MAKERERE UNIVERSITY

MAKERERE UNIVERSITY BUSINESS SCHOOL

FACULTY OF ENTREPRENEURSHIP AND BUSINESS ADMINISTRATION

DEPARTMENT OF ENTREPRENEURSHIP

BUSINESS PLAN ON PLASTIC RECYCLING

TO MAKE PLASTIC TINS FOR PACKAGING

BUSINESS PLAN SUBMITTED TO MAKERERE UNIVERSITY BUSINESS

SCHOOL IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE
AWARD OF A BACHELORS DEGREE OF ENTREPRENEURSHIP
AND SMALL BUSINESS MANAGEMENT OF
MAKERERE UNIVERSTIY

1
 TABLE OF CONTENTS
LIST OF TABLES......................................................................................................................................iv
LIST OF FIGURES.....................................................................................................................................v
LIST OF APPENDICES.............................................................................................................................vi
EXECUTIVE SUMMARY........................................................................................................................vii
SECTION ONE...........................................................................................................................................1
COMPANY OVERVIEW...........................................................................................................................1
1.0 Introduction.....................................................................................................................................1
1.1 Opportunity.....................................................................................................................................1
1.2 Vision statement..............................................................................................................................2
1.3 Mission statement............................................................................................................................2
1.4 Objectives........................................................................................................................................2
SECTION TWO..........................................................................................................................................3
PRODUCT DESCRIPTION........................................................................................................................3
2.1 Introduction.....................................................................................................................................3
This section of the business plan covers the product features and benefits..................................................3
2.2 Product features...............................................................................................................................3
2.3 Product benefits...............................................................................................................................4
SECTION THREE......................................................................................................................................5
MARKET AND INDUSTRY ANALYSIS.................................................................................................5
3.0 Introduction.....................................................................................................................................5
3.1 Market size and growth...................................................................................................................5
3.3 Industry structure.............................................................................................................................6
Threat of new entrants......................................................................................................................6
Threat of substitute products or services.........................................................................................7
Recycled products mainly compete with the virgin products. Plastic tins/containers made out of
recycling serves the same purpose as the one made using virgin materials. However the recycled one
are cheaper and are made using less resources and energy compared to the virgin counter parts. This
therefore shows that there is limited threat of substitute products or services because of the cheap
prices of the recycled products which easily makes the customers to change to the cheaper products.
.............................................................................................................................................................7

i
 Bargaining power of customers (buyers).........................................................................................7
Bargaining power of suppliers..........................................................................................................8
Currently in Uganda, there is limited direct competition for cleaning and refining post-consumer or
post-industrial PET. Recycling companies include Uganda recycling industries limited located in
Nakawa industrial park near Mbuya. It produces PET flakes for export to companies in china..........8
SECTION FOUR........................................................................................................................................9
COMPETITOR ANALYSIS.......................................................................................................................9
4.0 Introduction.....................................................................................................................................9
4.1 Competitive environment................................................................................................................9
4.2 Competitor profile...........................................................................................................................9
4.2.1 Competitor profile matrix............................................................................................................9
4.3 Competitive advantage..................................................................................................................10
SECTION FIVE........................................................................................................................................11
MARKETING PLAN................................................................................................................................11
5.0 Introduction...................................................................................................................................11
5.1 Target market strategy...................................................................................................................11
5.2 Product strategy.............................................................................................................................11
5.3 Pricing strategy..............................................................................................................................11
5.4 Positioning.....................................................................................................................................12
5.5 Communication strategy................................................................................................................12
5.6 Channel strategy............................................................................................................................13
5.7 Sales strategy.................................................................................................................................13
5.8 Revenue model..............................................................................................................................13
SECTION SIX...........................................................................................................................................14
OPERATIONS PLAN...............................................................................................................................14
6.1 Introduction...................................................................................................................................14
6.2 Input factors...................................................................................................................................14
6.2.1 Raw materials:..................................................................................................................................14
6.2.2 Equipment........................................................................................................................................14
6.2.3 Premises...........................................................................................................................................15
6.3 Production delivery process...........................................................................................................15
6.4 Quality control...............................................................................................................................23

ii
6.5 Record keeping and procedures.....................................................................................................24
6.6 Billing and collection policies and procedures...............................................................................24
SECTION SEVEN....................................................................................................................................26
MANAGEMENT PLAN...........................................................................................................................26
7.0 Introduction...................................................................................................................................26
7.1 Company organization...................................................................................................................26
The company is organized in a way that the power and authority flows from top to bottom with the board
of directors/promoters at the top followed by the company general manager, who is followed by the
departments of production (machine operation and store/warehouse and waste collection), marketing
departments consisting of the marketing team and sales volunteers and accounting department manned by
the accounts assistant. This is as shown in the staff structure or organization chart below........................26
7.2 Staff structure/organization chart...................................................................................................26
7.3 Management team..........................................................................................................................27
7.4 Reward structure............................................................................................................................27
SECTION EIGHT.....................................................................................................................................28
FINANCIAL PLAN..................................................................................................................................28
8.0 Introduction...................................................................................................................................28
8.1 Investment requirements................................................................................................................28
8.2 Financing plan...............................................................................................................................28
The investment requirements above will be financed by personal savings, contribution from friends,
family and relatives and underutilized assets.............................................................................................28
8.3 Financial assumptions and projections...........................................................................................28
The business has put in place a number of financial assumptions and projections which is shown below;
.................................................................................................................................................................. 28
8.3.1 Financial assumptions................................................................................................................28
5.3 Financial projections......................................................................................................................29
8.4 Financial sustainability strategy.....................................................................................................29
8.5 Risk and opportunity......................................................................................................................30
8.5.1 Risk and opportunity matrix......................................................................................................30
SECTION NINE........................................................................................................................................33
DEVELOPMENT PLAN..........................................................................................................................33
9.0 Introduction...................................................................................................................................33
9.1 The implementation plan...............................................................................................................33

iii
9.2 Time frame....................................................................................................................................36
APPENDICES...........................................................................................................................................38
Appendix 1: Financial Assumptions..........................................................................................................38
Appendix 2: Initial Investment Cost..........................................................................................................39
Appendix 3: Revenue Model.....................................................................................................................40
Appendix 4: Depreciation Schedule..........................................................................................................41
Appendix 5: Salaries Projections...............................................................................................................42
Appendix 6: Expenditure Projections........................................................................................................43
Appendix 7: Working Capital Schedule....................................................................................................44
Appendix 8: Income and Expenditure Account.........................................................................................45
Appendix 9: Cash Flow Statement............................................................................................................46
Appendix 10: Balance Sheet......................................................................................................................47
Appendix 11: Net Present Value...............................................................................................................48

LIST OF TABLES
Table 1: Features and benefits table................................................................................................4
Table 2: Competitive advantage matrix.........................................................................................10
Table 3: Summary of plastic types and examples (source: www.recoup.org)..............................17
Table 4: The Gantt chart................................................................................................................36

iv
 LIST OF FIGURES
Figure 1: Michael Porter’s Five Forces Model................................................................................6
Figure 2: Plastic recycling equipment...........................................................................................14
Figure 3: The production facility...................................................................................................15
Figure 4: simplified scheme of plastic recycling...........................................................................22

v
LIST OF APPENDICES

vi
 EXECUTIVE SUMMARY

Millennium Recycling Limited will be set up to make products from recycled plastics. The
Company’s mission is to free Uganda and the rest of the World from the problems that have been
caused by increased accumulation of plastics in the environment. Plastics have their impact on
the environment through all stages of their existence from manufacture, to utilization and
disposal. These environmental impact include but certainly not limited to air pollution when
burnt, depletion of natural resources like oil and natural gas which is used to make virgin
plastics, creation of landfills, and persistence of plastics in the environment.

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. Major industries Uganda limited will capitalize on the opportunities
to establish a plastics recycling plant to manufacture plastic packaging tins.

The Company will create a PET cleaning and refining plant located in Nakawa, and it will utilize
post-consumer bottle feed stock presently collected in Kampala, Entebbe, and Jinja.

The management team will comprise of a team of young and skilled graduates who have a large
history of experience in venture management and entrepreneurship development, one of whom is
a graduate of bachelor of entrepreneurship and small business management of Makerere
university business school.

