As part of WMW’s new leader series, we speak to Hermann Erdmann, CEO of the Recycling and Economic Development Initiative of South Africa (Redisa) about tyre recycling in South Africa.
WMW: Why did you decide to go into tyre recycling in South Africa?
Hermann Erdmann (HE), CEO, Redisa: After having worked in the tyre industry for years and working closely with manufacturers, I realised that one of the main challenges being faced was what to do with the waste tyres we accumulated over time. We saw an opportunity that would not only assist with the adverse environmental impact of waste tyres, while offering a viable solution to the socio-economic problems in the country through job creation, new industry development and support of SMME’s.
Entrepreneur Edrmann expects Redisa to generate R600 million (US$49.2m) annuallyWMW: How big an environmental problem was tyre disposal and recovery in South Africa prior to Redisa’s involvement?
HE: Redisa was developed to fulfil a mandate of job creation and to bring order to South Africa’s recycling of tyres, a market that only processed 10,000 tonnes of tyres each year of the 240,000 tonnes sold. The market lacked direction, and the uses for tyres – from the chemicals to the rubber – were mostly unexplored.
Before Redisa existed, the tyre industry was not able to deal with their waste in a responsible way. By implementing a waste into worth/circular economy concept into the industry, and pioneering the Redisa model the tyre industry has now been able to contribute to the environmental remediation of the products they produce – drive and assist in economic growth in a sustainable way, and finally to become more resource efficient.
Since beginning operations mid-2013, Redisa’s waste into worth concept has been successfully implemented to create a circular economy within the tyre industry. In less than two years we have achieved a number of noteworthy milestones in terms of exceeding job creation, tyre collection and remediation targets.
Before Redisa’s involvement, South Africa was only processing 10,000 out of the 240,000 tyres soldWMW: In a thought-leadership piece you said extended producer responsibility is “rather misleading”. Can you explain why you think this?
HE: Extended producer responsibility is an environmental protection strategy used to ensure that the manufacturer of the product is responsible for the entire life-cycle of the product – including the recycling and final disposal.
The problem is that just as you wouldn’t put a chef in charge of the sewage system because he roasts a chicken well, so the responsibility for waste tyres should not fall on manufacturers. By recognising this, South Africa is leading the world by mandating Redisa to create a circular economy for tyre waste. This is a uniquely South African solution to the world’s problems, and by emphasising the viability of recycling as a business, we hope it will soon become the norm.
Through the outsourcing of this responsibility to Redisa, and allowing us to implement a circular economy within the industry as a result, the tyre industry has been able to focus on its core business of growing the manufacturing sector, while assisting government in meeting objectives including job creation and environmental remediationWMW: How does the funding of the business and tyre levy work? Can you tell me what sort of revenues have been generated in the last two years?
HE: Funds collected are paid directly to us and there is no government involvement. Redisa then allocates spend of the money as clearly outlined in the gazetted Plan. When our Plan was established, the Department of Environmental Affairs Minister emphasised that the waste management fee collected would not end up in the general fiscus.
The advantage of this is that Redisa is 100% accountable for what happens with the funds and reports back monthly to the Department. In addition, as mandated in the Redisa Plan, everything is monitored by an external audit partner, KPMG.
The key difference is that a tax is a compulsory contribution to state revenue, levied by the government on workers’ income and business profits, or added to the cost of some goods, services, and transactions. Money collected from taxes goes into the general fiscus.
Comparatively, a waste management fee is paid by product producers and importers, and is used for dealing with the product when it reaches the end of its life cycle. This money is directly and specifically applied to dealing with the product, in an audited and accountable fashion, making it far more effective than a tax-based system where funds sink into the general Treasury and are not ring fenced.
In terms of revenues generated, the Plan outlines that approximately R600 million (US$49.2m) will be generated annually.
WMW: Talk us through your business model for the actual tyre recycling/reprocessing. What products are produced from the used tyres?
HE: Transporters registered with the Redisa Plan collect tyres from dealers and other collection points. These are then housed at the nearest depot. At the depots the tyres are either: downsized for use by various recyclers given their particular requirements; baled into manageable blocks which are easier to store and transported to recyclers, or sent directly to recyclers in their normal form.
From our experience, the rubber industry has developed innovative practices in reusing rubber crumb. By adding adhesive, it can be used as particles to make crumb rubber mats for homes, playgrounds and gyms. The crumb can also be used as filler for asphalt and used for road paving.
Nearly 200 jobs were created over 1.5 years as a result of the Redisa plan in South AfricaThere is a growing demand for more and more waste tyres that can be used for end products made from the rubber, steel and textile derived from processing waste tyres. Crumb rubber is the result of processing automotive and truck scrap tyres in particular.
During this process the steel and tyre cord (fluff) is removed, leaving tyre rubber with a granular consistency. This rubber crumb is often used in astroturf as cushioning, where it is sometimes referred to as astro-dirt, asphalt for tarring the roads, floor mats, carpet padding, vehicle mudguards and adhesives. We do not recycle tyres, or own any of the small businesses (i.e. transporters / recycling operations). Redisa supplies tyre feedstock to recyclers at no cost.
WMW: In the UK novel processes have been developed in the past for tyre recycling, including using liquid nitrogen to create pellets and turn tyres into artificial football pitches. Are you looking at any innovation process technology like this?
HE: Several tactics have been undertaken by Redisa to remediate waste tyres and ultimately reduce carbon emissions. This includes processing waste tyres through pyrolysis, crumbing, and controlled burning in cement kilns.
Redisa also invests a lot of time and resources in research and development as well as finding new technologies and processes for the recycling of tyres. In 2013 we partnered with Stellenbosch University and Nelson Mandela Metropolitan University (NMMU) to fund research and necessary equipment to drive innovation.
The focus of the research work at the University of Stellenbosch is to create technologies for valorisation of waste tyres with direct potential for industrial implementation, thus creating new commercial opportunities beyond those offered by existing tyre recycling technologies.
At NMMU, the research focus for Redisa is on extending the life of tyres through the development of an environmental rating system. The core focus of the centre will be to assess the environmental rating of tyres from production through to destruction, as well as conducting research on how to beneficiate materials from waste tyres.
WMW: Redisa estimates that it could create 10,000 jobs by 2017. How many jobs have been created so far and how do you intend to reach this number?
HE: From December 2013- March 2015, 1918 jobs have been created. Redisa has used this monumental task as an opportunity to develop the small to medium enterprise (SME) sector. Helping people to grow their own livelihoods and support themselves, their families and communities while eliminating the increasing challenges around waste. Within two years Redisa has created opportunities for over 170 SMEs, including transporter and depot operations.
WMW: How do you intend – if at all – to take the Redisa scheme from South Africa internationally?
HE: Given that the EU recently decided to re-look the proposed circular economy, we think that with our experience we are able to provide insight of how public private collaboration can work to implement a successful circular economy, not only in South Africa but across the globe and welcome the opportunity to bring our learnings to the table, as well as continue to learn from others.
WMW: There is expected to be a rise in the amount of domestically produced e-waste in South Africa. Could the Redisa programme work for other materials?
HE: The principle of recycling/re-using (circular economy development) is not only a solution for waste tyres, but the same principle can be used for other waste streams such as packaging and general waste.
Ultimately our key strategy is continued implementation of circular economies to transform the SA economy and drive the resource revolution, and we are always considering ways to continue to drive this objective.