Abstract
The rate of plastic consumption is predicted to grow at an increasing rate beyond 2050, with plastic waste reaching as much as 873 million tonnes by 2050. The drive towards a circular plastics economy means that plastic waste represents a growing resource, with the potential to contribute significantly to job creation and economic activity, particularly in developing countries. However, this potential is not currently being realised, highlighting the need for strategic interventions. In 2020 extended producer responsibility, one mechanism available to enable the circular plastics economy, was legislated in South Africa. One of the requirements for producer responsibility organisations is to report on job creation. This study investigated the beverage polyethylene terephthalate (PET) value chain and identified the critical and poorly understood role of buy-back centres (BBCs) in the system. A survey of 52 BBCs, covering 8 of the 9 provinces, was conducted to understand material flows, operating and financial models and staffing requirements. The BBC sector is estimated to employ over 15,500 full-time equivalents, the majority (68%) unskilled or semi-skilled workers, and contribute over R1.66 billion in wages and salaries. Beverage PET accounts for approximately 19% of the material handled, directly contributing to over 3000 jobs. Key findings of the research were the difference between the various categories of BBCs operating in South Africa referred to as ‘aggregators’ and ‘pre-processors’ and the critical role played by ‘bakkie collectors’, as an essential link for informal collectors.
Keywords
Introduction
A recent study by the World Bank (2024) estimated that 2.24 billion tonnes of municipal solid waste (MSW) was generated around the world in 2020 and predicted that under a ‘business as usual’ scenario this would increase to 3.88 billion tonnes by 2050. This increase in waste generation is being driven by factors such as population growth, urbanisation and economic development, leading to far greater consumption. The growth in consumption is increasing at a faster pace in developing countries (Kaza et al., 2018; World Bank, 2024).
The direct cost of managing this waste was estimated at $252.3 billion in 2020, increasing to an estimated full nett cost of $361 billion if the associated costs of pollution, poor health and climate change impacts from poorly managed waste were factored in.
Plastic accounts for a relatively small proportion of MSW, but has received increasing attention due to the very visible impacts of plastic pollution and more recently the concerns related to microplastics and their environmental and health impacts. A study by Dokl et al. (2024) reported plastic usage in 2019 of 459.7 million tonnes, with 353.3 million tonnes of plastic waste generated. Their model predicts plastic use will increase to between 735 and 884 million tonnes by 2050, with waste increasing to between 832 and 873 million tonnes. Several other studies have predicted increased plastic usage by 2050, with values ranging from 902 million tonnes (Geyer et al., 2017) to 1124 million tonnes (Ellen McArthur Foundation et al., 2017). Packaging is the largest individual contributor to plastic use and is predicted to increase from approximately 40 million tonnes in 1990 to over 236 million tonnes in 2050.
In terms of end of life, the Dokl study reports that in 2020 just over 48.5% of plastic was landfilled, 9.5% was recycled and 21.9% was mismanaged. Their model indicates that the proportion going to landfill will not change significantly by 2050, whereas the recycling rate will increase to 13.25%, and mismanaged plastic will decrease to 12.9%. Sub-Saharan Africa is responsible for the highest rates of mismanaged plastic, at around 65% in 2020, and this is not predicted to fall significantly by 2050 (Dokl et al., 2024).
The South African context
The Department of Environmental Affairs (DEA, 2012) reported that in 2011 South Africa generated 108 million tonnes of waste, and the most recent estimations suggest this has increased to over 122 million tonnes, of which 12.7 million tonnes represent MSW. The majority of this waste is disposed of in landfills or illegally dumped. A GreenCape (2017) study stated that the waste economy was valued at R960 million, with the potential to grow to R3.6 billion, with the potential to create over 7800 jobs. Viljoen et al. (2019) confirmed the lost economic opportunity as a result of landfilling valuable resources.
Plastic waste generation is estimated at 2.4 million tonnes. There are conflicting views on the rate of plastic recycling, ranging from over 53% (Plastics SA, 2024) to below 20% (Goga et al., 2022). These are based on the use of different metrics for the calculation (i.e. plastic collected for recycling or plastic converted to recyclate).