The Company is also seeking an investment of Ushs20, 000,000 in order to begin operations.
These funds will be used for the purchase of one multipurpose recycling and manufacturing line,
for the setup of the plant facilities and for working capital.

vii
 SECTION ONE
COMPANY OVERVIEW

1.0 Introduction
Millennium Recycling Limited will be set up to make products from recycled plastics. The
Company’s mission is to free Uganda and the rest of the World from the problems that have been
caused by increased accumulation of plastics in the environment.

1.1 Opportunity
Plastics have their impact on the environment through all stages of their existence from
manufacture, to utilization and disposal. These environmental impact include but certainly not
limited to air pollution when burnt, depletion of natural resources like oil and natural gas which
is used to make virgin plastics, creation of landfills, and persistence of plastics in the
environment.

Today, plastic is in almost everything we touch and or use. It is used to make a variety of
products like clothes, cars, toys, sunglasses, beverage bottles, electronics and electrical
appliances, household plastic items, straws, packaging polythene, and so much more.

Plastics are polymers, chains of molecules produced by smaller molecules called monomers.
Various types of polymers can be made from hydrocarbons derived from coal, natural gas, oil
and organic oils which are transformed into materials with desirable properties. There are many
different types of plastics depending on their molecular make up and shape that is PET, HDPE,
PVC, LDPE, PP, PS and others.

According to existing information put forward by Kampala City Council Authority, 30,000
tonnes of garbage is collected in Kampala City every month, an average of 1,000 tonnes a day.
1.6% of the total waste collected is plastics; which translates to over 480 tonnes of waste plastic
dumped monthly in Uganda. 1 tonne is equivalent to 20,000 plastic bottles, 15% of this is
recycled at present (2012). An estimated 9.2 billion plastic bottles are disposed of each year,
200,000 tonnes of plastic rubbish is being sent 8,000 miles by the currently available recycling
companies to China each year for recycling. The basic raw materials for plastic are petroleum
and/or natural gas. Although plastics only consume around 4% of the world’s oil, supplies are

1
becoming depleted. Many plastic products are reaching the end of their lifecycle, forming non-
biodegradable mountains of waste plastic. 11% of household and business waste is plastic, 40%
of which is plastic bottles.

Recycling is one of the most important actions currently available to reduce these impacts and
represents one of the most dynamic areas in the plastics industry today. Recycling provides
opportunities to reduce oil usage, carbon dioxide emissions and the quantities of waste requiring
disposal. Recycling of packaging materials has seen rapid expansion over the last decades in a
number of countries. Advances in technologies and systems for the collection, sorting and
reprocessing of recyclable plastics are creating new opportunities for recycling, and with the
combined actions of the public, industry and governments it may be possible to divert the
majority of plastic waste from landfills to recycling over the next decades.

In response to the negative consequences that have been caused by the accumulation of plastic
wastes in the environment, Millennium Recycling Limited will establish its production unit to
recycle these plastics wastes into usable products. This will not only inspire the redesign of the
products from plastic wastes but will also enable the reduction of the amount of plastic stuff that
is produced and used in Uganda.

1.2 Vision statement

The leading firm in the recycling and distribution of recycled products in the region

1.3 Mission statement

To ensure environmental sustainability through recycling plastic waste and manufacture of
affordable recycled products to the satisfaction of customers.

1.4 Objectives
i. To realize a 70% reduction in plastics pollution of the environment in Uganda by 2020
ii. To achieve 30% return on investment by 2018
iii. To provide direct and indirect jobs in plastics recycling to 1000 youths within 2017.

2
 SECTION TWO
PRODUCT DESCRIPTION

2.1 Introduction

This section of the business plan covers the product features and benefits.

2.2 Product features

The products the business will be producing are;

i. Cleaned and recycled plastic flakes of PET and bottles, recovered from post-consumer
beverage bottles. (This PET will work as raw material for packaging to various firms, not
for the end user).
ii. Household finished plastic goods. The business will manufacture plastic tins for
packaging of various diameters (for the end user).
iii. PET flakes will be molded into usable products) primarily to be used to produce high
visibility packaging like plastic tins.

The waste suitable for reprocessing at the facility includes all plastic packaging products
manufactured from a wide range of secondary materials including: Polythene, High Density
Polyethylene, Low Density Polyethylene, Polystyrene, PET, Polyurethane and Polypropylene.

The products take a wide variety of forms, ranging from standard to intricate designs, which in
many cases can be created to meet with specific customer requirements.

The first products that will be made will be water reservoirs for end users. This will make the
core of the product. These tins will be of various sizes ranging from small sizes to large sizes of
various colors and designs.

The products will be marked, symbolizing Millennium Recycling Limited as its trade mark, so as
to differentiate it from duplications and those of competitors. This will be its brand name that
will enable customers to easily identify the products in the markets.

3
2.3 Product benefits
The benefits of the product can best be described on the features and benefits table shown below.

Table 1: Features and benefits table

Features Benefits
Why recycling The goal at all times is to create an opportunity for the communities, both
domestic and commercial, to make a significant contribution towards
protecting the environment and creating a more sustainable future
Product variety Recycled plastic can be used for anything that virgin plastic is used for except
the packaging of food. In general, the pelletized plastic is sold by the
recycling company to other companies for molding into a wide variety of
products. Some of it is used locally and the remainder is exported. PET is
often made into fibres to make carpet and clothing, while the "other" stream is
usually used to make a wood substitute.
Environmental As stated above, plastic recycling prevents damage to the environment via
implications excessive land filling and use of non-renewable resources. The process is also
largely environmentally safe, with the only effluent being from the wash
water. This is recycled in the plant as much as possible to minimize water use
and when it is finished with it is still sufficiently clean to be dumped into the
sewers.
Immediate Plastic waste lying around in streets will be less and it will also be noticed that
impact the burning of plastic will be decreased in many areas of the city.
Product use The plastic tins will be used for storing water for domestic and industrial use.
Branding/trade For easy identification in the market
mark

4
 SECTION THREE
MARKET AND INDUSTRY ANALYSIS

3.0 Introduction
This section of the business plan covers the market size and growth, target market and industry
structure.

3.1 Market size and growth

Strong demand for recycled plastics is working in the industry's favor.  Major users of plastic
packaging, apparently responding to consumer desires, have begun incorporating at least some
recycled plastic tins content in their products as part of the growing interest in recycling. 
Recycled tins’ demand is on the rise as prices for the for example cosmetic tins, continue to hold
value among the cosmetics industry. .

In volume, PET which is mainly used for making plastic tins is currently the number one
recycled resin. According to the Ministry of trade and industry, Supply of recycled PET is in
excess of 800 million shillings per year. This figure is expected to grow, reaching over 1
billion shillings during the next few years. The plastics industry has developed new markets and
applications for recycled resins from both post-consumer and post-industrial sources.

Markets and uses for recycled plastics are rapidly expanding. Plastic containers are being
collected at the curb for recycling in nearly 500 communities, representing more than 4 million
households. Uganda’s demand for recycled plastic will continue to expand and new markets will
develop as technologies permit the efficient segregation and reprocessing of high-purity resins.

3.2 Target market

The business is targeting cosmetics industries for its finished products like packaging
tins/containers primary target. Its secondary market will be food processing industries which use
recycled PET for making packaging edibles for example tins for packaging peanut paste. Its
tertiary target market is the export market with its high quality and yet cheap products.

5
3.3 Industry structure
Porter five forces analysis is a framework for industry analysis and business strategy
development formed by Michael E. Porter of Harvard Business School in 1979. It draws upon
industrial organization (IO) economics to derive five forces that determine the competitive
intensity and therefore attractiveness of a market. Attractiveness in this context refers to the
overall industry profitability. An "unattractive" industry is one in which the combination of these
five forces acts to drive down overall profitability.

Porter's five forces include - three forces from 'horizontal' competition: the threat of substitute
products or services, the threat of established rivals, and the threat of new entrants; and two
forces from 'vertical' competition: the bargaining power of suppliers and the bargaining power of
customers. This is illustrated below.

