Recycling is a great business that can provide you with lots of benefits, not to mention an additional income stream, but only so when the commodities are priced higher.
We can back up our claim by giving you an example of one of the biggest companies in the waste management industry, which has recycled tons of materials ever since its establishment. This said company recycled materials weighing almost 600 million tons up till 2008. From then onwards, the company decided to recycle a total of 20 million tons by the year 2020. In order to achieve this aim, the company also invested $100 million to improve their facilities. Considering 2012, the company succeeded in recycling almost 12 million tons. The company utilizes advanced processes for the purpose and provides their services to reputed organizations, mainly belonging to the manufacturing sector. With the company’s help, these organizations can now be regarded as zero-waste centers since all the produced waste is converted into pelletized fuel.
Though the above narrative all sounds very good from a consumer’s point of view, the scenario is not all that great when you look at it from the waste management company’s perspective. The CEO of the company stated that the year may have been good in terms of projects and technological achievements. However, looking at things from a financial perspective, recycling is beginning to lose its charm despite the fact that it is beneficial. The CEO explained that ever since commodity prices have fallen, recycling has hardly been profitable. He added that the company had suffered increased loss in the last eighteen months, and no more investments were being made. As such, it was getting more difficult for the company to achieve their aim.
The above implications do not mean that the waste management industry is going to completely give up on recycling. However, companies will modify contracts so that risks for both parties can be subdued. For instance, when the commodity rates are higher, the manufacturing firms can enjoy a larger percentage of the resale revenues. However, if it is otherwise, the revenue percentage will be decreased so that the waste management companies can also earn some profits.
The industries also plan on recycling those materials that are profitable such as paper. However, glass does not generate any revenues and the same can be said for most organic waste. As such, no efforts will be made to recycle these.
Source: www.forbes.com
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