Waste Management 28 (2008) 294–298www.elsevier.com/locate/wasman

Economic potential of recycling business in Lahore, Pakistan

Syeda Adila Batool a,¤, Nawaz Chaudhry b, Khalid Majeed c

a Department of Space Science, Punjab University, Lahore, Pakistanb College of Environmental Science, Punjab University, Lahore, Pakistan

c Department of Solid Waste Management, Lahore, Pakistan

Accepted 6 December 2006Available online 1 May 2007

Abstract

The state of household waste recycling in Lahore city, Pakistan with a population of 7.2 million was analyzed. Data on solid wasterecycling were gathered from residents of low-, middle- and high-income groups, as well as from scavengers and junkshops. The recyclingactivities in Lahore exert a signiWcant impact on resource conservation, creation of jobs, provision of economic opportunity and reduc-tion in the magnitude of waste disposal problems. A cost analysis is presented to show the income that can be generated through a well-planned recycling program. It is shown that 21.2% of all recyclable waste in Lahore is recycled, and it generates an amount of Rs.271 million (US$4.5 million) per year through the informal sector. However, if the recycling practice is owned by the formal sector, it cansave an amount of Rs. 65 million by reducing the collection cost. If recycling is adopted as an industry, it can generate revenues of Rs.530 million (US$8.8 million) per year and can also save enormous amount of energy, as well as the natural resources.© 2007 Elsevier Ltd. All rights reserved.

1. Introduction

EVective, economic and safe disposal of municipal solidwaste is high on the agenda of developed and of developingcountries (Beukerering et al., 1999). Recycling is rapidlyemerging as a preferred strategy in the developed world andthe same trend is being considered and adopted by thedeveloping nations in order to deal with the problem ofuncontrolled waste generation and disposal (Cheng et al.,2002; Qureshi, 2000; Ludwig et al., 2005).

The handling of materials for recycling is not withoutenvironmental impacts, which arise due to the energyrequired for collection and sorting as well as those associ-ated with the utilization of recovered materials in produc-ing new products. However, these impacts are of muchlower level than the ones associated with uncontrolledwaste generation, handling and disposal.

Recycling uses much less energy compared to othermethods of waste treatment and disposal and saves natural

* Corresponding author. Tel.: +92 429230370.E-mail addresses: aadila@brain.net.pk (S.A. Batool), muhammad-

nawazchaudhry@yahoo.com (N. Chaudhry).

0956-053X/$ - see front matter © 2007 Elsevier Ltd. All rights reserved.doi:10.1016/j.wasman.2006.12.007

resources (Vencatasawmy et al., 2000; Van Beukering andBouman, 2001; Gaines and Stodolsky, 1993; Stodolsky andMintz, 1993). It has been demonstrated that a well struc-tured and executed recycling program can help to reducethe waste, its disposal and treatment cost (Kelley, 1992;Reams and Geaghan, 1996; Agunwamba et al., 1998; Bhat-tarai, 2000; Koli and Mahamuni, 2005; Singhal and Pan-dey, 2001).

Recycling in developed and in many underdevelopedcountries is generating substantial economic beneWts for thecommunities (Agarwal et al., 2005). According to Wndingsof the US EPA (2005), recycling and remanufacturingindustries in the USA generate approximately one millionmanufacturing jobs and US$100 billion in revenue. InWilkes Barre, Pennsylvania, it resulted in a saving ofUS$500,000 in landWlling avoidance costs during the periodbetween 1988 and 1991 (Agunwamba et al., 1998). InEngland household waste recycling centers handle 16% ofhousehold waste (Woodard et al., 2004).

Planned recycling on a countrywide scale or even inmajor cities of Pakistan does not exist. Over the last fourdecades, total municipal solid waste generated hasincreased many fold due to rapid increase in population,

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industrialization, urbanization and rising standard of liv-ing.

Municipal solid waste is managed by the municipalauthorities or contractors who are responsible for wastecollection, transport and disposal. Waste management isrestricted to urban areas, and there is no system of wastecollection from rural areas.

Urban waste management is poorly developed and isfaced with series of problems like lack of Wnancialresources, collection and transport facilities as well as ear-marked disposal sites.

There is limited information on the activities of scaveng-ers. No comprehensive cost analysis exists on the recyclingproblem in Lahore. Such information is vital for eYcientrecycling programs, not only in Lahore but also for othercites in Pakistan and other developing countries.

