Business case

Executive Summary

The production patterns, changing consumption and economic growth have resulted in the rapid generation and use of plastic materials. The world’s consumption of plastic has increased tremendously, thus more resources needed to meet the demand. However, the increase in plastic consumption does not match the recycling and waste management efforts. As a result, most of the plastic materials are not properly collected or disposed of in an appropriate manner to negative effects on the environment and public health. Hence, plastic waste recycling provides an opportunity to collect and dispose of waste in an environmental friendly way. Environs plastic recycling company will deal in the collection, consolidation, stocking, processing, distribution and sale of plastic waste and plastic products. The company aims to build a long history of unparalleled service in the plastics processing industry; from small molders, extruders, and scrap collectors to global corporations. The business will build relationships other companies to provide the company with the capability to provide companies throughout America with outstanding service and competitive prices. We desire to use the business opportunity to show how materials, pricing and staff can be the strongest link in a sustainable plastics industry. The company will engage in the following process from the collection until the products are turned into something new. The recycling process will be applicable to a range of plastic items such as plastic containers, plastic bottles, plastic pipes and other thermoplastics. However, the functioning of a business can be disrupted at a point in time and may have a significant impact as the business is disrupted. Such disruptions may have a significant result on the operation and performance both in the short run and in the long run. Different measure will be taken to mitigate the risks associated with these types of projects. The project will be built under the Cost type contracts. Environs plastic company will be financed using debt and equity. The company will raise funds from the share offer to finance its expansion strategy.

Introduction

Plastic Recycling involves the process of recovering waste plastic for the purpose of reprocessing the material into more useful products. At times, the craps are processed into completely different products from their original state. Apart from the commercial interest, recycling forms part of global efforts to reduce plastic in the waste stream given that they are not normally biodegradable. Among recyclable products, plastic recycling is the easiest and most important as it does not undergo degradation like other organic materials Plastic recycling companies have played significant roles in products. Environ Plastic recycling company will operate as a full-service thermoplastic recycler that will be based in the United States. The firm will specialize in the purchase, the collection, consolidation, stocking, processing, distribution and sale of plastic waste and plastic products sale, purchase, and processing of quality post industrial and post consumer material. The company will provide full-service recycling services and products for large publically traded companies, government agencies, mid-size & small companies and individuals.

General project information

Plastics are polymers that comprise smaller units of monomers joined together through the process of polymerization. In general, polymers contain hydrogen and carbon elements and other elements such as fluorine, chlorine, nitrogen, and oxygen. These plastics often contain additives to improve their performance. The type of polymer; synthetic and semi-synthetic plastics determines whether it can be designed or modified.

The types of plastics that can be repeatedly softened and melted are known as thermoplastics. Heat can be applied to melt them and are later solidified into new shapes or new products upon cooling. Of the total post- consumer plastics waste, in thermoplastics constitute the largest percentage. Environ plastic recycling company will be involved in the collection of thermoplastics for processing. The availability of the materials provides a strategic business opportunity given that raw materials will be easily accessible. The company will engage in the following process from the collection until the products are turned into something new. The recycling process will be applicable to a range of plastic items such as plastic containers, plastic bottles, plastic pipes and other thermoplastics.

Collection

The logistic department will be involved in the collection of available recyclable plastic material in their area, such as from special recycling bins, roadside collections or even directly from industries. In this way, both post-industrial plastic and post-consumer items will be gathered.

Manual sorting

All collected items will be sorted into various plastic types by indicating those using plastic recycling symbols and codes. The process will also ensure that unwanted non-plastic materials found will be promptly taken out.

Chipping

After sorting, the resulting plastic products will then be prepared for melting by being chipped into tiny pieces. The plastic items will then be fed into a machine with sets of blades to slice through the material and turn the plastic into tiny bits.

Plastic bags go through the same process as other plastic products. However, they are chopped rather than chipped. The chopped shreds are then melted down in the pelleting stage.

