Economy, Business And Markets

From Trash to Turnover

From Trash to TurnoverFrom Trash to Turnover

Iran Recycling Industries Union recently announced various investment opportunities in the recycling industry.

Polyethylene terephthalate bottle recycling was the top priority, as it emerged as the most lucrative among the introduced sectors.

PET has attracted considerable attention since it is used as raw material for the manufacture of sports gear, gardening tools, electric and electronic goods, autos and synthetic fibers, of which the latter is extensively used in the production of carpets, blankets and apparels.

They are also used in the production of bottles and containers for packaging a wide range of food products and other consumer goods. In fact, PET is one of the most common consumer plastics used.

The Persian daily Forsat-e Emrooz published a report on production of synthetic fibers from PET recycling in Iran and the sector’s investment potential.

  Capital Outlay

The production process comprises the transfer of PET wastes to the plant, crushing them using a mill, transforming them into scales convertible into granules and then washing them.

A plot of land measuring 6,000 square meters is required for establishing the production plant, 1,400 square meters of which should be allocated to housing the production line and machinery, and 400 square meters to establishing the offices, security and services.

A capital outlay of $1.4 million is needed, $294,000 of which is required for purchasing the plot of land and establishing the infrastructure, and about $300,000 are needed as working capital.

The rest of the invested amount will go to the purchase of the machinery and equipment, such as crushing, extruding and spinning machines. The total workforce needed is also about 40.

And last but not least, the relevant permits can be obtained from the Ministry of Industries, Mining and Trade in a nearly six-month long process.

  Industrial Potential and Pitfalls

According to a player of the field, there is currently a potential market in the region for PET waste products, ranging from synthetic fibers to machine-woven carpets.

“Other than Turkey, which has invested heavily in the industry and is one of the main purchasers of recycled materials, other countries in the region are potential markets for the export of products manufactured from recycled materials,” added Mirqasem Mirzadeh.

“Iran has a huge untapped amount of PET waste, but the investors’ lack of preparation and market research has so far stopped them cold in their tracks and prevented the industry from growing.”

Mirzadeh noted that investing without proper research is like walking blindfolded in a busy street.

“Before anything, the investor must assess the market demand. Considering the global demand for PET waste products, the investor must eye overseas markets to be successful in the industry,” he said.

Emphasizing that vying for a domestic market share is a strategic mistake, Mirzadeh said producers must strive to improve their product quality and bring them up to global standards to have a chance of tapping the significant potential of the regional markets.