Polysmart Packaging will switch on Phase 1 of its $60m recycling plant at Mowe, on the Lagos-Ibadan Expressway, this Thursday, 29 October. At full speed it can take in up to 100,000 tonnes of used PET bottles a year and turn out 60,000 tonnes of food-grade rPET, plastic clean enough to go back into a drinks bottle.
That's a big claim for a Nigerian recycler. The company calls it the largest facility of its kind in Africa. The machines come from European suppliers EREMA, SOREMA and TOMRA, and the processes are built to meet US FDA and European food-contact standards.
The maths on imported resin
Nigeria uses about 600,000 tonnes of virgin PET a year, by Polysmart's estimate. If the plant hits full capacity, its 60,000 tonnes of food-grade output would cover 10% of that (STATART calculation). The company puts the foreign exchange saving at about $72m a year. If that holds, the plant saves 1.2x its own cost every 12 months (STATART calculation).
Bottle grade isn't the only output. Another 20,000 tonnes of other recycled plastics comes out the back, so 80% of what goes in leaves as something Polysmart can sell (STATART calculation).
Feeding the machine
Supply is the hard part. 100,000 tonnes a year works out to about 274 tonnes of bottles every single day (STATART calculation). Polysmart runs 25 aggregation centres across 8 states today and plans 250 more across all 36 states within 2 years, which would make its collection network 11x bigger.
The company expects about 1,000 direct jobs and more than 50,000 indirect ones in collection, transport and processing. On direct jobs alone, that's roughly $60,000 of investment per job (STATART calculation).
Lenders have some reason to trust it. In a statement reported on 25 October, Polysmart said it had repaid all 4 series of its ₦4bn non-interest commercial paper programme, ₦5.71bn in total, and settled the last one before its 21 October maturity.
For bottlers facing Nigeria's Extended Producer Responsibility rules, food-grade rPET made in Ogun State is a cheaper headache than imported resin. Watch how fast Polysmart grows past its 25 collection centres, because the plant only pays off if the bottles keep arriving.
Figures are as reported at the time of writing. STATART news is written by Frank Brother (Markets), Christina Amgbari (Insights) and Ebipadei Joseph (Lifestyle), and checked before publication.