Professional Documents
Culture Documents
Wolkite, Ethiopia
Nov. 2019
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Contents
Executive Summary.....................................................................................................................................................4
1. Industry and Marketplace Analysis.............................................................................................................6
1.1 Global Context............................................................................................................................................6
1.2 Local Context..............................................................................................................................................6
1.3 Environmental Issues..................................................................................................................................6
2. Industry Profile............................................................................................................................................8
2.1 Background of the Company.......................................................................................................................8
2.2 Management Structure................................................................................................................................8
2.3. Need Analysis for Proposed Project..........................................................................................................10
3. Technical Information...............................................................................................................................11
3.1. Types of plastics........................................................................................................................................11
4. Production Process....................................................................................................................................13
4.1. Collection of waste plastic........................................................................................................................13
4.2. Storage.......................................................................................................................................................13
4.3. Sorting and identification..........................................................................................................................14
4.4. Washing.....................................................................................................................................................14
4.5. Cutting.......................................................................................................................................................15
4.6. Shredding...................................................................................................................................................15
4.7. Extrusion / Palletisation.............................................................................................................................15
4.8. Fabrication into end Product.....................................................................................................................15
5. Employment Generation of the Project.....................................................................................................16
5.1. Scope of Operations..................................................................................................................................17
5.2. Production Capacity..................................................................................................................................17
6. Sales and Distribution System...................................................................................................................18
6.1. Target Market Segments...........................................................................................................................18
6.2. Distribution Strategy.................................................................................................................................18
6.3. Advertising & Promotion Strategy............................................................................................................20
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6.4. Sales Strategy............................................................................................................................................20
6.5. Marketing Strategy....................................................................................................................................20
6.6. Market Comparison...................................................................................................................................21
6.7. Competitor Analysis..................................................................................................................................21
7. Supply Chain (Post- Consumer and Post-Industrial Plastic).....................................................................22
7.1. Supply Chain.............................................................................................................................................22
7.2. Sorting and storing facilities......................................................................................................................24
8. Operations & Land Utilization..................................................................................................................24
9. Time Targets..............................................................................................................................................26
10. Structure of Economic and Financial Analysis.........................................................................................26
10.1. Objective of the Proposal..........................................................................................................................26
10.2. Instrument of Data Collection...................................................................................................................27
10.3. Methodology.............................................................................................................................................27
10.4. Approach...................................................................................................................................................27
10.5. Principles and Procedures.........................................................................................................................28
11. Financial Analysis.....................................................................................................................................28
11.1. Cost Structure............................................................................................................................................28
11.1.1. Fixed Cost..................................................................................................................................................28
11.1.2. Variable Cost.............................................................................................................................................29
11.1.3. Labour Cost...............................................................................................................................................30
11.1.4. Raw Material Cost.....................................................................................................................................31
11.2.1. Returns from Plastic Product.....................................................................................................................34
11.2.2. Returns from Plastic Raw Materials..........................................................................................................35
11.2.3 Total Annual Revenue....................................................................................................................................36
11.5. Cash Inflow and Outflow of the Project....................................................................................................38
12.2. Environmental Benefit of the Project........................................................................................................39
13. Conclusions and Recommendations..........................................................................................................40
13.1. Conclusion.................................................................................................................................................40
13.2. Recommendation.......................................................................................................................................41
References..................................................................................................................................................................42
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Executive Summary
Criteria Summary Description
Name of the DA plastic industries
Project
Year Initiated Nov. 2019
Main Objectives of To conduct a cost benefit analysis for proposed post-consumer and post-
the Project industrial plastic recycling project in Wolkite, Ethiopia.
Proposal
Summary of The project is laid out basically under 4 main branches of (a).collecting
Proposed Project plastics from rural areas and mineral water bottling factories (b),
purification of chemical barrels (c) crushing plastics and (d) manufacturing
products. The water used for the purification of chemical barrels will be re-
used after undergoing a purification process via water treatment plants.
