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Enterprise &Ideas

CONTENTS Taka Kenya 50 The Metal Merchants 51 The Flip Flop Recycling Company 52 Bottom of the Pyramid 53

Sh500,000
The overseas resale value of one ton of copper, a non-ferrous metal

Scrap turns in a pretty

STARTING UP

penny
BY AKINYI JOSEPH

Entrepreneurs are investing and earning millions from recycled materials

ith the capital city alone producing 2,000 tonnes of garbage a day - equivalent to four mountain high football fields - the waste management industry in Kenya continues to oer a lucrative source of revenue for local businesses who are willing to rie through the trash.

Taka Kenya
Every business - regardless of the industry works on the basic idea of exchanging money for a good or a service. At a shop, you exchange money for groceries; at a restaurant for food; at a petrol station for fuel and so on. The business model operates on the simple concept of give and take: give money and get something in exchange. Garbage collectors, on the other hand, have the potential to diversify this standard model since they are paid a service fee to collect a product - business and residential waste - that has a resale value, thus creating two streams of revenue from one product. Of the 70 private garbage collection companies which operate in the void left by the countrys city and municipal councils, however, the countrys rubbish is currently only transported
| Nairobi Business Monthly April Above: Zameer Noorali, Executive Director of Taka Kenya.The bulk of Taka Kenyas start up investment was spent on semi-automated trucks.

In less than three months Taka Kenya already boasts a high prole clientele including the Serena Group, Diamond Plaza, Nakumatt, London Distillers and various residential homes
Kenya asks. The result of this is two-fold. First, a smaller percentage of the countrys waste - between 5% to 20% - ultimately arrives at a dumpsite after all the value has been gleaned from it. And second, a cost sharing approach to the business through which both the waste producer and the waste manager benet. It is a business opportunity that Zameer, a 50% shareholder, and his three business partners - two local real estate investors, and a US based company which oers technical support

from a residence or business to a dump site such as Dandora and various other illegal landlls. Taka Kenya which started operations in Nairobi in February, however, completes the protable business model by oering an integrated waste management solution that collects solid waste, sorts it into various groups (paper, plastic, glass, metal, food etc) and sells the product forward to a recycler. Why do we manage homes, businesses, even our own lives, but not our waste? 31 year old Zameer Noorali and Exective Director of Taka

he Metal Merchants is a scrap metal recycling company that has been in operation since 1985. Shezad Fazal, the Managing Director of The Metal Merchants, said We collect non-ferrous metals like copper, aluminium, brass, bronze from registered dealers across the country like Nyanza, Kisumu, Nakuru, Eldoret, Rift Valley and Mombasa. They also source scrap metal from Uganda, Tanzania, Rwanda and Burundi. On arrival at their yard in Embakasi, the scrap metals are weighed, then manually sorted and grouped by his 100 strong sta, and compressed by machine into cubes. No one in Kenya smelts these metals, said Shezad, because the cost of electricity is very high and so non-ferrous metal is exported to markets like China, India and Barcelona. Nairobi does have non-ferrous metal smelters such as Kens Metals, said Shezad, but they are only able to handle small quantities. The Metal Merchants sell some of their scrap locally and export the rest. Local prices for scrap are however lower than what is oered by the international market, and so dealers prefer to sell their wares abroad. According to media reports from December, the government is planning to establish a steel factory that will smelt non-ferrous scrap metal, create local jobs and stem export of the same. The cubes of non-ferrous metal are loaded into a container and shipped to China where they are smelted and reused. Between 8 to 10 tonnes of scrap metal t in one container. The most expensive non-ferrous metal is copper and one ton can sell for upto Sh500,000; the cheapest is hard aluminium (like motor vehicle spares) and goes for Sh90,000 a ton. Since each metal melts at a dierent

The Metal Merchants

Shezad Fazal, MD of The Metal Merchants (right) Piles of metal waste at their Embakasi yard

temperature, dierent metals require independent smelting plants, and according to Shezad, no one in Africa - excluding South Africa - smelts copper. The main barrier to opening a smelting ng plant, he said, are inhibitive operating costs such as the high cost of power and various bylaws including those from environmental associations, and council permits, which aim to balance the social and economic benet of recycling. Kenya does have smelters for ferrous metal (metals containing iron) such as Steel Minings, Apex Steel Mills and Bachoo based at Athi River, whose end product is reused in the local building, construction and hardware sector. Ferrous metal is available in greater volumes locally but has a lower resale value. The scrap metal sector has been accused of vandalising key installations such as elec-

tricity and t telephone t cables, c roadside ro lamp la posts, guard gu rails on bridges and manhole covers. Vandals cov however target how ferrous metals, ferro said Shezad. Licensed dealers are members of the Kenya Scrap Metal Dealers Association (KSMDA), a vocal group that has defended the rights of local businesses to legally source and recycle scrap metal. Until 2007, dealers were regulated by the Scrap Metal Act, a statute that makes provision for the control and regulation of dealing in scrap metal. In 2007 the law abolished the requirement for a licence to deal in scrap metal, which left the industry unchecked and open to abuse. KSMDA lobbied the Ministry of Industrialisation to regulate the sector and the Scrap Metal Draft Bill 2012 is currently tabled in Parliament.

