weee recyling business plan final

WEEE Recycling A path to a greener future

Prepared for: Brad Treat, Entrepreneur Robert Newman, CEO MiTeGen

Prepared by:

Jeffrey S Rosato,

Controller & Acting CEO

Liana R Casciani,

Director of Marketing

Justan A Caeser,

Director of Operations

2015 Recycling Way Ithaca, NY 14580

(607) REC-YCLE

[email protected]

WEEERecycling.com

Table of Contents

I. Executive Summary ............................................................................................... 3

Products and Services

Financial Highlights

Objectives

Mission Statement

Management Team

II. Description of Business......................................................................................... 4

Company Ownership/Legal Entity

System Flow Chart

Competitive Advantage

SWOT

Management

III. The Industry ......................................................................................................... 11

Definition & Size

Suppliers

Competition

Porters 6 Forces

IV. Critical Risks ........................................................................................................ 15

Political/Regulatory Risk

Industry Risk

Selling Price Risk

Oil Price Risk

V. Marketing ............................................................................................................. 16

Market Analysis

Distribution Channels

Pricing

VI. Operations ........................................................................................................... 22

Key Mechanisms

Ongoing Activities

Development Plan

VII. Funding Required ............................................................................................... 25

Round 1 Investment

Round 2 Investment

VIII. Financials ............................................................................................................. 27

Revenue Projections

Pro Forma Statements

Break-Even Analysis

IX. Miscellaneous Documents .................................................................................. 36

WEEE RECYCLING - JUNE 2015

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Executive Summary

The purpose of this business plan is to raise $1.4M for the development of a full service recycling facility for e-waste

material while showcasing the expected financials and operations over the next 5 years. WEEE Recycling is an Ithaca

based LLC that will proved e-waste collection and safe dismantling services to the customers in its targeted market. The

company was founded by Jeff Rosato, Liana Casciani and Justan Caeser.

Products and Services

WEEE Recycling has been developed to provide an extremely comprehensive removal and management service. The

business will generate highly recurring streams of revenue from both businesses and residences that use the Waste

Management business for their refuse removal needs. At this time WEEE Recycling will rent rents from Casella Waste

Management and other local government waste management entities. The following sections of the business plan will

further describe the services offered by WEEE Recycling.

Financial Highlights

WEEE Recycling is seeking an estimated $1.4 million in financing between government issued grants and convertible

debt. The terms for the convertible debt are subject to negotiations, but the ideal interest rate for the debt would be

between 10%-13%. The financing will be used to purchase the equipment necessary to produce our products, lease a

recycling facility, and to cover first year’s operating costs.

Objectives

Our Goal as a company is not just making money, it is improve the quality of life for future generations. Plastics from

our waste materials will be converted into fuels removing them from infecting our water ways. Metals will be distributed

for remanufacturing removing them from landfills. Finally, a portion of our profits will go to environmental charities to

improve the quality of the earth around the globe.

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

0 60,000 120,000180,000240,000300,000360,000

Units Sold

Cost vs. Sales

Sales Total Costs


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Mission Statement

WEEE Recycling focuses on the harvesting of rare and precious metals from everyday electronic equipment, while

providing the community the peace of mind, that all waste is disposed of the most environmentally safe manner.

Management Team

Casciani, Caesar, and Rosato combined have over 10 years in operational and marketing experience, as well as specialized

financial experience by Rosato. Our Board of Advisors combined have over 30 years of experience in the metal and

waste management industry.

Description of Business

Our business will effectively collect and remove electronic waste from communities then safely recycle and dispose of

this waste; revenue will be generated through the selling of precious and rare earth metals and plastics that can be found

in the waste. This helps solve the problem that worldwide there are 41.8 million tons of e-waste being thrown out

annually, as of 2014. Of that 41.8 million tons of waste was more than 16,000 kilo-tons of iron, 1,900 kilo-tons of

copper and 300 tons of gold as well as other precious metals such as palladium *foot note* this reference. 1

Company Ownership/Legal Entity

WEEE Recycling will be incorporated as an LLC. The benefits of this structure are below:

Protected assets

As an LLC, we the owners, our provided limited liability protection. Had we remained a general partnership, creditors

could pursue our personal assets (house, savings accounts, etc.) to pay business debts.

Pass-through taxation

LLCs typically do not pay taxes at the business level. Any business income or loss is "passed-through" and reported on

our personal income tax returns. Any tax due is paid at the individual level. However, as an LLC we can also elect for

our LLC to be taxed as a corporate entity (S or a C corporation). If we want to keep the business's profits in WEEE

Recycling in order to facilitate growth of the business, the preferred option is a C corporation. Under this form, WEEE

Recycling profits will only be subject to the beginning corporate tax rate of 15 percent-presumably less than the

owner/member's personal marginal income tax rates.

Heightened credibility

As an LLC, WEEE Recycling will garner credibility amongst potential customers, employees, vendors and partners

because they will see we have made the formal commitment to our business.

Flexible management structure

LLCs are free to establish any organizational structure agreed upon by the company owners. With that in mind, WEEE

Recycling’s owners will manage all business operations, unlike corporations which have a board of directors who oversee

1 Baldé, C.P., Wang, F., Kuehr, R., Huisman, J. (2015), The global e-waste monitor – 2014, United Nations University,

IAS – CYCLE, Bonn, Germany


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the major business decisions of the company and officers who manage the day-to-day affairs. Additionally, in lieu of a

board of directors, WEEE Recycling will establish a board of advisors to help with business matters.