Around 40% of the plastic powder, which is the final output, will be used
in the production of plastic sand-plastic roof tiles, flower pots and
Plastic crates and balance 60% will be sold as plastic raw materials.
Total Investment Fixed Cost = ETB. 5.9192Million, Average Variable cost with full capacity
(ETB.M) - ETB/Year = 1.282 Millions, Raw material cost ETB. 1.3332 Million per
year.
Gross Revenue With Full production capacity 6,092,900.00
(ETB. Per year)
Net Revenue (ETB. With full production capacity 4,759,700.00
Per year)
Total Job Creation 60 direct employments.
National level It is lead to address the behavior change necessary among the Ethiopian
impact of the consumer to ensure the proper disposal of plastic waste in manner which
project will not be harmful to the environment and Natural Resources.
Project directly support to save the foreign exchange by enhancing
recycling of post-consumer and post-industrial plastic waste
Methodology The methodology adopted for the cost benefit analysis of the investment is
Adopted based on guideline for environmental project assessment generally
recommended by African Development Bank and World Bank
Decision Criteria IRR , NPV and B/C ratio (Financial analysis or with financial Benefit
for overall project only),
evaluation IRR, NPV and B/C ratio (Economic analysis or with financial and Foreign
saving )
.
Major Conclusion It was observed that a financing of the prosed post-consumer and post-
under financial Industrial plastic recycling project can be well justified in both financial
analysis and terms.
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Major Conclusion All these decision criteria presented and discussed in this study, indicate
under overall that the financing of this plastic recycling Project would be well justified
Economic analysis economic terms. Besides, on social point of view, the project is highly
viable.
Major As the project is economically and financially justified, this study proposes
Recommendation to the further extension of project activities with the support of the local
of the Report Government.
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1. Industry and Marketplace Analysis
Ethiopia imports annually a considerable amount of plastic raw materials and finished products
and a major portion of them end up as Post Consumer Plastic Waste causing severe
environmental problems. It is estimated that about 170,000 tons of plastic raw materials and
imported which is 90% of the total consumption. According to the Reporter, currently some six
billion plastic bottles are said to be packed in Ethiopia alone and recollecting and recycling of
utilized bottles seems largely neglected. There are more than 67 water bottling companies in
Ethiopia which contributes plastic bottle waste both in the factories and outside. Among the
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those factories EDEN,FIKR,WOW and ETHIO mineral water factories are around wolkite town
where the proposed recycling plant is to be located.
Life-cycle analysis can be a useful tool for assessing the potential benefits of recycling
programmes. If recycled plastics are used to produce goods that would otherwise have been
made from new (virgin) polymer, this will directly reduce oil usage and emissions of greenhouse
gases associated with the production of the virgin polymer (less the emissions owing to the
recycling activities themselves).
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2. Industry Profile
DA Plastic Industries is a wholly Ethiopian owned private company owned by Mr.Amir Bedewi
and Mr. Dessalegn Gamini, and will be incorporated by Business Names from legal
governmental bodies. The company will take an Environment Protection License from Central
Environment Authority.
The General Nature of the Business Recycling plastic and Injection Molding
The Principal Place of the Business Wolkite, Ethiopia
The Year of the Commencement of the 2012 E.C
Business
Full Name of the Owner Amir Bedewi and Dessalegn Gamini
The Nationality of the Owner Ethiopian
The Usual Residence of the Owner Wolkite, Ethiopia
Mr. Amir Bedewi and Dessalegn Gamini are the owners and promoters of DA Plastics. They will
be working as a Managing Director and Vice Director and both have intensive knowledge and
vast understanding in plastic recycling and management which undoubtedly will help the
business. Creating promotional strategies and sales skills are extremely helpful in taking the
business a long way and prove intensely valuable to this venture. Thus such potential skills and
other qualities like efficient interpersonal skills, leadership skills and decision making quality of
owners, are expected to be success elements of DA Plastic Industries.
