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Waste Polymers Recycling Plant

Surname 1
Waste Polymers Recycling Plant
Name
Institution
Surname 2
Waste Polymers Recycling Plant
Polymer Solutions Company.
Executive Summary
Plastics and polyethylene papers are one of the primary needs in our every day’s life. In
the recent years, Plastics and polyethylene industrial sector have grown substantially. The
tremendous growth of the polymer industry is attributed to the increased need for packaging
products and also in making products such as tables, seat utensils and components such as
machine parts (Kreiger, 34). There are numerous types of polymers including polyethylene
Terephthalate (PET) and polyvinyl chloride (PVC) which have versatile applications. Polyvinyl
chloride polymers are used to make household plastic materials while Polyethylene
Terephthalate is used for packaging and production of beverage bottles. The increased polymers
utility in the industry has led to the need for recycling the waste plastics and polythene papers.
The Polymer Solutions Company intends to provide a vast range of plastics and
polythene paper solutions as raw materials for packaging companies and also for household
products. The company will produce household items like kitchenware and other related
polymer materials from waste plastic and polythene papers. Additionally, we will sell recycled
polymers (plastics and polyethylene) to production firms in the plastics industry. We will build
a recycling plant to be integral with the production unit. The waste collectors will supply the
raw materials for our firm which mainly includes waste plastics and polythene papers which
contain the soft plastic materials and used beverage bottles.
The company’s industrial market will majorly constitute industrial consumers who will
purchase the PET flakes and bottles. The industrial market is projected to be about 70% of our
gross sales while the remaining percentage will include the sales of the household plastic items.
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The initial startup cost will be $ 34400. Polymer solutions will use marketing strategy, utilize
strong industrial relations and well-planned distribution network to exploit the market.
The Business
Background information of Polymer Solutions Company
Polymer solutions enterprise will provide a broad range of plastics and polythene
solutions both for packaging industries and household use such as kitchenware, tables, and
seats. The business will be located in California State in the United States of America. The
company will collect the waste plastics and polythene bags such as the beverage bottles from
garbage stores in California and then our recycling unit will refurbish them for use in the
production of household products and packaging materials.
The polymer waste that we will receive the raw materials will have two types of
polymers; the polyvinyl chloride and the Polyethylene Terephthalate. At first, we will melt the
entire waste polymer, and then the polyethylene Terephthalate and polyvinyl chloride are
separated from by the process of froth flotation technique. The actual production facility will be
shared with the recycling unit to produce purified plastic flakes which are manufactured by
extrusion. The extruded polymer is then used to make various components. The company will
produce the PVC replay plastics and the PET replay plastics.
Mission statement
Strive to provide polymer solutions to the industrial consumers and domestic use at a
competitive price as well as reducing environmental pollution that is caused by the non-
biodegradable plastics and polythene bags.
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Markets and Products
Plastic products usually have no brand name, therefore, introducing the company will be
easier by adopting a low price strategy. The vast population of California State which is mainly
made up of the middle-income individuals and families mostly uses plastic products as opposed
to fiber since polymer products are relatively cheap. Therefore, California State is a huge
market to exploit about its population and consumption rate for polymers.
California generates 5,000,000 kilograms of solid waste per day. Of this waste, 15000kg
are plastic bags, and 7000kgs are plastic bottles. From the statistics, the company is projected to
have a continuous and reliable supply of raw materials. Over 100 polymer companies are
located in California hence the state presents an excellent access to the industrial market. The
company will produce two product folds; industrial and household products.
Key to Success
The success factors for the company will include securing supply contract to deliver
post-consumed polymer wastes for the PER feedstock. The company will satisfy the consumer
needs by manufacturing quality products with the aim of retaining them. Additionally, the
Polymer Solutions Company will maintain low operating costs and overhead expenses by
sourcing for the raw materials directly from the waste garbage and only buy to fill up the
deficit. The company will be able to provide recycled polymer products at a competitive price
compared to our competitors who buy from other industrial companies.
