A Kickass Business Plan – Establish a Productive Plastics Recycling Plant

In a previous article, we examined the basic elements of a comprehensive business plan. I also shared a link to a business plan around the production of soy milk in Tanzania. In this article, I’m providing yet another business plan on the establishment of a small scale plastics recycling unit.

Both business plans should serve to familiarize the purpose and outline of a business plan. Should you choose to write your own business plan and have questions or if you need help preparing one for your business idea, leave a comment or contact me directly and I’ll respond within 48 hours.


A Sample Business Plan - Establish a Plastics Recycling Plant LogoPin


The growing utilization of plastics in industrial and consumer applications, combined with increased consumer awareness surrounding solid waste recycling, has led to an increased demand for recycled plastic resins and products. One of the fastest growing types of collected plastic materials for recycling is polyethylene terephthalate (“PET”) from post-consumer beverage and water bottles. W2W will capitalize on the opportunities in the recycled resin and packaging markets through two main divisions: a Recycling Division and a Packaging Division.

The Company will create a PET cleaning and recycling plant located in Central Mwanza. Its initial capacity will be 500,000 pounds, and it will utilize post-consumer bottle feed stock presently collected in the Northern zone, which collects over 10 million pounds per year. The Company will be vertically integrated, and use almost all of its recycled material in its Packaging Division. Any surplus materials (clean flake) produced will be sold to outside companies. The extruded sheet may then be sold to manufacturers, who will thermoform it into high-visibility packaging or use it in other high value added manufacturing operations.

The strapping will be sold to companies who ship large packages or pallets, such as the lumber milling industry.

Waste recycling refers to the practice of adding value to used material by re-styling, refurbishment and renewal to a position of saleable products. Recycling has been used in different parts of the world as a means to better manage resources and reduce costs and the impact of waste materials on the environment. In Tanzania, the recycling of plastics has been chosen as an appropriate way to

  • Demonstrate  the  potential  for  lessening  the  impact  of  waste  plastics  on  the environment
    • Reduce operational and production costs for the plastics industry
    • Create  income  and  employment  opportunities  within  the  labor-intensive  urban recycling sector through economic linkages with processing facilities.

The level of waste recycling in Tanzania is low. There is more wealth to be created by our waste. A lot of employment opportunities can be created through this venture. The following waste can be recycled; paper, cardboard, newspapers, catalogues, magazines, glass bottles, plastic bottles, jars, aluminum, car batteries, cans, CDs, metal, electrical equipment, fluorescent tubes, ink jet cartridges, used engine oil, video tapes, unused paints, asbestos materials, used cooking oil etc. W2W will venture into the post consumer plastic recycling industry and help Tanzania escape the waste problems across the country by recycling and exporting plastic waste products such as PET etc.

W2W will reuse the raw materials that various products contain; rather than throwing goods in a dump, materials like waste plastic will be sent to facilities that separate and reprocess them, potentially saving energy, pollution and much more.

Waste REuse is even better than recycling; many perfectly good items can be re-used (by us or others) rather than thrown out or recycled.

REMake targets SMEs with ambitions to grow along the future greening processes in the manufacturing of engineered products focusing, in particular, on innovations concerning the leading market for the recycled wastes in most relevant sub-sectors of the manufacturing industry in Tanzania particularly plastic products but also including fabricated metal products, surface finishing, mechanical engineering, electric and electronic equipment.

Waste management – with population growth and more industrialization around the world, there is a growing need for ways to properly handle waste products.

A Sample Business Plan - Establish a Plastics Recycling PlantPin


2.1  Definition of Business Concept

Recycling Division Using a patented process, W2W will create a PET cleaning and recycling plant in the Central Mwanza region chosen because all major Tanzanian PET recycling plants are currently located in the central and eastern regions particularly Dar-es-salaam. Its initial annual capacity will be 500,000 pounds and it will utilize bottle feed stock from immediate regional locations, which collect over 10,000,000 pounds per year. The Company

will become totally vertically integrated, and use all or almost all of its recycled material in its Packaging Division.  Any surplus material produced will be sold to outside companies. Packaging Division W2W will create a plant (actual facilities to be shared with the Recycling Division) to manufacture extruded plastic roll stock sheet or high-strength strapping using recycled PET resin and which will be primarily sold to thermoformers who will convert it into high visibility packaging, as well as laminators and fabricators. The strapping will be sold to commercial users for use as package or pallet strapping.

2.2  Investment Cost and Financing Plan

The initial expenses are budgeted at $55,000, mostly for on-site contractor services during facility preparation. $3,000 has been set aside for legal and accounting, $2,000 for special consulting during start up, $7,000 each for local engineering and lab equipment and supplies,

$6,000 as contingency for the start up period. The largest start-up requirement is a recycling and extrusion facility. W2W needs $18,000 in machinery and fixtures, $5,000 of inventory (plastic bottle feed stock) and cash to cover us through the initial year.

