Waste Management 28 (2008) 294298 www.elsevier.

com/locate/wasman

Economic potential of recycling business in Lahore, Pakistan

Syeda Adila Batool
a b

a,

, Nawaz Chaudhry b, Khalid Majeed

Department of Space Science, Punjab University, Lahore, Pakistan College of Environmental Science, Punjab University, Lahore, Pakistan c Department of Solid Waste Management, Lahore, Pakistan Accepted 6 December 2006 Available online 1 May 2007

Abstract The state of household waste recycling in Lahore city, Pakistan with a population of 7.2 million was analyzed. Data on solid waste recycling were gathered from residents of low-, middle- and high-income groups, as well as from scavengers and junkshops. The recycling activities in Lahore exert a signiWcant impact on resource conservation, creation of jobs, provision of economic opportunity and reduction in the magnitude of waste disposal problems. A cost analysis is presented to show the income that can be generated through a wellplanned recycling program. It is shown that 21.2% of all recyclable waste in Lahore is recycled, and it generates an amount of Rs. 271 million (US$4.5 million) per year through the informal sector. However, if the recycling practice is owned by the formal sector, it can save an amount of Rs. 65 million by reducing the collection cost. If recycling is adopted as an industry, it can generate revenues of Rs. 530 million (US$8.8 million) per year and can also save enormous amount of energy, as well as the natural resources. 2007 Elsevier Ltd. All rights reserved.

1. Introduction EVective, economic and safe disposal of municipal solid waste is high on the agenda of developed and of developing countries (Beukerering et al., 1999). Recycling is rapidly emerging as a preferred strategy in the developed world and the same trend is being considered and adopted by the developing nations in order to deal with the problem of uncontrolled waste generation and disposal (Cheng et al., 2002; Qureshi, 2000; Ludwig et al., 2005). The handling of materials for recycling is not without environmental impacts, which arise due to the energy required for collection and sorting as well as those associated with the utilization of recovered materials in producing new products. However, these impacts are of much lower level than the ones associated with uncontrolled waste generation, handling and disposal. Recycling uses much less energy compared to other methods of waste treatment and disposal and saves natural
Corresponding author. Tel.: +92 429230370. E-mail addresses: aadila@brain.net.pk (S.A. Batool), muhammadnawazchaudhry@yahoo.com (N. Chaudhry). 0956-053X/$ - see front matter 2007 Elsevier Ltd. All rights reserved. doi:10.1016/j.wasman.2006.12.007
*

resources (Vencatasawmy et al., 2000; Van Beukering and Bouman, 2001; Gaines and Stodolsky, 1993; Stodolsky and Mintz, 1993). It has been demonstrated that a well structured and executed recycling program can help to reduce the waste, its disposal and treatment cost (Kelley, 1992; Reams and Geaghan, 1996; Agunwamba et al., 1998; Bhattarai, 2000; Koli and Mahamuni, 2005; Singhal and Pandey, 2001). Recycling in developed and in many underdeveloped countries is generating substantial economic beneWts for the communities (Agarwal et al., 2005). According to Wndings of the US EPA (2005), recycling and remanufacturing industries in the USA generate approximately one million manufacturing jobs and US$100 billion in revenue. In Wilkes Barre, Pennsylvania, it resulted in a saving of US$500,000 in landWlling avoidance costs during the period between 1988 and 1991 (Agunwamba et al., 1998). In England household waste recycling centers handle 16% of household waste (Woodard et al., 2004). Planned recycling on a countrywide scale or even in major cities of Pakistan does not exist. Over the last four decades, total municipal solid waste generated has increased many fold due to rapid increase in population,