Product and Services
Polymer Solutions will provide a vast range of polymer products such as raw materials
for packaging and household products. The collected waste polymers will be processed to form
polyethylene Terephthalate (PET) which is polyester that has excellent performance properties.
The PET material has high toughness, strength, hardness, ductility, and stiffness. Additionally,
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the PER material is transparent that makes the product perfect for packaging. After sorting out
the raw materials, the polymers are recycled and then extruded to generate a continuous profile
that is then used to make various components.
The products that Polymer Solutions Company will classify in to three categories. First,
the PET plastic flakes and bottles which are recycled from used beverage bottles. The PER will
be utilized as the raw materials for various packaging industries. The second category will
include finished household products such as kitchen utensils, seats, and tables. The third group
will entail the PET flakes that we intend to sell to the companies that mold plastic sheets to
make usable products. The PET flakes will be used by the thermoplastic molders to make high
visibility packaging.
Recycled polymers are frequently used in product construction such as drainage pipes,
damp proof membrane, flooring and ducting. Bins, planters and street signs are also made for
polymers. The polymer products are resistant to damage and cost efficient. Every day, plastic
items such as shop case scrubber, and water bottles are used. Therefore, the demand for the
polymer products is of high demand.
Market Comparison
In as much as quality is paramount to any product being sold, the cost of the product is
what determines the market share and the willingness of the buyer to purchase the product.
Polymer solutions will provide relatively cheaper polymer products compared to the current
price by adopting a line production system that has minimum lead time and also sourcing for
materials directly from the garbage. Quality will also be assured by use of recycled resins that
has excellent performance features. The current industries have an expensive production system
that has backtracking problems, and longer lead times as they rely on other manufacturers for
raw materials.
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Industry Analysis
The demand for plastics in the US has grown tremendously due to the increased demand
for the polymer items in packaging as well as domestic consumption. In the United States of
America, Polymer industry is one of the largest manufacturing sectors. The outlook for the
sector is stable due to increased injection molding companies and high demand for the 3D
printing technology that primarily uses plastics (Leegwater, Greet, et al, 45). The polymer
industry also translates to employment opportunities to nearly 900,000 employees in the
country. There are currently over 16,000 facilities in the US that are engaged in the plastics
industry which is distributed to all the fifty states. In 2012, manufacturers spent over $10billion
to purchase new equipment (Leegwater, Greet, et al, 49). The massive investment in the
industry shows that the investment sector is optimistic. From 2011 to 2015 the plastics
consumers increased by 15% hence the industry is worth of investment. Compared to other
areas, polymer industry enjoys a trade surplus of $ 13.1 billion (Leegwater, Greet, et al, 110).
The structure of the Polymer Industry
Raw material producers
These are the petroleum and chemical companies that produce resins or virgin polymers
in bulk. The primary influence that they have is to set the price and control availability of the
natural materials to the recyclers. The transparent polymers are delivered in pellets or powder
form.
Compounders
These are specialist companies that are run by qualified chemists and engineers who
advise the production companies on the right mixtures to be used to produce the desired quality
of the products. They are usually small in size and best fit for recyclers who should have erudite
technical knowledge of virgin materials.
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Stockists
These are firms that keep or store the polymers but do not manufacture nor provide
compounding services. They are mainly the subsidiaries or agents of producing companies
concerned with particularly supplying the products such as paper, rubber, and chemicals.
Specialist Manufacturers
These are specialists who have in-depth knowledge particularly on plastics and not in
the manufacture of other products. They buy the raw materials from compounders or directly
from the producers if the materials do not require to be compounded. Specialist manufacturers
are the biggest market to the recyclers because they manufacture high volume plastic products
with the minimal flexibility to vary or alter the product features.