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Figure 01: Organization Chart
Managing Director
Supervisors Supervisors
Sales (Procuanment)
Skilled Workers
Skilled Workers
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2.3. Need Analysis for Proposed Project
Ethiopia does not manufacture any plastics raw materials at all, 100% of raw materials are imported
(mainly from the Middle East, Europe and Asia). With 41 million euros Ethiopia is the second largest
importer of packing technology in East and Central Africa next to Kenya as data showed in 2018. Bottles
for cosmetics, detergents, pharmaceuticals, mineral water, domestic containers and general hallow items
produced in Ethiopia are made mostly from polypropylene polyethylene and polyethylene terephthalate
(PET). Soft drink manufacturers and bottling companies have continued to embrace PET bottles over
glass at alarming rate. This had played a great role in accumulation of plastic bottle waste in the country,
polluting the environment. With high amount of foreign currency to import the raw material and high
level of environmental pollution due to plastic waste, it is important to involve in recycling plastic waste.
Production of roof tiles by plastic powder and sand is cost effective alternative for home builders and can
save foreign currency of metal sheets for home roofs. Thus, this environmental friendly project is laid
out basically under 4 main branches of collecting from rural areas and mineral water bottling companies,
purification, crushing plastic and manufacturing of products. The water used for the purification will be
re-used after undergoing a purification process via water treatment plants. The plastic powder, which is
the final output, will be used in the production of non-consumer plastics such as plastic-sand roof tiles,
plastic flower pots, plastic crates, Lanterns.
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3. Technical Information
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LDPE Agricultural films
Low density Tough Refuse sacks
polyethylene Flexible Packaging films
(LDPE) Waxy surface Foams
Soft - scratches Bubble wrap
easily Flexible bottles
Good transparency Wire and cable
Low melting point applications
Stable electrical
properties
Moisture barrier
Poly PP Excellent chemical Yoghurt containers
propylene (PP) resistance Potato crisp bags
High melting point Drinking straws
Hard, but flexible Medicine bottles
Waxy surface crates,
Translucent plant pots
Strong Car battery cases
Heavy gauge woven bags
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4. Production Process
4.2.Storage
The plastic recycling enterprise needs quite a large storage space in order to store all collected
waste items, processed materials and finished products. Plastic waste items, especially chemical
barrels and cans which we have planned to collect, have a large volume and therefore a large
storage place is necessary.
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4.3.Sorting and identification
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 is manual process and we use full time man power for this task. 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. To aid in identification, it is now
common for plastic containers to have a polymer identification code. 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. We will
apply the following test for identification of plastics.
However in our organization, this separation or segregation process, in many cases, will be done
by manual process utilizing the availability of cheap and expert labor force. In case the waste is
contaminated with embedded metals, proper method of separating the metals / other
contaminants is required.
4.4.Washing
The scale of cleaning depends on the type of waste. Whenever a cleaning operation is involved,
it is to be ensured that the water or any other cleaning material used should be discharged after
ascertaining that the discharge does not contain any objectionable substance. A proper Treatment
Device may have to be deployed – like a water treatment plant / effluent treatment plant. For
drying, a suitably designed drier is used.
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If the plastic is dirty, cleaning is necessary. The main cleaning steps which we are planning to
apply:
- Draining of remaining fluids from containers into prepared collection barrels.
-Rough cleaning of plastic containers and other pieces of plastic.
- Removing of paper, plastic or metal stickers.
- In the case of PET bottles removing of caps and etiquettes.
- Intensive washing in cold or hot water with addition of detergents or caustic soda. The
waste water can be reused by installing a simple waste water treatment system like a
sedimentation basin
4.5.Cutting
Cutting is usually carried out for initial size reduction of large plastic objects. It can be carried
out with a plastic cutting machine, specifically designed to cut plastic into smaller plastic pieces.