Figure 1: Michael Porter’s Five Forces Model

Threat of new entrants

This industry has a lot of entry barriers for example;
i. Linking waste producer with waste recycler is risky as interruptions in waste production
or an inability to take the waste produced can affect the viability of both businesses
ii. There is Limited Supply of raw materials. Recycled PET (RPET) resins are in high
demand, and demand is currently under-supplied. Many manufacturers are delaying
expansion because of uncertainty of supply. Entrants would have to consider sourcing

6
 post-consumer or post-industrial waste and clean and refine it rather than attempting to
purchase flake on the open market. Even at that, there is not an over-abundance of post-
consumer or postindustrial material in the marketplace.
iii. Equipment costs are high and industry specific, resulting in a high exit cost.
Because of the scarcity of RPET flake, entrants may be forced to establish cleaning and
refining facilities for post-consumer bottles. The equipment required is costly and very
industry specific. It would not easily be re-sold as a system.
iv. There is a market for used extrusion equipment, which normally sees 60-70% of new
value being realized.
v. Hauling plastic materials is expensive so entrants will have to consider establishing
facilities close to materials and markets. Entrants with existing operations would have to
consider new separate facilities in many cases, reducing economies of scale and making
management more difficult.
There is however low exit barriers as a firm which feels unable to precede operations or change
line of production, is free to leave. This provides an opportunity for the few existing firms to
enjoy high economies of scale and overall profitability.

Threat of substitute products or services

Recycled products mainly compete with the virgin products. Plastic tins/containers made out of
recycling serves the same purpose as the one made using virgin materials. However the recycled
one are cheaper and are made using less resources and energy compared to the virgin counter
parts. This therefore shows that there is limited threat of substitute products or services because
of the cheap prices of the recycled products which easily makes the customers to change to the
cheaper products.

Bargaining power of customers (buyers)

In Uganda, the buyers of recycled products are informed of what they are buying because of the
vigorous campaigns made by the government and other concerned parties about the need to get
rid of the plastics through recycling. They are price sensitive and buy relatively cheap products,
and they are many in number currently about 4 million customers who can buy tins for example.
There has been a strong demand (sellers' market) for our products for several years. Traditional
buying patterns in this industry are based on quality, price, and reputation of manufacturer,

7
freight costs, delivery times and proximity to markets. During such a sellers' market, buying
patterns are often more influenced by availability. The customers therefore have a high
bargaining power compared to the existing firms.

Bargaining power of suppliers

Suppliers of raw materials, components, labor, and services (such as expertise) to the firm have
less bargaining power. They are not monopolists and hence compete with other firms to supply
their inputs to the available recycling companies. The existing Suppliers are always willing to
work with the firm and charge excessively low prices for unique resources. The collectors of
wasted plastic containers and bottles for example charge only Ushs400-USHS500 for a kilogram
of plastic bottles. The unskilled and semiskilled labour that is needed to assist production process
is readily available and is very cheap, given the high unemployment situation in the country
today. There is Absence of standard product or service. In the city, there are various small post
consumer plastic bottle collectors and there is a possibility of getting supply contracts from the
existing suppliers. This therefore shows a low bargaining power of suppliers.

Rivalry within the industry

Currently in Uganda, there is limited direct competition for cleaning and refining post-consumer
or post-industrial PET. Recycling companies include Uganda recycling industries limited located
in Nakawa industrial park near Mbuya. It produces PET flakes for export to companies in china.

8
 SECTION FOUR
COMPETITOR ANALYSIS

4.0 Introduction
This section of the business plan covers the competitive environment, competitor profile and
competitive advantage.

4.1 Competitive environment

As we are also not alone as a supplier of water tanks, there are many companies in this region
that are supplying plastic tins. Mukwano Industries limited is one of them who are currently
selling all types of plastics items. So in case of business-to-business market, they are our direct
competitors. The direct threat we will also have is with the companies operating in Kampala.
Uganda recycling industries limited is also another competitor which recycles plastics to make
PET flakes for export to companies in China.

4.2 Competitor profile

The profiles of these companies are as shown in the competitor profile matrix below;

4.2.1 Competitor profile matrix

Attributes Millennium Uganda Mukwano

Recycling Limited recycling Industries limited
industries
limited
Product offering 2 2 4
Quality 4 4 4
Environmental friendliness 5 5 3
Prices 2 5 5
Target market 4 4 5
Distribution channels 2 2 3
Sales strategy 4 4 4
Marketing strategy 5 4 3
Market share 4 4 5
Management background 5 4 4
Operational locations 4 4 4
Strategic alliances 5 5 5
Company size (revenues & 3 4 5
customers)
9
Financial resources 3 4 5

4.3 Competitive advantage

Table 2: Competitive advantage matrix

Main Their strengths Their weaknesses Millennium Recycling

competitors Limited’s competitive
advantage
Uganda It has been in operations Production of semi Secure Supply- Contract for
recycling since it was established finished products supply of post-consumer bottles
industries in 2006. for final production and post-industrial
limited companies manufacturing waste for PET
raw material feed stock.

Management - Strong senior

management with extensive,
broad-based, industry-specific
experience.
Mukwano High financial muscle Unreliable supply Marketing - Contractual
industries characterized by high of raw materials arrangements for the sale of
limited profitability, good virtually all initial production.
revenue inflows and
Cheap and reliable suppliers
large number of
within major collection centres
customers.
in Kampala and Entebbe.

10
 SECTION FIVE
MARKETING PLAN

5.0 Introduction
This section of the business plan covers the Target market strategy, Product strategy, Pricing
strategy, Positioning, Communication strategy, Channel strategy, Sales strategy and Revenue
model.

5.1 Target market strategy

The company has chosen to focus on the production of plastic tins/containers from recycled post
consumer beverage bottles. We have identified a significant available market in Uganda. All of
our initial marketing strategy will be to secure contracts in that segment, and after reaching full
planned capacity, look to grow in concert with that segment and related markets. We see little
need at present for further research and development, and will focus on continually updating our
production technology in an effort to remain in the forefront of our chosen market place.

5.2 Product strategy

The business 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, finished plastic tins which are on high demand. This demand is driven by
continuously increasing promotional activities.

5.3 Pricing strategy

The pricing strategy we will use is penetration pricing. The price of all the water reservoirs we
will sell will be lower than the market price. A lower price allows the company to get contract of
supplying plastic tins and other products to various companies and customers.

Price indicators Year 1 Year 2 Year 3 Year 4 Year 5

Annual price growth rate 2% 4% 6% 8%

Tin 500 510 530 562 607

11
5.4 Positioning
Millennium Recycling Limited is here to provide customers with high valued products made
from recycling that is not only cheap but also environmentally friendly. The best way to limit the
plastic waste that is created and to prevent rubbish from going to landfill is to avoid, reduce,
reuse and recycle. Plastics are increasingly used in our everyday life, thus recycling is more
important than ever to reduce waste. Try us for the latest designs in recycled plastic tins like
Vaseline tins, paste tins like peanut, among others at the most affordable prices in Uganda. We
are Millennium because we the new era and the future of recycling.

5.5 Communication strategy

The firm will use flyers that will have full detail of our product range, price, combo offers and
discounts. These flyers will circulate through the newspapers across the whole city.

The firm will promote through online social media and we will also develop our website through
which we shall spread our contacts among various customers. The site will have full details of
the products that are available for companies as well as end user.

The firm will create a central collection centre for plastics and use it as a ground to create
awareness about our company. From there, we shall create Contracts with local volunteer groups,
scavengers, middlemen and traders who collect plastic, create a drop-off center at the business
site for plastic waste collectors and Cooperate with the local governments and city councils to
get involved in collection schemes

Market the business locally by posting fliers, and advertising in print and online news
publications. Pick up plastics from interested clients’ homes and businesses, and begin recycling.

As a reliable input of raw material is of the utmost importance for the existence of the factory, at
the same time PRI set up a very successful collection system for Kampala. Several different
activities were executed to achieve this:
1. Execution of a public information campaign using posters, spots on local radio and TV,
articles and commercials in newspapers.

2. Training of NGO’s and other organizations involved in the collection of plastic waste material.

3. Setting up several collection points in the city.

12
In this way there will be a simple and reliable collection system exists now in Kampala. In this,
communication is a key factor.