2.3  Collateral Arrangements

The owner will secure bank credit on a personal chattel and other property.


3.1  The Vision

W2W strives to provide excellent plastic solutions to the customers at competitive prices; continually expand its range of products and position itself to service large and small customers, both locally and internationally.

3.2  The Mission Statement

W2W is a manufacturing company dedicated to converting waste plastic materials into commercially viable products, utilizing environmentally friendly recycling and manufacturing methods. We intend to make enough profit to generate a significant return for our investors and to finance continued growth and continued development in quality products. We will also maintain a friendly, fair, and creative work environment, which respects diversity, new ideas and hard work.

3.3  Legal Status

W2W is a start-up concept and will go through registration, incorporation and acquire a trading license following the acquisition of relevant capital.

3.4  Profiles of Key Principles

The founders will form the senior management group. Several qualified candidates will be sought for the position of plant manager. The balance of the employees will be hired and trained during the equipment purchase and installation phase (first five months after funding). Because the sales management function will be the responsibility of CEO and Marketing manager, with projected use of familiar sales agents, there are no plans for additional inside sales people or managers. In addition to their respective duties, equity holders will each

become totally familiar with all aspects of Senior Management, and be in a position to take over for each other should the need arise.

Plastics Recycling Business Plan TanzaniaPin


4.1  Industry Overview

Direct competition exists for both divisions of the company. Any production in the trading area remains captive and not available to our target market. The ability of the Company to obtain a source of post-consumer bottle stock is an integral component of the strategy to vertically integrate operations and manufacture products in demand by consuming industries. Without the cleaning and recycling division, it would be difficult to source sufficient RPET flake resin at costs that would allow the Company to be competitive.

4.2  Product / Service Description

W2W will utilize two processes in the same facility to produce:

  • Cleaned and recycled plastic PET flake (RPET), recovered from post-consumer beverage bottles and manufacturing waste produced by its sheet customers
    • Extruded roll stock sheet PET.
    • Extruded PET high-strength strapping for securing large packages or pallet loads; each using 100% RPET produced in-house

Roll stock sheet will be sold to custom thermoformers primarily for high-visibility packaging. It will also be sold to manufacturers of laminates and fabricated plastic products. High strength PET packaging strapping is used to secure packages or pallets in such industries as lumber milling and corrugated and other paper production.

Both products will be extruded from post-consumer polyethylene terephthalate (PET) bottles.

4.3  Business Environment Scanning-SWOT Analysis

The main keys to the success of the Company include: Secure Supply– Contract for supply of post-consumer bottles and post-industrial manufacturing waste for PET raw material feed stock; Marketing – Contractual arrangements for the sale of virtually all initial production; Management – Strong senior management with extensive, broad-based, industry-specific experience.

Barriers to Entry include Limited Supply of raw materials; Equipment costs are high and industry specific, resulting in a high exit cost; Vertical integration is important and difficult to accomplish successfully; Firm contracts for supply and sales; and Freight is a major operations cost; proximity to supply sources and markets is crucial.

4.4  Business Positioning

Value Proposition In a vertically integrated environment, W2W will apply recycling and extrusion technology managed by decades of industry specific expertise to create a competitive advantage for its clients. These processes will produce clean, cost-efficient, recycled raw material for manufacturers of thermoform, laminate and high strength packaging strapping for shippers of large products and pallets, thereby reducing costs and creating a clear pricing edge among their competitors. W2W will position itself as a party with a direct interest in keeping the environment clean & free from non biodegradable plastic materials as well as advocates for the maximum utilization of PET scraps materials.


5.1  The Market Definition

Target Market Segment Strategy The Company has chosen its target markets because recycled PET (RPET) is in high demand as flake resin by converters, as roll stock sheet used to produce high visibility packaging and as high strength strapping for the lumber industry.

RPET Flake Scarce supply forces consumers to look at wide spec virgin PET which is normally sold at a discount to virgin prices, but still higher than recycled (RPET) pricing. The current pricing for virgin resin is $0.65-0.73 per lb. and $0.42-.53 for RPET flake. The spread between the two has traditionally been maintained at approximately $0.20 per lb.PET Film & Sheet Current pricing for RPET sheet is $0.70-0.79 per lb.RPET Strapping It is generally accepted in the industry that less expensive strapping made from RPET could not only take over the polypropylene strapping market, but convert as much of the much larger and more expensive steel strapping market as RPET strapping was available. Current pricing for RPET strapping is $0.90 -1.08 per lb.

5.2  Market Size and Trends

Strong demand for recycled plastics is working in the industry’s favor. Major users of plastic packaging, have begun incorporating at least some recycled plastic content in their products as part of the growing interest in recycling. Recycled resin demand is on the rise as prices for the two major recycled resins, PET and HDPE, continue to hold value or appreciate against their virgin counterparts.