Approximately 70% of South African households receive some form of municipal waste collection, although this may be inconsistent (Rodseth et al., 2020). This falls below 10% in rural areas. This has contributed to the significant role of informal collectors in the waste economy. The Department of Forestry, Fisheries and the Environment has estimated the number of informal collectors to be between 60,000 and 90,000, with studies calculating that they account for between 45% and 51% of plastic collection for recycling (Godfrey, 2021).
It is clear that the poorly managed waste represents an underutilised resource in South Africa and more effective collection and recycling could stimulate economic activity and create jobs, feeding into the circular economy (Chitaka et al., 2025; Haas et al., 2023). However, global experience has shown that increased material use and waste generation has not consistently led to the increased job opportunities that were anticipated (Circle Economy Foundation [CEF], 2024; CEF et al., 2023), so strategic interventions will be necessary.
South Africa has recently (2020) passed far-reaching extended producer responsibility (EPR) legislation that is intended to improve the post-consumer management of paper, packaging, lighting and electronic goods and drive circularity in the sector (DFFE,2020). The legislation compels all producers and importers of these materials and products to sign up with one or more producer responsibility organisation (PRO) and pay fees based on the volume (tonnes) of material they put onto the market. The EPR fees are determined by the PROs and must be differentiated based on the weight and recyclability of each product class.
The legislation sets specific targets, in terms of collection and recycling rates, for the different material and product categories, as well as targets for the inclusion of recycled content where applicable. The targets increase incrementally over the initial 5-year period. In some cases, the year 1 targets are based on historical collection and recycling figures, but for many product classes where there is limited historical data the targets appear arbitrary.
South Africa has one of the lowest rates of formal employment in the world, particularly among the youth and women (Statistics South Africa [StatsSA], 2024, 2025). Informal waste collectors have historically played a major role in waste management and the potential for job creation from driving the circular economy has been recognised in the legislation. The PROs need to report on the number of ‘decent jobs’ created over each reporting cycle. The legislation stipulates that all registered informal waste collectors must be supported to earn a living wage, not below the national minimum wage.
The recycling value chain in South Africa, like many developing countries, is complex, with the intersection of formal and informal components and very different levels of municipal service delivery across different parts of the country and between large metros, smaller towns and rural areas. As such, the quantification of job creation potential for different material types is extremely challenging and requires a sound understanding of material flows, the recycling value chain and credible baseline data.
The recycling value chain
The value chain concept was introduced by Porter (1985) and describes the full range of activities required to take a product or service from ideation through the various steps to distribution to end-users, and finally disposal after usage (Kaplinsky and Morris, 2001). The product moves from one actor to another with the assumption that it will gain value during the process. With the focus on the recycling value chain, Cano et al. (2022) described it as a chain of activities performed by diverse stakeholders in the collection and processing of post-consumer recyclable waste material with the aim of retaining them in the economy.
These stakeholders can be directly or indirectly involved and can perform more than one activity in the value chain (Hoffman and Schenck, 2020; Zamora, 2016). The direct stakeholders include those involved in the production, collection and recycling, whereas indirect stakeholders can influence the value chain and include policymakers, academics/researchers, national, provincial and local government departments, non-governmental organisations (NGOs), consultants and the media.
Cano et al. (2022) conducted a systematic review of recycling value chains and categorised them into three types. Type 1 systems are prevalent in the developed nations of the global North and are dominated by formal waste management systems with highly developed infrastructure.
Type 2 (Figure 1) and Type 3 systems are mostly present in developing nations where not all areas, particularly rural, peri-urban and informal urban, receive formal services. These under-serviced communities often resort to illegal dumping, burning or burying of waste (Kalina and Schenck, 2024).
Overview of a type 2 waste value chain (Cano et al., 2022).
Type 2 and 3 value chains rely on a combination of formal and informal role players in the collection space. A significant feature of a type 2 value chain is that the informal collectors are mainly autonomous individuals with limited support from government or formal structures. Developing countries categorised under Type 3 value chains, recognise and support the informal role players. Cano et al (2022) categorised South Africa under Type 2 value chain. Although the EPR regulations and Waste Picker Guidelines (Department of Fisheries, Forestry and the Environment [DFFE], 2020) are trying to drive more formal structures for waste pickers, most remain autonomous.