Few Restrictions

There are few restrictions on who can be an LLC owner or how many owners an LLC may have and in the case of our

company, we have three owners.

System Flow Chart

Competitive Advantage

Our competitive advantage is in our location. Our full recycling facility will be the only one that takes the waste start to

finish in the northeast. This decreases the cost of transportation and shipping as well as decreases the time that it takes

to give our purchasers their recycled materials as it does not have to be shipped across the country or overseas. The

image on the following page depicts the competitive landscape.

Plastics

Non-Ferrous Metals

Ferrous Metals

Safely break down and

recycle obsolete devices

Sell plastics and rare earth

metals mined from recycled e-

waste

Reduce the environmental

impact of obsolete

technology on the environment

Acquire

e-Waste


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Location: Southern California

All Green States that determining how to handle the disposal of electronic equipment can be a daunting task for any

organization. Beyond internal sustainability policies, there are an increasing number of government policies around how

and where to recycle electronics, and increased regulations to consider when choosing a vendor for disposal of electronic

waste. All Green Electronics Recycling removes the complexity and guarantees accountability to ensure that the

electronics recycling process is done securely and responsibly. “Protecting your data and ensuring full environmental

compliance is what we do best.”2

Location: Headquarters in Denmark -- Recycling site in Spain

Eldan Recycling is a global supplier of recycling equipment for processing tires, cables, WEEE, aluminum, refrigerators,

MSW, magnesium and various scrap. “Since 1956, we have installed more than 830 complete plants and 7,100 single

machines all over the world.”3

2 http://www.allgreenrecycling.com/southern-california/ 3 http://www.eldan-recycling.com/

http://www.allgreenrecycling.com/southern-california/


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Location: India

Attero, India's largest e-waste management company and NASA recognized technology innovator, has been

spearheading efforts to tackle the e-waste issue through its 360 degree approach. Powered by patent pending disruptive

technology, Attero is now the only Indian company and globally, one among seven with the capability to extract pure

metals and rare earths from e-waste in an eco-friendly manner. Attero is also helping integrate the informal recycling

sector and setting up an effective e-waste takeback program, through training and consumer e-waste

collection/awareness events. As a global leader in the electronics asset management domain, Attero offers various

services including customized solutions for end to end e-waste management, electronics asset recovery, data security and

electronics reverse logistics along with repair, refurbishment and retailing of electronics.4

Located in Belgium

Umicore Precious Metals Refining operates the world's most sophisticated precious metals recycling facility. Umicore

recovers 17 precious and non-ferrous metals from industrial residues, used electronic scrap, automotive and industrial

catalysts and fuel cells.5

Located in Switzerland

Xstrata Recycling Inc. recycles electronic components, as well as secondary copper, nickel, gold, silver, platinum,

palladium, and lead. The company was formerly known as Noranda Recycling Inc. and changed its name to Xstrata

Recycling Inc. in August 2007. Xstrata Recycling Inc. was incorporated in 1984 and is based in San Jose, California with

additional offices in North America; Europe; East Providence, Rhode Island; and Penang, Malaysia. It has locations in

Brisbane, Australia; Zug, Switzerland; and Rouyn and Montreal, Canada. As a result of merger of Xstrata plc into

Glencore Xstrata plc. Xstrata Recycling Inc. became a subsidiary of Glencore Xstrata plc.6

4 http://www.attero.in/ 5 http://www.umicore.com/en/ 6 http://www.xstratacoal.com/EN/Pages/default.aspx


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SWOT

Management

Key Players

Jeffery Rosato Acting CEO / Controller

CMA (certified management accountant) candidate, with experience in budgeting, variance analysis, financial statement analysis, and sales experience.

Held program director roles for various sporting programs, as well as 5 years of sales experience in retail

BS in Accounting & MBA-PA from Ithaca College.

Strengths

-Short product life spands and quick obsollesance (endless supply)

-Centralized Regional Location

-Full Service Recylcing Center

-Growing social concern for enviornment

Weaknesses

- Not everyone is willing to go out of their way to safely recycle

- Unable to compete with companies who have buyback programs

- Companies are already out there with these contracts

-No established customers

-No market presence

Opportunities

-Repair/ refurbish area

-Work with the companies that are doing buyback programs

- Charge for pick up

Threats

-Changes to local and federal laws

- If Gov wants to take control of the entire market

-If exporting faced with international and environmental risks

SWOT


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Justan Caesar Director of Operations

Business administration major with a concentration in finance and a MBA from Ithaca College.

8 years of military experience, including the planning and overseeing the execution of both the long and short term operations of a number of naval vessels.

Has supervised projects totaling $13+ million dollars and involving 200+ workers.

Liana Casciani Director of HR and Marketing

Business Administration Major with concentration in Marketing and International business, marketing honor’s society

Manager of local Pittsford shops Facebook and twitter advertisements and social media presence for 5+ years.

4+ years in administrative work involving recruiting, hiring and training.

Board of Advisors

Thomas Cook Education

BS in Hotel Administration from UNLV

MBA from U Washington

Certifications: series 6,7, 31,& 66 Experience

Currently the VP of Investment at Stifel Nicholas

Total of 30+ years professional experience in finance & tourism International sales for DHL

Yield manager for Hilton in Hawaii General manager for two hospitality companies in Hawaii

Financial advisor at Morgan Stanley Smith Barney

Owns a Five Guys Burger and Fries franchise since 2013

Angelo Casciani Education

MBA Canisius College

Graduate program at RIT for computer science

CFP - St John Fisher Experience

CEO- Simcona Electronics retired after 31 years

Experience with purchasing and selling metals internationally

Bought, sold and managed multiple real estate properties in past Invested in multiple private startups and small business ventures as

silent investor, managing partner /CFO.