Markets and Competitors
Marketplace Analysis
The business of recycling plastics and polyethylene has a trade surplus of over $13
billion with a growing demand for the products. In 2016, 110 tons of plastics were consumed in
the US. The market has an ever increasing trend that seems optimistic for investors.
Additionally, many people who buy food staff, shopping and other household products have
their products packaged with plastic materials. The packaging need has led to the increased
demand for plastics. Additionally, most manufacturing companies are now switching from the
use of expensive production materials like steel to polymers. Reinforced plastics have found a
wide range of application as machinery body parts such as the lathe machine and also in the
construction of airplane body parts. Although the demand for the polymer products has
increased, recycling of waste plastics and polythene bags have not been fully undertaken. Most
companies that manufacture polymer product purchase the raw materials from producer
businesses that sell to them at a relatively high price. Polymer Solutions Company will rely on
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waste plastics and polyethylene as the primary source of our raw materials hence substantially
reducing costs.
Customer Analysis
Polymer Solutions will employ stringent market penetration strategies to make itself
known to the market. The clients who consume the polymer products are scattered because of
the absence of a well-established brand name. Our first strategy will, therefore, be to bring
together the scattered customers so that they can have our brand as their valid option.
California has more than 20,000 families who are regular polymer consumers who we
intend to focus on for the household plastic products. Similarly, the state has over 100 chemical
industries most of which often source the raw materials and packaging materials outside the
state. Because of the existing market niche in the country, Polymer Solutions Company intends
to take advantage of the opportunity and to become the suppliers of the companies with the raw
materials for packaging. The polymer companies will benefit through reduced prices as our
product will be of relatively lower price and also reduced transportation cost as our business
will be situated in California.
Competitor Analysis
Polymer Solutions Company has several competitors including the Greenmax recycling,
Excalibur Extrusion, Inc., New CH International LLC, AJ Industrial Recycling, and R& R
Trading Limited. These companies produce polymer products that that are either sold directly to
the consumers or sold to the industry as raw materials for other manufacturing processes.
Although the companies have got a significant market share, they fully rely on producer
companies for the raw materials used to make their products. Buying raw materials from
suppliers or producing industries increases the manufacturing costs hence resulting in higher
costs of the products.
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Our main competitor is Excalibur Extrusion, Inc. which supplies most of the household
products in California. The company has several years of establishment although it mostly buys
its raw materials from the producer companies. Polymer solutions intend to have a competitive
advantage of recycling polymers that are sourced from the garbage collectors which is relatively
cheaper than buying from manufacturers.
Sales and Marketing
Marketing Strategy
The company will adopt the consumer based marketing strategy where the needs of the
consumers are clearly studied and then design products that satisfy the needs. For the packaging
materials, the company will examine the raw material requirements for the packaging
companies and then develop a fixed line production system that produces the materials in bulk.
Product Strategy
The company will employ extrusion technology carried out by experienced experts to
ensure production of the high-quality PET bottles which are transparent. The extruded material
will be transparent and suitable for packaging mineral water, and also cost-efficient. Energy
efficient extrusion process will also be used to produce laminates and thermoforms for shippers
of pallets hence reducing cost.
Pricing Strategy
The business will use the penetration pricing strategy to sell our products. The price of
domestic plastic products will be lower than the market price due to recycling of waste material.
The company will also ensure that the amount of bottles and PET flakes sold to the packaging
companies are lower than the market price as we will use fixed line production system that
produces many units at ago to make use of the economies of scale.
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Marketing and Sales Forecast
The plastics industry is growing at a rate of 20% each year. Therefore, we assume that
our company will also grow at that rate.
Sales forecast in dollars
Year 1
Year 2
Year 3
Annual sales
24300
31590
41067
Monthly sales
2025
2632.5
3422.25
PET sales
1417.5
1842.75
2395.6
Household items
607.5
789.75
1026.7
Management
The company will be a sales proprietorship managed by a chief executive officer. The
company will also have a production manager, human resource manager, finance director,
quality control director. The production manager will be a qualified technician with broad skills
in recycling polymers. The human resource manager will be a qualified HR employee with
experience in dealing with staff’ welfare. Quality control director will be skilled to ensure that
the essential quality is being produced.
