Ekonomie 2B

Exam paper for second semester: Ekonomie 2

The opportunities and value-adding activities of buy-back centres in South Africa's recycling industry : a value chain analysis

Abstract : With only approximately 10 per cent of recyclables in South Africa being recycled, it is important to assess the opportunities for small, medium and micro-enterprises in the recycling industry. This paper investigates the entrepreneurial opportunities and value- adding activities of buy-back centres (BBCs) in the recycling industry. Using Porter’s firm-level value chain framework as theoretical framework for this analysis, a concurrent mixed method design was used to collect information from 67 BBCs across South Africa by means of face-to-face interviews, accompanied with a questionnaire with open-ended and close-ended questions. BBCs’ competitive advantage is that they have the facilities to add value to the recyclables according to the recycling industry’s standards and specifications. To be viable, they need to attract large and sustainable volumes of recyclables, which often poses a challenge. Increased volumes of recyclables can translate into more jobs and income earning opportunities at all hierarchical levels in the recycling industry. A recycling model that increases the volumes of recyclables recovered by BBCs through informal sector activities is proposed. Such a model should facilitate changing citizen behaviour and implementation of, among others, responsible separation at source programmes to increase the volumes of cleaner recyclables. Increased supplies of recyclables should, however, be accompanied by an increase in the demand for products 3 made from recyclables, to absorb the increased supply. South Africa’s unemployment is too grave and the amount of waste generated too voluminous to miss out creating value where otherwise there will be only direct and indirect cost for society