The role of the informal collectors in the South African recycling value chain has been the focus of increasing research over the past decade (Department of Environmental Affairs, 2016; Department of Forestry, Fisheries and the Environment and Department of Science and Technology [DFFE/DSI], 2020), but the critical role of formal and informal intermediaries remains poorly studied. These include waste aggregators and buy-back centres (BBCs) who are responsible for buying materials from informal collectors and selling it on to recyclers, converters and exporters (Sembiring and Nitivattananon, 2010; Wilson et al., 2006). They vary in size and complexity and their capacity to handle large volumes, assess the quality of recyclable materials and aggregate to facilitate transport.
The limited research into these intermediaries (Barnes et al., 2022; Viljoen et al., 2012, 2019) highlighted their critical role, noting that informal collectors typically cannot sell the materials directly to recyclers. The Barnes et al. (2022) study surveyed 53 BBCs across the greater Cape Town area to gain an understanding of material flows, BBC size and structure, employment numbers and level of support offered to informal collectors. They characterised the BBCs into four types, based on size and range of activities. The study concluded that there was a need for more research into the evolution of the BBC business models.
This study forms part of a larger initiative to try and determine the job creation potential along the polyethylene terephthalate (PET)-beverage container value chain. This category was chosen as it has one of the least complex value chains and the most established EPR scheme. The producer responsibility organisation, Petco (NPC) was established in 2004 and managed the first voluntary EPR scheme in South Africa. It represents the majority of the producers of PET-beverage containers and reported a 67% collection and 61% recycling rate, based on member contributions, for 2024.
The research presented in this article focuses on the role of the BBCs and aims to provide a deeper understanding of the operating models, employment levels, roles and responsibilities and the contribution of PET-beverage containers to their overall operations. This will help to inform predictions on job creation potential as collection rates increase to meet EPR targets.
Methodology
The study was conducted in three key phases. The first phase involved the development of a conceptual and a quantitative material flow analysis (MFA). The second phase focused on gathering quantitative and qualitative data from a sample of BBCs. The final phase was to extrapolate the BBC data to develop an industry-wide perspective for South Africa.
Material flow analysis
MFA is a comprehensive system-analytical view of a defined physical system and the various interlinked processes and flows to support decision-makers (Allesch and Brunner, 2015; Bringezu and Moriguchi, 2018). In their literature review of 83 studies, Allesch and Brunner (2015) determined that during the last 2 decades, MFA has become a common, widely used tool to analyse waste management systems with the goal of describing a defined system and establish a flow and stock diagram for individual materials based on the mass balance principle. The mass balance principle ensures that for a given system, the mass entering the system equals the mass leaving the system plus any change in mass within the system (Akinsulie, 2016; Allesch and Brunner, 2015).
A conceptual material flow diagram that mapped the most typical flows of empty (post-use) PET beverage bottles from consumer through to end-of-life was developed, informed by a review of relevant literature (Godfrey, 2021; Godfrey and Oelofse, 2017; Petco, 2022; Plastics SA, 2023) to provide key inputs to the flow. Once a broad framework was defined, it was refined and expanded, drawing on the project teams’ extensive experience and through consultation with Petco, the PRO primarily responsible for PET beverage containers in South Africa.
The next step was to quantify the various material flows, in tonnes of PET, and produce a Sankey diagram to illustrate these.
The nature and complexity of the recycling landscape in South Africa means that there is limited audited data available for material flows along the value chain. Audited data were provided by Petco NPC and relates to the total tonnages of beverage PET placed on market (POM) by their members, the total tonnes of PET collected for recycling by Petco’s contracted recyclers and the total tonnes of PET that these recyclers processed for the 2022 financial year.
The data used to estimate the material flow between volume POM, and the recyclers were collated from multiple sources. These included publicly available data on MSW, illegal dumping and volumes passing through formal material recovery facilities (MRFs). For the informal sector, data were sourced from academic literature, Petco and direct engagement with informal collectors to establish average working hours, volumes collected and mix of materials. The BBC data were gathered through direct engagement as part of this study and included volumes bought and sold and estimates of material loss.
BBC data gathering
Sample data
The BBC data utilised in this study was extracted from a sample of BBCs selected from Petco’s list of registered BBCs. The sample was defined through engagement with Petco and was selected to provide a representative spread of geographical location and size. The Eastern Cape was the only province not covered by the survey, as none of the BBCs approached in that province chose to participate (Table 1).