4.6.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 sited above the blade rotor. The product of shredding is a
pile of coarse irregularly shaped plastic flakes which can then be further processed.
4.7.Extrusion / Palletisation
This is the most important part of the process wherein the sized / chipped plastics are plasticized
and granulated to make the plastics material ready for fabrication next. The type and size of the
Extruder depend on the type and volume of the plastics waste.
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5. Employment Generation of the Project
In order to better inform investment decisions, it is important to understand all of the potential
benefits of projects, both direct and indirect. Given that a key feature of government policy is the
creation of jobs, an analysis of the employment impact of investment projects would clearly be
of assistance in the formulation of budgetary decisions. This note estimates the employment
impact of a range of possible infrastructure projects. The purpose of this section is to provide
clarity on the short-term employment effects of a range of potential investment projects.
For each project, the level of employment is evaluated. This includes the level of direct
employment (people employed on the project), indirect employment (people employed in the
supply of goods or services to the project) and induced employment (the additional employment
generated due to the increase in consumption as a result of the direct and indirect employment
increases). There will be some individual collectors who earn between Birr 300 to 500 daily by
collecting plastic waste and once it develops collectors could sell them to our collectors at the
best current market prices. This will give an opportunity for people to earn an extra income for
their day-to-day living while ensuring an Environment is ensuring the free of plastic waste.
Further, both skilled and unskilled additional labour will be absorbed to the project.
Process No of Employees
Direct Employment 35
Supervisors 2
Skilled Workers 2
Unskilled Workers 4
Waste Collectors 15
Agents 12
Others
Indirect Employment 25
Total 60
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5.1.Scope of Operations
The expected recycling capacity will be 8 Tons per month and will increase through time. With
the establishment of our new company at Wolkite the company expects to start producing more
advance plastics in the coming three years of our operations and accordingly the sales will
increase and the facility will have to be expanded. The proposed plant at Wolkite will commence
recycling of mineral water bottles in the coming three years associated with rapid growth of
mineral water factories. The expected recycling capacity of the company is given in table 04
below.
1st year
Type of Plastic MT
Recycled
(Mt/Month)
HDPE (4%) 0.27
PP (33%) 2.66
PS (1%) 0.07
PET&Other (ABS) 5
(62%)
Total 8
5.2.Production Capacity
We will provide a wide range of plastic items for households as finished goods and supportive
materials to companies which are produced based on post-consumer plastic and post-industrial
plastic. Besides, the plastic power which is our recycle unit is processed and eventually sold to
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Main plastic products in the country as raw materials which can be used for the production of
finished plastic good. The plastic powder, which is the final output, will be used in the
production of Roof Tiles and Sunk Boxes, Ceiling Rose, and others in the future.
6.2.Distribution Strategy
Firstly we will target the urban areas of Ethiopia for our new product, (roof tile) and plastic
Powder for other industries especially for those located in Addis Ababa and secondly the rest of
the country. We will have a distribution center in Wolkite, and Addis Ababa which will
continuously maintain the supply of finished goods. The roof tile products will be sold through
small local shops and Agents from which the customers can get them easily. Our final products
will be stored in warehouses which are close to the factory itself. The sales people will directly
contact to the companies which require our products and look for the contracts. With the
expansion of the market we will have distribution centers in other provinces and based on that
center we will distribute to whole sellers among the country.
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Figure 03: Market Segmentation
Market Segmentation
(Roof Tiles and Sunk Boxes, Ceiling (Roof Tiles and Sunk Boxes, Ceiling)
whole sales for Agents
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6.3.Advertising & Promotion Strategy
We will use two different promotional strategies. For our own products we will use flyers which
will have full detail of our product range, price and discounts. These flyers will circulate through
the newspapers across. For all business we will promote through online social media and we will
also develop our website which will enable us to widely spread our contact among various
companies. The site will have full details of product which are available for companies as well as
the end user.