As a result of this intensive marketing and promotional campaign, more than 100 contracts will
be established with suppliers of plastic waste materials like hotels, restaurants, schools, NGO’s,
garbage collectors, petrol stations, supermarkets, etc.

The firm will organize events and participate in exhibitions, conferences and events organized by
other environmentally supportive organizations.

5.6 Channel strategy

The firm will have a show room in its premises and also establish outlets in Entebbe and
Kampala city that continuously maintains the supply of goods. Some products will be sold
through small local grocery shops from which the customers can get them easily. Apart from
this, we will hire street hawkers who will roam around the city and sell goods door to door.

5.7 Sales strategy

The company’s sales strategy is totally based on the distribution channel and the pricing
strategies. The firm will hire a distribution centre in the city that will take care of sales of plastic
tins and also supply products to the wholesalers and also give the industrial customers a facility
to order the products through its website which will help them in reducing the delivery time.

5.8 Revenue model

In the first year, we will focus on generating public visibility. The sales forecast is based on the
assumption that we will sell all of the products we produce. Refer to the table below for the
revenue model.

Price indicators Year 1 Year 2 Year 3 Year 4 Year 5

Annual price growth rate 2% 4% 6% 8%
Tin 500 510 530 562 607
Volume indicators Year 1 Year 2 Year 3 Year 4 Year 5
Annual volume growth rate 5% 10% 15% 20%
Tin 200 52,800 55,440 60,984 70,132 84,158
Annual Sales Year 1 Year 2 Year 3 Year 4 Year 5
Tin 26,400,000 28,274,400 32,345,914 39,429,669 51,100,851
Total sales 26,400,000 28,274,400 32,345,914 39,429,669 51,100,851

13
 SECTION SIX
OPERATIONS PLAN

6.1 Introduction
This section of the business plan covers the Input factors, Production delivery process, Quality
control, Record keeping and procedures and Billing and collection policies and procedures.

6.2 Input factors

6.2.1 Raw materials: 
The main raw material for plastic recycling is wasted plastics. The most reliable sources of
plastic waste are local authorities and the open market. The material wanted for reprocessing
include: Coffee cups, Soft drink bottles, Toiletry containers, i.e. shampoo, shower gel, etc,
Thread protectors for oil drilling tubes, Carrier bags, Bread bags, Car bumpers, Chemical drums,
Chemical bags, Shrink wrap, Cling film, Food packaging, Cooking oil containers, Yoghurt pots
and Milk bottles and other beverage bottles.

6.2.2 Equipment
Equipment used for plastic recycling includes Shredders, Crushers, and Extruders, Plastic
washers, and solar dryers. This is shown in the figure below.

Figure 2: Plastic recycling equipment

14
6.2.3 Premises
The facility will be located in. Facility is divided into two parts that is recycling and production
unit and warehouse. The facility will be located in an area of 60metres by 42metres sqft. Apart
from these two units, there will be an office that will look for the perpetual supply of the required
raw material and also take care of the outbound logistics. See figure below.

Figure 3: The production facility.

6.3 Production delivery process

Plastics cause serious environmental problems. Although they are not intrinsically dangerous,
they take up a huge amount of space in landfills and they are made from a nonrenewable
resource, namely fossil fuels. For these reasons it is important that, where possible, plastics are
recycled. The recycling of plastics is carried out in a five step process namely collection,

15
sizing/chipping, cleaning, segregation, agglomerating/coloring, extrusion/palletization and
moulding into end product. This is explained in detail below.

Step 1 - Plastics collection

Plastics for recycling come from two main sources: post-consumer plastics and postindustrial
plastics. Post-consumer plastics are those which have already been used by people. These are the
plastics collected in plastics recycling bins and at domestic roadside collections. Postindustrial
plastics, on the other hand, are rejects from industry — off cuts, damaged batches etc. These
plastics are collected either directly from the industry or collected by the local council, squashed
into bales and sold to a recycler.

Step 2 - Manual Sorting

Plastics sorting operations may be carried out manually or automatically using appropriate means
of identification. The more accurate and efficient the means of identification, sorting and
separation, the better is the quality of the recovered product obtained. Best suited for sorting
plastics in developing countries are those technologies that make extensive use of the
(comparative) advantage of cheap labour. The secondary raw material obtained by hand sorting
is of high quality and offers an excellent basis for producing high quality products by small and
medium scale industry (Vest, 2000). In theory, every type of plastic can be recycled. In practise
only codes 1(PET) and 2 (HDPE) are recycled. The incoming plastic is manually sorted into
these two codes and 'other', and the three separate streams sent off to be chipped. It is particularly
important that all PVC is removed from the PET stream as the more sophisticated sorting used
later on cannot differentiate between these two types of plastic. Any rocks, nails, metal etc. that
is mixed in with the plastic is also manually removed at this stage. A summary of the plastics
recycling codes is given in Table 3.

16
Table 3: Summary of plastic types and examples (source: www.recoup.org)

Code Name Description Examples

Polyethylene Usually clear or green, soft drink bottles biscuit trays,
terephthalate sinks in water, rigid, Mineral water bottles, 2 liter
glossy soda bottles, Cooking oil
bottles, Powder detergent jars,
Fiber for clothing, Fiber for
carpets , Strapping, Peanut
butter jars

High density Slightly opaque, low milk bottles supermarket bags,

polyethylene gloss, crackly film, Jerry cans, “Crinkly” shopping
Barrier to water, bags, Film, Milk packaging,
Chemical resistance, Toys, Buckets, Rigid pipes,
Hard to semi-flexible, Crates, Bottle caps
Strong , Soft waxy
surface, Low cost,
Permeable to gas, Natural
milky white colour
Polyvinyl chloride Semi-rigid, glossy, sinks detergent bottles pipes
in water, Transparent, raincoats, Pipes and fittings,
Hard, rigid (flexible Carpet backing, Window
when plasticized), Good frames , Water, shampoo and
chemical resistance, vegetable oil bottles, Credit
Long term stability , cards, Wire and cable
Electrical insulation, Low sheathing, Floor coverings,
gas permeability Shoe soles and uppers

Low density Tough, Flexible, Waxy Agricultural films, Refuse

polyethylene surface, Soft - scratches sacks, Packaging films, Foams,
easily, Good Bubble wrap, Flexible bottles,
transparency, Low Wire and cable applications

17
 melting point, Stable
electrical properties,
Moisture barrier

Polypropylene Excellent chemical Yoghurt containers, Potato

resistance, High melting crisp bags, Drinking straws,
point , Hard, but flexible, Medicine bottles, crates, plant
Waxy surface, pots, Car battery cases, Heavy
Translucent and Strong gauge woven bags

Polystyrene Clear to opaque, Glassy Packaging pellets, Yoghurt

surface, Rigid, Hard, containers, Fast food trays,
Brittle, High clarity , disposable cutlery, Coat
Affected by fats and hangers
solvents

This includes a — Margarine containers

variety of Squeezable sauce bottles.
copolymers such Mostly not available in
as ABS sufficient quantities for
acrylonitrile recycling
butadiene
polystyrene,
and multi-layer
plastics

To aid in identification, it is now common for plastic containers to have polymer identification
code (see table 1). Unfortunately, other plastic applications do not carry such identifiers and are,
therefore, more difficult to identify by polymer type without some experience. There are several
simple tests that can be used to distinguish between the common types of polymers so that they
may be separated for processing. This include The water test: After adding a few drops of liquid
detergents to some water put in a small piece of plastic and see if it floats.

18
Burning test: Hold a piece of the plastic in a tweezers or on the back of a knife and apply a
flame. Dose the plastic burn? If so, what colour?

Baling
After collecting and sorting the plastic material, the option exists to sell the material to (other)
processing units. Especially when transporting distances are considerably, it is important to
compact the waste to improve handling and save costs during transport. In order to obtain a
Step 3 - Chipping
Each sorted stream of plastic is then sent separately to a chipper. This is a cylinder of blades
somewhat like an old-fashioned lawnmower in a vessel with a 10 mm grill floor. The blades cut
the material until it is small enough to fall through the grill.

