A propensity to recycle

Oct. 22, 2007
Simply crossing the street from hotel side to beach side on Rio de Janeiro’s Copacabana unveils any number of unique cultural attributes.

Simply crossing the street from hotel side to beach side on Rio de Janeiro’s Copacabana unveils any number of unique cultural attributes. These include a nearly untempered propensity toward recycling.

Four midsize waste bins stand outside each food pavilion or other likely gathering spot. One is labeled plastics, the next aluminum, another paper, and yes, there is still one called trash. And people actually use them. They pause long enough to put their beverage can in one hole, their napkin in another, and their plate and cutlery in a third, leaving only the corn husks or coconut shell or sandwich remnant for bin number four.

The pause is paying off. Brazil recycles 45-47% of all the paper, tires, and glass it consumes each year. The country’s success in recycling aluminum (96.2% of all beverage cans) prompted Alcoa and its partners to site the world’s first aseptic carton recycling plant there in 2005.

The entrepreneur

More than a cultural predilection, or a chance for large companies to do good business, recycling Brazilian-style is also an entrepreneurial opportunity. More than 160,000 people make more than minimum wage by selling gathered aluminum cans at a price of R$3.30/kg (roughly 70 cans). The middle-men they sell these to sell them to a still larger entity, until eventually the recycling plant is reached.

Elcio Soares Reis, a Copacabana street vendor by day, spends his nights transferring this business model to the still locally lagging world of plastics recycling. He and his business partner buy plastic at R$0.25/kg from collectors. They then sort it and resell it at R$0.65-1.25/kg, depending on quality.

The two men plan to buy a press (R$30,000-50,000) to increase the volume and efficiency of their operation. Soares expects it will take a year to save the lower end of the range, but he’d rather reach the upper end (or beyond) and use any money left over to establish a payroll cushion, buy a used truck, or both.

After acquiring the press, a purchase the Brazilian government will help offset through tax breaks, Soares and his partner will approach private condominium buildings and clubs along the Copacabana and offer to remove all their waste if they simply separate the plastic. This scheme is not without precedent, many condos and clubs having already taken to separating their aluminum cans from the rest of their waste.

Soares estimates that each condo or club generates 1-3 tonnes/week of plastic waste and that the typical Copacabana block generates 10 tonnes/week. He conservatively translates this into revenue of R$3,000/week/block, while noting that some individual buildings could well generate that much on their own.

Bigger picture

At a time when hydrocarbon fuels are at or near all-time high prices it is in the interest of not just the bulk of individuals, but also the bulk of businesses and the bulk of nations, to make sure that resources are being used as efficiently as possible. It is similarly important that these resources be devoted to areas in which substitution is either technologically or economically difficult (transportation), while other areas in which substitution is somewhat easier (base goods manufacturing) pursue whatever technical and economic advantages can be found in substitution.

Recycling plastics is a double winner. It not only allows the earth’s hydrocarbon resources to be dedicated increasingly to other areas, but the act itself is generally less energy-intensive than manufacturing plastics from new source materials. Given the pervasiveness of plastics in modern life, both consumers and finished goods manufacturers will want to obtain any plastics they need as cheaply as possible.

Plastics manufacturers, meanwhile, are driven by their bottom lines to find the least expensive avenue to meet demand for their products.

Economies of scale and integration might mean for some that this continues to be done by turning raw materials into plastics. But as the cost of raw materials continues to rise, the economic opportunities presented by recycling will become more attractive to everyone: from Soares to the fully integrated supermajors.