6.4.Sales Strategy
The strategy of sales effort will be to convert potential and first time customers into long term
customers. Our sales strategy is totally based upon the distribution channel and the pricing
strategies. The industry will establish a distribution center at Wolkite and in Addis Ababa and it
will take care of sales of household and also supply products to the whole sellers. We will also
give the industrial customers a facility to order the products through our website which will help
them in reducing the delivery time.
To market the products, the Company will use a number of sales agents/brokers. They have a
customer base of their own, having developed successful relationships with their clients over the
years. Their customer base is demanding products so they can expand upon their base. If the
Company grows faster then, additional capacity may be developed. The company will identify
additional prospective customers who can be attracted for our products
6.5.Marketing Strategy
It is helpful to view marketing strategy planning as a process of segmenting markets, target
specific customers and working to offer an effective position among the competitors. Four basic
market opportunities: market penetration, market development, product development and
diversification. With new plants at Wolkite we attempt to introduce and increase sales of our
products in Wolkite town markets at the beginning and we will introduce new strategies to
penetrate markets including: more aggressive marketing, increasing service to improve renewal
rates, or attracting competitor customers directly. Under market development our effort to
increase sales by selling products into new markets. We have planned to reach more new target
customers by expanding
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Our geographic region and look into international markets for expansion. With new plant at Wolkite we
have planned to increase the quality of the product or product development. It refers to offering new or
improved products to present markets. By working closely with our customers, we may find new and
innovative ways to better satisfy our target market. Besides after the establishment of our new venture at
Wolkite we would be able to diversify our future products. With diversification of our products, it will
open completely new lines of business, with new products in new markets. We have planned to
commence the production of roof tiles, plastic flower plots and plastic crates. We will diversify our
product mix to mitigate risks related to economic variables such as recessions.
6.6.Market Comparison
While quality and delivery are important factors to our potential clients, price is most often the
determining factor in a buying decision. Good-quality plastic products manufactured from
recycled (less expensive) resins, as close as practical to the end customer's operations, will be
most competitive and achieve a significant market share. With shortage of foreign currency to
import metal roof sheets in Ethiopia we will have better attraction with our new and cheap roof
tile product made of plastic and sand. These factors have helped to determine the business
parameters of Replay Plastics. Thus, we will highly focus those areas to expand the market share.
6.7.Competitor Analysis
Even if there are not recycled plastic manufacturing industries in Wolkite town with specific
brand name, flooding small companies in Addis Ababa which are already engaged in collecting
plastic waste all over the country in small scale will be our biggest direct competitors.
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7. Supply Chain (Post- Consumer and Post-Industrial Plastic)
7.1.Supply Chain
In Wolkite town we will employee plastic collectors closely connected with our industry. To
make a continuous supply of raw material we have linked with a few large scale plastic bottle
suppliers such as Eden Mineral Water, Wow mineral Water, Fikir Mineral Water and Ethio
Mineral Water factories. We will assign at least 15 permanent suppliers (agents) who are
continuously supplying the raw material over the country. We will directly purchase plastic
materials from Wolkite, Woliso, Butagira, Hossana and indirectly our service spill over to other
towns. Further, our agents will collect post-consumer paint baskets, fiber, soft drink bottles,
mineral water bottles and other plastic waste materials. In case of excess demand other suppliers
will be taken into consideration. All collected raw materials are stored in our ware house which
is to be located in Wolkite. With the new project, we have planned to establish the warehouse to
strengthen the supply chain and minimize the raw material risk.
