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If you collect recyclable materials, it’s tempting to sell to whoever offers the highest price. But getting a high price won’t mean much if the payment never arrives on time. In the recycling industry, delayed payment can choke cashflow, stop collections and limit business's ability to consistently purchase valuable recyclable material.
For clarity in this blog, we refer to the supplier as the person or business that collects or purchases recyclable material (i.e. paper, cardboard, plastic, cans, etc. See our waste classification guide) from waste collectors, households or companies, and sells it in bulk to buyers. The buyer is the business that purchases recyclable material, bales and then sells them on to a mill or recycling plant. We’ll explore how on-time payment keeps both suppliers and buyers open and the circular economy alive.
Getting paid on time is not a bonus, it’s the foundation of good business. It builds trust and ensures suppliers and waste collectors keep coming back.
Recycling is often dismissed as “informal”, but it operates like any other sector. There are contracts, investments, markets and risks to manage. Buyers set what’s called a gate price, the rate paid for recyclable material delivered to site based on market value and supply conditions such as stockpiling.
Price alone, however, doesn’t sustain the system or the industry. The principle of paying waste collectors and suppliers on their agreed terms does two things:
When suppliers are paid on time, they can cover wages, running costs, collections, etc. That steady cashflow allows them to keep selling, while ensuring buyers have the material they need. Like any other industry, recycling cannot afford delays.
At Mpact Recycling, we understand the importance of getting paid on time. We run a tight ship, so we can pay our suppliers on time.
We are part of the Mpact Group, one of South Africa’s leading paper and plastics packaging businesses. Collecting and buying recyclable materials from waste collectors, buy-back centres, dealers and other suppliers through our 14 branches across South Africa. Here, the material is baled and stored before being sold and delivered to paper mills, including Mpact’s three paper mills, which manufactures recycled-based paper for packaging, and other recyclers and convertors of other grades of material.
We work directly with the mills and recycling plants that buy our material, so we know exactly what they need and when. This is how we set market related prices for our suppliers so they can get paid on time, waste collectors always have a place to sell their material, and recyclable packaging stays out of landfill.
The Mpact Group has built one of the most complete circular value chains in South Africa. We have physical branches that buy recyclables from the collection industry. These materials are processed at our paper mills and plastics recycling plants. From there, our packaging manufacturers use the recovered material to make new packaging and products. Our on-site waste management services help businesses close the loop by diverting recyclables from landfill. As an added value we also offer alternative diversion streams for organic, hazardous and e-waste. This system keeps resources in use for longer, reduces pressure on the environment and supports jobs across the value chain. In a previous blog we explained how the circular economy works in South Africa. Read it here if you would like the bigger picture.
By mid to late 2019 the recycling industry was already struggling. Too much material had entered the market and supply far outweighed demand. Recycling businesses and buyers responded by dropping prices and in some cases stopping purchases altogether.
When the COVID-19 lockdowns began in 2020, many recycling businesses could not get the permits needed to operate. This initially worked in the industry’s favour because it allowed businesses to reduce the stockpiles (a build-up of material that’s been collected but not yet used or sold) that had built up during the oversupply period.
Once those stockpiles ran out, the situation reversed. Instead of too much material in the system there was not enough to feed the mills and recycling plants.
During this period, Mpact Recycling was forced to place our suppliers on volume quotas for the first time ever however, we were also classified as an essential service and stayed open under strict safety rules. So, we kept buying material and we honoured agreed payment terms. That kept cash moving through the system, helped suppliers stay afloat, and ensured that recyclable material was stored and managed until demand recovered. At the same time, packaging volumes increased as online sales in South Africa rose by 66% in 2020, which made it even more important to keep material moving.
When restrictions eased later in 2020 our suppliers were still in business and waste collectors, recognised as essential workers under Lockdown Level 3, were able to start collecting again. The circular economy was able to restart quickly because payments had continued, and material had kept flowing.
If you are a supplier, buy-back centre or waste collector, the healthiest buyer relationship is about more than the price on the scale ticket. Here are five things to look for before deciding who to sell to:
If you have any other questions, contact your nearest Mpact Recycling branch and ask for the dedicated branch manager: https://mpactrecycling.co.za/branches
Consistent, reliable payment will always outweigh the occasional big payout. A quick win is simply not sustainable. Partner with Mpact Recycling, sell to us, and see the difference on-time payments can make for your business, staff and the environment. The circular economy depends on it.
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