Step 4 - Washing
If the plastic is dirty, cleaning is necessary. The chips are then washed to remove glue, paper
labels, dirt and any remnants of the product they once contained. Both the "other" stream and the
PET stream are washed at around 90oC for at least twelve minutes, while the HDPE (which has a
much lower melting point) must be washed below 40oC to prevent discoloration.
The wash solution consists of an alkaline detergent in water, which removes dirt and grease and
degrades protein. The detergent used is an alkaline, cationic detergent (i.e. an alkaline solution
containing a cationic surfactant). Dishwashing detergents are usually anionic, because glass,
china etc. usually build up a negative surface charge. This means that positively charged dirt
particles are attracted to them, so an anionic detergent is needed to remove the dirt. If a cationic
surfactant were used it not only would be incapable of removing the dirt, but it would itself stick
to the surface to be cleaned, making it greasy.
However, plastics acquire a positive surface charge, meaning that a cationic detergent is needed
to clean them. Cationic surfactants are much less common than anionic ones, but they are used
for shampoos and for fabric softeners1. Surfactants are explained in more detail in the article on
soaps and detergents.

During washing the agitator in the wash tank acts as an abrasive, grinding off the glue of the
labels and reducing any paper labels to fibres. The plastics are then separated from the glue,

19
paper, dirt etc. in a spinning tower in which this very fine material is forced out through small
holes, while the plastic itself remains inside. The plastics are then further rinsed and then (in the
PET and HDPE streams) separated on the basis of weight. This is done using a water cyclone
which is designed to separate out the given plastic from all the others. In the case of
PET, it is heavier than all the others and so 95% of the PET falls to the bottom while the
remainder of the PET and everything else rises to the top. Unfortunately, PVC is of about the
same weight as PET and so cannot be separated in this step. For this reason it is very important
that all the PVC was removed during manual sorting.

The product at this stage can be sold for extruding, but it is only appropriate for extruding
through wide extrusion nozzles as it doesn't pack efficiently enough for narrow nozzles, hence
most of it is pelletized before sale.

Shredding
Shredding is suitable for smaller pieces. A typical shredder has a series of rotating blades driven
by an electric motor, some form of grid for size grading and a collection bin. Materials are fed
into the shredder via a hopper which is cited above the blade rotor. The product of shredding is a
pile of coarse irregularly shaped plastic flakes which can then be further processed.

Agglomeration
Clean film sheet is processed in an agglomerator. The agglomerator consists of a vertical crum
with a set of fast moving blades in the bottom. The agglomerator chops the sheets into thin film
flakes. Due to the cutting and friction energy of the process, the flakes are heated until they start
to melt and form crumbs or agglomerate. This will increase the bulk density of the material
which is now fit to be feed directly into the extruder.

Step 5 - Pelleting
This is done by melting the chips and extruding them out first through a fine grill to remove any
solid dirt or metal particles that have made it through the treatment thus far and then through a
die of small holes. If the plastic was simply allowed to extrude from these holes it would come
out as spaghetti-like strings and quickly tangle together. However, it is sprayed with water as it

20
comes out (to prevent the plastic from sticking together) and cut off by rotating knives to give
small, oval pellets.

Further processing
Extrusion: The extrusion process used for manufacturing new products is similar to that
outlined above for the process preceding pelletisation, except that the product is usually in the
form of a continuous ‘tube’ of plastic such as piping or hose. The main components of the
extrusion machine are shown in Figure 2 below. The reclaimed plastic is forced along the heated
tube by an Archimedes screw and the plastic polymer is shaped around a die. The die is designed
to give the required dimensions to the product and can be interchanged.

Injection molding: The first stage of this manufacturing process is identical to that of extrusion,
but then the plastic polymer emerges through a nozzle into a split mould. The quantity of
polymer being forced out is carefully controlled, usually by moving the screw forward in the
heated barrel. A series of moulds would be used to allow continual production while cooling
takes place. See Figure 2 below. This type of production technique is used to produce moulded
products such as plates, bowls, buckets, etc.

Blow molding: Again the spiral screw forces the plasticised polymer through a die. A short
piece of tube, or ‘parison’ is then enclosed between a split die -which is the final shape of the
product - and compressed air is used to expand the parison until it fills the mould and achieves its
required shape. This manufacturing technique is used for manufacturing closed vessels such as
bottles and other containers. See Figure 2 below.

Film blowing: Film blowing is a process used to manufacture such items as garbage bags. It is a
technically more complex process than the others described in this brief and requires high quality
raw material input. The process involves blowing compressed air into a thin tube of polymer to
expand it to the point where it becomes a thin film tube. One end can then be sealed and the bag
or sack is formed. Sheet plastic can also be manufactured using a variation of the process
described.
Storage

21
The plastic recycling enterprise needs quite a large storage space in order to store all collected
waste items, processed materials and finessed products. Plastic waste items, especially bottles,
have a large volume and therefore a large storage place is necessary.

This process is continuous and can be simplified as shown in the figure below;

Figure 4: simplified scheme of plastic recycling

6.4 Quality control

i. We shall follow the ISO9000 or any other quality standards put forward by concerned
bodies for the manufacturing of our products. ISO stands for the International
Organization for standardization.
ii. Plastics collected from domestic waste will be manually inspected and sorted to check for
contaminants.
iii. Separation of recyclable plastics from those which are not. Identifying plastics: The
Plastics Identification Code is stamped on all plastic products to identify the type of resin
used. Not all plastics are the same and the equipment line used by the business may only

22
 be able to recycle certain types. In most areas, plastics labeled 1, 2, and 3 can be recycled.
We shall make sure we are aware about what plastics can be recycled and only put these
in your recycling bins.
iv. To prepare plastics for recycling, we shall rinse residue from bottles and containers,
remove lids. Plastic bags, bin liners, and cling wrap are not recyclable. These plastics can
get stuck in the sorting equipment in recycling facilities causing it to stop or break. Often
bottle tops and lids cannot be recycled with the bottle as they may be made of a different
type of plastic.
v. The company will acquire second hand advanced machine from either China or India,
which machine would have been tested for quality and improved performance.
vi. The business will Guarantees in case of failed products. The customers will be given
chance to claim for another product in case what he or she bought fails to work out within
the prescribed time.
vii. The business will employ skilled and well trained team of skilled, semi-skilled and
unskilled but trainable employees who will take care of the production process,
marketing and customer feedback.
viii. There will be close supervision of workers and the production process to ensure that
everything is going well according to plan.
ix. In case of machine and equipment break down, immediate repair and maintenance of the
machinery or equipment will be done to ensure that production goes on without any
delays.
x. There will be proper storage of finished products in a well designed show room far away
from the storage of raw materials to avoid incidences of contamination.
xi. Workers will be given protective gears like nose masks, gloves, overalls, among others
for their safety within the production process.
xii. Continuous improvements will be made in the company equipments to ensure that more
products are introduced to meet the increasing demands of the workers.

23
6.5 Record keeping and procedures
Creating a system for collecting revenue, paying employees, suppliers, and taxes correctly and
on time is part of operating a small business. The business will put in place an electronic
recordkeeping system to manage its records life-cycle, which includes from the time such
records are conceived through to their eventual disposal. This work includes identifying,
classifying, prioritizing, storing, securing, archiving, preserving, retrieving, tracking and
destroying of records. The type of records kept will include an up-to-date register of all
employees, including their residential addresses, an up-to-date version of the rules and
regulations of the business, accounting records that correctly record and explain the financial
transactions and position of the association in such a manner that allows true and fair accounts to
be prepared, minutes of meetings, financial records, certificate of incorporation, bank statements,
business reports and manuals, employment records, safety records, sales records, customer
databases, insurance records among others.

The financial reports that will be used to measure and monitor the business condition include
statement of comprehensive income, statement of financial position, and statement of cash flows.
These reports will be extracted monthly basing on the daily records of the business operations,
and compiled to make the final report at the end of the year. Bookkeeping will be done by the
company accounts assistant.

6.6 Billing and collection policies and procedures

Having a billing system is important for keeping track of bills and payments to and from
customers and suppliers or other businesses. The business will use small business billing
software like excel invoicing template, quick books, etc. to keep billing records and information
up-to-date.

