
stage of development.
Of the five companies, only two work
exclusively on plastic (EcoPost and Proplast),
while the others have a broader focus.
The choice of presenting such a diverse cohort
of companies is intentional, as it will allow to
identify the challenges that are common to all,
but also to compare the different choices that
the companies made, the strategies that they
implemented and the different partnerships
that they adopted in order to achieve their
goals.
Ultimately, the comparison will identify the
social and environmental achievements
and the key success factors for each social
enterprise.
10. Private Agents
10
Zanzibar
The Company
Zanrec (http://www.zanrec.com) is a waste management company that collects all waste fractions;
recyclables like plastics and metals are re-sold in East Africa, organic material is composted and sold
as fertilizer to farmers, while approximately 15% of the waste is dumped on landfill. The company
aims at building a sustainable business while generating maximum social and environmental
impact.
Zanrec was started in 2011 by Switch Responsible Ventures, a Swedish company specialized
in building sustainable ventures in East Africa. In December 2013 a sister NGO was established to
manage the community-engagement and environmental awareness campaign.
The Company is currently employing 15 staff members, included 4 managers.
Zanrec operates in Zanzibar, the biggest island of
Tanzania, where 260 tons of solid waste are produced
every day by its over 1 million inhabitants and numerous
tourists.
The organic fraction amounts to roughly 80% of the
total and only 30% of the waste produced is collected,
while the remaining part is dumped on the island or
directly into the Indian Ocean, causing clear negative
effects on the environment as well as health problems
among Zanzibar residents.
Most inhabitants are unaware of the damage caused
to the environment and to their health by uncontrolled
waste management, but the level of awareness is
increasing among younger generations. Moreover, the
degradation of the environment is starting to affect the
tourism industry, one of the biggest revenue sectors
on the Island. According to a recent survey by Zanrec,
four out of five visitors believe that the region is too
polluted to be visited again. As a consequence, those
engaged in the tourism sector in Zanzibar are starting
to take action.
zanrec
11. 11
Zanrec generates revenues from two sources:
• waste collection fees paid by hotels -
roughly 85% of sales
• sale of collected materials - 15% of sale
Plastic is currently sold in Zanzibar “as-it-is”,
with no further treatment or processing. It
could be sold also in Dar es Saalam at an higher
price, but the transportation costs would make
the activity unsustainable.
Operating model
Business model
Zanrec collects all waste from different
sources: hotels, private agents and local NGOs/
associations.
The company is currently collecting 4-5 tons of
waste per month.
Zanrec original plan was to recycle and process
the plastics into value-added products, but
decided to switch to a full waste service
provider business model, in order to achieve
better margins.
Hotels
Currently Zanrec collects all waste from 9
hotels, which pay 450 €/month in average for
the service, depending on the hotel size, on
logistics, and on other specific conditions.
Zanrec is also running a pilot service with
39 hotels, where the Company collects only
plastics and metals: at the end of Q2 2014 the
pilot will transition into a full waste service.
Zanrec usually visit the hotels 3 to 7 times a
week, depending on their size.
Private Agents
Zanrec engaged 15 existing shopkeepers in
the collection of plastic as private agents:
the company provides them with a scale
and a small working capital fund to start the
collection.
The agents paint their shop with the “Zanrec”
logo, and act as local collection points: they
buy plastic from local people, and resell it to
Zanrec, applying a mark-up. Zanrec visits the
agents to collect the plastic waste once they
have gathered at least 500 kg.
NGOs/associations
Zanrec is also collaborating with NGOs and
Local Associations to collect separated waste
at village level, but these organizations have
struggled to run the collection so far.
Despite the activities of training that have been
run at community level, the collection centres
have been ineffective so far. A new model is
being developed, according which the villages
and the NGOs will be paid according to the
cleanliness of the village and of the collection
points. This model is currently being piloted
in 2 villages on Zanzibar and will be scaled up
during 2014.
Bureaucratic problems prevented Zanrec from
being granted land for handling the waste.
However, the Company has recently won a
public tender which will allow Zanrec to collect
waste in the northern part of Zanzibar, and
will also provide the Company with access to a
dedicated land plot for waste processing.
13. 13
The way forward
Zanrec plans to expand rapidly the collection to a
higher number of hotels.
This objective will be achieved by approaching
each area with an high-density of hotels and
selling the waste management services to
clusters of hotels.
The service to hotels will subsidize the
community collection.
Extending the collection also to organic waste,
opening several waste collection sites and
starting the production of compost will also
require a substantial increase of employment
creation, as the company will need 40-50
additional staff members for waste collection
and for waste treatment.
Key challenges
To effectively scale-up, the company will need
to ensure that waste separation levels remain
satisfactory at scale, as this is vital in order to
produce compost and resell plastic and other
materials.
In order to achieve optimal separation Zanrec
will need to work at close contact with its main
waste providers, the hotels and the village
agents.
From the social impact point of view, the most
challenging part of the collection model will
be to substantially improve the collection and
separation levels at community level, working
directly with local authorities, local NGOs and
associations.
14. 14
EcoPost Nairobi
The Company
EcoPost (http://www.ecopost.co.ke) manufactures high-quality fence posts from waste plastic.
