Resolution liquidation bad news for recycling
03 Jul 2009 14:39 | Percy Mabandu
Resolution Recycling, the once-celebrated Johannesburg-based waste recycling company, on Monday announced that it had filed for liquidation.
In a communiqué sent to its clients, the company cited "insufficient cash flows" and an unspecified "number of challenges" as the reasons for closing down. It also identified a lack of assistance from the municipality, regulation in the industry and low community buy-in as contributing to its woes.
Resolution Recycling started operating in 2004, focusing only on collecting and recycling paper waste. But by the time of its liquidation announcement, its focus had expanded to include a one-stop shop for its clients, separating and collecting aluminium and steel, plastic and glass, even e-waste and cartridges. Its services also included an off-site document-shredding service.
Prospective clients, domestic and corporate, would request a recycling evaluation of their premises. Thereafter they would receive a costing of the service and "green bins" to help them separate their recyclable waste products. The bins would be collected on a weekly basis, based on the clients' needs.
The liquidation of the company means that 22 full-time and 35 part-time jobs will be lost. Also under threat is a humanitarian project, Nurturing Orphans of Aids for Humanity (Noah), which was established by Resolution at the end of 2000.
Noah was a financial beneficiary of the company, receiving a percentage of Resolution's recycling profits. The project worked by "franchising" community-based models and skills to accountable caregivers, who would then set up their own community network "Arks" or care networks for Aids orphans.
Resolution also had a partnership with MySchool, helping to raise funds for schools through recycling.
Jalda Hodges, who co-runs Reliable Recycling, another recycling company in Johannesburg, agrees that "buy-in from the community has been very low". She complains that "people say they want to be green, but don't expect to pay for the recycling services they receive".
She said companies need to "charge a realistic service fee". Some companies come in "too cheap" and end up facing business difficulties. There are variable running costs such as fuel that come into play. Plus the return price of collected waste products is "not a sustainable income" source for businesses because it fluctuates from month to month. In Johannesburg, for example, they make 65 to 70 cents for a kilogram of tin.
Hodges says recycling interventions are able to save at least 30% of waste from ending up in landfills. However, she say that even though legislation is in place to regulate the sector, it has not been "activated".
The expected legislation will "force cities to put into place waste separation and management strategies", says Hodges, which might provide a good space for businesses like hers to play positive a role. Perhaps even find some "protection" in law.
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