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Figure 04: Supply Chain
Mega Suppliers
Agents/ Collectors
Purchased
and
Transported
Warehouses
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Table 05: Monthly Expected Average Plastic Collections
Suppliers Quantity
(Mt/Month)
Mega Suppliers
Eden 0.3
Wow 0.2
Ethio 0.3
Fikir 0.5
Household level 1.5
Chemical and oil Barrels 2
Others 3.2
Total 8.0
Crusher
Machine
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9.Time Targets
Main Activities Duration
2019 2020 2021 2022
N D J F MAM J J A S O N D
Preparation of Project Proposal X X
Taking legal approval from local X
authorities
Preparation of land for X
construction
Ordering required machines X
Commence construction X
Establishing electricity, water and X X X
telephone
Establishment of plants/machine X X
And Test run
Commence the initial production X
Commence the scrap bottles X
recycling
Establishment of plants X
50% improvement of whole X
production process
100% improvement of production X
process
100% improvement of production X
process
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project activities and observe the financial and economic viability in future expansion of the
project.
10.3. Methodology
The methodology adopted for the cost benefit analysis of the investment is based on guideline
from environmental project assessment generally recommended by African Development Bank
and World Bank. It is based on widely accepted techniques for the appraisal of environmental
based investment projects. The method provides a basis for achieving the necessary degree of
uniformity and comparability between similar projects. The data used and all conclusions are
based on the latest available information with a bearing on the offices of suppliers and related
governmental agencies. However, reliability and consistence of the information were rechecked
with field observation at each point and finally made reasonable adjustment to minimize the
mismatch.
10.4. Approach
The approach followed is that of a cost and benefit analysis with the emphasis on economic
criteria and their impact in the national context. Consequently, elements of multi-criteria analysis
such as environmental impacts and, in particular cost and benefit condition have been dealt with
financial and economic validity of the project. The economic analysis described here has been
carried out on the basis of comparisons of cost incurred and benefit expected.
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10.5. Principles and Procedures
• The economic useful life of project is twenty five years
• All benefits and costs have valued in constant in 2019 financial prices
• The overall economic viability of the project has been judged on the basis of four
decision criteria; (a) The Financial Internal Rate of Returns (FIRR), (b) The Financial Net
Present Value (FNPV) , The Cost Ratio (B/C) and Net Profit.
11.Financial Analysis
Under this section present study examines the financial cost and benefit stream of the project.
11.1.1.Fixed Cost
According to recorded data, the net value of total fixed investment of the project is ETB 5.78
Million.
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Table 06: The Value of Fixed Cost Required
Moulds 10 0.4
Vehicle 01 0.5
Other Equipment 0.5
Total Value of Fixed Assets 5.78
29
Table 07: Total Variable Cost Birr/Year
30
11.1.4.Raw Material Cost
Table 09: Average Cost on Raw Material (Birr/ Year)
31
11.1.5.Fixed Costs for Office Equipments
Birr(Millions)/year
Fixed Cost (Including 5.9192
office equipment)
Variable Cost 0.778
Salaries 0.504
Material Cost 1.3332
Total 8.5344
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of the benefits. If the time period is taken into account, then the benefits generated by the project
could be related to short term and long term benefits, individually.
Apart from this, benefits can be looked into under the basis of financial criteria and /or economic criteria.
The state of recycled plastic powder which is the final output and different types of products we
produced using plastic powder creates direct and immediate financial benefits. In this study, attention has
been paid to the assessment of environmental or economic benefits also, Since this type of project is be
focused on economic and environmental impacts rather than financial benefits. However, long term
sustainability of the project depends on their financial profitability. Thus this study has done micro level
financial analysis while observing the environmental impact as well.
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11.2.1. Returns from Plastic Product
Table 12: Gross income from Plastic Products (Birr)
34
Table 13: Average Selling Prices of Plastic Products
Type of Product Average Sold Price Average Sold Price Average Sold
Price (ETB/Unit) (ETB/Unit) Price(ETB/Unit)
1st year 2nd year 3rd year
Roof tiles 15 15 15
Sunk Boxes 5.0 5.0 5.0
Ceiling Rose 7.0 7.0 7.0
Flower Pots 15.0 15.0 15.0
Bottle Crates 50.0 50.0 50.0
Plastic 10.0 10.0 10.0
Household items
Note: As a marketing strategy, the company will maintain the same prices for their products
until the 4th year.