EcoPost was founded in 2009 by Lorna Rutto (CEO) and Charles Kalama (Technical Director).
In addition to Lorna and Charles, the key management people are a Production and Supply Manager
and an Accounting / HR person.
Roughly 20 operations persons complete the staff.
EcoPost operates in Nairobi, the capital of Kenya
and one of Africa’s largest cities, with over 3 million
inhabitants.
Nairobi produces around 1.900 tons of waste per day.
While 93% of Nairobi’s waste is potentially reusable,
only 5% is actually recycled and composted. Only 33%
of waste produced is collected for disposal at Nairobi’s
only official dumpsite, Dandora, while the rest is littered
on hundreds of illegal dumpsites, next to houses or
burned.
The official dumpsite, and even more so the illegal ones,
is operated in an unsystematic, unplanned and highly
unsanitary way. As a result, poorly managed and not
properly disposed solid waste pollutes the air, water
and soil, causing significant health and environmental
problems. This is especially concerning in slums and
other lower income areas, where high population
density, paired with lack of infrastructure and service
provision, aggravates these problems.
Different approaches by various actors have not been
able to provide adequate solutions to the problem,
with these being entities from the public, private,
and informal sector, including non-governmental
organisations (NGOs).
15. 15
Operating model
The company collects plastic from Nairobi’s
streets through a network of collection yards
operated by independently run and owned
collection yards, which are operated by 1-2
managers; at each yard, 20-30 collectors pick
up plastic and deliver it to the yard. These yards
create employment for Nairobi’s poorest, and
reduce garbage.
After collection, waste plastic is processed at
the EcoPost factory, that in 2013 was operating
on 2 shifts and 6 days/week, as the Company
was not able to keep up with the demand for
its products.
The Company is currently about to move
to a new facility where a new wood-plastic
composite extrusion line will be installed,
allowing to scale-up the plastic processing
capacity from the current 20 tons/month to
over 100 tons/month without significantly
modifying the production process.
The new line will increase automation,
improvingefficiencyandreducinghumanerror.
The new line will also allow manufacturing new
products (i.e. pallets, roof trusses, pellets). All
in all, the new line will allow EcoPost to expand
the business and to increase its impact,
creating more than 100 permanent jobs by
2018, up from the current 24 jobs.
EcoPosts’ main customers include farmers, real
estate developers, municipal parks, ranches,
hotels and local authorities.
So far, about 80% of revenues came from
direct sales, mostly thanks to word-of-mouth
and personal referrals, while the remaining
came from sales through two big wholesalers
(for household and farms). The Company is
now approaching wholesalers to build long-
term commercial relationships.
EcoPost offers an environmental option for
fencing designed to last a lifetime, making it
an economical long-term solution.
The main applications of EcoPost products are
landscaping and fencing. EcoPost products can
be used outdoor, where weather resistance
and low maintenance are required. EcoPost
products are used in both residential and
commercial applications.
EcoPost competes against traditional posts
for fencing, offering superior quality at higher
price. However, currently EcoPost has few
direct competitors, as there are few plastic
post providers in a large potential market, but
this will almost certainly change as market is
proven, and new entrants will be attracted by
a profitable market opportunity.
As the production process is low-tech and
reasonably straightforward, barriers to entry in
the market are low, and therefore competition
mayappearquickly;however,theriskissomewhat
mitigated by the market size, which is huge:
post-investment, after the expansion, EcoPost
production capacity would still only amount to
10% of the estimated market demand.
The company recorded sales of USD 150.000
in 2013, and should reach break-even in 2014,
when sales might be close to USD 1 Million.
Business model
16. 16
EcoPost leverages on a growing market for fencing posts and sign
posts,. to obtain social and environmental benefits such as:
• Eliminating plastic waste from the environment, and at
the same time avoiding deforestation. By 2018, it is expected that
EcoPost will remove and process over 9,000 tons of plastic waste
from the streets of Nairobi. EcoPost will produce over 800,000
posts, most of which would otherwise be produced from local
trees. This will lead to saving roughly over 60,000 trees.
• Creating BoP jobs both directly (within the Company itself) and
indirectly (waste pickers), thus reducing poverty. Today EcoPost
directly employs 24 people (including part-time labor) of which 12
women, and indirectly employs roughly 89 people through plastic
collection. By January 2018, is expected that EcoPost will directly
employ 106 people and indirectly employ 979 people.
Impact / Inclusion of vulnerable
groups
The key partnership for EcoPost has been the one with a social business accelerator and – above
all – with external investors.
In 2012 the company was selected to take part to the Unreasonable Institute in Colorado (USA),
a 5-weeks mentorship programme specially tailored for social enterprises of developing countries.
During the program the EcoPost management had the chance to acquire additional business skills,
refine the company’s strategy, and got in touch with Blue Haven Initiative an American impact-
focused family investment company that invests in social enterprises in developing countries.
After an initial due diligence, BHI decided to offer EcoPost a pre-investment assistance in the
form of a consultancy provided by an experienced investment advisory firm based in Nairobi. The
consultancy primary objective was to assist Lorna and Charles in refining EcoPost strategy and in
making the Company investment-ready.
