A step back in time to the early Eighties puts a very different slant on the word recycle and its meaning to the population. The onus on recycling in the 21st Century has multiplied out of all recognition from the time when Cape Waste started out.
The original company in the Wykco Group, Cape Waste has grown to become one of the leading independent recyclers in the country. Headquartered in Parow Valley, just outside of Cape Town, the company operates two sites, in Parow and in Paarl.
The Wykco Group is a collector and recycler of waste paper, plastic and magazine. Wykco has four divisions to the organization these cover transport, recycling and manufacturing. The company also manufactures several products such as paper towels and plastic pallets.
The privately-owned Group employs around 800 staff working across seven companies; in addition to Cape Waste these are: Natal Waste, West Coast Packaging, Wingspan Plastics, Midlands Tissue, KZN Tissue and Wykco Logistics. Wykco has a structure that helps corporate clients to enhance their environmental credentials through the recycling of raw materials.
Within that framework, Cape Waste collects a variety of materials for recycling from a wide range of businesses and organisations, including printers, manufacturers, office blocks, office parks, shopping centres, and independent recyclers.
It is big business and the Group’s annual turnover is in excess of R350 million, underlining how the company – as well as the perception of recycling, has grown, as Colin Higgins, General Manager at Cape Waste recalls:
“Mr van Wyk started Cape Waste with a small second hand vehicle, with only 30 tons a month, 30 years ago. Through his commitment to service, building relationships and identifying the needs of both his suppliers and customers and having a “can-do” approach to everything he does, he has grown the business to over 8,000 tons per month today. Nick is extremely hands on and takes ownership overseeing and interacting with all our suppliers and customers on a daily basis.”
“Today the business is a leading independent recycler in South Africa that provides an on-site waste minimisation service to its clients. We collect process and recycle various grades of pre and post consumer recyclable products which include: paper, newspaper, magazine, IMW and cardboard. We also recycle LLDPE and LDPE plastic. In keeping with Nick’s “can-do” attitude, we offer a variety of solutions to our clients which are tailored to best suits their individual needs,” he continues.
Having a diverse range of solutions is essential to a business that works with a wide variety of clients, as Higgins explains, “Our suppliers are varied, from small entrepreneurs, printers, office parks and shopping centres, packaging manufacturers, satellite depots country-wide to street hawkers from the informal settlements, in the respective regions we operate.”
Cape Waste operates four Material Recovery Facilities (MRFs), covering an area of 20,000 square metres. The work is very labour intensive, as materials have to be carefully sorted to comply with quality requirements.
“Due to the aged nature and technology constraints of the equipment at South African Mills, quality specifications of the recyclables, particularly paper, are very high and therefore detailed sorting of this material is required for our customers.
“This means that more human capital is required to hand sort (through materials) and therefore with the country’s job creation requirements and the specific Mill requirements, automation of this process would be very difficult,” Higgins states.
“Across our MRFs we recycle around 100,000 tons a year. This comprises of cardboard, paper, plastic, newspaper and magazines coming in from a wide variety of pre-consumer and post consumer sectors.
“The paper and magazine is used to make 1ply toilet tissue which is distributed around the country, while the newspaper is used to make newsprint reels for inserts or your daily newspaper. We are also looking at providing it as a component in roof insulation,” he adds.
Innovation is very much a cornerstone of Cape Waste’s success as the industry continues to develop and Higgins says that the company is keeping abreast of customer demands:
“The industry is evolving and growing all the time. Over recent years a trend has developed from when a skip was simply dropped and collected, to companies now wanting to have a full account of their waste streams with separation at source, waste minimisation, on-site sorting of the waste materials with a full waste management package. We offer a great onsite and waste minimisation service to all our clients.”
Whilst Cape Waste is a national business, Higgins says that most of its (approximate) 12 per cent market share is derived from the Western Cape. Despite the growing trend towards green, recyclable products, he suggests that maintaining market share is a challenge and that the combination of oversupply and the prevailing economic conditions are making growth harder to achieve.
Perhaps part of the problem stems from everyone wanting to jump on the bandwagon, as environmental awareness, particularly in the corporate world, has seen a marked rise in the number of companies offering recycling solutions.
“South Africa is fairly well informed and aware of the importance of recycling,” Higgins affirms, “Recent legislation has empowered companies to re-look and re-think how they handle their waste and recyclables. Recovery rates are improving all the time – in fact South Africa has one of the highest recovery rates in steel cans in the world. Big corporate companies are doing their part and in the pre-consumer manufacturing environments have a huge recovery rate.
“The issue of post consumer recoveries is where the challenges lie. Public and private projects are being tested and more work needs to be done however in the same breath, oversupply could certainly have a hugely negative economic impact on the recycling market here.”
The public sector projects again underline Cape Waste’s ethos of building relationships; whilst the company receives no assistance from government, Higgins reveals that dialogue is ongoing: “In my opinion the Western Cape local government is very progressive and have facilitated open communication between the public and private sector within the respective industry bodies. This helps us understand what challenges we will face and guides us through the legislative changes and requirements. It also allows us to network and share best practice with the industry stakeholders.”
Amongst those challenges are diminishing margins, the result of non-recoverable costs that cannot be passed on to the customer, on account of the markets Cape Waste operates within. Higgins explains that the customers dictate the selling price as the market fluctuates greatly with supply and demand, which does not take into account the company’s variable costs, such as labour, utility and fuel prices, that in recent times have increased above inflation.
“The only way to mitigate the above is to grow volumes on current cost structures and to maintain lean and effective ways of working,” he suggests, “operationally we are very effective, we pro-actively have already planned in capacity for additional growth, installing the latest bailing equipment, which works faster, giving us a more streamlined process that uses less energy and creates better payloads. This in turn reduces the number of trips required and thus also reduces the carbon footprint of our product.”
Cape Waste operates its own fleet of vehicles and manages this aspect using route planning software and vehicle tracking, to ensure service delivery is optimised and that most collections are done on the same day it was requested. Higgins indicates that the company is one of the few recyclers that can collect out of hours, offering clients greater convenience and flexibility.
Despite the squeeze on margins, Cape Waste has remained at the forefront of technology and continuously invests in upgrading or replacing equipment. Recent investments include the installation of new air systems and balers at key suppliers, helping them to meet their own growth plans and to maximise energy efficiency.
“Over the past 3 years we have invested in market leading baling equipment from Germany. These balers are linked to our IT department and we get up to the minute production figures, while our CAPEX strategic planning projects are ongoing ensuring both growth and our sustainability in the market place,” Higgins adds.
With that same eye very much fixed on the future, Cape Waste recently went through a rebranding exercise that acknowledged the success of the past:
“The business we operate in is all about service and price. Word of mouth about our excellent service ethos has been systematic in our success. We recently embarked on creating awareness about our group’s services which we ultimately want to shout about, because the relationship between our companies shows a cradle to cradle way of working. Simply put, refreshing and branding our business in line with the market will create more awareness in this competitive market place.”
All of which will prepare Cape Waste for a bright future; “We have strategic growth plans to increase our market share, compete in new markets, enlarge our national footprint and continue to provide excellent service. The future looks good, despite the past few years being challenging in the market place. We envisage good market recovery in the next 12 months,” Higgins predicts.