Other employees of the company will include five employees for sorting the raw
materials, two workers to operate the belt conveyor, two to produce the PET separator and five
for packaging the product. Sorting staff will be semiskilled while the workers operating the
machinery such as the extruder and injection molding machines will be skilled technicians.
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Operations
The recycling facility is situated on the city’s outskirts and is divided into two parts,
recycling, and production and the warehouse unit. The facility is located in the suburbs because
land is relatively cheaper to acquire than neighboring towns. However, the region has
insufficient skilled labor required for the injection molding and extrusion operations. The plant
will be located in a 3000 square fit area. In addition to the two units, there will be an
administrative office to take care of the management and administrative tasks. The machinery
production capacity will be 80kg/hour.
The company will employ the Just in Time production system whereby we have a
redundant supplier to deliver the raw materials in case of deficiency of the waste plastics from
the garbage collectors. The use of JIT and KANBAN system ensures that we have lean
production and that the inventories are supplied at the time of need without the company having
to incur the costs of storing idle stocks or running short of supply. The raw materials entail both
the waste beverage bottles and other polymers. The recyclable polymers are identified and then
transferred to the recycling unit.
The PET and PVC polymers cannot be processed simultaneously hence a parallel
sorting process is running parallel to enable distinct processing of the materials. One unit will
recycle the PET while the other will recycle PVC polymers. After recycling, the PVC will then
be taken in to the injection molding machine to be formed into different components. The
household products will be produced in batch depending on the demand.
After completion of the recycling process, some parts of the PET flakes will be taken to
the shipping warehouse awaiting sale depending on the demand of the requested material for
packaging from the packaging companies. The other parts of the PET flakes are moved to the
molding section to make bottles. The PET flake is subjected to heat to enable forming of the
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material into various components. The resulting PET resin is then taken to the molder to form it
to the desired shape. The resulting product is then dried before inserting other auxiliary
components such as handles for buckets.
Stages of the Recycling Process
Chipping
The plastic waste is appropriately sized to be able to fit into the extruder for palletizing and
processing.
Segregation
Flotation process is employed to separate incompatible waste polymers in addition to manual
separation and sorting.
Cleaning
The sorted material is cleaned and then dried using a suitable oven.
Agglomerating
A high-speed mixer is used to mix the polymer wastes with the desired color
Extrusion
The chipped plastic is granulated by being pressed through the die in an extruder to prepare the
material for fabrication.
Fabrication
The extruded polymer granules are used for manufacturing to make different products through
injection molding.
Scope of operation
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The plant will start at a production rate of 0.2 tons per day, utilizing 50% of our potential and
then grow gradually with time.
Supply Chain
Our main supply will come from the garbage collectors and another permanent supplier
in case of a deficiency in supply. The finished products will be stored in the finished goods
inventories and then distributed to consumers according to demand.
Facility layout
Where,
A – Belt conveyor
B- Rolling separator
C- Belt conveyor
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D- Crusher
F – PET Separator
L- Extruder
M- Molder
N- Labeling
O- Packing
G- Hot washer
I-Centrifugal dryer
K- Molder
P- Packaging
Q- Quality unit
Suppliers will be selected on a competitive basis where quality and price will be considered.
Financial Forecasts
Projected Income statement IN DOLLARS
Particulars
YEAR 1
YEAR 2
Year 4
Net sales
16200
21060
32853.60
Cost of good sales
8910
11583
18069.48
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Gross margin
7290
9477
14784.12
Operating expenses:
Admin exp.
30
31.5
34.73
Advertisement
60
72
103.68
Salaries
1920
2112
2555.52
Transportation
960
1056
1277.76
Maintenance
150
157.5
173.64
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Electricity
48
50.40
55.57
Telephone
100
110.00
133.10
Legal exp.