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Michael Bobry

Education

BA from Ohio State University Experience

Experience in metal recovery industry for 30+ years

Owned family business: Lyell Metals for 20+ years. Involved with Premier Metals for 10+ years

Part of Liberty Iron and Metal Holdings for 10+ years

Staff Position Needed

Warehouse Supervisor

Job Description

Plans, directs, coordinates, and controls activities of workers engaged in production by performing the

following duties:

Essential Functions:

Studies production schedules and estimates staffing, duty assignments and inventory requirements

Develops a process plan including people, resources, equipment, and floor space

Establishes or adjusts work procedures to meet production schedules

Coordinates manpower requirements by increasing or decreasing personnel and overtime to meet changing

conditions

Recommends measures to improve production methods, equipment performance, and quality of product

Initiates or suggests plans to motivate workers to achieve work goals

Maintains time and production records

Performs activities of workers supervised

Interprets company policies to workers and enforces safety regulations

Responds to grievances accordingly and works with subordinates and human resources to discuss and eliminate

problems

Additional Responsibilities:

Participates in Safety Meetings

Assist in all loading and unloading operations at the start and end of all trips

Performs other similar or related duties as requested or assigned

Requirements

Education: o Associate's degree (A.A.) or equivalent from two-year College or technical school; or six months to

one year related experience and/or training; or equivalent combination of education and experience

Experience: o Minimum 1 - 3 years management experience with direct reports, hiring and terminating o Experience managing of production lines and repair and maintenance o Experience in scrap business is a plus o Experience in e-waste business is a highly preferred

Physical Demands: While performing the duties of this Job, the employee is regularly required to stand; walk; use

hands to finger, handle, or feel and reach with hands and arms. The employee is occasionally required to sit; climb or

balance; stoop, kneel, crouch, or crawl and talk or hear. The employee must be able to climb or descend one or more set

of steep stairs or vertical ladders both inside or outside in all weather conditions. The employee must regularly lift and


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/or move up to 10 pounds, frequently lift and/or move up to 25 pounds and occasionally lift and/or move up to 50

pounds. Specific vision abilities required by this job include distance vision and depth perception.

The Industry

Definition

The Industry Definition - Operators in this industry collect hazardous and nonhazardous waste and recyclable materials.

Nonhazardous waste includes municipal solid waste (household waste) and industrial and commercial waste. This

industry also includes transfer stations where waste is transferred from local vehicles to long-distance automobiles for

transport to disposal facilities. This industry does not account for government-provided services of a similar nature.

The Waste Collection Services industry has a medium level of barriers to entry. The industry comprises of large national

and regional operators and a host of small local collection companies. As the industry ramps up in scale, larger operators

increase their advantage in terms of the economies of scale they can garner, the services they can provide and their

access to capital for further investment and acquisitions. Fuel costs and environmental regulations are an increasing

burden for all industry operators, but smaller players are at a greater disadvantage.

The global waste and recycling industry collects more than 11 billion tons of solid waste and generates about $410 billion

in revenue each year, according to the United Nations Environment Program. The waste management services industry

is the largest in developed nations that consume more resources and generate more waste.

The US waste management industry includes about 24,000 establishments (single-location companies and units of multi-

location companies) with combined annual revenue of about $86 billion. Companies that provide wastewater treatment

services are covered in the Water & Sewer Utilities profile.

Size

The current size of the industry is estimated to be around $410 billion. The specific e-waste management market is

expected to grow itself by 23.5% annually to reach an estimated $49.4 billion by 2020.7

Growth

2010-2015 1.7% growth8

Major Players9

Other waste collection services

Residential waste collection services

Recyclable material collection services

Transfer and storage facility services

Nonresidential waste collection services

Hazardous waste collection services

Construction and demolition site waste collection service

7 https://www.alliedmarketresearch.com/press-release/E-waste-management-market-is-expected-to-reach-49-4-billion-global-by-2020-allied-market-research.html 8 http://www.cbi.org.uk/media/1231301/cbi_rebalancing_the_economy_report_301211.pdf 9 http://tippie.uiowa.edu/henry/reports14/waste_collection.pdf


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Trends

Although revenue for the Waste Collection Services industry dipped because activity in the industrial and construction

sectors plummeted during the recessionary period, a stronger economy will boost consumer spending and, therefore,

demand for industry services. In addition, business, industrial and construction activity will also increase, resulting in

higher waste volumes and solid revenue growth; however, regulation and high fuel costs will remain a threat.