Number of BBCs surveyed per province.
BBC: buy-back centre.
The initial data were collected via an online survey of the 52 BBCs and included information on the total tonnages of all recyclable material purchased, actual tonnes of PET bottles collected over past 12 months, the sources of PET bottles and staffing details of the BBC. The latter included gender, role type and whether the employees were permanent/part-time/casual. The role types addressed in the study are presented in Table 2.
Role types used in study.
A series of telephonic interviews were held with 23 of the BBCs to validate the survey data and collect additional information around buying and selling prices of used PET beverage bottles. The telephonic interviews were conducted with those BBCs who were willing to engage. They included a range of different sized BBCs and covered eight provinces, so provided a representative sub-sample.
The information on buying and selling prices was used an input into an analysis to estimate gross margins as a function of BBC size. This, coupled with the qualitative insights into the operations and role types, for various BBC sizes, allowed conclusions to be drawn with respect to the economic models and business structures of these entities.
The staff cost calculations that formed part of the analysis were based on an allocation of roles to relevant Paterson grade scales, supported by desktop research into roles and related salaries. The allocation of roles to Paterson grade (Table 3) and the salary assumptions used in the income calculations (Table 4) are detailed below.
Allocation of roles to Paterson job grade.
Roles and salary assumptions per BBC category.
BBC: buy-back centre.
The salary assumptions were differentiated based on the size of the BBC. These were informed by the qualitative understanding of various BBC sizes, supported by the literature review (Barnes et al., 2022; Viljoen et al., 2012), survey and interview feedback and knowledge of the industry knowledge. The salaries for the very small BBCs were estimated at 70% of the lowest pay scales per role and as a result, the salaries for the sorters and general labour are assumed to be below the national regulated minimum wage. This is both possible and probable as these are typically informal businesses (i.e. unregulated) and in most instances, the workers in these businesses will have more than one job, or supplementary income (e.g. social grant) and will work if and when needed (Barnes et al., 2022).
Data extrapolation
The data gathered via the survey and telephonic interviews were analysed and then extrapolated to determine high-level industry-wide implications.
The extrapolation was based on industry players’ estimates of the total number of BBCs operating in South Africa and an estimated distribution of the various categories of BBC within the total. The total volumes of beverage PET placed on the market, both by Petco members and other role players was also considered.
The extrapolation resulted in an estimate of the total tonnes of beverage PET handled by the total sector. It also provided an insight into the estimated number of full-time equivalent (FTEs) employees, by role, employed by the sector and an estimated number of FTEs employed by the various size BBCs. By applying the relevant salary assumptions, it was possible to estimate the total earnings attributable to BBC workers, by role.
It was also possible to determine the approximate number of jobs (FTEs) that relate directly to beverage PET collection, based on an assumed beverage PET contribution of 19% to the total BBC waste processed. A total estimate of salary earnings related to beverage PET was also determined using the same approach.
Results and discussion
Material flow analysis
The South African recycling value chain is very complex, with many role players, both from a formal and an informal sector perspective. There are several areas within the value chain where waste ‘loops’ exist, particularly for waste that has an intrinsic economic value, such as PET beverage containers. This points to the inefficiencies within the various sub-systems and highlights how the informal sector plays a key role in extracting valuable material that would otherwise be lost, even from very challenging places such as landfill and the environment (DFFE/DSI, 2020; Godfrey, 2021; Godfrey and Oelofse, 2017; Viljoen et al., 2012).
Figure 2 provides a simplified overview of the fate of empty beverage containers within the South Africa waste system, highlighting the predominant loops that exist.
High-level flow of empty beverage containers through the South African waste system.
At a high-level, there are only two options for the disposal of empty containers. The first is into the environment, either as litter or at an illegal dump site. The second is for them to be collected from the point of disposal, either by the formal waste management sector or by informal collectors.
Formal waste management involves both private and public (municipal) players. The waste collected by the formal sector is typically sorted and recyclable materials such as PET beverage containers are extracted and sold to recyclers, with the remaining non-recyclable solid waste being sent to landfill. 1 In some instances, municipalities collect, sort and sell recyclable waste that has been separated at source. However, most municipal waste, containing PET beverage containers, will likely end up as mixed solid waste and is disposed of at landfill. Transfer stations and/or ‘dirty MRFs’ are often used as aggregation points for municipal mixed solid waste en route to landfill.
