Commercial Recycling

STRATEGIC PLANNING / PROCESS IMPROVEMENT
BACKGROUND

A Middle East-based waste paper recycling business, engaged in processing mix paper waste, packaging, and shipping recycled material to international clients. The raw material is sourced through various forms, including local pick up, local bulk purchases, and some regional purchases.

THE BRIEF

Waste paper sales and trading is a global business, where sales and raw material price changes occur frequently. Sales are based on current and projected raw material pricing, but by procurement, price fluctuations have a significant impact on the margins of the business. 

The second challenge this business faced was cash flow management. The time between obtaining raw material to selling the recycled product had to be optimized for cash flow.

THE SOLUTION

An analysis showed:

• The facility operated the plants at full capacity instead of optimizing profitability.
• Material was being processed on historical reasons and not based on the current cost of processing at each facility.
• Alternate sources of raw material were not being investigated, which would bring in higher value material at lower costs – or maximize the use of licensing the company had to collect more local raw material.
• As the company lost money, cash flow tightened and the ability of the company to procure raw material declined, compounding the problem.
• Aspects of the processing facility lacked efficiency and the design allowed for more expensive material not to be sorted optimally.

 

WHAT WE DID

Presented with a significant challenge in a ever changing global pricing environment, Jaffer Consulting Inc. enabled a significant turn around and now the business is poised for growth and profitability. This was accomplished by:

• Defining a strong structure and processes – for all aspects of the business from procurement, sales, processing and overhead.
• Enabling management and finance teams to develop weekly/monthly KPI’s to manage the business.
• Reviewing the processing plant functions, shutting down non-performing assets, creating efficiency, and driving the product life cycle through optimized processing costs and overhead.
• Identifying alternate sources of raw material.
• Trading was a business that was lucrative, required no processing and was relatively risk free. We encouraged the shareholders to invest additional funds to drive that business, and create processes of separating the business for better accountability and tracking.

The business started the turn around within the first three months and headed to breakeven in nine months (latency due to committed costs for processing facilities that had to be either shutdown or repurposed). 

Today the business has passed breakeven, with projections of increased profitability.

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  • Suite 200, 10133 - 97 Street NW   Edmonton AB  T5J 0L2
  • (780) - 429 - 1255
    M-F 09:00-17:00
  • info@jaffergroup.com
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