S.A. Batool et al. / Waste Management 28 (2008) 294298

295

industrialization, urbanization and rising standard of living. Municipal solid waste is managed by the municipal authorities or contractors who are responsible for waste collection, transport and disposal. Waste management is restricted to urban areas, and there is no system of waste collection from rural areas. Urban waste management is poorly developed and is faced with series of problems like lack of Wnancial resources, collection and transport facilities as well as earmarked disposal sites. There is limited information on the activities of scavengers. No comprehensive cost analysis exists on the recycling problem in Lahore. Such information is vital for eYcient recycling programs, not only in Lahore but also for other cites in Pakistan and other developing countries. The objectives of this paper are to present the state of solid waste reuse and recycling in Lahore, Pakistan, discuss the problems, and propose a recycling program and highlight the usefulness of such a program in solving the problems associated with municipal solid waste. Additionally, a cost analysis of waste management with diVerent recycling options will be presented. In Lahore, the private, informal sector (the sector that is not working under government) is currently involved in the recycling business at the micro level. It is important for local municipal authorities/councils throughout Pakistan to promote recycling as an industry so as to gain economic advantage. In this paper, the economic potential of recycling in Lahore will be considered. 2. Solid waste recycling in Lahore, Pakistan 2.1. Trend of recyclables in waste composition Planned recycling may be proWtable in countries where the high value of recovered materials and low wage cost of recovery and recycling compensate for the relatively small proportions of recyclables waste that can be recovered from MSW (municipal solid waste), e.g., paper, plastic, glass, ferrous (Johnsons et al., 1984; Beukerering et al., 1999). This appears to be the case in Pakistan. Proportions of recyclables in Lahore based on the studies carried out for solid waste composition in 1980 (Willing, 1979), 1990 (Qasami, 1996), 19921993 (EPD, 19921993), and 2005 (current study) are shown in Fig. 1. The data was collected to determine the percentage (by weight) of recyclables in the solid waste of Lahore. It is interesting to note that from the period of 19802005, the quantity of paper and plastic has shown a continuous increase whereas glass and iron products have shown a decline. The census report of 1998 reveals that the rise in middle-income and low-income groups, from 1980 to 1998, is 53% and 15%, respectively, because of economic growth. The increase in paper and plastic in recyclables is due to the enhanced purchasing power of people. There is no signiWcant estimated increase in glass and iron in the waste

Fig. 1. Comparison of recyclables by weight percent of total waste. Sources: 1980 (Willing, 1979); 1990 (Qasami, 1996); 19921993 (EPD, 19921993) and 2005 (this study).

stream because plastic and paper goods have replaced them. On the basis of a waste generation rate of 0.75 kg/cap/ day (determined in this study), the annual waste generation in Lahore comes out to be 1.97 million tons. The composition of solid waste in 2005 reveals that waste in Lahore contains 21.2% recyclables, such as plastic, paper, glass and metal. There is no regulation on recyclables or recycling in Pakistan, and the formal sector is not actually involved in recycling. This study shows that the involvement of formal sector in this area can result in considerable savings. 2.2. Methodology As the recyclable materials emanating from diVerent sources reach the consumers through diVerent routes, three sources were studied for data collection. Data from source separation. Data from junkshops. Interviews with households. 2.2.1. Source separation Data were collected from the residents of low-income, middle-income and high-income areas within Lahore. The data were collected through qualitative research, and interviews were conducted with residents. Questionnaires were not used because of literacy problems with low and middleincome groups and diYculty in contacting members of the high-income group. A total of 360 households were selected for the years, 2001 and 2005, in this part of the study. The data generated has been presented in tabular form as follows: Low-income housing: 118. Middle-income housing: 210. High-income housing: 32. Table 1 shows that solid waste of Lahore contains four major types of recyclables, i.e., iron, glass, plastic and paper. Our study shows that iron is the most common recyclable in the waste generated. It is interesting to note that from year 2001 to 2005, the overall increase in the recyclable portion in Lahores waste was 9.1%. The data shows that the

296

S.A. Batool et al. / Waste Management 28 (2008) 294298

Table 1 Increasing trend in the quantity of average recyclables purchased per household, their average and the average purchase cost for the years 2001 and 2005 (US$1 D Rs. 60) Recyclable Items Quantity purchased from households (A) (kg/yr) 2001 Iron Glass Plastic Paper Total 216 360 240 252 1068 2005 220 375 280 300 1175 Average purchase rate (B) (Rs./kg) 2001 7 0.5 7 1 2005 20 10 12 7 Total purchase cost (C D A B) (Rs./yr) 2001 1512 180 1682 252 3024 2005 4400 3570 3360 2100 13,610

Sources: 2001 (Qayyum, 1990; Saleem, 2001); 2005 (personally collected data).