Washing

Washing will be the third process in recycling where the removal of various contaminations and all residues of products originally contained in the plastic items. A particular wash solution consisting of cationic detergent with alkaline dissolved in water will be used to wash effectively all the contaminants in the plastic material. The washing process will ensure that all the plastic bits will be clean and ready for the final step. During the process, the wash tank agitator will serve as an abrasive important for stripping any labels from the adhesive and shredding any paper in with the material. The alkaline, the cationic detergent will be used since plastic materials are characterized by the positive surface charge. Only positively-charged chemical compounds such as cationic detergents can effectively clean them, and remove grease and dirt from the surfaces of plastic materials.

Pelleting

The last step in the process will involve melting down the cleaned and chipped pieces of plastic. The plastics will then be put through an ‘extruder’ machine at this stage of the recycling process. The purpose of the extruder will be to shape the melted plastic into thin noodle-like tubes. A set of rotating knives will be used to cut the plastic tubes into small pellets. The thin pellets will then be reused and remade into new items.

High-level business impact

The functioning of a business can be disrupted at a point in time and may have a significant impact as the business is disrupted. Such disruptions may have a significant result on the operation and performance both in the short run and in the long run. For example, a power outage lasting a few minutes can result in a minor inconvenience for most businesses; however, one lasting for hours can result in significant business losses. In the plastic recycling industry business, a short duration disruption has high impacts as a result of the high demand linked to plastic materials by individual customers and corporate customers. There are several operational and financial impacts resulting from the disruption of business functions and processes. Disruptions caused by power supply, market conditions, natural disasters and other calamities will more likely impact in terms of lost sales and income, delayed sales and income, Increased expenses, Regulatory fines Customer dissatisfaction or defection and Contractual penalties.

The demand for recycled plastic products has increased with the rising awareness of the need to recycle plastics. The recycling industry overview shows that the industry has become more profitable in the past decade. Plastic scrap recycling reduces production costs and saves natural resources particularly amidst the rising costs of petroleum. A recycling plastic business integrates the services of a recycling plant, scrap suppliers, shipping facilities and buyers of the end product. Many Recyclers have a preference for direct purchases from larger suppliers. A successful recycling plastic business requires the uninterrupted supply of scrap plastic. A business impact analysis reveals the business consequences in lost hours, customer confidence and revenue and profits.

Environ plastic recycling company will stay in business by having reliable sources for scrap plastic. The company will be a shrewd scrap plastic buyer and will have multiple collection locations. The company will have different sources and monitor the market prices for operation costs. The plastic recycling business appeals to environmentally minded businesses. Environ Plastic recycling company will offer a guaranteed price for post-consumer scrap plastic and work directly with local and regional solid waste haulers. As many businesses are turning green, the line of business is very profitable. However, the plastic recycling business has become increasingly competitive with a growing international presence in America. Recycling is cost-effective as numerous industries depend upon synthetic materials. Increased demand has created a more competitive pricing structure for scrap plastic. Due to significant volatility in the plastic recycling market, a shortage of plastic materials and subsequent price spike may be experienced.

A further obstacle to recycling is the Plastics items made up of different materials that cannot be sensibly separated. These obstacles whose residues are difficult to remove entirely result in the problems that arise from post-consumer film wastes and thus require laborious treatment. Non-beverage bottles pose further challenges as they are made of PET in a huge variety of types, which have limited recoverability.

Various movements have been against the manufacture of plastics as they pose serious, proven health concerns. Even though no law restricts the production of plastics so far, such laws are likely to be enacted in future. Given that Environ Plastic Recycling will fully rely on plastics as raw materials for the recycling process, the move will likely cause the closure of the business. What makes plastic attractive to consumers and manufacturers alike is the limitless ways that plastic can be put into use. Plastics can be made into any shape, size, color and texture. It can be light or heavy, It can be flexible or hard and can even be given it a scent. However, the properties also what make them harmful to the environment and health. Plastics contain harmful chemicals in the form of lubricants, plasticizers, stabilizers pigments among others. Currently, in the United States, their over 82,000 synthetic chemicals register for use in commerce. The law that regulates industrial chemicals in the U.S. under the Toxic Substances Control Act together with the Environmental Protection Agency has required safety testing for a few substances. The body has been previously banned from plastic manufacturing several including polychlorinated biphenyls asbestos and dioxin. However, it does not mean the rest are entirely safe. To compound matters, testing typically engages one chemical at given time but various problems may occur only when various chemicals interact in the manufacturing process. This can happen during the recycling process when they are melted down.