The billing procedures of Major Industries Limited will include the following;

i. Setting up a billing service or software and Follow the service's or software's

instructions to set up your billing system.
ii. Input customer information into the system. Include items such as credit card
information, billing and mailing addresses and payment schedules.

24
 iii. Add any standard billing items and amounts charged. This will enable to business to
save time working on bills by only having to enter typical billing costs once into the
system.
iv. Set up recurring billing for customers if applicable. Schedule billing to occur
automatically in regular intervals, such as once a month.
v. Send customers bill payment reminders if necessary. This can ensure that the business
receives payment on time and in a regular fashion.
vi. Prepare billing invoices. These invoices may be printed and mailed or emailed to
customers. Check the invoices for errors before sending them to customers to prevent
problems or arguments later. If you bill for materials on a job, make a list of the
materials you used or bought to get paid for them later. Provide copies of any receipts
for the materials to attach to your customer's bill.
vii. Record receipt of payments. Keep track of when you were paid by a customer and
what the payment amount was.

SECTION SEVEN
MANAGEMENT PLAN

7.0 Introduction
This section of the business plan covers the company organization and the management team.

25
7.1 Company organization
The company is organized in a way that the power and authority flows from top to bottom with
the board of directors/promoters at the top followed by the company general manager, who is
followed by the departments of production (machine operation and store/warehouse and waste
collection), marketing departments consisting of the marketing team and sales volunteers and
accounting department manned by the accounts assistant. This is as shown in the staff structure
or organization chart below.

7.2 Staff structure/organization chart

Board of
Directors

General
Manager

Production Marketing Accounts

Department Department Department

Waste Product
Sales Accounts
collection Processing and Sales Team
Volunteers Assistant
Team storage

7.3 Management team

The business’s management team consists of two Promoters and six supporting staff who will
manage the company.

The two promoters of Millennium Recycling Limited are well educated, well experienced and
travelled individuals who have done extensive research in polymer production and recycling
technologies and possess a rich history of experience in Venture Development;

26
One of the promoters is a graduate of Bachelor of entrepreneurship and small business
management from Makerere University Business School and the other is a graduate Engineer of
Manufacturing Engineering with bias in Plastic Conversion Methods from Kyambogo University
and with over 3 years’ experience in the post-consumer plastics recycling industry. Along with
the promoters, five more employees will work for the accomplishment of company’s objectives.

7.4 Reward structure

Millennium Recycling Limited has put in place an attractive reward system that will not only
attract quality and experienced human resource but will also retain them. The business’s reward
structure will take into account both intrinsic (Information / feedback, Recognition, Trust,
Relationship and Empowerment) and extrinsic reward systems (Bonuses, Salary raise, Gifts,
Promotion and Other kinds of tangible rewards). The business’s salary structure is shown in
appendix 5.

Salary rate per month Year 1 Year 2 Year 3 Year 4 Year 5

Annual increase in rate per year 1% 2% 3% 4%

Manager 200,000 202,000 206,040 212,221 220,710
Administration assistant 180,000 181,800 185,436 190,999 198,639
Drivers 120,000 121,200 123,624 127,333 132,426
Machine operators 160,000 161,600 164,832 169,777 176,568
Cashier 150,000 151,500 154,530 159,166 165,533

SECTION EIGHT
FINANCIAL PLAN

8.0 Introduction
This section of the business plan covers the Investment requirements, financing plan, financial
assumptions and projections, financial sustainability strategy and Risk and opportunity.

27
8.1 Investment requirements
The business venture requires Ushs20million to start operations on small scale. This money will
provide for the fixed capital expenditures, pre-operating expenses and working capital.

8.2 Financing plan

The investment requirements above will be financed by personal savings, contribution from
friends, family and relatives and underutilized assets.

8.3 Financial assumptions and projections

The business has put in place a number of financial assumptions and projections which is shown
below;

8.3.1 Financial assumptions

i. Capital expenditures: the company will acquire a number of fixed assets for its operations
including among others machines, tools, and equipment. See appendix 2 for more details.
ii. Funding: the business will solicit its funds from equity sources that is personal savings,
friends and family and underutilized assets. See appendix 4 for more on such sources of
funds.
iii. Revenue forecasts: The revenue forecasts for the business will consider 264 working
days, sales target of making at least Ushs100, 000 per day. This is shown in appendix 3.
iv. Depreciation plan: with the assets above, we intend to follow straight line depreciation
policy and depreciation rates as follows; 20% for the building, 25% for machinery and
equipment, 25% for motor vehicle, 12% for furniture, and 15% for computers. See
appendix 4 for more details.
v. Salary: very attractive Salary projections have been designed to not only attract but also
retain quality human resources and reduce staff turnover. See appendix 5.
vi. Expenditure: the company has extracted a list of other expenditures (indirect costs of
materials, labor, and so on). See appendix 6.
vii. Working capital: the company’s extracts of inventory, accounts receivable, and accounts
payable have also been shown in appendix 7

28
5.3 Financial projections
i. Income statement: the business’s income projections show a surplus for the next five
years of business operation. See appendix 8.
ii. Balance sheet: The projections show an annual financial strength of the company, which
stretches throughout the five years and beyond. See appendix 9 for more details.
iii. Cash flow: The Company’s cash balances (cash at hand) are sound and promising. See
appendix 10 for details.

8.4 Financial sustainability strategy

Millennium Recycling Limited) will in the medium to long run be base on a combination of the
following financial strategies;

i. Selling of company shares to the public at competitive prices so as to invite shareholders

to own a given percentage of stakes in the company. Using this strategy, the company
may be able to raise any amount of money it needs for its health.
ii. Carrying out fundraising activities through quarterly community cleanup exercises,
annual auctioning of its unique products in events and conferences, and annual charity
walks. Through this the business will be able to call for sponsorships from environmental
conservation bodies like NEMA, media houses like Nation media and others to be a part
of the exercise.
iii. Reinvesting part of the profits and other incomes towards internal and external expansion
of the business.
iv. Look for soft loans from interest free or little interest sources. This loans would be used
to carry out business operations.

8.5 Risk and opportunity

The potential risks and opportunities that may befall the business or act in the business’s favor is
as shown in the risk and opportunity matrix below;

8.5.1 Risk and opportunity matrix

Risk/opportunity Potential Prevention/capitalizing

impact
Potential risks

29
Recycled plastics are unacceptable Low
for packaging, which is to be in
direct contact with food.
Failed products can be costly and High
incur replacement under guarantees.
Plastic recycling is an expensive Extreme
business. The process uses huge
amounts of electricity, particularly
during the extruding step leading to
high overheads.
Unavailable or scarce raw material High
feed stock for production
Technology employed may be High
unreliable or unproven
The location may not be near Low
enough to markets
The Company may not be able to Low
attract top management  management team with proven ability and
30
the business will acquire a recycling process
which is specifically approved for production
of tins fit for storing food and others.
Make quality products and assure customers
of quality. Put guarantee on our products
We shall put in place energy saving
technologies and standby generators and
solar energy alternatives
The business is confident that it has secured
good availability of low cost post-consumer
PET bottles (feed stock) derived from post-
consumer beverage bottles from Kampala
based recycling collectors, and has back up
sources identified.
The business will use a proven, patented
technology that was developed by the
Chinese for the cleaning and recycling phase.
The extrusion division will employ
commercially proven technology - the
industry is employing unique recycled PET
technology which is used by prominent
recycling firms in Uganda, south Africa or
India.
The markets that have been identified are
primarily in Uganda which will provide a
distinct advantage to the Company because
of transport costs and delivery timing.
The Company has assembled a world class
direct experience in the Company's market
segments.
Company may not meet Low This environmentally-favorable
environmental standards venture provides for the development of
technically feasible and economically viable
solutions to PET plastic beverage bottle
recycling, as well as environmentally aware
in-house re-use practices which filter and
return nearly all of the process water to the
production lines.

The Company may not be able to High Through the Senior Management's industry-
sell all of its production capability wide contacts, the Company has identified
potential customers and received
commitments for all of the production
potential of the initial facility.