In recent years, the household recycling rate of PET bottles has more than doubled to 30% of all PET soft drink bottles sold.  In fact, PET’s recycling rate is the fastest growing among all beverage containers. The future of PET recycling is even brighter than it has been in the past. The recycling industry intends to accelerate the rate of plastic recycling as part of its commitment to develop solutions to the solid waste problem.

Industry analysts have projected that 50% of all PET containers will be recycled by the year 2025. More plastics will be recycled annually than any other recyclable material. There is presently below average demand from local cleaning and recycling facilities converting the bottles into resins suitable for re-manufacturing. A strong demand for post-consumer bottles from Asia has prevented the buildup of inventories and reduced the pressure for the collection industry to find or develop western markets.

5.3  The Competition

Tanzania already has over 20 participants in the recycling industry. Finalized in 2008, Enviropet Tanzania Ltd is a Dar-es-salaam based post-consumer plastic recycling firm. The Bakhresa Group of Food Products currently has a plastics recycling division dedicated to recycling used PET bottles and converting them to pellets which can be re-used for various applications such as with the bottles used to package their Uhai brand of water products.

Morogoro Plastic boasts a network of grinding and washing plants across the country. In particular, in Dar es Salaam there is now a thriving private sector-led recycling sector network in which plastics companies are forging numerous mutually-beneficial partnerships with small recycling operators in micro supply-chain linkages. Late last year, the recycling technology came under pressure as competition hit by-products, a survey by the TOMRIC news agency revealed.

5.4  Marketing Strategy and Plan-The 4Ps

The Product W2W will develop environmentally friendly products by using 3R that is Reduce, Reuse and Recycle.

The Price There is a myth that recycled products always cost more than “virgin” products. It is a myth because while some recycled products are more expensive, some are competitive and some are less expensive. Rapid penetration pricing will be coupled with awareness creation on the part environmentally minded consumers.

Product promotion Dispelling the myth that buying recycled products means comprising on quality and just looking through catalogs; Play up the fact that recycled products can and do cost less than virgin products. Encourage good purchasing decisions at home and works that help to reduce society’s solid waste burden. Market research on labeling perceptions and approval ratings on the post-consumer content labels and recycling symbol.

5.5 Estimated Sales

Year/period of operationAmount in dollarsExchange rate
First quarter5000USD=1600 TZS
Second quarter7000USD=1600 TZS
Third quarter9000USD=1600 TZS
Fourth quarter11000USD=1600 TZS
Second year67000USD=1650 TZS
Third year93000USD=1700 TZS


6.1  Development Status

The proposed recycling processing project will look to prioritize plastic waste and later incorporate wood, paper and metal waste. Plastics are rapidly becoming an urban menace with not infrequent blockages of infrastructure, littering and non-biodegradable environmental damage.

6.2  Production and Operational Process

Tanzania produces nearly 200 tons of plastic per day. Plastic waste collected will be sorted, cleaned and then put forth for extrusion in the extruding section. Grinding and washing (in a Washing System) will then follow. A shredder will be used to grind or break down rigid plastic items into small “flakes”. An agglomerator will then be used for converting soft plastic sheets into a crumb-like consistency or “crumbs”. An extruder-pelletizer machine will then convert both flakes and crumbs into pellets using heat, an extruder and a pelletizing unit.

6.3  Business Location and Infrastructure

Central Mwanza preferably close to Lake Victoria to enhance the setting up of a washing unit, and suitably close to the main distribution roadways.

6.4  Labor and Skills requirements

The Company expects to have a head count of 11 (2 part-time) by the end of year one, 16 (4 part-time) in year two, and 25 (5 part-time) in year three through five at full capacity. We have budgeted for labor rates ranging from $0.5 per hour for unskilled labor to $1 per hour for machine operators and Maintenance Technicians. We expect to pay $1.5 per hour to supervisors. We have also included 30% burden for benefits and employee costs, as well as a 25% bonus potential for all plant employees.

6.5  Utilities availability and Reliability

Industrial power supply is reliable and relatively affordable; water will be available in gross quantities at a cheaper price. Modern communications are assured in this relatively urban area.

  • Capital Requirements
  • Implementation Schedule

W2W will utilize industry-wide relationships to obtain significant contracts for its production. Some business will be obtained directly by Management, while some amount of product will be sold by sales agents well known to the Company who have proven their effectiveness.

Plastics Recycling Plant Business Plan TanzaniaPin


7.1  Management Description and Responsibilities

W2W will enjoin a graduate engineer with experience in the post-consumer plastics recycling industry. In the finance division, the firm plans to recruit an ace with investment and merchant banking and management experience who may even take up an advisory role on the board provided their having worked in both the public and private sectors and with a proven track record in raising finance.