quantity of plastic and paper has increased at comparatively higher rates, i.e., 14.3% and 16%, respectively, compared to iron and glass, which showed an increase of 1.8% and 4%, respectively. The economic potential of the recyclable portion can also be gauged from the fact that the prices of these materials have increased during the same period, in the range of 5001300%. The minimum increase in price is 500% for plastics and highest increase is 1300% for iron. Paper prices have also increased to the extent of 600% during period 20012005. These Wgures indicate that the recycling industry is Xourishing in Lahore, although in the informal sector and without the support of the formal sector. The demand for recyclables in the recycling industry is the main reason for escalating prices. The 360 households on average are earning Rs. 13,610 per year from the sale of recyclable materials to the scavengers (persons who search through waste for recyclables), as shown in Table 1. It indicates that for a total projected population of 7.2 million in the year 2005, a sizeable amount of Rs. 271 million (US$4.5 million) per year can be generated through the sale of recyclables to the scavengers. Fig. 1 shows that the total percentage of recycled material increased dramatically over the 25 years from the 1980 data (910% recycled in 1980, 1990, and 1992/1993) to the 2005 data (21.2% recycled). There is considerable increase of plastic and paper in the recycled portion. The reason is that the use of packaging material and of plastic goods such as pet bottles and shopping bags has considerably increased. There is no noticeable increase in glass and iron because plastic goods have replaced them. Fig. 2 shows that

prices of iron and glass have witnessed a steep increase .The reason for the escalation in prices is increasing demand and limited supply of these recyclables. Prices of plastics and paper have not increased as steeply as those of iron and glass. The increase in the quantities of plastic and paper indicate that our society is in a transition period and heading towards a throw-away society because of increased aZuence. Pakistan has now come out from the list of under developed countries. The per capita income in Pakistan is US$750 per annum according to the Pakistan Institute of Development Economics (2006). We do expect higher per capita disposal rates in the future. 2.3. Junkshops (Kabaria) The waste purchased by the scavengers from residents is sold to the middlemen who own junkshops in and around Lahore city. A total of 400 such junkshops were identiWed in Lahore. The data regarding the quantity of recyclables sold at junkshops by scavengers per year, and total earning of scavengers from the sale of recyclables at junkshops are shown in Table 2. Similarly, the price at which recyclables were sold to recycling industries and the total earning of junkshop owners are presented in Table 3. 2.4. ProWt of scavengers (from purchase at source to sale at junkshops) Net proWt D (57.5 49.0) (100)/57.5 D 15% The scavengers in Lahore are mostly small children and are totally illiterate and poor, so it was very diYcult to gather information from them. Keeping in view their socio-economic status, the net proWt of 15% is quite high (see Table 4). 2.5. ProWt of junkshop keepers (from sale to recycling industries) The 260 junkshop owners are generating an amount of Rs. 271 million (US$xxx) per year through the sale of recyclables to the recycling industrial units. It is quite evident from the information in Table 3 that a junkshop owner is earning a net proWt of 14% from the sale of recyclables to the recycling industries.

Fig. 2. Comparison between the selling rates of recyclables for the year 2001 and 2005 (US$1 D Rs. 60). Sources: 2001 (Qayyum, 1990; Saleem, 2001); 2005 (personally collected data).

S.A. Batool et al. / Waste Management 28 (2008) 294298 Table 2 Total earning of scavengers (US$1 D Rs. 60) Recyclable Items Total quantity sold at junkshop by scavengers (A) (tons/yr) Avg. price (B) (Rs./ton)

297

Total earning of scavengers through sale of recyclables to junkshops (C D A B) (Rs. million/yr) 2005 1398 92 141 74 1705

2001 Iron Glass Plastic Paper Total 59,640 5226 6395 5970 77,231

2005 62,000 8000 9450 8690 88,140

2005 22,550 11,500 15,000 8500 57,550

Sources: 2001 (Qayyum, 1990; Saleem, 2001); 2005 (personally collected data). Table 3 Total earning of junkshop dealers (US$1 D Rs. 60) Recyclable items Total quantity available at junkshop for sale to recycling industries (A) (tons/yr) 2005 62,000 8000 9450 8690 88,140 Average rate at which recyclables were sold to recycling industries (B) (Rs./ton) 25,900 14,850 16,500 11,000 68,250 Total earning of junkshop owners (C D A B) (Rs. million/yr) 1605 119 156 96 1976