Opportunities
A constant supply of raw material High It is possible to integrate in this system by
to the factory is of utmost letting them know that the factory is willing
importance for the existence of the to buy plastic waste material.
business.
Appropriate time for action when Extreme Use this chance to use our experience and
every stakeholder is more interest to occupy a large market share.
concerned with environmental
sustainability through among others
recycling
Growing market for recycled High Ensure constant supply of products to cover
products. Semi-finished and the growing markets.
finished recycled products are
becoming a hot spot for consumers
both locally and internationally.

31
 SECTION NINE
DEVELOPMENT PLAN

9.0 Introduction
This section of the business plan covers the implementation plan and the Gantt chart.

9.1 The implementation plan

WORK BREAKDOWN STRUCTURE

PLASTIC RECYCLING PROJECT
MAJOR SUB TASK DURATION TEAM
TASK ASSIGNMENT
Research of Feasibility study for the available plastic 1 month market research
the plastic recyclers in Uganda consultants
Potential customers and recycled products on 1 month market research
recycling
high demand consultants
market
Writing the business plan 1 month market research
consultants
Setting up a Contracting with local volunteer groups, 1 month general manager
collection scavengers, middlemen and traders who
32
system of collect plastic
Creating a drop-off centers at the business site 1 month General manager
waste
and at selected places for plastic waste
plastic.
collectors
Cooperating with the local governments and 1 month General manager
city councils to get involved in collection
schemes accompanied with a public
awareness campaigns.
Business Apply for a business license from registrar of 1 month General manager
legality companies in Uganda and the town clerk
Apply for environmental impact assessment 1 month General manager
from National Environmental Management
Authority
Operation Site acquisition 1 month Production
premises. manager
Site planning and renovation of the building 1 month Outsourced
and compound engineers
Recycling Dispatching orders for used recycling 1 month General manager
machinery machinery and equipment. For example
and shredders, crushers, extruders, washers and
equipment solar dryers
Researching local processors to whom the 1 month General manager
business can outsource processing if it can’t
afford equipment upfront.
Obtaining equipments and installing them in 1 month Production team
the plant
Obtaining Recruit human resource through head 2 months General manager
the best hunting, advertisements, referrals, etc
Train human resource on recycling 1 month Production
Human
methodologies manager
resource
Schedule work to human resource 1 month Production
manager
collecting Beginning to collect recyclables from the 1 month Collectors
recyclables traders, middlemen, volunteers, etc.
Recycling Test recycling and making of projected 1 month Production team

33
 products and test marketing of the finished and marketing
products team
Making necessary adjustments in the 1 month Production team
recycling equipment and collecting customer and marketing
complaints (if any) team
Commercialization of recycling and 1 month Production team
production of recycled products
Publicity Printing and distributing fliers and posters, etc Continuous Marketing team
Talk shows, events, conferences and Continuous marketing team
exhibitions
Television, radio and news papers, press Continuous Marketing team
release
Developing and launching company website 1 month Marketing team
Launching the business 1 month Marketing team

34
9.2 Time frame
Table 4: The Gantt chart

TASKS RESPONSIBILITY Jan Feb Mar Apr Ma Jun Ju Aug

y l
Market research
Feasibility study market research
consultants
business plan market research
consultants
Collection system of
waste plastic
Contracting with local general manager
plastic collectors
Creating a drop-off centers General manager
Cooperating with the local General manager
governments
Public awareness general manager
campaigns.
Business legality
business license General manager
environmental impact General manager
assessment
Operation premises
Site acquisition Production manager
Site planning and Outsourced
renovation engineers
Recycling machinery and
equipment
Dispatching orders for General manager
used recycling machinery
and equipment.
Researching local General manager
35
equipment outsource
processors
Equipment Installation in Production team
the plant
collecting recyclables Collectors
Recycling
Test recycling and making Production team and
of projected products marketing team
Making necessary Production team and
adjustments marketing team
Commercialization of Production team and
recycling and production marketing team
of products
Publicity
Printing and distributing Marketing team
fliers and posters, etc.
Talk shows, events, marketing team
conferences and
exhibitions
Television, radio and Marketing team
newspapers, press release
Developing and launching Marketing team
company website
Launching the business marketing team

36
 APPENDICES

Appendix 1: Financial Assumptions

Millennium Recycling Limited
Financial Assumptions
Note 1
Number of operational days in a year 264
Number of months in a year 12
Corporation Tax 30%
Discount Factor 30%
Note 2 Capacity indicators
Capacity (Volume in units) per day
Tins 200

Note 3 Depreciation policy

Buildings 20.0% sln
Machinery & Equipment 25% sln
Motor Vehicles 25% sln
Furniture, Fixtures 12% sln
Computers 15% sln
Note 4 Working capital requirements
Inventory purchases 0 days
Debtors - 1 months' revenue 1 month
Creditors 1 month's expenses (Excluding salaries) 1 month
Note 5 Cost indicators % of revenue
Power & lighting 1.20%
Water 2.50%
Airtime, telephone bills 2.30%
Transportation 3.00%
Admin Expenses 4.00%
Business Promotion (advertising, etc) 1.80%
Maintenance & Repairs 3.70%
Cleaning 2.00%
Note 6 Financing
Personal savings 50.00%
Friends & family 40.00%
Underutilised Assets 10.00%
Total 100%

37
Appendix 2: Initial Investment Cost
Millennium Recycling Limited
Initial Investment (start up costs)
(Amount in UGX)
Investment Item Amount
Fixed Assets: Year 0
Land & Building (underutilised)
Land & site development 500,000
Total Land & building 500,000
Machinery & Equipment:
Equipment 3,000,000
Machinery 7,000,000
Total Machinery & Equipment 10,000,000
Motor Vehicles:
Truck 5,000,000
Total Motor Vehicles 5,000,000
Furniture & Fittings (donated)
Furniture & fittings 600,000
Total Furniture, fittings & others 600,000
Computers (donated) 700,000 700,000
Pre- Operating Expenses
Plant layout 300,000
Legal costs 500,000
General expenses 400,000
Total pre- operating expenses 1,200,000
Working Capital 2,000,000
Total Investment cost 20,000,000

Financing structure
Personal savings 50.00% 10,000,000
Friends & family 40.00% 8,000,000
Underutilised assets 10.00% 2,000,000
Total 20,000,000

38
Appendix 3: Revenue Model
Millennium Recycling Limited
Sales projections
(Amount in UGX)
Price indicators Year 1 Year 2 Year 3 Year 4 Year 5
Annual price growth rate 2% 4% 6% 8%
Tin 500 510 530 562 607
Volume indicators Year 1 Year 2 Year 3 Year 4 Year 5
Annual volume growth rate 5% 10% 15% 20%
Tin 200 52,800 55,440 60,984 70,132 84,158
Annual Sales Year 1 Year 2 Year 3 Year 4 Year 5
Tin 26,400,000 28,274,400 32,345,914 39,429,669 51,100,851
Total sales 26,400,000 28,274,400 32,345,914 39,429,669 51,100,851

39
Appendix 4: Depreciation Schedule
Millennium Recycling Limited
Depreciation schedule
(Amount in UGX)
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Building
Opening cost 500,000 500,000 500,000 500,000 500,000 500,000
Additions -
Depreciation 20%
Net Book Value 500,000 500,000 500,000 500,000 500,000 500,000
MACHINERY AND EQUIPMENT
Opening cost 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000
Additions
Depreciation 25% 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000
Accumulated Depreciation 2,500,000 5,000,000 7,500,000 10,000,000 12,500,000
Net Book Value 10,000,000 7,500,000 5,000,000 2,500,000 - (2,500,000)
MOTOR VEHICLES
Opening cost 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000
Additions
Depreciation 25% 1,250,000 1,250,000 1,250,000 1,250,000 1,250,000
Accumulated Depreciation 1,250,000 2,500,000 3,750,000 5,000,000 6,250,000
Net Book Value 5,000,000 3,750,000 2,500,000 1,250,000 - (1,250,000)
FURNITURE
Opening cost 600,000 600,000 600,000 600,000 600,000 600,000
Additions
Depreciation 12% 72,000 72,000 72,000 72,000 72,000
Accumulated Depreciation
Net Book Value 600,000 600,000 600,000 600,000 600,000 600,000
Computers
Opening cost 700,000 700,000 700,000 700,000 700,000 700,000
Additions
Depreciation 15% 105,000 105,000 105,000 105,000 105,000
Accumulated Depreciation 105,000 210,000 315,000 420,000 525,000
Net Book Value 700,000 595,000 490,000 385,000 280,000 175,000
TOTALs
Opening cost 16,800,000 16,800,000 16,800,000 16,800,000 16,800,000 16,800,000
Total Additions - - - - - -
Total Depreciation - 3,927,000 3,927,000 3,927,000 3,927,000 3,927,000
Total Accumulated Depr - 3,855,000 7,710,000 11,565,000 15,420,000 19,275,000
Total Net Book Value 16,800,000 12,945,000 9,090,000 5,235,000 1,380,000 (2,475,000)

