Creating Wealth…With Waste

Creating Wealth…With Waste

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Waste management is a science that can be turned into an entrepreneurial opportunity if managed correctly. In South Africa, currently most waste management is handled by five multi-national companies, but waste management opportunities could be transferred through a community model, enriching communities rather than international companies.

An example of such a model is where waste is collected using small trucks owned by women. For every 80 houses one truck with two men can be used. Corporates have no business within communities, where money spent should be retained within the community.

Economic growth

While Government supports the development of small companies and local ownership, small community enterprises are not being developed. Another community enterprise opportunity is where organic waste can be transformed into energy, directing the flow of wealth into the hands of the people. An example of such community business is the fishery model developed by Gestalt.

Fish are a national asset and should be used for the community, yet fishing rights like waste management are currently granted to international companies. Salmon is imported, while the Gestalt fishery model can produce 200 tons of Salmon per year and Salmon can easily be farmed in South Africa in a controlled environment.

Businesses procuring from a local Salmon producer or waste management company can gain procurement, enterprise development and CSI points on their balanced scorecard, while enriching the local community. When business is given to community entities it creates economic growth and an upward spiral throughout the community.

Community control

When a need exists, an order is generated, there are technical partners and sound management, and the community is involved in the project to fulfil on the orders. The entity buying from such a community project is providing jobs and thus disposable income to the very same people that will buy from the purchaser.

 

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Therefore the money stays in circulation in the community and is not exported to other communities or countries. At the same time community members are afforded ownership opportunities. The same is true for waste management, but it is important to understand the problem and the solution before embarking on a new business model.

South Africa has a bad record for failure with regards to community empowerment projects. The agricultural world abounds with stories of successful farms being given to communities, only to be turned into wastelands within a year or two. Farms are, however given to people with no farming or business experience.

The problem is that these new farmers are not receiving the training required to make a profit out of the farm. It’s not correct to start by saying ‘I have land, what can I produce on it’? The question to be asked is, ‘what can I get orders for’ or ‘what can I export’?

Agriculture is a complex business. When community members are given farm land, every possible step should be taken to contain the risk elements. South Africa has a wonderful climate that should be seen as an asset to be turned into money.

Similarly, if waste management is taken out of the hands of multinationals and rather controlled by community members, it is the South African Government’s responsibility to teach community members how to collect and manage waste effectively. As a result, unemployed community members will benefit from a community waste management business and jobs will be created, while the load on the local municipality will be much lighter.

Opportunities abound

Other entrepreneurial opportunities involve recycling waste in order to minimise the amount of waste management throughout South Africa. On the 4th of May 2012 the Department of Environmental Affairs published the National Waste Management Strategy, identifying eight goals to be achieved by 2016.

Targets are set to have 25% of recyclable waste diverted from landfill and include the creation of employment and business opportunities through waste management. Such opportunities will include recycling strategies and the development of a policy to export redundant electronic equipment. Other opportunities include the remediation of contaminated land, for which a remediation fund will be established.

Waste management can be classified into collection and removal, waste treatment, cleaning, spill management and inspection and analysis, each providing different entrepreneurial opportunities. In the US, 18 000 waste management companies have a combined turnover of $75billion.

Waste management can therefore be lucrative, but as in the US the danger exists that small community businesses will not be sustainable due to the strength of the larger international waste management companies. Operational excellence is required and therefore training and Government protection is of utmost importance.

Waste management is a regulated environment. Small waste management companies should be aware of all corporate governance requirements. Other threats will include a lack of landfill sites or rights to dump waste at a specific site. In South Africa there is little involvement in waste removal as residents of most communities are used to it being taken care of by the municipality.

For smaller companies to break into the market there therefore has to be a specific programme supported by Government or enterprise development programmes. It’s time for South Africans to take control of the business opportunities in waste management as in most other industries and create wealth and business ownership for our own people.

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Mannie Hirsch
Mannie Hirsch has consulted internationally on the development of emerging entrepreneurs. He founded The Gestalt Group in order to pave the way for emerging entrepreneurs to enter the mainstream of the South African economy. For more information, contact Mannie at mannie@gestaltconsult.com, on 011 781 7841 or visit www.gestaltconsult.com.