Informal collectors play a significant role in the South African recycling value chain (DFFE/DSI, 2020; Godfrey, 2021; Godfrey and Oelofse, 2017; Schenck and Blaauw, 2011; Viljoen, 2014). They focus on materials, including PET beverage containers, that have an intrinsic economic value, as they derive their income from the sale of the materials that they collect.
The informal collectors obtain their materials from a wide variety of sources, including municipal waste bins prior to collection by the municipality, landfills and ‘wet MRFs’ in certain municipalities where collection is allowed, and from the illegal dumps and the environment (litter).
Once collected and sorted, the informal collectors will sell their materials, typically to the so-called bakkie collectors or to BBCs, but in limited instances, directly to recyclers. Unfortunately, material that is not suitable for sale tends to be illegally dumped or left as litter, as the collectors do not have access to other waste disposal options.
‘Bakkie collectors’ is a generally accepted term for those role players who use pickup trucks or small trucks, in some instances with trailers, to collect waste from informal collectors’ storage sites or landfill sites and sell it on to established BBCs. There is very limited information available in either the published literature or from players in the broader waste industry, on the bakkie collectors, despite the critical role they play in the value chain. They provide essential logistics functions and operate as important market facilitators for the informal collectors.
The BBC sector is a complex one, with several tiers of operators (Barnes et al., 2022; Viljoen et al., 2019). Due to the logistical constraints (time and effort) of moving recyclable waste from collection points to BBCs, informal collectors will typically sell their collected materials to the BBCs within the closest proximity to where they collect or if more BBCs are available, where the best prices can be obtained. The collectors are very aware of the prices offered by the BBCs in their areas and will endeavour to secure the maximum possible value for their collected waste. As a result, informal collectors will sell to all tiers of BBCs, from very small local businesses to very large operations (Barnes et al., 2022).
Within the BBC sector, the different tiers of operations interact extensively with one another. The recycling sector for beverage PET waste is highly concentrated and technically advanced. As a result, the recyclers generally only accept baled PET waste as a feedstock for their plants. Smaller BBCs do not have the infrastructure to bale or transport waste at the volumes that are acceptable to these recyclers. Consequently, they sell their collected and sorted waste to the larger players who do have the necessary infrastructure (Barnes et al., 2022). Non-recyclable waste from BBCs goes to landfill, or in some instances into the environment via illegal dumps or as litter.
Gaining deep insights into employment and job creation within the recycler component of the PET recycling value chain was particularly challenging. As mentioned above, the sector is highly concentrated, with only four to five dominant players. Two of these entities are currently investing in building new capacity. PET recycling is highly capital intensive, and the price of recycled PET (rPET) is inextricably linked to the global commodity markets for both virgin and rPET. As a result, it is a very competitive sector in South Africa and the existing role players are very cautious with sharing any insights into their operations. This study was therefore only able to utilise publicly available data (Petco, 2022; Plastics SA, 2023), supplemented with proprietary information and personal communication with key stakeholders.
A material flow diagram (Figure 3) was developed using available information to model the PET material flows through the value chain.
Estimated PET flows through the value chain (2022 data). 2
The information highlighted in the value chain at the bottom of the figure is derived from data published by Petco (2022) financial year. However, the flows depicted in the Sankey diagram are based on various assumptions and analysis of multiple inputs, including publicly available and confidential information, and interviews and insights from various industry role players, rather than audited information. They should therefore be considered as high-level estimates.
It should be noted that Sankey diagrams do not enable mapping of value chain loops. As a result, certain key nuances in the South African recycling value chain, such as material recovery from landfill, cannot be adequately modelled using this tool. Despite its limitations, the analysis does provide a clear overview of material flows and estimated volumes of PET moving through the various phases of the value chain.
Deep dive into BBCs
BBC categorisation
Previous research into the BBC landscape in South Africa (Barnes et al., 2022), identified three core categories of BBCs: type D which sells to a type C BBC, type C which sells all core products to a BBC who sells to recycler, and type B which sells all core products to a recycler.
A total of 52 of the 450 BBCs that are registered with Petco were formally surveyed. Based on the survey responses, it was possible to clearly define five categories of BBCs based on tonnages of total recyclable waste handled per annum. This clearly highlighted the inter-selling between levels within this sector.