100
10
10
Insurance
200
200
200
Rent
240
264
319.44
Other expenses
60
66
79.86
3868
4129.40
4943.30
EBITDA
3422
5347.60
9840.82
less depreciation
3030
2727
2208.87
EBIT
392
2620.60
5349.23
7631.95
Less interest paid
1755.50
1650.61
1399.26
EBT
-1363.50
969.99
6232.69
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tax @ 30%
0
291
1869.81
PAT
-1363.50
678.99
4362.88
Projected Balance sheet in dollars
The projected balance sheet of four years is as follows:
Sources of Funds
Year-1
Year-2
Year-3
Year-4
Capital
Owner's capital
19300
19300
19300
19300
Surplus
-1363.50
-684.51
1302.74
7652.87
Net worth
17936.50
18615.49
20602.74
26952.87
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Long Term loan
Loan
14173.02
13241.16
12191.11
11007.89
Current Liabilities
Creditors
705
567.22
680.66
816.80
Total liabilities
32814.52
32423.87
33474.51
38777.56
Application of fund
Plant & M/C
30300
27270
24543
22088.70
Less depreciation
3030
2727
2454.30
2208.87
27270
24543
22088.70
19879.83
Land
3000
3000
3000
3000
Actual Fixed Asset
30270
27543
25088.70
22879.83
Current Assets:
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Inventory
972
3159
4106.70
8213.40
Bank
100
400
1000
1000
Debtors
1472.52
1321.87
1179.11
2327.03
Advance to suppliers’
0
0
2100
3357.30
Investment
1000
Total Assets
32814.52
32423.87
33474.51
38777.56
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Break Even Point
Variable cost
Amount in dollars
Fixed Cost
Amount in dollars
Admin
30
Other expenses
60
Interest
1755.50
Transportation
960
Advertisement
60
Telephone
100
Insurance
200
Wages
1192.50
Salary
1920
Carriage inward
2385
Rent
240
Power
1192.50
Maintenance
150
Raw material
4140
Depreciation
3030
Legal
10000
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Total
10030
Total
7485.50
Contribution
6170
pv ratio
0.380
BEP units
19653.98703
1350
BEP SALES
15
in months
1.21
In years
The enterprise will break even at the fifteenth month when the total revenue
equals expenses.
Financial Requirements
Start-up
Requirements
Amounts in dollars
Start-up expenses
Legal
60
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Stationery
5
Business cards
5
Initial mailing
1
Process funding
4
Office equipments
25
Total start-up cost
100
Start-up Assets
Cash required
1000
Other current assets
0
Long term assets
33300
Total Assets
34300
Total Requirements
34400
Assessing the Risks
The company may fail to satisfy the environmental standards. There are stringent
environmental regulations set by the federal and state governments for any operating industry
which should be adhered to by our enterprise. Additionally, the company may run short of
supply of the raw materials as it is possible to get raw materials which are not desired.
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The company will, therefore, subcontract the services of a legal, environmental specialist
to ensure that the enterprise conforms to the environmental regulations. The enterprise will also
have a standby or redundant supplier who will supply materials in case of any shortage.
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Work cited
Kreiger, M., et al. "Distributed recycling of post-consumer plastic waste in rural areas." MRS
Proceedings. Vol. 1492. Cambridge University Press, 2013.
Leegwater, Greet, et al. "Technical performance and benefits of recycling of reclaimed asphalt
containing polymer modified binder into premium surface layers." Transport research
Arena (TRA) 5th conference: transport solutions from research to deployment. 2014.
Vinodh, S., M. Prasanna, and N. Hari Prakash. "Integrated Fuzzy AHP–TOPSIS for selecting the
best plastic recycling method: A case study." Applied Mathematical Modelling 38.19
(2014): 4662-4672.

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