The service was successful, and in mid-2013 BHI invested in EcoPost, together with other partners,
including Fondazione Opes5
. The investment was meant to finance the expansion capacity, both
in terms of capital expenditure and working capital. The investors, now represented in the Board of
Directors of the Company, continue to provide EcoPost with business advice on a regular basis.
Key partnerships
5. Fondazione Opes is the first Italian initiative that promotes impact investments in developing countries. It was founded by
five Italian organizations with a strong social background: ACRA-CCS, Altromercato, MicroVentures, Fem S3 and Fondazione
Maria Enrica. Fondazione Cariplo is Opes’ main financial supporter.
17. 17
The way forward
Once the new production line will be in place,
EcoPost will mostly focus on expanding sales,
identifying new market segments and new
customers.
Key challenges
The biggest challenges for EcoPost will be:
• to efficiently scale-up the production
• to secure a much increased waste plastic
supply:themanagementoftherelationship
with the collection yards will be crucial
• to identify the best sales opportunities in
terms of volumes, marginality and payment
terms
18. 18
Wecyclers Lagos
The Company
Wecyclers uses a fleet of low-cost cargo bicycles and an incentive-based program to offer a
convenient household waste collection service in densely populated low-income neighbourhoods.
After collection, Wecyclers aggregates the material and sells it to local recycling processors.
The Company was founded in 2012 by Bilikiss Adebiyi (CEO) and Jonathan Kola (CTO), two
US-educated African entrepreneurs with substantial previous business experience.
Wecyclers have created 42 full-time jobs so far, including 20 operators who collect the waste using
the Wecyclers.
Wecyclers operates in Lagos, Nigeria, the largest city in
Africa with a population that is estimated to be in the
15-20 million range, and rapidly growing.
Lagos produces roughly 10,000 tonnes of waste daily,
but only 40-60% of the population is served by a regular
waste collection service, leaving large quantities of
rubbish blocking gutters and piling up on streets and
outside houses, a major health and environmental
hazard.
According to Wecyclers, of the waste collected only
21% is recycled, while the remaining 79% is disposed
at landfill sites.
Low-income neighbourhoods are the least served by
waste collection services, and as a consequence people
in those communities end up living in a tremendously
unhealthy environment.
19. 19
Operating model
Today,Wecyclersworksinthedenselypopulated
Itire and Ebute-Metta neighbourhoods, which
total roughly 2,5 million inhabitants.
Every week, the Company’s cyclists peddle
from door to door in these neighbourhoods
to pick up recyclable trash from registered
households. Items like plastic bottles,
aluminium cans and plastic sachets are all
weighed on site, and from there are taken to a
specific sorting area where they are bagged in
order to be sold to recycling factories.
In return for the waste material that
participating households give to Wecyclers,
they receive redeemable Wecyclers points
over their cell phones via SMS. Every three
months customers can redeem the collected
points for goods that they value, such as cell
phone credit, basic food items, and household
goods. As families receive collection reminders
and rewards updates directly on their
mobile phones, the benefits of recycling are
immediately perceived.
Wecyclers have grown today to having 5,000
households subscribe to its service. The
Company has so far collected nearly 300 tons
of waste, using a fleet of 16 low-cost cargo
bicycles (“wecycles”) that are designed to
transport large cloth sacks of trash.
At this stage, each wecycle can collect waste
materials from close to 30 households per day /
150 households per week, and 2,250 households
per week per hub. The total waste each hub can
currently collect is 600 tons per year.
In the long term, the Wecyclers model will
be organized by hubs, which will act as
mini-transfer stations: they will have space
for sorting and aggregating waste, storing
wecycles and spare parts.
Every Hub will have 35 wecycles, which will
collect from 30 households per day. As every
household is expected to generate 5kg of
waste per week, every single Hub will collect
1.300 tons/year.
Wecyclers’ current target market is low-
income neighbourhoods; 72% of subscribers
are female, and the average household size of
their subscribers is 5,5 persons.
Wecyclers sources recyclable waste from
the households, who are rewarded with
redeemable Wecyclers points over their cell
phones,andearnrevenuessellingthecollected
wastetorecyclingcompanies.Thesecompanies
usually re-sell the recyclables internationally,
and do not have long-term agreements with
Wecyclers at the current stage. The Company
is also exploring the possibility to directly
export and resell collected waste.
Wecyclers are also supported by corporate
sponsorships, such as:
• Donation of goods: companies can
decide to donate goods, which can be
redeemed by subscribers. This has already
taken place for TVs donated by Samsung
and for drinks donated by Coca-Cola
• Payment to cover for the cost of
incentive program. For example,
Coca-Cola sponsored two of Wecyclers
redemption events, covering the costs for
all the redeemed prizes.
• Cycles sponsorship: companies sponsor
wecycles in exchange for recognition and
branding (advertisement) on the wecycles
themselves.
Business model
20. 20
Wecyclers is delivering impact in several different ways, such as:
• Bringing a reliable waste collection service where no service is
available, with benefits in terms of improved and safer living
environment. The Company is currently serving 5.000 households
• Offering stable-long term jobs to low-income communities.