E-Waste Management Segment

Size

Market Size

E-waste accounted for 41.8 million tons in 2013 (EPA)10

Global E-Waste Management Market to be worth

$20.25 billion in 2016 from 9.15 billion in 2011 at a

CAGR of 17.22% from 2011 to 2016. 11

Growth

Growing at a CAGR of 23.5% during 2014 - 2020

The global volume of e-waste generated is expected to

reach 93.5 million tons in 2016 from 41.5 million tons

in 2011 at a CAGR of 17.6% from 2011 to 2016

Trends

In what's referred to as the “eco-movement”, individuals are now more than ever environmentally conscious. We’ve

seen the number individuals purchasing eco-friendly homes, riding bikes to work, and composting increase over the last

few years. To get a better sense of where the industry is headed we’ve identified the following trends. 12

1. Ban on plastic

2. From paper to digital

3. “Biodegradable” plastics

4. Mandatory composting

5. Sustainable innovation

6. 3-d printing

7. Energy from waste organics

8. Recycling cigarettes

9. Increased corporate responsibility

10. Growing issues with e-waste

11. Mandatory e-waste recycling

10 http://www.epa.gov/epawaste/conserve/materials/ecycling/manage.htm 11 http:/ /www.marketsandmarkets.com/PressReleases/e-waste-management.asp 12 http://www.treehugger.com/corporate-responsibility/10-recycling-and-waste-management-trends-watch-out-near-future.html


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Suppliers

Our suppliers consist of where we are going to get the e-waste that we will be recycling. We will be getting e-waste from

residents (individuals), businesses, hospitals, educational entities, government agencies. We will also be purchasing e-

waste from collection and consolidation sites that are looking to sell or remove their e-waste in a safe and protected

manor. We will be collecting, but are not limited to the following:

Customers

Our customers include bio-tech companies, such as Agilyx, which converts previously non-recyclable and low

value waste plastics into crude oil through a patented system that is environmentally beneficial.

Other waste management companies, such as Advanced Environmental Recycling Technologies Inc

(AERT), which develops and commercializes technologies to recycle waste polyethylene plastics and develops,

manufactures, and markets value added,

green building compounds.

Companies that operate within the basic

materials sector under the Industrial Metals

and Minerals Industry, these include:

o Ferrous & non-ferrous metal

recycling companies, similar to

Schnitzer Steel, which collects,

trades, brokers, processes and

recycles metal, both ferrous

(containing iron) and nonferrous

(not containing iron).

o Precious metal refiners, like

Elemental, which focuses on the

recovery, refining, and minting of

precious metals and providing

retail and wholesale investment

possibilities to a broad range of customers worldwide.

Competition

Demand depends on the volume of waste generated, which is contingent upon the economic conditions and consumer

spending. The profitability of individual companies depends on efficient operations, because the service is a commodity

sold based on price. Big companies enjoy economies of scale in purchasing equipment and establishing networks of

facilities. Small companies can compete successfully by offering specialized services or serving local markets. The US

industry is concentrated: the 50 largest companies account for about 55 percent of revenue.

Our competitors include:

o Municipal waste management agencies

o Consumer Electronics

Sony


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Electronic retailers

Best Buy

Wireless telecommunications companies

Sprint

Privately and publicly traded companies

All Green

Waste Management

Porters 6 Forces

Competitive Rivalry

o Medium

Finger lakes reuse

Local Government trash management

Threat of substitutes

o High

Government program

Local dump/waste facility

Bringing it to any manufacturer in the area

Storage closet/drawer

Threat of new entreats


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o Medium

Cost of processing plant

Can’t lease equipment

Dangerous metals and chemicals

Bargaining power of suppliers o High

They want to be paid for their crap electronics

Want free removal

Bargaining power of customers

o Medium

They can charge what they may because our product is literally garbage, we need them to buy it or we are left with trash aka nothing

Complimentors

o Medium

We need people who want to melt down scrap precious metal

The machines that break down these metals

People who want to safely remove their electronics

NYS Electronic Equipment Recycling and Reuse Act

Refurbished sites

Critical Risks

Political/Regulatory Risk

The risk of new government regulations on the disposal of hazardous chemicals obtained from the deconstruction of e-

waste could increase our costs and reduce our margins. New regulations may also require the purchasing of new

equipment to perform newly required tasks, forcing us to either finance the purchase of new machinery or take money

out of retained earnings for the purchase.

Industry Risk

The risk of a competitor, such as All Green, expanding into the Northeast could affect our market share because of an

already established brand that businesses trust. Also there is a risk of a company like Waste Management, who doesn’t

currently deal with e-waste, moving into the market, which could also affect our market share because of the economies

of scale and presence in the other waste markets.

http://www.dec.ny.gov/docs/materials_minerals_pdf/ewastelaw2.pdf


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Selling Price Risk

The risk of fluctuating selling prices affects our ability to accurately forecast our revenue. This is because each material

being sold is assigned a quality level upon delivery to the customers each plastic, non-ferrous, and ferrous metal is given

a quality percentage (0-100%) and a price per pound is then determined.

Oil Price Risk

The risk of a price increase in oil would increase our cost of transportation for selling our inventory, ultimately reducing

our margins. On the other side, a decrease in the price of oil would affect the market for plastics because as oil prices

decrease the cost to recycle plastics increases and selling price for recycled plastics also will decrease.

Marketing

Market Analysis

Our target market consists of three niche consumers: the plastic purchasers, the non-ferrous metal purchasers and the

ferrous metal purchasers. At this point in time we are focusing in on companies located in the Northeast region and only

expanding into North America who want to purchase this recycled material, rather than mine it themselves


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Distribution Channels

Plastics

Plastics are the largest volume component of electronic scrap, called “e-plastics,” some of which contains brominated

flame retardants FR. Personal computers contain the most—as much as 2.62 lb. of FR agents in the cabinet and another

1.13 lb. in the circuit boards—according to a report from the Univ. of British Columbia, Vancouver, published in the

February issue of Resource Recycling magazine.13

Plastics can be divided into two general categories--thermoplastics and thermosets

Thermoplastics can be mechanically recycled (through application of heat and

pressure) into new manufacturing feedstock.