For plastics recycling to work, Environ plastic recycling must be able to collect cost-effectively and sort plastics. The cost of operation of the plastic recycling will vary depending on factors beyond the company’s control. Being a start-up, the business will also take longer to penetrate into the market and secure a market share. Just like any new business, extra marketing, and promotional efforts will be required for the business.

Alternatives and analysis

The business alternative will be to engage in other material recycling to ensure its survival. Given that plastic manufacturing is a new technology, manufacturers are constantly improving it. New types of material are being used to optimize its characteristics for use in particular products. Bio-based plastics are also becoming more extensively used. Today, many recycling businesses are recycling plastics from durable goods such as fridges and cars. In fact, one of the Today's plastics recycling challenge includes trace amounts of heavy metals. By combining plastic recycling and metal recycling, environ Plastic recycling will be able to diverse its operations and reduce the cost of operation.

By engaging in different types of recycling, Environ Plastic Company will be able to expand its operations by adding products, markets and stages of production to the existing business. The company will enter a line of business a bit different from its core operations.

The Large size will lead to economies of scale because production and Marketing synergies may result from more efficient use of longer production runs and reduced changeover time. Additionally, the Learning and experience curve effects will likely produce lower costs as the company gains experience in manufacturing and distributing its products. Large size and Experience may also lead to improved gains in labor efficiency, more qualified staff departments’ layout and redesign of products or production processes. Lower average unit costs will result from the firm's ability to spread expenses over a larger unit volume such as administrative expenses and other overhead costs.

Preferred solution

Financial consideration

Environ plastic company will be financed using debt and equity. The company will raise funds from the share offer to finance its expansion strategy. At the beginning, debt finance will be used due to the owners’ limited financial capabilities for the capital intensive business. Equity financing will be preferable for the expansion projects as the funding is committed to the business and the intended projects. In addition, investors will only realize their investment if the business is doing well. It will not be necessary to keep up with the costs of servicing or debt finance, allowing the business to use the capital for operational activities.

Preliminary acquisition strategy

The project will be built under the Cost type contracts. The choice of contract type was advised by the performance risks not easily quantified and the impossibility of requirements that cannot be accurately defined. The types of contracts will require the contractor to deliver his "best effort" to provide the needed services. Reasonable, allowable, allocable costs will be refunded up to the total estimated amount agreed. The amount will represent an estimate of total costs. The type of contract supports the most effective way to achieve the goals of the company. Different measures will be taken to select the right contractor and incentive structure that will best deliver goals.

Preliminary works breakdown structure

level

Element

Time

1

Implementation of project management system

2 months

2

Initiation

1 month

3

Project charter development

1 week

4

Approval of project charter

1 day

5

Planning

2 months

6

Preliminary scope statement creation

1 week

7

Determination of project team

4 months

8

Develop project plan

2 months

9

Execution

1 years

10

Validate user requirements

3 months

11

User training

3 months

12

Risk management

Assumptions and constraints

The first assumption is that the government will approve the operation of the project. The project also assumes there will be enough markets for plastic products to maintain its operations. The first constraint relates to startup capital.

References

Haig, S., Langley, M., & Morton, R. (2015). What should we do with waste plastic?. TCE: The Chemical Engineer, (884), 38-41.

• zkan, K., Ergin, S., I??k,?., & I??kl?,?. (2015). A new classification scheme of plastic wastes based on recycling labels. Waste Management, 3529-35.

Miller, Soulliere, Tseng, & Tam, E. (2014). Challenges and Alternatives to Plastics Recycling in the Automotive Sector. Materials (1996-1944), 7(8), 5883-5902.

Jones, A. (2008). So you want to set up a new business?. Chemistry In Australia, 75(6), 24-27.

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