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Entrepreneurial spirit and a little help produce successful recycling business

27 March 2014

All success stories begin with a little bit of help. But access to financial help, equipment, business training and industry knowledge are often major stumbling blocks for small business initiatives.

Small businesses operating in the recycling sector have faced many of the same challenges, and that’s where Mpact Recycling plays a role. The company, part of the Mpact Group, has helped establish several successful small recycling businesses that have shown that they can support themselves after an initial period of support.

One of the earliest small recycling businesses established in this way is today known as Twin Cities.

Twin Cities had its origins in 2007 when Mpact Recycling, then known as Mondi Recycling, gave existing staff members an opportunity to be their own boss by taking over the management of what was then the process and production unit for Mpact’s Johannesburg-based recycling operations.

Seven years later, the former staff members who took up that opportunity are now the proud owners of Twin Cities, a successful outsourced operation to Mpact Recycling based in Tulisa Park in the south of Johannesburg.

Twin Cities is directly responsible for the process and production unit which separates and bales recovered paper at Mpact Recycling’s Tulisa Park and Springs operations.

The company currently boasts a staff complement of 55 with plans for expansion.

“When we were awarded the opportunity to start our own business, it was really daunting. We had no business and administration skills. Having worked directly in the process and production unit at Tulisa Park – which is now Twin Cities – we knew the existing issues that the operation was experiencing. We knew also that the decision to accept the offer came with a lot of challenges, responsibility and accountability,” says Aaron Nteke, CEO and one of the Twin Cities shareholders.

Nteke explains the business journey.

“It certainly did not just happen for us. We had to learn fast. We had limited machinery when we took over the entity at Tulisa Park. To be up and running with immediate effect we had to  figure out how to expand operations on a limited budget, and that includes taking over the payments for the existing machinery,” he says.

“However, at a later stage we managed to buy additional machinery to assist in meeting our work load,” he says.

Other challenges included the maintenance of the machinery, which needed to be serviced regularly and replaced over a period of time.

“As a business we had to go back to the drawing board and figure out how we best maintain the machinery to be able to meet the requirements for more than 5 000 tons of paper that we had to deliver to the mills on a monthly basis. The number of tons that we delivered at the mills determined how much money we made,” says Nteke.

According to Nteke, the excellent working relationship that Twin Cities built over the years with Mpact Recycling played a major role in making their business sustainable.

“The credibility of our company, alongside our experience in safety and environmental compliance standards in the industry, allowed for Mpact Recycling to offer us more business and expand our service to an additional recycling plant based in Springs,” he says. To serve the plant in Springs, the company created a separate entity under the name of Efficient Recyclers with a staff complement of 26 people.

Looking ahead, Twin Cities plans to expand its services beyond the process and production unit to other parts of the recycling industry. The business plans to offer transport services that will help in the sourcing and delivering of recovered paper to the mills. 

“So while the industry challenges remain, Twin Cities is poised to go from strength to strength and with partners like Mpact Recycling alongside us, we believe the sky is the limit,” says Nteke.

John Hunt, managing director of Mpact Recycling, says the company recognises the value and importance of small businesses as engines that drive economic growth and contribute to job creation.

Hunt points to figures from the Paper and Recycling Association of South Africa (PRASA) that show that the pulp and paper industry is one of the largest employers in South Africa, making a significant annual contribution to the economy of some R35,26 billion.

“In all, around 100 000 people have  jobs in recycling, a strong indication that the industry’s case for job creation remains significant,” he says.

Hunt adds that empowerment and enterprise development is central to Mpact’s strategy for its recycling business. To date Mpact Recycling has empowered about 140 dealers with 28 buy-back centres across the country to collect paper.

“We are proud to have contributed to the growth and stimulation of a business such as Twin Cities. Our partnership over the years has demonstrated the value of creating an enabling environment for small business to operate in and unlocking potential business growth that boosts job creation,” says Hunt.

Issued by FTI Consulting – Strategic Communications

Kgomotso Moalusi +27 (0) 11 214 2413 / +27 (0)76 941 2902

Trevor Jones +27 (0) 11 214 2414 / +27 (0)83 326 7698

On behalf of Mpact Limited

Deborah Chapman Communications Manager, Mpact +27 (0) 11 994 5500 / +27 (0)76 650 4155

About Mpact

Mpact is a leading manufacturer of paper and plastics packaging in Southern Africa. The Paper business is integrated across the recycled paper-based corrugated packaging value chain and comprises three divisions being Recycling, Paper Manufacturing and Corrugated. The Plastics business manufactures rigid plastic packaging for the food, beverage, personal care, homecare, pharmaceutical, agricultural and retail markets. Products include PET preforms, bottles and jars; plastic jumbo bins, wheelie bins, and crates; plastic containers for the Fast Moving Consumer Goods (FMCG) market; styrene and PET trays, fast food containers and clear plastic films. The Group employs 3,998 people in 32 operations in South Africa, Namibia, Mozambique and Zimbabwe.

Source: MPACT