Thermosets cannot be mechanically recycled because of chemical bonds

binding the plastic molecules (monomers) together.

13 http://www.ptonline.com/articles/recycling-e-plastics-new-material-stream-brings-its-own-set-of-problems

Plastics

Non-Ferrous Metals

Ferrous Metals


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Thermoplastics

The resin types included in commodity grade plastics are identified in the resin coding system developed by the Society

of Plastics Industries (SPI) shown below:

Commodity Grade Plastics SPI Resin Codes

Polyethylene Terephthalate (PETE ) #1

High Density Polyethylene (HDPE) #2

Polyvinyl Chloride (PVC) #3

Low Density Polyethylene (LDPE) #4

Polypropylene (PP) #5

Polystyrene (PS) #6

Engineering Grade Plastics

Engineering grade plastics are recovered principally from two durable good waste streams: brown goods (computers and

electronics) and automobiles. Engineering grade plastics contain blended resins and/or additives that increase properties

such as chemical resistance, rigidity, and fire and impact resistance. The development of automated identification and

sorting technology has increased the economic competitiveness of postconsumer plastic recovered from these waste

streams. The following engineering grade plastics are covered in this marketing guide14:

Acrylonitrile-butadiende-styrene (ABS)

Polyurethane (PU)

Nylon

Polycarbonate (PC)

Thermoplastics Purchaser

Agilyx, located in Oregon is the first company in the world to effectively convert previously non-recyclable and low

value waste plastics into crude oil through a patented system that is environmentally beneficial. Their technology is

making a significant impact in the reduction of the disposal of non-recyclable waste plastics, while creating a new source

of domestic energy. Their proven technology provides an environmental and cost effective alternative while producing

high value low carbon intensity petroleum products.

Thermosets

Thermosets are the types of plastics that are non-recyclable. They are made from a type of plastic that is permanently

hardened by cooling. Thermosets are heavily cross-linked.

14 http://www.calrecycle.ca.gov/Plastics/Markets/Definitions.htm


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Thermosets Purchaser

AERT, located in Arizona since 1989, has pioneered the use of recycled polyethylene plastic in the manufacture of

composite building materials. With its constantly evolving portfolio of patented and proprietary recycling technologies,

AERT has been widely recognized as a leader in resource conservation innovation and received the EPA Award for

Environmental Excellence for its process of converting scrap plastic to composite outdoor decking.

Metals

Ferrous Metals

Ferrous metals and alloys contain iron; non-ferrous materials do not. There are several other factors that differentiate the

two.

Characteristics

Ferrous metals include mild steel, carbon steel, stainless steel, cast iron, and wrought iron. These metals are primarily

used for their tensile strength and durability, especially mild steel which helps hold up the tallest skyscrapers and the

longest bridges in the world. You can also find ferrous metals in housing construction, industrial containers, large-scale

piping, automobiles, rails for railroad and transportation, most of tools and hardware you use around the house, and the

knives you cook with at home.

Due to the high amounts of carbon used when creating them, most ferrous metals and alloys are vulnerable to rust when

exposed to the elements. While this isn’t true of wrought iron, which is so iron pure that it resists oxidization, or

stainless steel, which is protected thanks to its high chromium content, it’s a good rule of thumb that if you see rust, it’s

a ferrous metal.

Most ferrous metals also have magnetic properties, which makes them very useful in the creation of large motors and

electrical appliances. The reason you can tack your child’s artwork to the refrigerator with that magnet with the local

pizza place’s phone number on it? Ferrous metal.

More importantly, ferrous metals make up the most recycled materials in the world. In 2008 alone, 1.3 billion tons of

steel were produced, and 500 million tons of that was made from scrap materials. But we’ll get to why that’s important a

little later15.

Ferrous Metals Purchaser

Sims Metal Management, located in Frankfort, NY is the world’s leading metals and electronics recycler. They are global

leaders in the secure and sustainable management of resources for industry, organizations and the public-at-large.

15 www.altonmaterials.com/the-differences-between-ferrous-and-non-ferrous-scrap-metal/


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Today, Sims Metal Management has over 250 locations on five continents, and more than 6,000 employees. In addition

to its industry-leading metal recycling business, Sims Metal Management also operates the world’s leading electrical and

electronics recovery and recycling business, Sims Recycling Solutions, as well as Sims Municipal Recycling, which

handles curbside materials.16

Non-Ferrous Metals

Characteristics

Non-ferrous metals include aluminum, brass, copper, nickel, tin, lead, and zinc, as well as precious metals like gold and

silver. While non-ferrous metals can provide strength, they are primarily used where their differences from ferrous

metals can provide an advantage.

For instance, non-ferrous metals are much more malleable than ferrous metals. Non-ferrous metals are also much

lighter, making them well-suited for use where strength is needed, but weight is a factor, such as in the aircraft or

canning industries. Because they contain no iron, non-ferrous metals have a higher resistance to rust and corrosion,

which is why you’ll find these materials in use for gutters, water pipes, roofing, and road signs. Finally, they are also non-

magnetic, which makes them perfect for use in small electronics and as electrical wiring.

As far as recycling goes, aluminum is the third most recycled material in the world. However, many other non-ferrous

materials like copper, brass and lead are relatively scarce, and metallurgists rely heavily on scrap material recycling to

make new ones.

Non-Ferrous Metal Purchasers

Miller Scrap, located in Massachusetts for over 70 years Miller Recycling has helped find solutions to recycling and solid

waste related problems. They provide answers, through waste reduction, recycling, and implementation of efficient

processing systems.