- considered lucrative enough to invest Sh43 million into. The bulk of the companys investment has gone into the purchase of twelve special trucks - ve of which will service Nairobi and its environs by end April - each of which caters which for between 12 to 20 tonnes of waste. The trucks, which are semi automated, sort and compact the garbage into its dierent groups which are later ooaded at its Addis Ababa Road and Karen warehouses. The semi automated system also allows Taka Kenya to oer its clients a quarterly

breakdown of the kinds of garbage that each business and residence produces. While food waste is turned into compost by various community based organisations in Nairobis informal settlements, the glass is sold to Kitengela Glass and the paper to Kamongo Paper Recyclers and Mandhav Paper Group. Plastic recycling is not yet a viable business in Kenya because it doesnt have a resale value, and so most of it is exported to China. In less than three months Taka Kenya already boasts a high prole clientele including the

Serena Group, Diamond Plaza, Nakumatt, London Distillers and various residential homes in Kilimani, Kileleshwa, Westlands and Parklands. The young company hopes that an increased consciousness of waste production practices will help its business to grow, even as it cultivates a relationship with a leading retail supermarket chain to set up recycling bins outside their locations where customers can dispose of their waste sorted into dierent bins. Taka Kenyas waste management services range from between Sh150 to Sh200 per houseApril Nairobi Business Monthly |

Enterprises &Ideas

hold, and vary for business clients depending on their unique needs. This cost includes the provision of plastic dumpsters, recyclable plastic bags and collection service. We talk about climate change but what as an individual can I do to make that change? asks Zameer, and believes that his company answers that question.

The Flip Flop

Recycling Company

to observe, and while punching a hole in the turtle, she discovered that small beads could also be made from ip ops. Ideas of items that could be made from the discarded rubber footwear began to snowball, and Julie began selling some of the pieces informally at craft fairs to generate some money for the local communities that had made them. Nearly eight years later, she admits that she never imagined she would go into it fully, but today Julie is the founder and managing director of The Flip Flop Recycling Company (FFRC), which recycles around 400,000 kilos of ip ops a year (each kilo contains between ve to six ip ops) My love and passion has always been the ocean so I didnt expect to set up a real business, said Julie but set it up she did in 2005 with an investment of Sh6 million, and the FFRC workshop and gift shop is which is based on Marula road in Karen, employs over 100 0 people across the country including around d 40 people in Karen, and women from the e islands of Kiwayu and Wasini at the Coast.

nesia washes up on the East African coast. And it connects the land and the sea because what is discarded in the river eventually reaches the sea. The nal connection, Julie said, was between people and the sea since the ip op helps humans to realise that by using the ocean as a dumpsite for rubber and plastic goods, great harm is being done to marine life and birds. Each item that FFRC produces is hand collected, cleaned, carved and sanded which makes it a labour intensive, manual process. Parts of the process have been slightly mechanised to make it more ecient and faster since the company has to meet the growing demand for its products. The basic tools of the trade, however, include sanders, die cuts and sewing machines. FFRC used to boast a product range of over 400 items but have since cut down to around 60 of the most popular. The price of

Julie Church, Managing Director of the Flip Flop Recycling Company in Karen. The company recycles over 400,000 kilos of ip ops a year.

While working on an environmental project with KWS and WWF in Kiwayu, an area north of Lamu, Julie Church who comes from a marine conservation background, grew more and more concerned by the ubiquity of ip ops on Kenyas beaches. She engaged with some children from the local community and got them involved in making toys from the ip ops - initially using sticks and thorns to hold them together, and then glue. The rst order she received was for a turtle, the species she was actually in Kiwayu
| Nairobi Business Monthly April

Over the years, the business continued to evolve and now it sells its items at retail outlets across the country including Spinners Web, Kazuri beads and duty free shops in Kenya; Tanzania; Uganda and even the United States where the rubber animals are especially popular at zoos and aquariums. The company currently turns over between Sh12 million to Sh14 million a year. The ip op is interesting, said Julie, because it is a connector between the rich and the poor since both groups wear ip ops albeit of dierent styles and prices. The ip op also connects continents, she said, since what is discarded in India or Indo-

items ranges from Sh250 to Sh35,000 Sh35 000 for an extra large animal. The FFRC also create giant animals like a whale which is at Bamburi Cement Park, and an 18 foot girae which is displayed in Rome, Italy to build awareness of ethical fashion practices. We are going to make more of these giants, said Julie, and 25% of our prots from that will go back to the beaches and the communities to collect the rubbish and create masterpieces from everything washed ashore. She hopes that this will improve the relationship that local communities have with the sea. Even the small scraps of rubber that remain after making an item do not go to waste. While the biggest pieces are used under climbing gyms at schools, Julie hopes that ultimately, she will be able to grind all the scraps down and make oatable pool cushions.