The objectives of this paper are to present the state ofsolid waste reuse and recycling in Lahore, Pakistan, discussthe problems, and propose a recycling program and high-light the usefulness of such a program in solving the prob-lems associated with municipal solid waste. Additionally, acost analysis of waste management with diVerent recyclingoptions will be presented.

In Lahore, the private, informal sector (the sector that isnot working under government) is currently involved in therecycling business at the micro level. It is important forlocal municipal authorities/councils throughout Pakistan topromote recycling as an industry so as to gain economicadvantage. In this paper, the economic potential of recy-cling in Lahore will be considered.

2. Solid waste recycling in Lahore, Pakistan

2.1. Trend of recyclables in waste composition

Planned recycling may be proWtable in countries wherethe high value of recovered materials and low wage cost ofrecovery and recycling compensate for the relatively smallproportions of recyclables waste that can be recoveredfrom MSW (municipal solid waste), e.g., paper, plastic,glass, ferrous (Johnsons et al., 1984; Beukerering et al.,1999). This appears to be the case in Pakistan. Proportionsof recyclables in Lahore based on the studies carried out forsolid waste composition in 1980 (Willing, 1979), 1990(Qasami, 1996), 1992–1993 (EPD, 1992–1993), and 2005(current study) are shown in Fig. 1.

The data was collected to determine the percentage (byweight) of recyclables in the solid waste of Lahore. It isinteresting to note that from the period of 1980–2005, thequantity of paper and plastic has shown a continuousincrease whereas glass and iron products have shown adecline. The census report of 1998 reveals that the rise inmiddle-income and low-income groups, from 1980 to 1998,is 53% and 15%, respectively, because of economic growth.The increase in paper and plastic in recyclables is due to theenhanced purchasing power of people. There is no signiW-cant estimated increase in glass and iron in the waste

stream because plastic and paper goods have replacedthem.

On the basis of a waste generation rate of 0.75 kg/cap/day (determined in this study), the annual waste generationin Lahore comes out to be 1.97 million tons. The composi-tion of solid waste in 2005 reveals that waste in Lahore con-tains 21.2% recyclables, such as plastic, paper, glass andmetal. There is no regulation on recyclables or recycling inPakistan, and the formal sector is not actually involved inrecycling. This study shows that the involvement of formalsector in this area can result in considerable savings.

2.2. Methodology

As the recyclable materials emanating from diVerentsources reach the consumers through diVerent routes, threesources were studied for data collection.

• Data from source separation.• Data from junkshops.• Interviews with households.

2.2.1. Source separationData were collected from the residents of low-income,

middle-income and high-income areas within Lahore. Thedata were collected through qualitative research, and inter-views were conducted with residents. Questionnaires werenot used because of literacy problems with low and middle-income groups and diYculty in contacting members of thehigh-income group. A total of 360 households were selectedfor the years, 2001 and 2005, in this part of the study. Thedata generated has been presented in tabular form as fol-lows:

Low-income housing: 118.Middle-income housing: 210.High-income housing: 32.

Table 1 shows that solid waste of Lahore contains fourmajor types of recyclables, i.e., iron, glass, plastic and paper.Our study shows that iron is the most common recyclablein the waste generated. It is interesting to note that fromyear 2001 to 2005, the overall increase in the recyclable por-tion in Lahore’s waste was 9.1%. The data shows that the

Fig. 1. Comparison of recyclables by weight percent of total waste.Sources: 1980 (Willing, 1979); 1990 (Qasami, 1996); 1992–1993 (EPD,1992–1993) and 2005 (this study).

296 S.A. Batool et al. / Waste Management 28 (2008) 294–298

quantity of plastic and paper has increased at compara-tively higher rates, i.e., 14.3% and 16%, respectively, com-pared to iron and glass, which showed an increase of 1.8%and 4%, respectively.

The economic potential of the recyclable portion canalso be gauged from the fact that the prices of these materi-als have increased during the same period, in the range of500–1300%. The minimum increase in price is 500% forplastics and highest increase is 1300% for iron. Paper priceshave also increased to the extent of 600% during period2001–2005. These Wgures indicate that the recycling indus-try is Xourishing in Lahore, although in the informal sectorand without the support of the formal sector. The demandfor recyclables in the recycling industry is the main reasonfor escalating prices.