Their professional management team has the industry experience necessary to properly provide you with the proposal

you desire. From marketing, brokerage, transportation to equipment design and installation, they are the choice for

overall service. They also own and operate a high capacity processing facility, equipped with vehicle scales, baling

systems, loading docks, and full rail car siding.

Schnitzer located in New York, NY is a global leader in the metals recycling industry. Founded in 1906, they collect,

process and recycle raw scrap metal (ferrous and nonferrous) and provide processed scrap metal to mills and foundries

around the world

16 http://www.simsmm.com/#sthash.OY0rJz6I.dpuf


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The Pricing Difference

For the most part, ferrous scrap metals tend to be in good supply, so the prices tend to be lower than most non-ferrous

metals. Because steel and iron alloys are constantly being recycled in high volume all over the globe, the prices for these

materials stay fairly constant on a month-to-month basis, dropping or raising only slightly. Non-ferrous scrap, as we

mentioned before, are somewhat harder to come by and more difficult to create. This makes the demand higher, which

drives up the price per pound higher than ferrous metals. While aluminum prices don’t fluctuate often due to recycling

efforts, others like copper and brass can change drastically in just a month’s time depending on the needs of the

market17.

Pricing

In order to gauge the selling price per pound for scrap metals and plastics we used a market-based pricing technique.

Market-based pricing can be determined two ways: 1) demand-based pricing, or 2) competition-based pricing. Demand-

based pricing is directly affected by the need for such metal or plastic, the higher the demand the higher the price per

pound will be and vice-versa if demand is low the price per pound will decrease. Competition-based pricing is set

according to the prices offered by competitors of identical and substitute products. Our selling prices will mainly be

determined on site by our customers based upon the quality grading of the mined scrap metal or plastic from the e-

waste. In determining a price pound for our sales revenue we took the average selling price per pound for the most

common metals and plastics found in e-waste materials and the result was an average price per pound equal to $1.25.

17 http://www.altonmaterials.com/the-differences-between-ferrous-and-non-ferrous-scrap-metal/


22

Operations

Key Mechanisms

Startup Activities

The following flowchart depicts the startup activities of the organization.

The following image is a digital rendering of the WEEE Recycling facility.


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Ongoing Activities

The following flowchart depicts our machineries recycling process. Other than recycling, other ongoing activities including seeking new customers and suppliers, maintaining relationships with current customers and suppliers, advertising/marketing, machinery upkeep, staff training, and other normal business activiites.


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Development Plan The image below depicts WEEE Recycling developments, starting with inception in quarter 2 / 2015 to opening of the facility in quarter 2 / 2017.

Q2/2015

Research and Proof of Concept

Q3/2015

WEEE Recycling Founded

Q4/2015

First Round of Investments

Q1/2016

Second Round of Investments

Q3/2016

• Construction Begins

• Foundation and Framing

Q1/2017

• Machinery Installation

• Operational Checks

Q2/2017

WEEE Recycling Facility Opens


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Funding Required

Equipment Price

Super Chopper SC 141218 $439,140

v700 Single Shaft Vertical Ring Mill Shedder

$20,000

Overband Electromagnetic Separator (2)

$16,000

Eddy Current Separator (2) $60,000

Heavy Duty Granulator $11,000

Multi Purpose Rasper $50,000

ZY-200 Fine Scrap Granulator $10,000

Separation Table (2) $4,000

Water Separation Table $1,898

Total Equipment Cost $612,038

Direct Labor & Machine Cost Year 1

$155,525

Factory Overhead Year 1 $308,753

Selling & Administrative Cost Year 1

$258,134

Estimated Total Year 1 Financing Required

$1,334,450

Multiplier 1.05

Requested Initial Funding $1,401,173

Round 1 Investment

New York State has many grant programs such as, Innovate NY Fund (Cayuga Ventures is a local participant in

program), which are designed to help startup companies get access to initial funding. This is where we would seek our

first round of funding to reduce the amount needed to be financed through debt or equity. There are also grant

18 http://recyclingmachineryinternational.com/content/eldan-super-chopper-1412


26

opportunities for new construction of LEED certified buildings and for the installation and use of solar panels, if we

select to build our own facility from the start.

Round 2 Investment

After the grant awards are factored in, if any, we are seeking the remaining amount of $1.4 million in convertible debt at

an interest rate between 10% - 13%. Convertible debt gives us the ability to avoid placing a valuation on our business at

such an early stage and allow us to determine a set date in the future when the debt can be converted into an equity

share of WEEE Recycling. Finally, since convertible debt is expected to be converted into equity at the end of life it

allows us to avoid repayment of the principal amount financed.

We would also consider a royalty deal at 2% of sales until the $1.4 million is repaid and an additional 1% until an

additional $600,000 is paid. This would allow us to not part with any equity in the business and maintain full control of

operations. This construct however is not ideal because it would force us to part with money that could be reinvested

into the development of the company.