Wecyclers actively recruit within the communities where they work
(42 jobs created so far, 15 women employed).
• In some cases Wecyclers work where alternative waste collection
services are available. In these communities, Wecyclers allow
households to save up to 1/3 on waste disposal fees (approximately
USD 1,2 per household per week).
Impact / Inclusion of vulnerable
groups
The key partners of the Company include:
• Corporate Sponsors, like Samsung and Coca-Cola (see above);
• LAWMA (Lagos State Waste Management Authority): the
Authority provides Wecyclers with free use of public spaces around
Lagos, where the company can set up their local bases, and would like
the Company to help improve the waste management of low-income
communities which are usually seen as not lucrative by other waste
collection companies and - as a consequence - do not get served;
• Industry Coalition on PET recycling: the coalition is working
to build a viable infrastructure for the collection of post-consumer
PET bottles, as its members (companies like Coca-Cola, Nigerian
Bottling Company, Nestle Water, Nigerian Breweries and Pepsi)
realize that a workable collection solution needs to be found or
they could face negative reputation consequences for their brands.
Wecyclers is currently working with the Coalition to set up a large-
scale PET collection site.
Key partnerships
• CSR initiatives: DHL supported Wecyclers by donating a van,
GlaxoSmithKline sponsored 3 wecycles.
TheCompanyrecordedsalesofUSD99.000in2013,whichareexpected
to grow to USD 265.000 in 2014.
21. 21
The way forward
Wecyclers currently run two Hubs, and want to
start and fully operate two additional hubs by
the end of 2016. Of the two new Hubs, one will
be a PET Shredding Hub, which will allow the
company to provide PET shredding services,
while the second will be a new Collection Hub,
to increase the Company’s collection capacity.
The Company plans to go from the current
5.000 subscribers to over 8.500 by the end of
2014 and nearly 50.000 by the end of 2016.
Wecyclers intend to achieve this goal by
franchising their wecycles and hubs.
Wecyclers expect to reach break-even point
with 200 wecycles by 2016.
Key challenges
The biggest challenges for the Company to
grow are:
• Securing the capital to finance the
expansion of additional hubs.
• Getting government support. In order to be
successful, recycling needs to be mandated
through government policy. Currently
there is no official policy guiding recycling
or promoting goods manufacturers
responsibility.
• Increasing the technical skills to build and
repair wecycles: as Wecyclers grows, lack
of skilled technicians could be a major
impediment.
• Falling price of recycled PET: the falling
price of recycled PET plastic caused by the
drop in the price of virgin plastic is a major
challenge.
• China’s Green Fence: China has started
enforcing new rules that closely regulate
the quantity and quality of post-consumer
waste imported for recycling. Reduced
demand for post-consumer waste from
China could seriously weaken the sale
market for collected waste.
22. 22
Proplast Senegal
The Company
Proplast processes plastic such as polypropylene (PP) and polyethylene (PE), to turn it into
granulated plastic that is sold to local plastic processing companies. In the medium-term, Proplast
expects to start recycling PET.
Proplast was started in 1998 by the Italian NGO LVIA (http://www.lvia.it). After 10 years of activity
as a cooperative, in 2010 Proplast became a private company (an SARL, according to Senegalese
law), with each of the 15 female employees awarded with 6% of the Company.
Proplast has three main objectives:
• to clean the Senegalese environment from plastic waste
• to create a new and sustainable economic activity
• to create stable, full-time jobs.
Besides the 15 full-time jobs, the Company has also created 50 casual daily jobs.
Proplast (http://www.proplast-sarl.com) is based in
Thies, the third largest city in Senegal with a population
of 320,000; Thies lies 70 km East of the capital Dakar,
and is a major industrial city.
As elsewhere in Africa, plastic waste is becoming a
serious environmental problem in Senegal, because it is
disposed everywhere: in the cities, in the countryside, in
the rural villages as well on the beaches and in the sea.
Plastic waste gets usually incinerated in uncontrolled
fires, which lead to the production of dioxins, furans
and other noxious composts, with potential serious
consequences for the human health.
Photos Proplast by Manuel Meszarovits Photojournalist
23. 23
Operating model
Proplast buys plastic from a network of
collectors operating in Thies, who are usually
run by youth associations or women groups.
The plastic carried by collectors is checked
for quality, and is weighted and stored in
temporary warehouses, before being sent to
the central processing centre by truck.
The price paid to collectors is 40 CFA/kg for PE
and PP and 50-100 CFA/Kg for PVC (according
to quality)6
.
Proplast currently collects the following types
of plastic:
• Polyethylene (PE): coming from bottles,
cans, etc.
• Polypropylene (PP): coming from chairs,
bowls, buckets and pots
• PVC: coming from shoes and sandals
At the processing centre, the plastic is sorted
by type and colour in order to make the
subsequent grinding phase easier, when plastic
is finally granulated. Before being bagged in
25kg bags, the plastic is washed and dried.
Once bagging is completed, plastic granulate
is weighed and shipped to customers, such as
local plastic processing plants.
