Waste paper shortages in South Africa the challenges and opportunities PRASA (Paper Recycling Association of South Africa)

) Ursula Henneberry 14 February 2009 Introduction The waste paper recycling industry is going through interesting and exciting times. Sappi has expanded capacity at one of their mills; Mondi operations have increased capacity; Nampak has a new machine coming on stream and a few of the independent paper mills are also increasing capacity, e.g. Janjiker Tissue Mill, in Cape Town, who will be increasing capacity by 8000 tons per annum in April this year. The increased demand from all this dynamic activity has resulted in there being a severe shortage of recovered fibre for paper and tissue manufacturers. The industry started feeling the shortage when forest fires in Kwa Zulu Natal and Mpumalanga in 2007 and 2008, resulted in there being major timber shortages. Other contributing factors were fires in the paper recycling industry, which destroyed nearly 5500 tons of waste paper and the decline in the sugar industry, which created a shortage of bagasse, thereby increasing the demand for recovered fibres.

A success story The above is where the paper recycling industry steps into the breech. When the going gets tough, the tough get going. PRASA members boast a success story: to ourselves; to the mills we provide; to the economy; and the environment because we have steadily increased our rate of recovery having collected in excess of 2 million tons of recoverable fibre during the past two years. Challenges A Star reporter wrote the other day: the one thing we do know is that we dont know. For the recycling industry the challenge is that: today we estimate that the shortage of recoverable fibre will be in the region of 100,000 tons in 2009. Tomorrow we may be told that sales are down at this mill and that mill due to the world economy. This affects sales: and if you cant sell you dont make and if you dont make, it reduces your recoverable fibre requirements. We know that the 2010 World Cup will increase the demand for paper but we do not yet know to what extent. Creativity vs Innovation. The cyclicality of the paper industry comes with its own unique set of challenges. We need to put creativity before innovation find creative ways to put recovered paper to other uses when there is a surplus. Making business partners of our suppliers (agents and buy-back centres) so that they come through for us when the demand is high and understand and continue to support us when there is a surplus. There is a window of opportunity here to look at loyalty incentives for agents and buy-back centres. We could launch appropriate competitions, establish databases and look at creative ways of adding dignity to the profession of waste collection. Education and awareness campaigns are necessary. The challenge is the chicken and egg scenario because when we educate the householder on how and what to recycle we need to provide them with the tools to do so. e.g. a two bin system and assistance with the cost thereof.
2

Intervention at government level by way of legislation to encourage householders to recycle, as well as financial assistance to introduce a 2 bag system in households. Virgin fibre demand. There is an interesting article on Page 6 of PAMSA brochure which you are invited to read at your leisure. Basically it warns that: As the population increases and standards of living improve, the growth of South Africas plantations is imperative to meet future demand increases. It is estimated that an additional 25 000 hectares per annum is necessary in this regard a substantial increase on the current approximate rate of 1500 hectares per annum. Recovered fibre eases the strain on virgin fibre demand. The challenge is that currently we are already in short supply of recovered fibre. Opportunities Putting aside the current downturn in sales in some sectors of the economy, we expect the demand for recovered paper to continue well into 2011. Paper recyclers are resilient, dedicated and committed. We see that along with challenges come many opportunities. Financial: Recycled fibres are marginally cheaper (at this stage due to the exchange rate and world economy factors), provides a strong financial incentive to use recovered fibres. Opportunities for new entrants: Because manufacturing costs are relatively cheaper, we see an opportunity for increased manufacturing capacity (new machines, entrepreneurs to enter the market, new products). Innovation: there is opportunity for the industry to find more innovative uses for recycled fibres. Technology: Improving technology enables some products containing recycled fibres, to come close to the quality standards required, but at a relatively cheaper cost. Income generation: Entrepreneurs will find opportunities to recover paper from available sources. Already we are seeing an increase in requests for assistance from potential buy-back centres.
3

