TRANSFORMING WASTE INTO BUSINESS OPPORTUNITIES: SRI LANKA’S PROGRESSION IN THE CIRCULAR ECONOMY

Regenerative and circular models of production and packaging are increasingly forming part of the solution to the limited resources and a population that is consuming more goods.

Neptune Recyclers, a subsidiary of Expack Corrugated Cartons PLC, which is a part of the privately held conglomerate Aberdeen Holdings, is a pioneer recycling solutions provider that commenced its business by offering waste management services to offices and industries. It’s now adding more capacity to diversify the types of waste it can process and make services available to new customers including individual households.

Neptune Recyclers was a business that was ahead of its time when founded two decades ago when the idea of circularity as a solution to the world’s sustainability issues didn’t exist. Now the second generation managing the business is doubling down on the founders’ vision, by helping companies, industries and households embrace circularity.

Managing Director, Abdullah Kassim discussed the early years and the way forward for the company and for Sri Lanka with a sustainable circular economy.

What inspired you to start Neptune Recyclers, and how does the industry operate?

In the early 90s, we started a corrugated cartons production facility in the country and then Neptune Recyclers were incorporated in 1994 to recycle waste generated from that factory. Subsequently, without limiting recycling to our own waste material, we commenced offering services to other companies and industries as well. You may have noticed when your garbage is picked up by trucks weekly, the collectors always set aside the cardboard, PET and other recyclable items from the general waste. These are then sold to collectors who consolidate supplies and sell onwards for recycling. Neptune Recyclers purchases waste material from a range of these large-scale collectors, part of the SME sector, who form the backbone of the recycling economy in the country.

We collect two categories of recyclable material, which we refer to as pre- and post-consumer waste. Post-consumer goods are recyclable materials collected from households, offices, restaurants, etc. Pre-consumer waste includes all types of recyclable waste which gets generated from the manufacturing and industrial sector.

We process around 2500 metric tons of paper monthly. We also have a ‘confidential shredding service’ for paper, offered to the corporate sector including banks and financial institutions. We work with several government institutions as well.

Can you give a sense of how the business is doing and if you are being impactful with your championing of the circular economy?

It has been an extremely fulfilling journey so far. We are at the forefront of the circular economy while also making a profit, and generating value for all of our stakeholders. At the same time, we are adding value to recyclable materials and impacting the lives of thousands of people in the supply chain.

Over the years we’ve processed over 600,000 metric tons of paper for recycling, creating value amounting to over $160 million, in the circular economy. There’s plenty more to do but the journey so far has been incredibly satisfying.

What are the challenges and opportunities that will support Neptune Recyclers to rise up the value chain?

Unconsciously, we all have been participating in the circular economy in our households. Plastic bags and bottles are reused in many households. Even paper waste is collected from households by individuals, in the recycling economy. So, the foundations for the system already exist. What’s needed is increased awareness and education because unlike in the past, the variety of packing products is greater and more complex today.

While paper usage is shifting due to various paper-less initiatives in companies, aided by digital transformation and accelerated by Covid-19, consumption of paper-based packaging will increase. As economies expand, populations grow and trade increases, paper usage will continue to invariably grow, especially in packaging. The world is more sustainability conscious now and it’s discovering that paperbased packaging can be a great substitute for plastic packaging. Those shifts are expected to increase paper consumption globally.

What are your plans for the future?

Despite the challenges in our economy over the past few years, we have doubled down on our belief in Sri Lanka and invested in enhancing our processing capacity by more than 100%.

The vision is for rapid growth, tracking and outgrowing the trajectory of the country. We are expecting to fulfil our capacity expansion and reach 5000-6000 metric tons of processing per month, which is double what we’re doing today. With a focus on the country’s export sector, increased focus on circularity and constant depletion of the world’s natural resources, we believe this is possible.

We are also looking at investing and exploring value addition in the types of waste we process, along with expanding our service offering to accept other types of recyclable waste as well.

We have recently invested in Sri Lanka’s first on-demand mobile platform that supports sustainable waste management in Sri Lanka. It aims to provide convenient waste management solutions to its users while educating them on the benefits of recycling and facilitate the submission of waste for recycling, ultimately rewarding the app users. Furthermore, the issue of inefficiencies in the traditional waste management process is aimed to be addressed through this initiative.