The 360 households on average are earning Rs. 13,610per year from the sale of recyclable materials to the scav-engers (persons who search through waste for recyclables),as shown in Table 1. It indicates that for a total projectedpopulation of 7.2 million in the year 2005, a sizeableamount of Rs. 271 million (US$4.5 million) per year can begenerated through the sale of recyclables to the scavengers.

Fig. 1 shows that the total percentage of recycled mate-rial increased dramatically over the 25 years from the 1980data (9–10% recycled in 1980, 1990, and 1992/1993) to the2005 data (21.2% recycled). There is considerable increaseof plastic and paper in the recycled portion. The reason isthat the use of packaging material and of plastic goods suchas pet bottles and shopping bags has considerablyincreased. There is no noticeable increase in glass and ironbecause plastic goods have replaced them. Fig. 2 shows that

Fig. 2. Comparison between the selling rates of recyclables for the year2001 and 2005 (US$1 D Rs. 60). Sources: 2001 (Qayyum, 1990; Saleem,2001); 2005 (personally collected data).

prices of iron and glass have witnessed a steep increase .Thereason for the escalation in prices is increasing demand andlimited supply of these recyclables. Prices of plastics andpaper have not increased as steeply as those of iron andglass. The increase in the quantities of plastic and paperindicate that our society is in a transition period and head-ing towards a throw-away society because of increasedaZuence. Pakistan has now come out from the list of underdeveloped countries. The per capita income in Pakistan isUS$750 per annum according to the Pakistan Institute ofDevelopment Economics (2006). We do expect higher percapita disposal rates in the future.

2.3. Junkshops (Kabaria)

The waste purchased by the scavengers from residents issold to the middlemen who own junkshops in and aroundLahore city. A total of 400 such junkshops were identiWedin Lahore. The data regarding the quantity of recyclablessold at junkshops by scavengers per year, and total earningof scavengers from the sale of recyclables at junkshops areshown in Table 2.

Similarly, the price at which recyclables were sold torecycling industries and the total earning of junkshop own-ers are presented in Table 3.

2.4. ProWt of scavengers (from purchase at source to sale at junkshops)

Net proWtD (57.5¡49.0) ¤ (100)/57.5D15%The scavengers in Lahore are mostly small children and

are totally illiterate and poor, so it was very diYcult to gatherinformation from them. Keeping in view their socio-eco-nomic status, the net proWt of 15% is quite high (see Table 4).

2.5. ProWt of junkshop keepers (from sale to recycling industries)

The 260 junkshop owners are generating an amount ofRs. 271 million (US$xxx) per year through the sale of recyc-lables to the recycling industrial units. It is quite evidentfrom the information in Table 3 that a junkshop owner isearning a net proWt of 14% from the sale of recyclables tothe recycling industries.

Table 1Increasing trend in the quantity of average recyclables purchased per household, their average and the average purchase cost for the years 2001 and 2005(US$1 D Rs. 60)

Sources: 2001 (Qayyum, 1990; Saleem, 2001); 2005 (personally collected data).

Recyclable Items Quantity purchased from households (A) (kg/yr) Average purchase rate (B) (Rs./kg) Total purchase cost (C D A £B) (Rs./yr)

2001 2005 2001 2005 2001 2005

Iron 216 220 7 20 1512 4400Glass 360 375 0.5 10 180 3570Plastic 240 280 7 12 1682 3360Paper 252 300 1 7 252 2100

Total 1068 1175 3024 13,610

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Table 2Total earning of scavengers (US$1 D Rs. 60)

Sources: 2001 (Qayyum, 1990; Saleem, 2001); 2005 (personally collected data).

Recyclable Items Total quantity sold at junkshop by scavengers (A) (tons/yr) Avg. price (B) (Rs./ton) Total earning of scavengersthrough sale of recyclables tojunkshops (C D A £B) (Rs. million/yr)

2001 2005 2005 2005

Iron 59,640 62,000 22,550 1398Glass 5226 8000 11,500 92Plastic 6395 9450 15,000 141Paper 5970 8690 8500 74

Total 77,231 88,140 57,550 1705

Table 3Total earning of junkshop dealers (US$1 D Rs. 60)

Recyclable items Total quantity available atjunkshop for sale to recyclingindustries (A) (tons/yr) 2005

Average rate at whichrecyclables were sold torecycling industries (B) (Rs./ton)

Total earning of junkshopowners (C D A £ B) (Rs. million/yr)

