Evaluate the business idea of transforming the global problem of plastic waste into a highly profitable business with a payback period of up to 2 years
According to global statistical data as of 2018, approximately 380 Mio tons of plastic materials are produced annually around the world. About 6,3 billion tons of plastic materials were produced from 1950 to 2018, of which 9% were recycled and 12% were burnt. The remaining 79 % have been accumulated at the landfills, waste recycling plants and in the environment in the form of uncontrolled waste on the land and in the oceans.
Every year the amount of plastic wastes increases by 380 000 000 tons. Plastic wastes affect the degradation of other wastes buried in waste landfills. They create a greenhouse effect and maintain the long waste burning time at the landfills which results in environment pollution with toxic substances. 80% of plastic wastes had not been recycled and properly disposed before Ikhlyas technology was developed.
Key issues related to disposal of polymer wastes
Polymers have many layers
Disposal requires sorting waste. Many polymers are thermodynamically incompatible
Hazardous substances are released during the processing of polymers, such as nitrogen dioxide, and formaldehyde
The relatively high complexity and low profitability of some of the processing methods
As follows from the analysis, only 100% recycling of polymer wastes will make it possible to reduce the actively growing waste accumulation rate. The Ikhlyas technology is capable of disposing the mixed plastic wastes that do not contain chlorine and terephtalic acid, which is 74% of difficult-to-recycle plastic wastes from the total amount, i.e it can dispose the most common and useless plastic wastes that are most harmful for the environment and are not suitable for recycling.
Plastic waste codes that we recycle
What are the ways of problem solving?
We can: reduce the amount of produced disposable tableware, bags and other products and try to replace them with some other products. But what will be the result? Plastic products have become the part of people’s lives at home, in industry, in construction and other fields. It is convenient and, what is more important, cheap.
Let’s imagine that a big amount of plastic wastes, for example 30%, would be recycled in the world. 70% will still be accumulated in the waste landfills, and the result will be like a snow ball effect. The restrictive measures aimed to reduce the use of plastic tableware, bags, straws and other products of daily use look like useful actions and desire to solve the problem. But if you look at this problem in more details, then you will immediately realize that such restrictions will not yield the expected results, as the extraction volume of raw materials for plastic production is only going up every day. According to the news and based on your own experience, you can see that plastic products are present in many spheres of life.
Solution to the problem
100% recycling of plastic wastes is the only way to transform the global problem related to plastic wastes into the highly-profitable, environmentally safe business with payback period of 2 years
Business model description
The investment project for the environmentally safe recycling of unwanted plastic wastes. The government is concerned about the maintenance of environment in compliance with the Paris Agreement and charges package recycling fees to go into its budget. The highly-profitable and environmentally safe business with payback period of 2 years and the possibility to use the recycling products in the production of other specific products to increase the profitability.
This project will solve the following issues:
- Full recycling of polymer wastes;
- Generation of environmentally safe energy from waste;
- Reduction of costs for the available infrastructure due to the use of the recycling products.
What is the volume of raw materials and market?
Let’s look at the potential market. The below calculations have been based on the statistical data on the globally accumulated plastic wastes:
- Potential market — 7 060 000 000 tons;
- Potential market in $ — $3,530,000,000,000.
Can be received from each liter of recycling product
IKHTECH 30 plant is capable of recycling 9360 tons of plastic wastes per year
IKHTECH 30 plant is converting them into 46 800 Megawatt of energy
What is the cost of raw materials?
The process was designed to recycle the difficult-to-dispose polymer wastes that do not have any commercial value and pollute oceans and land. All countries of the world are concerned about the issue related to plastic wastes. In civilized countries the government pays for the recycling of polymers according to the established tariff.
As per project, the waste recycling plant is to be located at waste landfill and close to sorting lines, to avoid logistics costs. The government will pay for the recycling of such category of wastes.
How can you describe the technology?
Ikhlyas technology is the process of complete recycling of plastic wastes by means of thermal destruction without environment polluting emissions, producing 1000 liters of useful liquid products and gas from 1000 kg of polymer wastes.
