Nigerian entrepreneur discusses the ups and downs of the waste recycling business
Recyclan is a waste recycling company with operations in Nigeria, Ghana, Cameroon, Togo, Benin and Uganda. It buys locally recovered waste, which is then crushed and exported to international markets, where it is sold to packaging companies. Recyclan was started in 2018. Co-founder Chime Okwuokenye (27) answers our questions.
1. Give us your elevator pitch
Recyclan is a pan-African plastic recycling company. Our mission is to resell 100% of plastic waste, add value to it, meet the increasing demand for recycled and sustainable plastic, and earn a profit while doing so. We want to make the world more habitable and provide better livelihoods in the informal sector.
2. How did you finance your startup?
So far we have been financed by personal funds, family and friends.
3. If you were given $1 million to invest in your company now, where would it go?
Some 70% of it would go into working capital to enable us to recover more waste through our supply chain. The remaining 30% would go towards capital expenditure to buy more equipment – such as baling machines and crushers – to increase our production capacity.
4. What risks does your business face?
We are exposed to the general risk of doing business in Africa, such as inconsistent policies that change all the time. In terms of regulatory risks, the waste management regulations are different in each country and municipality.
What we do is also new so you have to educate members of the value chain that it’s for their benefit.
In addition, we face financial risk, which basically means running out of money. I will give you a scenario of something that happened. We bought a lot of goods but as we were ready to ship, the vessels cancelled. That affected our cash flow and put us in a position where we almost had to shut down production. There are often situations where we have a lot of cash tied up in the business.
Another risk is price volatility, both for our raw materials (waste) and finished processed commodities (recycled waste).
The Covid-related lockdowns also impacted our supply chain. Although we are regarded as an essential service provider, not everyone in our supply chain could work efficiently.
5. So far, what has proven to be the most successful form of marketing?
Our business is B2B, so the type of marketing we do is mostly based on referrals within our existing network. We do not do active marketing because there is more demand than we can supply. It’s mostly referrals and companies reaching out to us.
6. Describe your most exciting entrepreneurial moment.
The day we loaded our first container. This business was a dream, so it was surreal when we loaded our first container. It was going to Valencia port in Spain. Since then it has only been challenges; more challenges than excitement.
7. Tell us about your biggest mistake.
My biggest mistake was setting up a business without a proper finance structure from the first day. It has made me understand that the first person to hire in a business is the CFO. It’s the CFO who should determine who else you hire and what else you do with the numbers.
Many small companies in Africa are basically one-man businesses. Everything is built around the founder who has full financial control over the business. However, the moment you set up proper finance structures, with management accounts and audited books, it’s easier to raise capital and plan for business growth.
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