Iron 62,000 25,900 1605Glass 8000 14,850 119Plastic 9450 16,500 156Paper 8690 11,000 96

Total 88,140 68,250 1976

Table 4ProWt of scavengers (US$1D Rs. 60)

Recyclable items Average purchase rate ofrecyclables (Rs./kg)

Average selling rate ofrecyclables (Rs./kg)

ProWt (Rs./kg) ProWt (%)

Iron 20 22.50 2.5 11Glass 10 11.5 1.5 13Plastic 12 15.0 3 20Paper 7 8.5 1.5 18

3. Results and discussion

3.1. Economic potential

In Lahore, 1.97 million tons of waste are generated peryear, out of which 30–35% of waste, i.e., 0.6895 million tons,is not being collected every year. Therefore, the total wasteavailable is 1.2805 million tons, out of which 21.2% is recy-clable, i.e., 0.27 million tons of recyclables per year. The sur-vey also revealed that approximately 15% of the totalrecyclables, i.e., 0.04 million tons is directly sold to industryin order to gain more proWt every year. It was also disclosedthat households are reusing approximately 20% of therecyclables, i.e., 0.054 million tons. This means that thereremains 0.086 million tons of recyclables available for scav-engers every year. However, Table 2 shows that only88,140 tons (0.09 million tons) of recyclables are sold atjunkshops by scavengers and households every year.

The overall calculation has revealed that 21.2% of totalrecyclable waste in Lahore is being used for recycling, andthat is generating an amount of Rs. 271million(US$4.5million) per year through the informal private sector.If recycling is adopted as an industry in Lahore, it can gener-

ate revenues of Rs. 530million (US$8.8million) per year.Recycling is a lucrative business and currently generating aproWt of 15% for scavengers and 14% for junkshop owners.

Revenues amounting to Rs. 65 million (US$1.08 million)can be generated by reducing the collection cost of solidwaste generated in Lahore.

3.2. BeneWts of recycling

3.2.1. Energy conservationRecycling saves energy by reducing the need to process

new material, which usually requires more energy than therecycling process.

In Lahore, it is estimated through the IWM-2, a LCImodel, that the informal sector saves 9,012,974,966 GJ ofenergy by the recycling of 417,852,000 tons of recyclablesper year.

3.2.2. Land conservationRecycling saves valuable landWll space, land that must be

set aside for dumping trash, construction debris, and yardwaste. In Japan only 25–30% of waste goes to landWll whilethe rest is either burned or recycled (Werlin, 1995). It is

298 S.A. Batool et al. / Waste Management 28 (2008) 294–298

calculated from the Life Cycle Inventory Model IWM-2that a volume of 2,136,245 m3 is occupied as landWll site forthe generated household waste. If the 21.2% recyclable por-tion of waste is recycled into new products, then1,054,219 m3of landWll volume is saved by avoiding the57,029 tons of waste to the landWll site. It is very importantand a considerable issue for the study area, because opendumping is a common practice instead of proper landWlling.The waste may be disposed of along the street sides. Thispractice is not only aesthetically bad but also hazardous tohealth.

3.3. Recognizing recycling as an industry

The setting up of recycling industries will generate reve-nue and jobs (Ludwig et al., 2005; Agarwal et al., 2005).

Currently solid waste management in Lahore is costingRs. 730 million annually. The recyclable portion in solidwaste has enough potential to share this burden to a con-siderable extent if recycling is recognized as an industry.The following strategies may be adopted:

1. Inducing the private sector to build a MRF (materialrecovery facility) on a build-own-transfer basis. A sharefrom the sales of the recycling industry may be given tothe Solid Waste Management Department (SWMD).There are only three private companies in Lahore thatcollect MSW and maintain MRFs. These companies col-lect approximately 10% of MSW generated in Lahore.They separate and sell recyclables to industry and alsocarry out limited composting and recycling of plasticand tetra pack.

2. After segregation at a MRF, the major portion oforganic waste may be delivered to the compost plant.

3. The SWMD may introduce 5-year plans indicating spe-ciWc goals to achieve collection of recyclables throughdoor-to-door collection. Door-to-door collection isalready being carried out by some private companies. Inorder to achieve the indicated goals, government caninvolve private companies in the collection of MSW andseparation of recyclables.

4. If recycling is adopted as an industry, there will be con-siderable diversion of land from landWll sites, which willnot only save precious land but also reduce environmen-tal burdens associated with handling and disposal ofsolid waste.

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