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Financials

Revenue Projections

Cell Phone Computer & Laptop

Tablet Television (households)

MP3

NY Population (2014) 19750000 19750000 19750000 7234743 19750000

Percentage of Adults 77% 77% 77% 2.93 (TVs per Household)

77%

Number of Adults in NY State

15,148,250 15,148,250 15,148,250 21,197,797 15,148,250

Percentage of Ownership

90% 76% 42% 97% 47%

Number of Devices in NY State

13,633,425 11,512,670 6,362,265 20,498,270 7,119,678

Annual Replacement Percentage (Once

every 4 years)

25% 25% 25% 25% 25%

Annual Replacement per Device

3,408,356 2,878,168 1,590,566 5,124,567 1,779,919

Item LBS. of Scrap per Item

Number of Items in NY

State

Estimated LBS. of Scrap

in NY State

Price per LBS. of Scrap

Estimated Revenue per Item

Laptop & Computer 0.1875 2878168 539,657 $1.00 $539,657

Cell phone 0.015 3408356 51,125 $1.00 $51,125

Televisions 2 5124567 10,249,134 $1.00 $10,249,134

Tablet 0.02 1590566 31,811 $1.00 $31,811

MP3 0.015 1779919 26,699 $1.00 $26,699

Total Estimated Revenue

$10,898,426

Expected Value Probability Estimated Revenue

Expected Revenue

Boom Economy 15% $14,167,954 $2,125,193

Normal Economy 70% $10,898,426 $7,628,898

Bare Economy 15% $8,173,819 $1,226,073

Total Expected Value for E-Waste Market

$10,980,164

Market Share Estimated Percentage

6%

Year 1 Expected Revenue

$686,260


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Sales Budget

Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year 1 Year 2 Year 3 Year 4 Year 5

Sales in LBS. of Scap

68626 137252 205878 274504 686260 724,004 763,825 805,835 850,156

Price per LBS. of Scrap

$1.25 $1.25 $1.25 $1.25 $1.25 $1.25 $1.25 $1.25 $1.25

Total Sales Revenue

$85,783 $171,565 $257,348 $343,130 $857,825 $905,005 $954,781 $1,007,294 $1,062,695

Production Budget

Quarter 1

Quarter 2

Quarter 3

Quarter 4

Year 1 Year 2 Year 3 Year 4 Year 5

Budgeted Sales in

LBS.

68626 137252 205878 274504 686260 724004 763825 805835 850156

Add: Desired Ending

Inventory

13,725 20,588 27,450 72,400 72,400 76,383 80,584 85,016 89,691

Units Needed

82351.2 157839.8 233328.4 346904.4 758660.4 800386.5 844408.5 890850.6 939847.458

Less: Beginning Inventory

0 13,725 20,588 27,450 0 72,400 76,383 80,584 85,016

Budgeted Production

in LBS.

82,351 144,115 212,741 319,454 758,660 727,986 768,026 810,267 854,832


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Direct Labor and Machine Budget

Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year 1 Year 2 Year 3 Year 4 Year 5

Budgeted Production

82351 144115 212741 319454 758660 727986 768026 810267 854832

Direct Labor

Hour per LBS.

0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01

Direct Labor

Needed

824 1,441 2,127 3,195 7,587 7,280 7,680 8,103 8,548

Hourly Rate

$9.50 $9.50 $9.50 $9.50 $9.50 $9.75 $10.00 $10.25 $10.50

Direct Machine Hour per

LBS

0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01

Direct Machine

Hours Needed

824 1,441 2,127 3,195 7,587 7,280 7,680 8,103 8,548

Hourly Rate

$11.00 $11.00 $11.00 $11.00 $11.00 $11.00 $11.00 $11.00 $11.00

Total Direct

Labor Cost

$16,882 $29,544 $43,612 $65,488 $155,525 $151,057 $161,285 $172,182 $183,789


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Overhead Budget

Rate per

DMH

Quarter 1

Quarter 2

Quarter 3

Quarter 4


Total Direct Machine

Hours

824 1441 2127 3195 7567 7280 7680 8103 8548

Variable Overhead

Supplies $0.17 $140 $245 $362 $543 $1,286 $1,238 $1,306 $1,378 $1,453

Utilities $12.00 $9,888 $17,292 $25,524 $38,340 $90,804 $87,360 $92,160 $97,236 $102,576

Transportation $0.32 $264 $461 $681 $1,022 $2,421 $2,330 $2,458 $2,593 $2,735

Maintenance $0.25 $206 $360 $532 $799 $1,892 $1,820 $1,920 $2,026 $2,137

Total Variable Overhead

$10,498 $18,358 $27,098 $40,704 $96,404 $92,747 $97,843 $103,232 $108,902

Fixed Overhead

Depreciation $21,943 $21,943 $21,943 $21,942 $87,771 $87,771 $87,771 $87,771 $87,771

Plant Rent $25,000 $25,000 $25,000 $25,000 $100,000 $100,000 $100,000 $100,000 $100,000

Supervisor Salary

$6,750 $6,750 $6,750 $6,750 $27,000 $27,500 $28,000 $28,500 $29,000

Total Fixed Overhead

$53,693 $53,693 $53,693 $53,692 $214,771 $215,271 $215,771 $216,271 $216,771

Total Factory Overhead

$64,191 $72,051 $80,791 $94,396 $311,175 $308,018 $313,614 $319,503 $325,673


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COGS Budget

Quarter 1

Quarter 2

Quarter 3

Quarter 4


Beginning Inventory

$0 $13,725 $20,588 $27,450 $0 $75,619 $78,972 $85,016 $90,588

Direct Labor & Machine

Used

$16,882 $29,544 $43,612 $65,488 $155,057 $151,057 $161,285 $172,182 $183,789

Factory Overhead

$64,191 $72,051 $80,791 $94,396 $311,175 $308,018 $313,614 $319,503 $325,673

Cost of Goods

Manufactured

$81,073 $101,595 $124,403 $159,884 $466,232 $459,075 $474,899 $491,685 $509,462

Cost of Goods

Available For Sale

$81,073 $115,320 $144,991 $187,334 $466232 $534,694 $553,872 $576,701 $600,049

Less: Ending Inventory

$13,725 $20,588 $27,450 $75,619 $75,619 $78,972 $85,016 $20,588 $20,588

Cost of Goods Sold

$67,348 $94,732 $117,541 $111,715 $390,613 $455,722 $468,856 $556,113 $579,461

Selling and Admin Budget

Quarter 1

Quarter 2

Quarter 3

Quarter 4


Marketing (7.5% Sales Revenue)