7.2  Organization Structure

The Organizational Structure of W2W is planned to be a simple and traditional one. All recycling and manufacturing operations will report to the COO. All administrative and finance functions will report to the CFO. Both the COO and CFO will report to the CEO, who will also have the responsibility for Sales and Marketing.

7.3 Company Ownership

W2W will be owned by the initial founders, who are the proposed executives of the operating entity. The business plan was conceived and developed by these individuals, with the intent to apply their extensive experience and contacts in the industry to building a successful profitable corporation.

7.4 Board of Directors

W2W plans to enlist the services of experienced professionals encompassing all aspects of Polymer Raw Material, Plastic Conversion Methods, and Venture Development. W2W will seek support from industrial organizations such as UNIDO and TIRDO who have successfully created, in collaboration with donor-funded programs, ventures in the plastic converting industry, and assisted in the launch plastic converting manufacturing plants.

7.5 Support Services

Local governments, Research institutions and industrial support organizations such as the Ministry of Industry, Trade and Marketing, TIRDO and UNIDO are expected to play a role of assisting W2W to search and develop new products and waste recycling technologies and processes to improve its competitiveness in the recycling industry. Donors, NGOs and private sector industrialists will help support studies related to establishment of recycling industries in the country, awareness creation programs and capacity building through exposure visits, links to recycling enterprises and technology transfer arrangements.


8.1 Basic Assumptions

30 day collection period due to knowledge/experience with customers in the industry.

Inventory turnover is predicted at 12 times, which is extremely conservative.

The personnel burden includes contribution by the Company to employee health care.

Accounts Receivable financing of 70% at an interest rate of 12% per annum.

General annual growth rates of 5% on all sales prices and material and labor costs.

8.2 Capital Investment and Cost Schedule

Capital Investment

 Capital ItemsQuantityUnit CostTotal Cost
1Agglomerator1USD 4000USD 4000
2Plastic Shredder1USD 15000USD 13000
3Extruder Pelletizer1USD 18000USD 17000
5PET Bottle Washing unit1USD 18000USD 18000

8.3 Depreciation Schedule

Buildings4%Storage and operation
Plant, equipment and12.5%Soymilk maker, tofu maker,

8.4 Sources of Funds and Financing Plan

Once the equipment arrives and is installed, production ramps up rather quickly, with sales beginning in the sixth month after funding. Positive cash flow and net profit will be achieved within the first year.

8.5 Financial Risks

These include unavailable or scarce raw material feed stock for production; Technology employed may be unreliable or unproven; There may not be a market for the Company’s products; The location may not be near enough to markets; The Company may not be able to attract top management; Company may not meet environmental standards; and The Company may not be able to sell all of its production capability.

8.6 Analysis of Financial Results

After a four month start-up period to build the recycling and packaging facilities, buy equipment, and incorporate the business, W2W will begin a quick turnaround of product. Sales will begin in May, and with over $32,000 in sales the first year, we will see a first year net profit of $4,100. The owner is investing $5,500, and is looking to raise at least 50,000$ through grants and securing at least $30K in a long-term loan.

The Company is also seeking an investment of $27,000 in order to begin operations. These funds will be used for the purchase of one recycling line and one packaging line, for the set up of the plant facilities and for working capital. An outside investor providing this amount would receive 48% equity in W2W, and receive an IRR of 69% from simple dividends alone over the next 5 years. At the end of that period, we will consider a public offering of stock or a buy-out by a related business. Recent information on private sales of similar industry companies has indicated that transactions under $25 million have averaged 5.3 times EBITDA, while transactions in the range of $25-250 million have averaged over 7 times EBITDA.


9.1  Funding Requirements

The recycling sector is largely expensive and to sheath the scale of operations from unnecessary commitments, USD 55,000 or more will be raised to bring this venture to fruition. As much as 85% will be secured through equity investments and bank credit. At least USD 20,000 looks to be raised through a long-term loan agreement with a bank that shares investment sentiments. At least USD 50,000 is required for complete recycling operations to begin. Most of the equipment will be imported from Asian market particularly China.

W2W’s Exit Strategy

Management is indifferent as to the question of looking to sell the Company after 4-5 years or retaining ownership and the resulting annual cash flow. They will look to the investors for their direction and will generally support their wishes.

Recent information on private sales of similar industry companies has indicated that transactions under $25 million have averaged 5.3 times EBITDA, while transactions in the range of $25-250 million have averaged over 7 times EBITDA.

Such multiples would put the potential sales price of W2W, after 4-5 years of operation, in excess of $300,000 based on current projections.

9.2  Cash flow statements

See cash flow template– Ms. Excel document

9.3  Balance sheet

See Balance Sheet template– Ms. Excel document

9.4  Income statement

See Income statement template– Ms. Excel document

Click here to download the full business plan in PDF format.

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