An entrepreneur's journey of growing a waste and recycling business in Ghana
In the Nineties, Jürgen Meinel, a former manager of the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and KfW, founded the first recycling company in Ghana. Almost twenty years later, Jürgen and the ‘City Waste Group’ provide income opportunities for almost 600 people. In this interview, he tells us about his journey of growing a waste enterprise and of setting up a business model that acknowledges the situation of people at the base of the economic pyramid.
What made you start a recycling company in Ghana?
I first started to work in waste management in 1986, when I was assigned to a project that GIZ and KfW conducted in Ghana. I saw big opportunities in recycling while nobody else was interested in this topic. Therefore, I started City Waste Management in 2002 after early retirement.
How did your company evolve over the years and what were the drivers of growth?
At first, we only recycled sawdust, then plastic waste. In 2008, we founded City Waste Recycling for electronic waste. When we started this second enterprise, it was an advantage that we could recourse to our experiences and processes that we had with City Waste Management. For example, we used the resources of City Waste Management to cross-finance the initial phase. Finally, we added a fridge de-gas plant in 2012 and since 2013 we are involved in battery recycling.
The drivers for growth are the available resources. Our main resource is waste, which is there in abundance. With a population of 27 million people, Ghana produces 12,710 tons of waste per day. We recycle now around 4000kg per day out of this is 2000kg plastics. This is only a fraction, but given that the estimated plastic waste production per capita is at around 45g, we are recycling the plastic waste of almost 45000 people per day. We have 62 employees in our plant and about 500 informal waste collectors. More than half of the people we work with are women, some of them for more than 15 years.
You are working with several hundred informal waste collectors. Do they have any kind of contract?
We do not provide classic labour contracts. We have records from everyone on how much they collect. Once somebody is collecting more than 1000 kg in one year, we pay them health insurance for the following year. This brings the waste pickers closer to the formal sector, while it helps us to secure our supply.
With plastic, a person makes a minimum of 16 - 20 Cedi per day (3,50 - 4,00 USD). This is not much, but twice the national minimum wage of 9,50 Cedi (2 USD). We also have people that make 30 - 40 Cedi ( 6,50 - 8,50 USD) a day.
Do you maybe know of a success story or somebody who managed to escape the informal sector?
Yes. In the Volta region, there were a lady and a boy who were at first informal waste collectors. By now, they have started their own collection point.
What are these collection points and how do they work?
The idea of the collection points is similar to a franchise model. At the collection points, the plastic waste is gathered and compressed for transport. The collection points sell the plastic to us and we sell it to our contract partners. The people who are heading the centres are self-employed and live on the margin between what they pay their own waste collectors and the sales revenue that they get from us.
We also had some bad experiences with people managing the collection points. You need to provide some money in advance for someone to set up the collection point. The first person we worked with simply squandered the money. You have to be very careful whom you select and our experience is that women are more responsible than men are. Still, our future goal is to establish these local waste management centres all over the country and to have them managed by people from the informal sector. Now, there are collection points in two cities.
Can the collection centres also sell to other entities?
No. They are obliged to sell only to us. We insist on this clause because otherwise people will sell the good items to the highest bidder and throw the hazardous items away.
We already have that behaviour in Agbobloshie, Accra’s biggest dumpsite for e-waste. Highly toxic substances like lead, acids or condensers are simply thrown in the river or on the ground.
With City Waste Recycling, we want to be responsible and take care of all the hazardous items. But this also means that we have higher costs and people are not making as much money as in the Agbobloshie. We have costs for the machines and protective clothes. We pay insurance and pensions for our workers. We offer paid holidays and paid maternal leave. Finally, we pay all the permits and fees. It is impossible to be competitive with the informal sector.
What is your attitude towards the people in Agbobloshie?
We are working very closely with the people there. We train them what not to do, like hitting a TV or computer screen with a hammer or how to handle hazardous waste. Whenever we are looking for new employees for our plant there, we recruit them there.
From time to time, we also provide people with small tools like screwdrivers so they can dismantle things properly. In Agbobloshie, many people do not use gloves or nose masks. It is heartbreaking to see them barefoot and with terrible injuries. Most people disappear after four or five years. They don’t live long and nobody is doing anything about it. People close their eyes to the danger. It is obvious and every day sees it but nobody is doing anything. At least not so far.
Countries like Rwanda and Kenya have introduced strict rules and regulations for plastic bags. Do you also wish similar regulations for Ghana?
Regarding plastic, the government in Ghana wanted to ban plastic, but the industry has a strong lobby. After that, they tried to introduce biodegradable plastic. I oppose this approach because this would increase the mentality of throwing stuff in the environment. For the future, I would rather see that the industry itself introduces a payback system for plastic. Another problem is the enforcement of rules.
What are your plans for the future and what keeps you going?
With each technology that we adapted to City Waste Management or City Waste Recycling, we were the first in Ghana. This shows clearly that we are paving the way for many others to follow. We just started to build our new factory. We want to open it partially this year and intend to have another 200 people working there. Finally, we always want to be one step ahead of others and that is also what keeps me going.
City Waste Management on AlJazeera: Inside Ghana's electronic wasteland
This blog post is part of the February 2018 edition of the ‘THEME’ that reflects on scaling inclusive business.
What motivated entrepreneurs to stay focused while scaling their business? How did they overcome hard times trying to reach scale? What navigated them through this process? Read the full series to see what thought leaders and practitioners think about these questions.