$5,147 $10,294 $15,441 $20,588 $51,470 $53,757 $56,141 $60,438 $64,399

Administrative Salary $22,500 $22,500 $22,500 $22,500 $90,000 $90,000 $90,000 $90,000 $90,000

Shipping/Transportation ($0.17 per LBS Sold)

$11,666 $23,333 $34,999 $46,666 $116,664 $123,081 $129,850 $136,992 $144,527

Total $39,313 $56,127 $72,940 $89,754 $258,134 $266,838 $275,991 $287,430 $298,926


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Cash Receipts and Cash Disbursements

Quarter 1 Quarter 2 Quarter 3 Quarter 4

Sales $85,783 $171,565 $257,348 $343,130

Cash Receipts

50% — Same Month $42,892 $85,783 $128,675 $171,564

50% — 1 Month Lag $28,594 $71,486 $114,378 $157,268

Total Cash Receipts $71,486 $157,269 $243,053 $328,832

Cash Disbursements

Direct Labor & Machine (Paid Same Month)

$16,882 $29,544 $43,612 $65,488

Variable Overhead (Paid Same Month) $10,498 $18,358 $27,098 $40,704

Fixed Overhead (Paid Same Month) $53,693 $53,693 $53,693 $53,692

Selling & Administration (Paid Same Month)

$39,313 $56,127 $72,940 $89,754

Interest on Long-Term Debt $42,000 $42,000 $42,000 $42,000

Tax Installment (Paid Annually) $0

Total Cash Disbursement $162,386 $199,722 $239,343 $291,638


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Cash Budget

Quarter 1 Quarter 2 Quarter 3 Quarter 4

Cash Balance, Beginning $1,400,000 $575,062 $410,608 $292,318

Less: Equipment Purchase (One-time)

Add: Cash Receipts $71,486 $157,269 $243,053 $328,832

Total Cash Available for Needs $859,448 $732,330 $653,661 $621,149

Less: Cash Disbursements $162,386 $199,722 $239,343 $291,638

Minimum Cash Needed $10,000 $10,000 $10,000 $10,000

Total Cash Needed $172,386 $209,722 $249,343 $301,638

Cash Excess or Deficiency $687,062 $522,608 $404,318 $319,511

Financing

Borrowing, Beginning $1,400,000 $1,350,000 $1,300,000 $1,250,000

Borrowing $0 $0 $0 $0

Repayment $50,000 $50,000 $50,000 $50,000

Interest Expense $42,000 $42,000 $42,000 $42,000

Borrowing, Ending $1,350,000 $1,300,000 $1,250,000 $1,200,000

Cash Balance, Ending $575,062 $410,608 $292,318 $207,511


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Pro Forma Statements

Income Statement

Balance Sheet


35

Break-Even Analysis

UNITS

SOLD

SALES TOTAL

COSTS

PROFIT/LOSS

0 $0 $214,771 -$214,771

Fixed Costs $214,771 15,000 $18,750 $217,771 -$199,021

Variable Cost

per Unit

$0.20 30,000 $37,500 $220,771 -$183,271

Unit Price $1.25 45,000 $56,250 $223,771 -$167,521

Unit Increments 15,000 60,000 $75,000 $226,771 -$151,771

BREAK-EVEN

POINT 204,544 75,000 $93,750 $229,771 -$136,021

90,000 $112,500 $232,771 -$120,271

105,000 $131,250 $235,771 -$104,521

120,000 $150,000 $238,771 -$88,771

135,000 $168,750 $241,771 -$73,021

150,000 $187,500 $244,771 -$57,271

165,000 $206,250 $247,771 -$41,521

180,000 $225,000 $250,771 -$25,771

195,000 $243,750 $253,771 -$10,021

210,000 $262,500 $256,771 $5,729

225,000 $281,250 $259,771 $21,479

240,000 $300,000 $262,771 $37,229

255,000 $318,750 $265,771 $52,979

270,000 $337,500 $268,771 $68,729

285,000 $356,250 $271,771 $84,479

300,000 $375,000 $274,771 $100,229

315,000 $393,750 $277,771 $115,979

330,000 $412,500 $280,771 $131,729

345,000 $431,250 $283,771 $147,479

360,000 $450,000 $286,771 $163,229

375,000 $468,750 $289,771 $178,979

390,000 $487,500 $292,771 $194,729

405,000 $506,250 $295,771 $210,479


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Miscellaneous Documents

This is a pamphlet that we would give to our local communities to increase awareness and support to recycle their e-

waste. In tandem with this effort we will have social media accounts on Facebook, Instagram and Twitter to maintain

connections with our “suppliers”. Using these social media outlets we will increase awareness to the destruction that e-

waste is bringing to third world countries, and our own country. Instagram post will consist of educational but also

factual information about our operations, with frequent videos of computers and electronics being chopped up, because

who doesn’t like to watch things being smashed into millions of pieces?! This will keep our company attached to our

core values and missions to help better our communities and earth.


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