Iron Glass Plastic Paper Total

Table 4 ProWt of scavengers (US$1 D Rs. 60) Recyclable items Iron Glass Plastic Paper Average purchase rate of recyclables (Rs./kg) 20 10 12 7 Average selling rate of recyclables (Rs./kg) 22.50 11.5 15.0 8.5 ProWt (Rs./kg) 2.5 1.5 3 1.5 ProWt (%) 11 13 20 18

3. Results and discussion 3.1. Economic potential In Lahore, 1.97 million tons of waste are generated per year, out of which 3035% of waste, i.e., 0.6895 million tons, is not being collected every year. Therefore, the total waste available is 1.2805 million tons, out of which 21.2% is recyclable, i.e., 0.27 million tons of recyclables per year. The survey also revealed that approximately 15% of the total recyclables, i.e., 0.04 million tons is directly sold to industry in order to gain more proWt every year. It was also disclosed that households are reusing approximately 20% of the recyclables, i.e., 0.054 million tons. This means that there remains 0.086 million tons of recyclables available for scavengers every year. However, Table 2 shows that only 88,140 tons (0.09 million tons) of recyclables are sold at junkshops by scavengers and households every year. The overall calculation has revealed that 21.2% of total recyclable waste in Lahore is being used for recycling, and that is generating an amount of Rs. 271 million (US$4.5 million) per year through the informal private sector. If recycling is adopted as an industry in Lahore, it can gener-

ate revenues of Rs. 530 million (US$8.8 million) per year. Recycling is a lucrative business and currently generating a proWt of 15% for scavengers and 14% for junkshop owners. Revenues amounting to Rs. 65 million (US$1.08 million) can be generated by reducing the collection cost of solid waste generated in Lahore. 3.2. BeneWts of recycling 3.2.1. Energy conservation Recycling saves energy by reducing the need to process new material, which usually requires more energy than the recycling process. In Lahore, it is estimated through the IWM-2, a LCI model, that the informal sector saves 9,012,974,966 GJ of energy by the recycling of 417,852,000 tons of recyclables per year. 3.2.2. Land conservation Recycling saves valuable landWll space, land that must be set aside for dumping trash, construction debris, and yard waste. In Japan only 2530% of waste goes to landWll while the rest is either burned or recycled (Werlin, 1995). It is

