Financial Plan Recycling Business

Financial Plan Recycling Business – Rehabilitation project provided by Sustainable Environment Technologies for Mikana Municipality 1 Contact Mark Horan – [email protected] Tel Cell Shirley Horan – [email protected] Cell Jose Wellman – [email protected] Tel

2 Contents A. Introduction… 2 B. Background… 2 C. Concept and Description of the Proposed Project… 2 D. Objectives… 3 E. Outputs… 3 F. Proposed Property Plan and management. .. 4 F.1. Municipal Participation… 4 G. Action Plan… 5 G.1. Equipment required for operation … 6 G.2. Non-structural requirements… 6 G.3. Personnel Requirements… 7 H. Financial Policy… 7 H.1. Capital expenditure required:… 7 H.2. Monthly Income… 8 H.3. Monthly Expenses… 8 I. Financial /01/18 1 of 10

Financial Plan Recycling Business

Financial Plan Recycling Business

3 A. Introduction This business plan has been developed as a basis for starting the process of establishing or organizing a company in Makana District. This business plan has been developed for such operations that will form a public-private partnership with Makana Municipality. This is to guide the planning stage of such a business. This document is not final and still needs the approval of the municipality and potential investors or financial institutions. The involvement of the municipality in the project is considered. The municipality has shown interest in this project, with the director of social and community development, Mr. Rami Xunxa, together with the committee that manages the environmental action plan. The committee raised the fact that the municipality is currently not supporting renewable businesses in the Makkah district. The committee has now asked consultants to explore ways municipalities can support recycling. B. Background Recycling has been carried out by Graham Town Recycling in Graham Town for the past four years. The business has one owner and employs about 11 people, the business is currently in the process of closing due to high maintenance costs and mounting debt. The closing of the current recycling company has put the municipality in a situation where it is possible that the municipality will take over the burden of recycling. This can be realized by creating additional pressures on the municipal waste collection system. Another 11 jobs will be lost in the district where the jobs are most needed. Another long-term problem is that existing landfills will fill up quickly without recycling, so the final costs (environmental and financial) will be high. c. Reasons and Description of the Proposed Project The proposed business will involve the establishment of a recycling and sorting operation at the Grahamstown Municipal Landfill site. This was the result of research and discussions with Mr Sean Haddock (Owner of Grahamstown Recycling). 2005/01/18 2 of 10

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4 His business spends a lot of money on transport and collecting recyclables. Mr Haddock said the on-ground sorting process would allow 75% of incoming waste to be recycled and at a lower cost than the current process. Although this will solve the problem of overloading the municipal collection system, it will save jobs and reduce land degradation. Landfill sorting may make the process more separate than current recycled materials because the cost of washing and separating them will be significantly reduced. Exact unit dimensions and specifications will not be known until further feasibility studies are conducted. D. Objectives 1. To establish a recycling company in partnership with Makana Municipality. 2. Developing businesses based on good business practices 3. Ensuring that recycling is a sustainable goal 4. Reducing landfill 5. Creating jobs 6. Investigating ways of working and adding value to recycled products addition E. Products Many different products are recycled in South Africa and around the world, some of which are already being used in Grahamstown. However, not all recycling is financially feasible. The list below includes items that are recycled by Grahamstown Recycling as well as other items that can be recycled if the business plan is implemented. Product price Annual revenue Paper R 700 / ton 300 tons Cardboard R 360 / ton 900 tons PET bottles Unknown Plastic bag Unknown R 200 / ton 100 tons R 17 per thousand tons Unknown 2005/301/108

5 F. Proposed Ownership and Control The purchase price of the company will reside not only with the proposed company to be established, but also with the Municipality of Makana. Although only preliminary discussions have taken place with councilors, at this stage it is thought that their involvement in the project is important. The company must be governed by a board of trustees that includes members of the recycling company as well as municipal officers and councillors. The diagram below shows a suggested management structure: Board of Trustees: Board of Directors Manager, Municipal Officers and Councilors Role: Business decision-making, recruitment, evaluation Role of Communications Director: Day-to-day management, recruitment, financial management, Area Manager of Contractual Agreements: Production. Supervision, Sales, Management Drivers, Workers, Clerks, Laborers Section: Daily Operations F.1. Municipal Involvement Municipal involvement is essential to building a successful Makana recycling business. At this stage, the planned part is not finished, but it can be done in several ways: land (dump site) with the help of the municipality with dump trucks. 3. Municipalities may have a limited supervisory role but pay a fee for each ton or cubic meter of recycled material. 2005/01/18 4 of 10

6 4. The municipality does not intervene in the process but implements plans to maintain the operation of recycling companies through the notification of resource separation signs, regulations, fines and general campaigns. There may be other ways, but at this stage the involvement of the municipality should be discussed and the council should act on what the involvement will be. This business plan is the starting document to start this process. This business plan and the figures shown below are based on the assumption that the sorting center will be built in the Graham Town area and that the business that will be created will only be sustained with the involvement of the municipality. This is the safest option at this point because the current recycling company can be sustainable with this plan. For the purpose of this business plan it is assumed that most of the investment will be purchased and that very little can be transferred to the existing business. G. Action Plan The Action Plan was developed by talking with the current owner of Grahamstown Recycling and looking at successful recycling operations across the country. There are two sorting centers for general waste. The first will be launched with these funds and the second is proposed to come from natural development. It is proposed to establish a sorting center at the existing municipal site where general waste will be separated into different streams. This area will have a garbage platform where municipal trucks will dump general garbage. The trash will be put into a bag breaker where the bags will be opened to let the contents go onto a conveyor belt, where collectors will remove the recyclables from the bins. These bins will be removed with a forklift and the recyclable products will be taken to various locations where they will be packed or prepared for sale to agents or other buyers such as Mundi, Click-A-Can, Consol etc. . Proposed: First in landfill, as described above, and second in Grahamstown East. This second site is not part of this offer but 2005/01/18 5 of 10

7 are included here to understand the development strategy. This second site will serve as a waste transfer and sorting center. Recyclables from general waste will be handled by garbage collectors here, and recyclables will be taken to municipal landfills as much as possible. The rest will be packed for shipment to agents or buyers (Mondi, Sapi, etc.). G.1. EQUIPMENT REQUIRED FOR OPERATION The following infrastructure, machinery or equipment is required to carry out such operation: 1. A vehicle carrying light goods (purchased with vehicle money) 2. 1 conveyor belt 3. As at now D) 4. 1 forklift 5. 1 tractor or front loader 6. 1 large tractor 7. 1 cloth 8. An office 9. A set of equipment 10. A computer G.2. The non-structural requirements listed below include the various tasks or administrative tasks that must be performed to make such a process work. 1. Business training for company management 2. Computer training for one or more employees 3. Comprehensive consultation with Makana

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