Plastic Recycling Business: A Guide For Filipinos

The Philippines faces a significant plastic waste crisis, with the country contributing around one-third of all ocean plastic globally. This issue has been exacerbated by the sachet economy and a lack of awareness about proper waste disposal methods among the public. However, the growing problem has also created opportunities for entrepreneurs interested in starting a plastic recycling business. In the Philippines, several legal and logistical requirements must be met, including obtaining necessary licenses and authorisations, such as an incorporation certificate, Consent NOCs, and an EPR authorisation. Additionally, there are financial considerations, such as the cost of specialist recycling machines, which can range from $10,000 to $100,000. Entrepreneurs must also decide on the type of plastic to recycle and choose suitable recycling machinery.

Starting a plastic recycling business in the Philippines

Research the market and business plan

Market research is a crucial step in starting a plastic recycling business in the Philippines. It is essential to understand the local market dynamics, the demand for recycled plastic products, and the existing competition. Here are some key considerations for researching the market and developing a business plan:

Understanding the Plastic Waste Problem in the Philippines:

The Philippines contributes significantly to global ocean plastic pollution, with approximately one-third of ocean plastic originating from Asian rivers, according to a 2021 report by Oxford University's Our World in Data. The country's sachet economy and lack of a clear strategy to manage plastic waste have resulted in a worsening plastic waste crisis. This presents a unique opportunity for your business to address a pressing environmental issue.

Identifying Your Target Market:

Determine your target customers and their specific needs. Will you be collecting plastic waste from restaurants, companies, consumers, or a combination of these sources, as The Plaf does? Understanding your customer base will help you tailor your recycling processes and develop products that meet their needs.

Researching Local and State Requirements:

Familiarize yourself with the legal and regulatory framework for recycling businesses in the Philippines. This includes obtaining necessary licenses and authorizations, such as an incorporation certificate, Consent NOCs from State Pollution Control Boards, EPR authorization, and a factory license. Contact the relevant government departments and seek clarification on any requirements specific to your business.

Analyzing the Competition:

Research existing plastic recycling businesses in the Philippines, such as Resiklo and The Plaf, to understand their business models, products, and market positioning. Look for gaps or areas where you can differentiate your business to gain a competitive edge.

Choosing the Type of Plastic to Recycle:

Decide on the specific types of plastic you will recycle, such as PET, HDPE, LDPE, or PP. Each type of plastic may require different processing methods, so it is essential to understand the properties and recycling processes for each.

Estimating Start-up Costs and Financing:

Determine the start-up costs for your recycling business, including equipment purchases, location leasing, and operational costs. Specialist recycling machines can range in price from $10,000 to $100,000. Identify potential sources of financing, such as loans or investors, and compare their terms and interest rates.

Developing a Marketing Strategy:

Create a plan to promote your recycling business to potential clients, including counties, cities, municipalities, and plastic manufacturing companies. Consider building a website, creating brochures, and utilizing other marketing collateral to raise awareness of your business and its unique offerings.

Remember, thorough market research and a well-thought-out business plan will increase your chances of success in the plastic recycling industry in the Philippines.

Identify the type of plastic to recycle

When starting a plastic recycling business in the Philippines, one of the first and most crucial steps is to identify the specific types of plastic you want to recycle. This is important because not all plastics are created equal; they come in various forms, with distinct chemical compositions, properties, and recycling protocols. Here's a comprehensive guide to help you identify the types of plastic you should consider for your recycling business:

Understanding Plastic Resin Codes:

Plastic products are often marked with a resin identification code, which is a number enclosed by a triangle of arrows. These codes help identify the type of plastic resin used. The most common resin codes you'll encounter are:

• PET (Polyethylene Terephthalate): Commonly used for beverage bottles, food packaging, and containers. It is lightweight, strong, and has good barrier properties.

Choose and source machinery

When choosing and sourcing machinery for a plastic recycling business in the Philippines, there are several factors to consider. Firstly, determine the type of plastic you will be recycling, as different plastics may require special processing. The most commonly recycled plastics are PET (Polyethylene terephthalate), HDPE (High-density polyethylene), LDPE (Low-density polyethylene), and PP (Polypropylene). The type of plastic you choose to recycle will dictate the machinery you need. For instance, a machine with a cutter-compactor is suitable for processing HDPE, LDPE, and PP film materials, while a single-shaft shredder is ideal for stronger materials like PP raffia.

Next, consider the scale of your operations and your budget. If you are starting on a smaller scale, you may opt for a mini plastic recycling machine, which is more cost-effective and space-efficient. These machines are perfect for recycling plastic waste directly from your factory floor, as they can be placed next to blown film or bag-making machines. Alternatively, you could invest in larger-scale equipment if you have the budget and space.