298

S.A. Batool et al. / Waste Management 28 (2008) 294298 Beukerering, P.V., Sekher, M., Gerlagh, R., Kumar, V., 1999. Analysing Urban Solid Waste in Developing Countries: a perspective on Bangalore, India working paper no. 24, Collaborative Research in Economics of Environment and Development (CREED), London. Bhattarai, R.C., 2000. Solid waste management and economics of recycling: A case of Kathmandu Metro City. Economic Journal of Development Issues 1 (2), 90106. Cheng, S., Chan, C.W., Huang, G.H., 2002. Using multiple criteria decision analysis for supporting decisions of solid waste management. Journal of Environmental Science and Health A37 (6), 975990. EPD (Environmental Protection Department). 19921993. Study of 4 Cities solid waste, Govt. of Punjab, Lahore. Gaines, L.L., Stodolsky, F. 1993. Mandated Recycling Rates: Impacts on Energy Consumption and Municipal Solid Waste Volume. Argonne, IL, Energy System Division, Argonne National Lab., US Department of Energy. Johnsons, S., et al. 1984. Integrated Resource Recovery, World Bank technical paper no. 30, UNDP Project management report number 1, USA. Kelley, K.E., 1992. Multi-family recycling guide. Solid Waste Authority, Palm Beach County, FL, pp. 12. Koli, P.A., Mahamuni, V.V., 2005. Environmental Economics of Solid Waste Management. Jaipur University Book House Pvt. Ltd. Ludwig, C., Hellweg, S., Stucki, S., 2005. Municipal Solid Waste Management, strategies and technologies for sustainable solutions. Waste Management and Research. Qasami, M.F., 1996. Municipal solid waste management through community participation, Environmental management division, WWF-Pakistan. Qayyum, A., 1990. Improvement in Solid waste Storage, Collection and Source Separation Facilities. M.Sc. thesis. Institute of Environmental Engineering and Research, UET, Lahore. Qureshi, A.P., 2000, Waste Busters: An experience of Pakistan. in: Sinha, et al., (Ed.), Community Based Solid Waste Management: The Asian Experience, waste concern, Dhaka, Bangladesh. Reams, M.A., Geaghan, J.P., 1996. The link with recycling and litter: a Weld study. Environment and Behaviour 28, 92111. Saleem, S. 2001. A study of salvage industries in and around Lahore. M.Sc. thesis. Institute os Environmental Engineering and Research, University of Engineering and Technology, Lahore, Pakistan. Singhal, S., Pandey, S., 2001. Solid Waste Management in India: status and future directions. TERI Information Monitor on Environmental Science (Times) 6 (1), 14. Stodolsky, F., Mintz, M.M., 1993. Energy Life-Cycle Analysis of Newspaper. Argonne, IL. Energy System Division, Argonne National Lab., US Department of Energy. US EPA, 2005. EPAs recycling goal: Its beneWts, costs, and feasibility. Biocycle 36, 6667. Van Beukering, P.J.H., Bouman, M.N., 2001. Empirical evidence on recycling and trade of paper and lead in developed and developing countries. World Development 29, 17171737. Vencatasawmy, C.P., hman, M., Brnnstrm, T., 2000. A survey of recycling behaviour in households in Kiruna, Sweden. Waste Management and Research 18 (16), 545556. Werlin, H.H. 1995. comparative solid waste management the technical implications. Journal of Asian and African studies, December 1995. Willing, E., 1979. Waste Disposal and Resource Recovery, in: Proceedings of the 2nd Regional Seminar on Solid Waste Management, Bangkok, Thailand. Woodard, R., Harder, M.K., Stantzos, N., 2004. The optimisation of household waste recycling centers for increased recycling A case study in Sussex, UK, Waste and Energy Research Group (WERG), School of the Environment, University of Brighton, Lewes Road, Brighton, Sussex, UK.

calculated from the Life Cycle Inventory Model IWM-2 that a volume of 2,136,245 m3 is occupied as landWll site for the generated household waste. If the 21.2% recyclable portion of waste is recycled into new products, then 1,054,219 m3of landWll volume is saved by avoiding the 57,029 tons of waste to the landWll site. It is very important and a considerable issue for the study area, because open dumping is a common practice instead of proper landWlling. The waste may be disposed of along the street sides. This practice is not only aesthetically bad but also hazardous to health. 3.3. Recognizing recycling as an industry The setting up of recycling industries will generate revenue and jobs (Ludwig et al., 2005; Agarwal et al., 2005). Currently solid waste management in Lahore is costing Rs. 730 million annually. The recyclable portion in solid waste has enough potential to share this burden to a considerable extent if recycling is recognized as an industry. The following strategies may be adopted: 1. Inducing the private sector to build a MRF (material recovery facility) on a build-own-transfer basis. A share from the sales of the recycling industry may be given to the Solid Waste Management Department (SWMD). There are only three private companies in Lahore that collect MSW and maintain MRFs. These companies collect approximately 10% of MSW generated in Lahore. They separate and sell recyclables to industry and also carry out limited composting and recycling of plastic and tetra pack. 2. After segregation at a MRF, the major portion of organic waste may be delivered to the compost plant. 3. The SWMD may introduce 5-year plans indicating speciWc goals to achieve collection of recyclables through door-to-door collection. Door-to-door collection is already being carried out by some private companies. In order to achieve the indicated goals, government can involve private companies in the collection of MSW and separation of recyclables. 4. If recycling is adopted as an industry, there will be considerable diversion of land from landWll sites, which will not only save precious land but also reduce environmental burdens associated with handling and disposal of solid waste. References
Agarwal, A., Singhmar, A., Kulshresther, M., Mittal, A.K., 2005. Municipal solid waste recycling and associated markets in Delhi, India. Resources, Conservation and Recycling 44 (1), 7390. Agunwamba, J.C. et al., 1998. Solid Waste Management in Onitsha, Nigeria. Waste Management and Research 16 (1), 2331.