Proplast produces granulated plastic of very
good quality and purity, which is sold to plastic
manufacturing companies in Thies and Dakar,
and is used to produce new items such as
septic tanks, furniture or detergents bottles.
The Company now generates sales of about
USD 250.000 per year, and has reached
profitability.
By far the most important partnership for
Proplast has been the one with the Italian
NGO LVIA, which started the Company in 1998
as an innovative international cooperation
approach, and later turned into a private
company.
More recently, the French cooperative
Espere France became an impact investor7
in Proplast.
Proplast started as an initiative aimed at
enhancing the income of several unemployed
and illiterate women of Thies, who, during
the years, have been trained on waste
management, recycling and small business
management.
After more than 10 years, the 15 women have
built together a small but profitable company,
of which they areemployeesand shareholders,
something unprecedented in Senegal.
Business model
Key partnerships
Impact / Inclusion of
vulnerable groups
6. 40 CFA = € 0,06 ; 100 CFA = € 0,15
7. Impact investments are investments made into companies,
organizations, and funds with the intention to generate social
and environmental impact alongside a financial return
24. 24
The way forward
Proplast has been operating for over 15 years, and has reached
profitability. However, there are two operational challenges that are
limiting the Company’s growth:
• the amount of collected waste plastic, which is relatively low (150
tons/month)
• the transformation capacity is still limited
Key challenges
In order to overcome the above-mentioned challenges, Proplast is
going to focus on:
• Strengthening the waste collection system, by:
› The organization of awareness campaigns on waste collection;
› The expansion of the network of waste collection to other regions
of Senegal;
› The collection of plastic waste from manufacturing companies;
• Increasing the Company’s processing capacity, which will require:
› External financing via investment capital, that will allow to
purchase new machineries
› Training of staff on new processing techniques that will be
introduced.
26. 26
Kenya
The Company
TTS collects, recycles and composts waste: its mission is to provide affordable and environmentally
friendly waste management services to all income areas.
TTS was founded in January 2011 by Daniel Paffenholz (CEO and main shareholder), and employs
underprivileged youths for waste collection. The Company has created 60 full time jobs so far.
Taka Taka Solutions operates in Nairobi, Kenyas’ capital8
.
TakaTaka Solutions (TTS) (“taka taka” means waste in Kiswahili) is a waste management business
and a social enterprise committed to addressing the waste management challenge.
Taka Taka
Solutions
8. For a background about MSW context in the city, please refer to the EcoPost chapter.
27. 27
TTS has three main revenues streams:
• WasteCollectionFeesfromcustomers
(households, businesses, etc..)
The service is very affordable. TTS charges
as low as USD 1 per household per month.
In order to make the sales process more
effective, TTS is now marketing its services
through individual sales agents and real
estateagencies,whichreceiveacommission
for their services.
• Sale of Recyclables
TTS sells plastic, glasses, clothes to several
companies that in Nairobi trade or process
recyclable waste.
Operating model
Business model
TTS is creating a fully integrated waste
management service that will result in greatly
reducing the amount of waste going to the
dumpsite. In order to achieve this, TTS collects
separated waste (organic and recyclable
waste) by offering high quality waste collection
services to its clients, who pay the Company
for a twice-a-week door-to-door collection
service. TTS provides its customers with bins
for waste storage and separation, and offers
weekly cleaning of bins and plots.
In lower income areas waste is collected
from households using handcarts. Waste is
separated at the collection point: the Company
has provided its customers with separation
bins that are checked by waste collectors
who, if the separation level is not satisfactory,
manually perform further separation on-site.
Waste is subsequently moved to decentralized
transfer points where it is further separated.
The recyclable waste is separated into 20
fractions (plastics, glass, metals, paper,
etcetera) and then sold to recycling industries
from the transfer points. The organic waste
is temporarily stored at the transfer point,
before being transported to TTS’ central waste
processing plant (TTS has just started operating
a new and much bigger site). The residual
waste is taken directly from the transfer points
to the municipal landfill.
In higher income areas, where TTS is about
to start its activities, waste will be collected
with trucks and then transported to a transfer
point.
The different waste fractions are converted
into different waste-to-value products:
• the organic waste (around 60%) is
converted into compost (sold to farmers
and gardeners - activity in pilot stage).
• recyclable materials (paper, plastic and
metal - around 20%) are separated from
the recyclable waste, to be then sold to
recycling industries.
• only the 20% of residual waste is disposed
into landfills.
TTS is now serving 3,500 households, 50 small
businesses and 10 schools. Around 5 tons
of waste are handled by TTS every day. The
Company is currently acquiring additional 400
households a month.
In order to test the compost produced through
the organic waste fraction, TTS started
operating a 2,5 acres compost test farm; the
results are very encouraging, and the farm
is used also as a marketing tool for potential
customers (farmers) who are invited to visit it.
28. 28
Taka Taka is delivering significant positive impact, by:
• Offering affordable waste collection services to low income
areas (3.500 households reached so far)
• Creating formal jobs for youths living in low- income areas (60
jobs created so far - 14 women and 46 men)
Impact / Inclusion of vulnerable
groups
Over the years the Company has been able to raise a considerable
amount of grant money from different sources (USAID/DIV9
,
Siemens Foundation, etc.) as well as patient investment capital
(DEG10
) which allowed TTS to start building an ambitious model right
from the start, and to adjust it according to the changing market and
operating conditions.
