In this series of recycling business articles, today we will discuss about aluminium recycling business which has some great potential if done correctly. In this article I have created a business plan sample which you can use in setting up your recycling plant. This article is focussed on aluminium can recycling process, cost estimation in setting up of recycling plant and profit margin in this business.
Aluminium can is a cylindrical shaped container which is used to store food items and beverages. One would have definitely used an aluminum can while drinking beer, soft drinks like coke or Pepsi, chocolate milk, or buying food items like ghee, meat, oil, packaged foods and chemicals. Aluminum cans are the single largest products made of aluminum globally. There is a total production of 180 billion aluminum cans per year globally. Most of the cans that are used are made from recycled aluminum and not from primary aluminum. Aluminum cans are extremely light in nature and it requires 34 cans to make 1 pound.
Nearly half of the aluminum cans are made from recycled aluminum. In a report, 68% of North America’s total aluminum cans are made from recycled aluminum while 92% of Switzerland’s aluminum are also made from recycled aluminum. The advantage of using recycled aluminum is the cost effectiveness, less usage of power, less usage of natural resources and overall a productive utilization of waste that may become harmful for the surrounding.
Aluminum waste is regarded as one of the most valuable waste in the world. In a report it was stated that Americans throw around $1 billion worth of aluminum can. The aluminum recycling companies in USA spend around $800 billion per year on recycled aluminum as the industry of recycled Al is very versatile.
Now if you have understood the importance and versatility of this industry then one can definitely be interested in investing in aluminium can recycling business. From Indian perspective, there has been a great demand of products packed in aluminum cans. From beverages to eatables to medical products, nearly everything is packed nowadays in aluminum can first substituting glass jar and later plastic container as it is toxic in nature. The production and demand is very huge and therefore one can definitely think of investing in aluminum can recycling business.
There is nothing much in recycling aluminum can as it very light and made from pure aluminum and sometimes a mixture of magnesium is used in order to make strong. There are few steps that are needed to be followed during the recycling of aluminum can.
Aluminum Can Recycling Business
The aluminum can market in India is growing at a stellar speed and is expected to grow in manifolds in time to come. Higher will be manufacturing higher will be waste generation and higher will be the recycling. It is estimated that nearly all aluminum products are recycled as there is highest output rate in recycling aluminum as one has to only melt and give a proper shape. The other plus point in opening a recycling plant is that it has very less installation charge in comparison to any other recycling plant that recycles metal scrap. The other profit is the margin of profit between in investment and return.
As a newbie who wants to earn a good profit in recycling business, recycling aluminum can would be the best possible idea.
Aluminium Can Recycling Business Plan
The plan for recycling aluminum can is very simple. Like any other recycling business, you need to fulfil some basic utilities. Here is a look at what is required to start a recycling business for aluminum cans.
- Resources in the form of recycling space, infrastructure and machinery
- Input material in the form of waste aluminum cans
- Modern machineries, equipment and gadgets
- Expertize and manpower
- Capital requirements
- Time required to get the first return
- Other important points to ponder
- Return on investment
These are few of the most important points that one must consider before starting an aluminum can recycling business. Now let us go into the brief of every point mentioned above.
Resource required to start Aluminum Can Recycling Plant:
Space for Recycling: Aluminum can recycling doesn’t requires much space. A 100 sq. feet space is enough to operate an aluminum can recycling plant. After taking NOC from the concerned authorities you can start your recycling plant even at your home if it has that space and is in open. The better option would be either rent the space or use your own land for it.
Basic Infrastructure: A decent ventilated room is necessary where you will install your recycling machine. It should have proper safety norms, power connection, ventilation openings, tech support and other required tools. Apart from this, you also need a decent space to keep your recycled product and the waste product that needs recycling. Ensure that the space is enough so that it doesn’t causes congestion creating a situation of accident.
Utilities like Power Connection and Water Supply: You need to have proper power connection. Make sure that wherever you install your recycling plant there should definitely have regular power supply as its shortage may hamper your business production. Also ensure a proper supply of clean water for your recycling purpose. Cleaning of waste aluminum cans require a good amount of water. For this you may also need to take special permission from the water authority as the usage may be relatively high.