To source your machinery, you can either purchase it new or look for certified refurbished waste machinery to save on costs. When buying new machinery, conduct thorough market research to find a reputable dealer who offers high-quality machines at reasonable prices and provides additional services. You may also want to consider seeking out local recycling entrepreneurs, such as Koshneir Sarte Jimenez from Resiklo, who builds his recycling machines, or Precious Plastic Philippines, which has been building small-scale recycling machines for several years.

Lastly, employ a technician familiar with the machinery and plastic recycling process. This person can help you operate the machinery efficiently and safely. You can also hire an advisor or consultant with experience in the plastic recycling industry to guide you in making efficient and effective choices for your business.

Secure funding and location

Starting a plastic recycling business in the Philippines requires careful planning and consideration of various factors, including funding and location. Here are some detailed instructions to help you secure the necessary funding and find an ideal location for your business:

Secure Funding:

• Determine Start-up Costs: Estimate the initial costs required to establish your plastic recycling business. This includes expenses for leasing a location, purchasing equipment, and covering operational costs during the first few months.
• Identify Funding Sources: Explore potential sources of funding, such as personal savings, loans from financial institutions, or partnerships with investors. Compare interest rates and terms from multiple lenders to secure the most favourable financial arrangements.
• Explore Government Initiatives: Research government grants, subsidies, or loans specifically designed to support recycling businesses or environmental initiatives. These opportunities can provide additional funding and demonstrate your commitment to sustainability.
• Develop a Business Plan: Create a comprehensive business plan that outlines your company's mission, services, target market, financial projections, and growth strategy. This plan can help attract potential investors and secure funding from financial institutions.

Choose a Location:

• Research Local Regulations: Familiarize yourself with local and state requirements, zoning laws, and environmental regulations that may impact your business operations. This knowledge will help you make informed decisions about your location.
• Select an Appropriate Space: Choose a location that can accommodate your recycling machinery and equipment. Consider warehouse or plant locations that offer ample space for your operations and potential future expansion.
• Proximity to Suppliers and Customers: Opt for a location that is conveniently accessible for your suppliers and customers. Being centrally located or near transportation hubs can streamline the transportation of plastics from clients to your facility.
• Environmental Considerations: Ensure that your chosen location complies with environmental regulations and does not pose any risks to the surrounding area. Consult with local authorities and conduct thorough due diligence to make an informed decision.
• Infrastructure and Utilities: Assess the availability of essential utilities such as electricity, water, and waste management services at your chosen location. Ensure that the site can support the energy demands of your recycling equipment and day-to-day operations.

Marketing and promotion

• Identify your target audience: Research and understand your potential customers, including businesses, organizations, and individuals interested in recycling. Determine their needs and preferences for plastic recycling services.
• Develop a strong brand: Create a unique and memorable brand identity for your recycling business. This includes choosing a catchy and relevant name, designing a logo, and establishing a consistent visual style for all your marketing materials.
• Build an online presence: Create a user-friendly and informative website that showcases your recycling services, contact information, and the benefits of choosing your company. Optimize your website for search engines to improve its visibility. Additionally, leverage social media platforms to reach a wider audience and engage with potential customers.
• Utilize print and digital marketing collateral: Design professional brochures, flyers, and other promotional materials that highlight the features and advantages of your plastic recycling business. Distribute these materials in strategic locations, such as local businesses, community centers, and events.
• Network and build partnerships: Attend industry events, conferences, and workshops to network with potential clients, suppliers, and partners. Collaborating with organizations like the Center for International Trade Expositions and Missions (CITEM) and the World Economic Forum's Global Plastic Action Partnership (GPAP) can help you reach a wider audience and establish yourself in the industry.
• Offer incentives: Consider providing promotions or discounts to early adopters of your recycling services. This can help attract customers and build loyalty.
• Public relations and media outreach: Reach out to local media outlets, such as newspapers, magazines, and online publications, to share your story and raise awareness about your plastic recycling business. Highlight the environmental impact and the benefits your company brings to the community.
• Partner with local businesses: Collaborate with local businesses, such as restaurants, companies, and retailers, to collect their plastic waste for recycling. This not only helps the environment but also creates a network of supporters who can spread the word about your business.
• Educate the community: Organize workshops, seminars, or information campaigns to educate the public about the importance of plastic recycling. By providing knowledge and resources, you can empower individuals to take action and potentially increase participation in your recycling initiatives.
• Leverage success stories: Share testimonials and case studies from satisfied customers or partners who have benefited from your recycling services. Highlight the positive impact your business has had on the environment and the community.

Remember, effective marketing and promotion are crucial to the success of your plastic recycling business. By implementing these strategies and adapting them to your specific target audience and location, you can increase awareness, attract customers, and establish yourself as a trusted and environmentally conscious brand in the Philippines.

Frequently asked questions