The Company also benefited from high-level advisory from two
internationally experienced waste management experts, who are also
shareholders of the Company.
Key partnerships
• Sale of Compost
In the long term, the sale of compost will be the single most
important source of revenues for the Company, and it will drive TTSs’
profitability.
However, due to the current low compost production volumes, there
have been limited compost sales so far, as large customers (such as
large-scale contracts with local farmers) are looking for high-volume,
long term supplies. When the new site will become fully operational,
the Company will be able to start compost sales on a full scale. In the
short term, the Company is exploring compost sales for the urban
gardening market in Nairobi.
TTS generated about USD 50.000 in revenues in 2013, of which 60%
came from waste collections fees and 40% from the sales of recyclable
materials.
During 2014 the new treatment site will become fully operational,
allowing the Company to start producing and selling compost in
significant quantities; sales are expected to substantially increase.
9. USAID (the US development agency) has launched the Development Innovation Ventures program, an open competition
supporting breakthrough market-based solutions to the world’s most intractable development challenges.
10. DEG (Deutsche Investitions und Entwicklungsgesellschaft) is a initiative of KFW (Germany development bank) aimed
at promoting business initiative in developing and emerging market countries as a contribution to sustainable growth and
improved living conditions of the local populations.
29. 29
Key challenges and
the way forward
The Company is facing several challenges:
• The quality of the collection service:
the company will continue to focus on
improving the collection operations, in
order to ensure a high level of separation11
of the collected waste as well as to drive
sales more effectively.
• The start-up and ramp-up of the new waste
processing plant: despite some delays, the
site should become fully operation during
the summer/fall of 2014.
• Recycling 80% of collected waste, with a
focus on organic waste (in progress, should
be achieved during 2014)
• Providing high quality waste-to-
value products (compost, recyclables)
• Improving soil productivity through
organic fertilizers (produced in limited
quantities so far)
• The expansion of the waste collection
service into new areas, that will introduce
newcomplexityinthecollectionoperations:
TTS should start expanding into additional
low income areas as well as starting to
serve high-income areas soon
• The ramp-up of compost production and
sales: TTS is already running a farm where
it tests its compost with good results. The
challenge will be to produce compost in
quantities high-enough to secure large
contracts with local farmers.
• Risk related to producing compost from
organic waste collected from households
is contamination- not good quality of
segregation (raise standards on quality of
segregation at household level and check
on compost produced)
All in all, Taka Taka Solutions’ integrated waste
management model offers an ambitious
proposition to tackle the Nairobi waste
challenge. Reaching a much-increased scale
will be critical to achieve financial sustainability
and to substantially increase the social and
environmental impact delivered.
11. Achieving a high level of separation is the biggest challenge for every waste collection and recycling company: TTS started
providing its customers with three different waste bins (one for organic, one for recyclables and one for undifferentiated
waste), but lately switched to a two-bins model (organic and undifferentiated waste) because the three-bins model was too
complicated to be managed by customers.
30. 30
Company
Place of
Operations
Start of
Operations
Founders
Zanzibar
(Tanzania)
2011 Foreign company
Nairobi
(Kenya)
2009 Local entrepreneurs
lagos
(Nigeria)
2012 Local entrepreneurs
thies
(Senegal)
2010
(1998)
International NGO
Local Communities
nairobi
(Kenya)
2011
Foreign entrepre-
neur
Comparative Analysis
Before moving to the analysis of the similarities and differences between the companies, it’s
useful to summarize the main information regarding the companies in two different tables: the
first describes the main characteristics of the 5 companies, while the second focuses on their
activities.
Comparative Analysis
and Conclusions
Exhibit 4 - Company Description
31. 31
Legal form
Employees/
Female employees
Key Partnerships Company
Private Limited
15
2 13
Investors
Donors
International NGO
Local Communities
Government
Private Limited
24
12 12
Investors
Business Accelerator
Private Limited
42
15 27
Corporate Sponsors
Government
Private sector
SARL
(from 2010)
Before was a
cooperative
15
15
International NGO
Local Communities
Investors
Private Limited
60
14 46
Investors
Donors
Advisors
32. Company Main Activity
Main revenue
sources
Collection and resale
of waste plastic and
other recyclables
Waste collection fees
Sale of recyclables
Manufacturing and
sale of fence posts
made from waste plastic
Sale of fence posts
Collection and resale
of waste plastic and
other recyclables
Sale of recyclables
Processing and resale
of waste plastic
Sale of processed waste
plastic
Fully integrated waste
management service
Sales of recyclables
Production and sale
of compost
Waste collection fees
Sale of recyclables
Sale of compost
(going forward)
32
Exhibit 5 - Company Activities
Story of the company
All the companies have been established pretty recently, with the exception of Proplast, which was
run as a cooperative for many years since its start-up in 1998, and decided to become a private
company in 2010.