Input Material in the form of Waste Aluminum Cans: The most important thing you need is the waste aluminum can that will be recycled as a product for further sell. For this you need to team up with local scrap pickers who also pick aluminum cans that are sold at relatively higher rates in comparison to other wastes like paper or plastic. If your demand is high then you can contact scrap authorities near the dumping ground who can provide you tons of aluminum can waste based on your requirement. For this you need a decent amount of investment.
Modern Machineries, Equipment and Tech Gadgets for Aluminium Recycling:
If you want to recycle the waste aluminum cans into just an aluminum sheet then it requires only few machines and equipment but if you want to recycle new cans then you require few more machines. Here are some machineries, and equipment needed.
- Baler Compressor: A baler compressor is a hydraulic machine that compresses the aluminum can that consume much space. These cans are compressed using the baler into a square shaped thick and heavy solid that comprises of thousands of cans. This saves space and is easy to recycle.
- Smelter: Smelter is used to extract aluminum by melting it in a smelter. This brings pure aluminum out while the dross is removed which is unwanted waste material associated with aluminum can.
- Furnace: This is where the aluminum can waste is heated at a temperature of 750 degree Celsius.
- Sheet Maker: After the aluminum is melted it is given shape based on requirements. Generally it is drawn into sheets as aluminum is a malleable metal. The sheets are manufactured in large rolls.
- Machine Shaping Aluminum Cans: There are many more machines required that shape aluminum cans, polish them, print the sticker around the can, clean them to fill the items, etc.
- Other Equipment: There are many other support gadgets that you require like power generator, heater to produce heat to melt aluminum, container, coolant, boiler, etc.
It is obvious that to recycle and manufacture aluminum you will need some experts, engineers and technicians apart from labors. Do hire them in order to increase your productivity.
Capital investment depends on requirement of resources, expertize, manpower, tech gadgets, machineries and miscellaneous items. Based on their location one can calculate the cost of space for recycling plant, infrastructure and utilities.
The other requirement is for machineries which can either be rented or can be purchased. Machines like baler are sold at low cost and one can even develop it. You can also rent it but it would be better to purchase it. Similarly melting machines, sheet making machine and other key machines should also be purchased or rented. If you are willing to buy such machines then it will cost around Rs 2 to Rs 15 lakhs. It will also depend on at what level you are going to recycle the material. The whole setup of making of recycled can will cost you around Rs 30 lakhs to 1 crores in minimum.
The other investment will come in arranging expertize, technicians and labors. You can calculate their wages on monthly basis. The next thing would be packaging of the recycled product and transporting it to the market which may cost around Rs 2-5 lakhs per month.
Alas, one can expect a major investment between Rs 10 to Rs 50 lakhs with an additional investment of Rs 1 to 5 crores if the level of recycling increases like making variety of sophisticated standard aluminum cans for big markets.
Market for Selling Recycled Goods
Your market will depend on what exactly you are selling. Either you are selling melted solid aluminums or recycled polished aluminum sheets your rate of profit will depend on it or so will be your market. The best returns will come from selling solid and durable aluminum cans for storing food items and beverages. But for that you need to have standard and complex setup for recycling and then manufacturing which will cost additional investment. Network will people involved in this business to understand your market and then team up with them. Start with small production and later based on returns you can expand your business.
An estimated time of 6-12 months will be needed from day one of starting to the end result of getting returns. Be patient in your business as it is time taking process especially in perspective of returns.
Other requirements include taking of permissions from concerned authorities to start your recycling business. You will have to take permissions from environment authority, recycling authority, local municipality, industrial authorities, etc. As you are starting a new business you will also need to register your business. Later on you have to register yourself as a tax payer in GST. Water tax, transportation charge, packaging charge, power tax, etc. should also be included.
Return on Investment
Aluminum cans are sold at very good amount in comparison to the waste cans. The sheets of aluminum are also costly and if you are selling them in good amount then you can earn good returns. The sheets of aluminum cost from Rs 250 to Rs 3000 based on the grade of aluminum sheet. Aluminum can too cost a good amount. One aluminum can costs around Rs 2-5 based on its quality. If you are able to sell at least 10, 000 cans a day then your return will be around Rs 25,000 to 35, 000 per day. Overall the return will be based on the end product of recycling + market of selling + total production + total time invested. Your net profit will be after reducing investment on various requirements including packaging, taxes and transportation.