The amount of waste that’s produced by one tonne of polymers
For diesel engines — complies with Euro 4 and Euro 5 standards
For gasoline engines — complies with Euro 4 and Euro 5 standards
Can be used for the production process or the generation of electricity
Has many industrial and everyday uses (production of candles, matches, etc.)
Can be used in road construction and the production of dyes
Carbon residue: is it a waste and how to get rid of it, or is it a good product?
This is an additional promising product. It has not been taken into account for profitability calculation.
- Burning in space-heating furnaces (coal). Production of hot water.
- Compacting into pellets with wax (wax jelly). More efficient usage and longer burning.
- Can be used to produce a paint pigment.
- The laboratory tests have been conducted to prove its efficiency as a water filter.
It is a good chance to improve the self-sustainability of plastics recycling process and to reduce the water consumption.
How to get the governmental recycling fee?
- The cost of all plastic package, containers, bags and other disposable polymer products include the recycling fee which is paid during their import or production.
- The Committee on Tariffs and Prices will define the recycling tariff.
- The recycling organization will receive the recycling tariff.
What are the costs for electricity and energy materials?
The «zero residual waste» technology allows to receive 5 useful derivative products:
- composite gasoline additive;
- composite diesel additive;
- petroleum jelly (combination of soft and infusible wax).
- multi-consistency gas;
- carbon residue.
Of the produced gas will be sufficient for the operation of reactor burners, and the remaining 20% of gas will be used to generate 60% of the electric power consumed by the plant and pretreatment line
Of the electricity consumed can be received using one of the recycling products. What product exactly is the matter of finetuning to the specific requirements of investor’s infrastructure and business processes
What is % cost of the plant use and maintenance?
- Annual cost of the plant operation and maintenance is 0,04% to 0,01% from the amount of income for the year. The cost of warranty services includes 1 annual replacement of the shell in each reactor and filter cleaning. This maintenance is sufficient if all equipment operation instructions are followed.
- 3-year warranty for the key components of the plant.The processes are computerized, all data are registered and controlled by the server, in order to avoid any interruptions and failures of working equipment.
- In case of the failure of the working equipment due to its mishandling the owner can replce such equipment at extra cost.
What about the competition in this business segment?
Ikhlyas plastic recycling plants can operate independently or can become the cost-efficient power supply centers for tech parks or available waste processing plants. We can be very successful together.
The Ikhlyas team is inviting the investors to join the project with potential market volume of $3,530,000,000,000
Just to stop the annual flow of new plastic wastes, it is required to install 29615 pcs of IKHTECH-30 plants
And another 29615 plants mod. IKHTECH-30 should be installed to recycle the plastic wastes within the next 23 years
It seems that high level of competition is not likely in this business for a long time. And what do you think?
To solve the global task, we do not need a lot of employees. The plant operation is controlled by the software. Currently there are 6 people working in our team:
- Project manager.
- Design engineer.
- Engineer for measurement and inspection tools and process computerization.
- Production engineer.
- Finance director.
The other infrastructure functions are outsourced.
What are financial results?
The financial performance is positively different from the standard financial performance of traditional business models and the payback period is shorter with higher investments.
Is it a startup project or already operating business?
It is an operating company which you can visit and look at the process and recycling products. You can also get an idea of the process by watching the video and read the information in Russian and English languages available on the website
The process has been patented and the international PCT application is ready to go through the national phase and being patented for all countries of the world.
Rental of premises or purchase of land?
Marketing and advertising, storage, logistics
No need to bear these expenses. According to the project, the recycling plant is to be located on landfill premises and close to sorting lines in order to avoid additional costs. The costs analysis is already available to define the suitable method of monetization with account of available and future infrastructure of investor’s business.
It is possible to get the payback analysis including the additional infrastructure, if you choose the strategy of selling the recycling products (at the request of the investor) but there are more profitable models for project implementation.
Who is the end customer, what is the sell model?
- the available waste recycling companies;
- manufacturers of waste processing and sorting lines;
- manufacturers of other waste processing and recycling lines;
- power-intensive industrial enterprises;
- importers of agrochemistry products;
- pollution funds;
- big companies seeking to implement their plans for the reduction of carbon footprint and to achieve 100% environmentally safe production;
- any investors who want to leave a mark in history and be the part of the fight with the global problem related to plastic wastes.