This is coherent with the strong economic development of Africa in the last 15 years: the continent
is the second fastest growing region in the world after Emerging Asia, with an annual GDP growth
rate exceeding 5%12
.
In such a dynamic context it is significant to notice that Proplast, started by an NGO, decided to
change its legal structure moving to a new legal form that allows it to exploit the new opportunities
- also in terms of external financing - that a growing economy offers.
Asfortheoriginofthecompanies,itisinterestingtonoticethatbothlocalandforeignentrepreneurs
decided to embark in ventures that address a challenge that is considered intractable and is usually
left to the public institutions.
12. “Lions on the move: The progress and potential of African economies”, McKinsey and Company
33. 33
Volumes collected / tre-
ated
Sales / year Breakeven Company
5 tons / month
$ 38.000
(2013)
No
Should be reached
in 2014
20 tons/month
(scaling up
to 100 tons/
month)
$ 150.000
(2013)
No
Should be reached
in 2014 with scale-
up of operations
25 tons / month
$ 99.000
(2013)
No
Will require sub-
stantial scale to
reach breakeven
50 tons / month
$ 250.000
(2013)
Yes
The company is
now focusing on ex-
panding its business
150 tons /month
$ 50.000
(2013)
No
Will require sub-
stantial scale to
reach breakeven
5
20
25
50
150
A combination of increased environmental sensibility and conscience that a business opportunity
was opening up – due to the Government inability to tackle the problem – stimulated entrepreneurs
of different backgrounds to enter the sector.
Partnerships and funding
Funding: The companies leveraged on a pretty diverse set of partnerships, but all of them – in one
form or another – had access to grants. The level of grant- financing has been very different among
the five companies, but it can be reasonably assumed that none of them would have reached the
current stage of development without it.
All the companies but one have already received non-grant financing by external investors, while
the other (Wecyclers) is now interested in attracting investors. As in other sectors, grant funding can
be vital for the start-up of social enterprises, paving the way for the entrance of private investors
in the growth phase.
34. 34
Blended Capital
Typically, social enterprises have to deal with
different actors (i.e. Donors, Banks, Investors)
in order to receive support, and everyone of
these actors tend to stick to their own usual
funding area (a donor provides a grant, a bank
provides a loan, an investor provides equity)
Thiskindofapproachisnotideal,assplittingthe
type of capital needed by the company among
different providers might reduce the efficiency
and the effectiveness of the support.
More and more social enterprises are looking
for blended capital, from actors that are able
and willing to offer different types of capital
(grants, loans, equity) to the same company.
Thisappearstobethemostappropriatesupport
for the specific needs of social enterprises
The public sector: The role of the Government
is significant, especially for the companies that
directly operate in waste collection. Waste
management is often heavy regulated, and
is typically under the responsibility of public
authorities.
However, the under-funded public sector
might see positively the intervention of private
actors in this space, above all if these are able
to effectively operate in low-income contexts
where the waste challenge is particularly tough
and external support might be needed.
Local communities: the involvement of local
communities happens in different ways. Often
it is through the direct employment for local
low-income communities as collectors, sorters,
resellers of recyclables. In other cases local
communities can become active economic
players, directly dealing with the companies as
business partners; in this case the relationship
is somehow less direct but potentially more
empowering.
The involvement of vulnerable and low-income
communities is not easily achieved, as these
usually lack the skills and the sophistication
needed to independently run small businesses
in such a complex and new sector. In these
cases, the provision of adequate training
is vital, and the role of support-agencies is
particularly relevant.
Private sector: It is interesting to notice that
only one of the selected companies (Wecyclers)
is actively engaging with the private sector
to structure and run its activities, as the
partnerships with big corporations such as
Coca Cola and Samsung represent a structural
part of their business model.
This is a relevant opportunity and should not be
overlookedbecause-asenvironmentalsensibility
increases also in African countries - large private
actors will have to adapt their strategies to the
changing behaviours of customers.
35. 35
Activities and Business Models
Only two companies, among the five selected,
work exclusively on plastic (EcoPost and
Proplast), while the others have a broader
focus and operate also with other types of
waste materials.
EcoPost and Proplast are also the two
companies that are closer to sustainability:
Proplast is already profitable, while EcoPost
should reach breakeven in 2014.
The reason is that these two companies are
the only ones in the cohort that are processing
waste at a significant level, producing finished
(EcoPost) or semi-finished products (Proplast)
that are sold to third parties. In addition, both
companies are not directly involved in waste
collection.
This is particularly significant, as it reaffirms the
fact that plastic recycling and processing offer
the economic potential to build successful
businesses,while–atthesametime–providing
positive social and environmental impact.
Two other companies – Zanrec and Taka
Taka Solutions – are pretty similar in terms
of business model and activities, albeit at
different stage of development. Both directly
collect waste, offering a paid service to their
customers, and generate revenues also from
the sale of unprocessed recyclables and – in
perspective – from the production and sale of
compost.
It’s known that waste collection is the phase
in municipal waste management where
companies operate at the lowest margin. In
developing countries this is exacerbated by the
extremely low-income level of customers that
are served.