40
Appendix 5: Salaries Projections
Millennium Recycling Limited
Salaries projections
(Amount in UGX)
Number of staff Year 1 Year 2 Year 3 Year 4 Year 5

Category Terms
Manager Full time 1 1 1 1 1
Administration assistant Full time 1 1 1 1 1
Drivers Full time 1 1 1 1 1
Machine operators Full time 1 2 2 2 2
Cashier Full time 1 1 1 1 1
Sales representative Volunteers 2 2 2 2 2
Total 7 8 8 8 8
Salary rate per month Year 1 Year 2 Year 3 Year 4 Year 5

Annual increase in rate per year 1% 2% 3% 4%

Manager 200,000 202,000 206,040 212,221 220,710
Administration assistant 180,000 181,800 185,436 190,999 198,639
Drivers 120,000 121,200 123,624 127,333 132,426
Machine operators 160,000 161,600 164,832 169,777 176,568
Cashier 150,000 151,500 154,530 159,166 165,533
Annual salary amount
Manager 2,400,000 2,424,000 2,472,480 2,546,654 2,648,521
Administration assistant 2,160,000 2,181,600 2,225,232 2,291,989 2,383,669
Drivers 1,440,000 1,454,400 1,483,488 1,527,993 1,589,112
Machine operators 1,920,000 1,939,200 1,977,984 2,037,324 2,118,816
Cashier 1,800,000 3,636,000 3,708,720 3,819,982 3,972,781
Total annual salary 6,000,000 6,060,000 6,181,200 6,366,636 6,621,301

41
Appendix 6: Expenditure Projections
Millennium Recycling Limited
General Expenditure projections
(Amount in UGX)
% of sales
General expenses revenue Year 1 Year 2 Year 3 Year 4 Year 5
Power & lighting 1.20% 316,800 339,293 388,151 473,156 613,210
Water 2.50% 660,000 706,860 808,648 985,742 1,277,521
Airtime, telephone bills 2.30% 607,200 650,311 743,956 906,882 1,175,320
Transportation 3.00% 792,000 848,232 970,377 1,182,890 1,533,026
Admin Expenses 4.00% 1,056,000 1,130,976 1,293,837 1,577,187 2,044,034
Business Promotion (advertising, etc) 1.80% 475,200 508,939 582,226 709,734 919,815
Maintenance & Repairs 3.70% 976,800 1,046,153 1,196,799 1,458,898 1,890,731
Cleaning 2.00% 528,000 565,488 646,918 788,593 1,022,017
Total General expenses 5,412,000 5,796,252 6,630,912 8,083,082 10,475,674

42
Appendix 7: Working Capital Schedule
Millennium Recycling Limited
Working capital schedule
(Amount in UGX)

Working capital requirements Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Inventory 6,000,000 10,000,000 15,000,000 22,000,000 30,000,000
Debtors - 1 months' revenue 2,200,000 2,356,200 2,695,493 3,285,806 4,258,404
Creditors 1 month's expenses (Excluding salaries) 5,412,000 5,796,252 6,630,912 8,083,082 10,475,674
Net Working Capital 2,000,000 2,788,000 6,559,948 11,064,581 17,202,724 23,782,730

Incremental Working Capital 2,000,000 788,000 3,771,948 4,504,633 6,138,143 6,580,006

43
Appendix 8: Income and Expenditure Account
Millennium Recycling Limited
Income and Expenditure Account
(Amount in UGX)
Year 1 Year 2 Year 3 Year 4 Year 5
INCOME
Total Sales 26,400,000 28,274,400 32,345,914 39,429,669 51,100,851

Less: EXPENDITURE
Salaries 6,000,000 6,060,000 6,181,200 6,366,636 6,621,301
Depreciation 3,927,000 3,927,000 3,927,000 3,927,000 3,927,000
General expenses 5,412,000 5,796,252 6,630,912 8,083,082 10,475,674
Net profit before interest and tax 11,061,000 12,491,148 15,606,801 21,052,951 30,076,875

Net profit before tax 11,061,000 12,491,148 15,606,801 21,052,951 30,076,875

less: tax 30% 3,318,300 3,747,344 4,682,040 6,315,885 9,023,062
Net profit (loss) after tax 7,742,700 8,743,804 10,924,761 14,737,065 21,053,812
Retained earnings 7,742,700 16,486,504 27,411,265 42,148,330 63,202,142

44
Appendix 9: Cash Flow Statement
Millennium Recycling Limited
Cashflow statement
(Amount in UGX)
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Cash Inflows
Opening cash balance (1,400,000) 18,800,000 37,506,200 58,716,569 83,925,012
Personal savings 10,000,000
Friends & family 8,000,000
Undeerutilised assets 2,000,000
Sales 26,400,000 28,274,400 32,345,914 39,429,669 51,100,851
Total Inflows 20,000,000 25,000,000 47,074,400 69,852,114 98,146,237 135,025,863
Cash Outflows
Pre-operating Expenses
1,200,000
Capital Expenses 18,200,000
Working Capital 2,000,000 788,000 3,771,948 4,504,633 6,138,143 6,580,006
Operating expenses 5,412,000 5,796,252 6,630,912 8,083,082 10,475,674
Total Outflows 21,400,000 6,200,000 9,568,200 11,135,545 14,221,225 17,055,681

Closing cash balance (1,400,000) 18,800,000 37,506,200 58,716,569 83,925,012 117,970,182

45
Appendix 10: Balance Sheet
Millennium Recycling Limited
Balance sheet
(Amount in UGX)
Year 1 Year 2 Year 3 Year 4 Year 5
ASSETS:
Non current assets
Net non current assets 12,945,000 9,090,000 5,235,000 1,380,000 (2,475,000)
Current assets
Inventory 6,000,000 10,000,000 15,000,000 22,000,000 30,000,000
Debtors 2,200,000 2,356,200 2,695,493 3,285,806 4,258,404
Cash 18,800,000 37,506,200 58,716,569 83,925,012 117,970,182
Prepayments
Total current assets 27,000,000 49,862,400 76,412,062 109,210,818 152,228,587

Total Assets 39,945,000 58,952,400 81,647,062 110,590,818 149,753,587

Equity and Liabilities
Equity & reserves
Capital 20,000,000 20,000,000 20,000,000 20,000,000 20,000,000
Retained Reserves 7,742,700 16,486,504 27,411,265 42,148,330 63,202,142
Owners Equity 27,742,700 36,486,504 47,411,265 62,148,330 83,202,142
Current Liabilties
Accruals 6,790,300 16,669,644 27,604,885 40,359,406 56,075,770
Creditors 5,412,000 5,796,252 6,630,912 8,083,082 10,475,674
Total current liabilities 12,202,300 22,465,896 34,235,797 48,442,488 66,551,444

Total Equity & Liabilities 39,945,000 58,952,400 81,647,062 110,590,818 149,753,587

46
Appendix 11: Net Present Value
Millennium Recycling Limited
Net Present Value computation

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Cashflows
Initial Investment 20,000,000
Net Cashflows 18,800,000 37,506,200 58,716,569 83,925,012 117,970,182
20,000,000 18,800,000 37,506,200 58,716,569 83,925,012 117,970,182
Discount factor 30% 1.000 0.769 0.592 0.455 0.350 0.269
Present Value 20,000,000 14,461,538 22,193,018 26,725,794 29,384,480 31,772,800

NPV 144,537,630
IRR 154%

47