35
Table 15: Average Prices of Plastic Powder (ETB/Kg)
36
11.3. Profit and Loss Account
37
11.5. Cash Inflow and Outflow of the Project
Table 18: Projected Cash Inflow and Outflow of the Proposed Project
Time
1 2 3 4 5 6 7 8
Income from
Plastic Raw 0.7209 1.0814 1.4418 1.4418 1.4418 1.4418 1.4418 1.4418
Materials
Income from
5.3720 11.4320 22.0450 22.0450 22.0450 22.0450 22.0450 22.0450
Products
Total Inflow 6.0929 12.5134 23.4868 23.4868 23.4868 23.4868 23.4868 23.4868
Fixed Cost 4.0 1.9192
Running
0.241 0.305 0.4038 0.4038 0.4038 0.4038 0.4038 0.4038
Expenses
Salaries 0.504 0.756 1.008 1.008 1.008 1.008 1.008 1.008
Raw Materials 1.3332 1.9998 2.6664 2.6664 2.6664 2.6664 2.6664 2.6664
Replacement
3.42
Cost
Total Outflow 6.1 5.0 4.1 4.1 4.1 7.5 4.1 4.1
Net Cash
0.0147 7.5334 19.4086 19.4086 19.4086 15.9886 19.4086 19.4086
Inflow
38
12. Economic Analysis
With project, one of the major incremental net benefits is the net foreign saving on plastic and
polythene raw material imports. This proposed project has planned to recycle plastic mineral
water bottles and other plastic waste materials and finally produce plastic powder which could be
substituted for imported plastic virgin. Total financial value of recycled quantity under project is
exactly equal to the net incremental benefit from the project since in without project that output
becomes zero value.
The overall value or “natural capital cost” gives indications of the financial cost to companies
were to internalize impacts associated with their current practices. These costs can also be
factored into business and investment decision making. In order to quantify the natural capital
cost of the impacts of plastic, the high-level methodology follows six steps: sector selection,
plastic use quantification, scope and boundary selection, impact quantification, and natural
capital valuation and application (Johnson, 2015). Thus this study does not apply all those steps
to measure natural capital valuation of plastic due to the absence of robust data and scientific
39
research. However, the report briefly examines the environmental impacts of the recycling
process of plastic as follows.
Generally there are three types of plastics such as Plastic-in-product, plastic-in-packaging and
plastic-in-supply-chain. Plastic-in-product includes the quantity of plastics directly used in the
product, as well as any losses that were incurred during the manufacturing process. Plastic-in-
packing includes the quantity of plastic directly used in the packaging of the product as well as
any losses that were incurred during the packaging of the product. Plastic-in-supply-chain
includes the quantity of plastic used indirectly by consumer goods businesses via their supply
chain. According to the United Nations Environmental Program (UNEP), 2015 overall, global
weighted average of plastic-in-packaging used in the consumer goods industry is 2 tons per $1m
revenue; of plastic-in-product 2 tons per $1m revenue; and of plastic-in-supply-chain 4 tons per
$1m revenue. This indicates that for every $1m in revenue in the consumer goods industry, 8
tons of plastics are consumed. The expected target of this project is to recycle 648 ton of post-
consumer and post-industrial plastics. Otherwise all these plastics could cause damage to the
whole society. Thus, this project could be reasonably justifiable as an environmentally viable
project.
13.1.Conclusion
All these decision criteria presented and discussed above, indicate that a financing of the plastic
recycling Project would be highly justified in both financial and economic terms. Besides, with
an environmental point of view, the project is highly viable. However, it is important to
emphasize that, this type of project should be focused more on social and environmental impacts
rather than the financial returns. Policy makers need to be concerned about the economic
viability rather than financial viability.
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13.2.Recommendation
13.2.1. As the project is economically and financially justified, this study
proposed to the further extension of project activities with the support
of the local government
41
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