As a consequence, it is virtually impossible for
a private enterprise to be sustainable while
providing only waste collection services. In
these contexts extracting value from waste is
not only a matter of environmental and social,
but also of economic sustainability.
The strategy that both Zanrec and Taka Taka
are implementing is to add to their waste
collection activity the resale of recyclables, and
– above all –to produce and sell compost as a
high-value agricultural fertiliser.
Wecyclers differentiate from all the other
companies in the group with its creative
business model characterized by incentivising
low-income communities in providing the
company with high-quality recyclable waste
in exchange for redeemable points. In this
business model the relationship with the
private sector is very important, as it can play
an essential role in stimulating its customers
toward a more sustainable approach to waste
disposal.
Despite the company being in its start-up phase
and still having to prove the sustainability of its
model, the Wecyclers experience clearly shows
that even in such an established sector there is
still room for innovation.
Impact
All the five social enterprises analysed deliver
a positive environmental and social impact to
the communities where they work.
Job creation is the most evident impact:
although the number of direct employees is
relatively limited, all the social enterprises
generate many more indirect jobs, above all
in the waste collection phase. These jobs are
particularly significant, as they are typically
found in low-income communities where
stable employment opportunities are lacking.
Environmental protection is the second great
impactarea:byproperlycollectingwaste,social
enterprises are preserving the environment
and limiting deforestation, and are avoiding
the production of other waste by adding value
to recyclables, which are reintroduced in the
production cycle.
36. 36
Finally, a large impact area – albeit of difficult
quantification – is in terms of improved living
conditions, with positive consequences on the
health of the people belonging to low-income
communities.
Even if impact monitoring and measurement
in social enterprises is typically elusive, it’s
possible to sketch a comparison between the
five different companies.
Fromthepointofviewof jobcreation,itisclear
that the companies that work in the collection
phase offer a higher number of full-time and
stable jobs. Moreover, these companies are
directly in control of the salaries and of the
working conditions of their employees, and
therefore offer better guarantees in terms of
the quality of the jobs created.
All in all, waste collection companies offer and
higher impact in terms of direct job creation
opportunities.
From the environmental point of view the
most quantifiable parameter is the amount of
waste “treated” (collected or processed) by the
differentcompanies.Fromthispointofview,it’s
not possible to come to any significant ranking
of the different impact models. However, it is
reasonable to assume that the companies that
are not directly involved in waste collection
might scale more easily, at least on the supply
side of their model, as they can leverage on
external networks. It’s also true, however,
that - if waste is going to be processed and not
simply resold - processing capacity bottlenecks
might represent the real constrain for such
companies to scale-up their activities.
If we take a look at the companies’ impact
models,itcouldbearguedthattheintegrated
waste collection model - which both Taka
Taka Solutions and Zanrec are trying to build
- potentially offers a more comprehensive
solutiontothewasteproblem,andatthesame
time also offers the highest potential social
impact. This is because, by operating directly
in the collection phase, the two companies
offer the largest employment opportunities;
by reselling recyclables, they promote the
reuse and the recycling of disposed goods,
thus extending the life cycle of materials; by
composting the organic waste they provide a
support to sustainable agriculture that can,
in turn, increase productivity and generate
additional jobs.
It is worth noting that these conclusions are
obviously preliminary, and depend on the
specific companies that are analysed in this
report; moreover, these companies are at
different stages of development and operate
in substantially different contexts.
37. 37
The analysis of five different African social
enterprisesoperatinginthewastemanagement
sector has allowed identifying several key
conclusions.
For what concerns the African waste
management sector in general, we highlight
the following trends:
As other areas of the African economy, waste•
management is a growing business, which is
attracting new companies that see a huge
economic potential in the sector;
Governments and Local Authorities in•
general are playing a vital role in the sector,
above all for what concerns waste collection
activities in low income areas;
It is fundamental to make steps forwards•
in terms of the legislative framework that
regulates waste management in African
countries.
Social Enterprises can become relevant•
actors in multi-stakeholders platforms on
policy, incentives and regulation of the
waste sector.
Plastic processing seems to offer, among•
all the waste-related activities, a particular
high potential in terms of economic
sustainability;
Waste collection activities in low-income•
communities are particularly challenging
both from an operational and from an
economic point of view; as a consequence,
otheractivities–suchascompostproduction
– are being developed in order to extract
more value from the waste.
Social Enterprises might play an important role
in the sector as:
They tend to operate in communities•
and neighbourhoods where traditional
companies usually decide not to operate,
thus helping Local Authorities in facing the
waste challenge;
The impact that they generate in these•
communities is huge, and include
employment creation, environmental
safeguard and health protection;
They might represent an important source•
of innovation in such a traditional sector,
extending their impact to the whole waste
sector, with a catalytic effect.
On the funding side, it has to be highlighted
that for social enterprises the role of
philanthropic capital is still vital, especially in
the initial phases of their lives. Moreover, this
support can be leveraged by the companies in
their growth phase in order to unlock private
capital.
However, what probably social enterprises
need the most is blended capital , (grants,
loans and equity provided by the same actors),
as it is the most flexible, efficient and effective
form of capital, the best suited for the needs of
social enterprises.
Conclusions