R & D: The paper industrys potential for growth lies in developing niche market products, accelerating a culture of recycling and getting lots and lots of trees planted. Refer to page 6 of the PAMSA brochure. Job creation: Although limited and difficult to obtain exact figures opportunities for job creation in the informal sector exist. Employment of the disabled: Projects that will enable the employment of physically challenged (disabled) people should be incorporated in creative projects. Environmental impact: We see a window of opportunity for us to consistently and critically look at our processes to see how we can do things differently (at mill level) to make the end product more recyclable. Things like technology, processes, chemicals used etc. Lets take the example of the banana box. The development of a wax coating that protects the banana has been great. But we need to take that further and look at how our processes can be improved to handle or dissolve the wax when it is recycled or to look at paper coatings that are 100% recyclable. Sludge. Another opportunity lies in our sludge content. Lets go back to our mills and look at our sludge as a saving opportunity lets find a way to extract the fibre from the sludge. Register as CDM project: - 40% less energy is required to manufacture paper from recovered paper. - Air emissions in papermaking is reduced by 70% when recycled fibres are used. - Trees sequester carbon and 17 pine trees per ton of paper recycled are saved when recoverable fibres are used. - There is a reduction of 10 kg of SO2. - Water consumption is reduced by 50% and waste water by 35%. This equates conservatively to a reduction of 8 m3 of waste water discharged. PRASA sees the savings above as potential selling points to get carbon credits. The screening form on the CDM website, indicated that PRASA would not qualify but we remain optimistic that a meeting with the appropriate people could assist with them swaying in our favour.
4

Those in the industry who could work with PRASA and assist them to promote and be rewarded for the paper recycling industrys contribution to the environment are invited to contact Ursula so that a meeting can be set up. Ursula.Henneberry@pamsa.co.za Extending the life of landfill sites: The more recoverable paper we collect through street collectors and vendors, the less there is to transport to landfill sites, resulting in reduced costs to local municipalities. If all household paper/cardboard was recycled million m3 of landfill space would be saved per annum. Packaging Levy. Discussions at government level to introduce a packaging levy (similar to the plastic bag levy) are at an advanced stage. We need to take a critical look at our processes to find ways of counteracting the additional cost to our businesses and to minimize erosion of our profit margins. E.g. re-visit the principles of Total Productivity Management (TPM); incentivise employees to reduce costs; vigorously apply lean manufacturing principles etc. Extended Producer Responsibility (EPR). As with the packaging levy, government is intent on making it the responsibility of the industry to handle their waste. Their stance is: you make it, you profit from it, you get rid of it. For the paper industry, this should be incentive enough to promote the recycling of our packaging in the workplace and at home. CONCLUSION The opportunities outweigh the challenges. PRASA is doing something with our opportunities we wont let them go to waste. PRASA focus areas: Grade specifications ratified by PAMSA. Once ratified will be on our website; PRASA stand and PRASA presentations. Proposal submitted to Wastecon for 2010 programme; Establish a MRF single biggest project for the next few years. Robinson Deep;

 Funding DTI, IDC and other sectors within government for assistance with funding; PRASA Education and Awareness Campaigns; Raise PRASA profile; Recovery Action Group Communications committee shared resources and finances; ITAC Increase membership It takes all of us to make a difference: Please recycle. Dont just talk about it, do it!

About PRASA

PRASA (Paper Recycling Association of South Africa) was established in 2003 and is allied to PAMSA (Paper Manufacturers Association of South Africa). PRASAS primary objectives are to: > Promote a culture of recycling > Promote and support the reduction, reuse and recycling of paper waste > Reduce the amount of recoverable paper and board packaging materials ending up in landfill > Establish awareness campaigns aimed at educating the public about the benefits of and necessity to recycle > Promote employment and economic empowerment opportunities, in particular in SMMEs (Small, Medium and Micro Enterprises), through material recycling > Promote sustainable recycling opportunities and engage in activities that will grow and develop the recycling industry > Contribute to the preservation and protection of our environment Waste reduction is everyones responsibility.

Paper is renewable, recyclable and the natural support of ideas