Table 5 illustrates these categories and the range of tonnages handled per annum. The telephonic interviews conducted with a sub-sample of BBCs provided insights into the primary customers of each category. This clearly highlighted the inter-selling between levels within this sector.
BBC categories by tonnage handled per annum.
BBC: buy-back centre.
There is currently no verifiable data confirming the total number of informal and formal BBCs that exist in South Africa, but industry players estimate the total to be approximately 600. Based on the data collected, literature review, experience working with the sector and insights from the engagement with BBCs, the distribution of BBC categories across the industry was assumed to be as illustrated in Figure 4.
Estimated number of BBCs per category operating in South Africa.
Analysis of the data relating to the source of materials for the BBCs (Figure 5) confirmed that the informal sector remains a major contributor to post-consumer waste collection. Therefore, it is estimated that between 50% and 60% of PET waste is collected through informal collection channels. This is, however, substantially lower than previous estimates (DFFE/DSI, 2020; Godfrey and Oelofse, 2017), and similar to Godfrey et al (2021) estimating the informal sector’s contribution at 51%.
Source of BBC input materials (consolidated for all BBC categories).
BBC operating models
Each category of BBC has a slightly different operating model which affects its offering (Table 6) and operating costs (Table 7).
Major suppliers, offerings and customers by BBC category.
BBC: buy-back centre. Green indicates applicability to all/almost all BBCs in that category; Orange indicates applicability to some of the BBCs in that category.
Activities, key resources and infrastructure by BBC category.
BBC: buy-back centre. Green indicates applicability to all/almost all BBCs in that category; Orange indicates applicability to some of the BBCs in that category.
Smaller BBCs tend to source their inputs predominantly from the informal collectors, after which they sort and, in the case of some small BBCs, hand-bale materials for sale on to bigger BBCs. Their infrastructure is limited, and they seldom own vehicles to transport materials. Their permanent staff numbers are typically low, so they make use of part-time staff as needed. Most part-time staff are employed as general labourers or sorters. They do not tend to have any formal administration or sales systems.
The larger BBCs (medium and larger) tend to have a strong base of commercial suppliers of waste (e.g. municipalities, retail centres, etc.), although they also buy from informal collectors and the smaller BBCs. They sell baled material directly to recyclers. They typically own their own vehicles, which are used for both in- and out-bound logistics (i.e. for collecting input materials and for transporting baled product to recyclers), as well as baling machines, forklifts and other large-scale equipment. They are likely to have IT systems in place, which range in their level of sophistication, depending on the size of the operation. From a staffing perspective, larger BBCs employ more people, who operate in clearly defined roles. The survey highlighted that only medium-sized BBCs make use of part-time staff, typically in general labour and sorting roles. Large and very large BBCs indicated that they are unlikely to use part-time labour.
BBC human resource models
This study clearly highlighted the differences in human resource capacity and models that exist across the various BBC categories. Figure 6 illustrates the contribution by type of role to the total permanent staff base of each BBC category.
Contribution by type of role to permanent employment by BBC category.
Very small BBCs employ no logistics or maintenance staff, which confirms that they do not have either vehicles or mechanical equipment such as balers or forklifts on their premises. These BBCs have a higher proportion of administration staff, although these resources are typically responsible for multiple tasks, including weighing, engaging with collectors and general administration. They do not employ supervisors, as their staff contingent is too small (typically between three and eight people). Management acts in a supervisory capacity and are, in most instances, the business owner. Most of their staff are sorters and general labour, as the bulk of the work for these businesses is sorting and cleaning. One of the first studies on BBCs in South Africa, by Viljoen et al. (2019), found that small BBCs had five or less employees, which was supported by the more recent study by Barnes et al. (2022) confirmed that the small BBCs had on average three employees.
This research showed that small and medium BBCs employ between 14 and 24 FTEs. They have a similar distribution of roles, although the medium BBCs almost always have trucks for collection and delivery, so have a larger contingent of logistics staff. Smaller BBCs will employ a higher percentage of sorters, as they will typically handle only loose materials. Both the small and medium BBCs employ supervisors as their staffing structures and numbers justify them. They also both employ administrative staff.
The large BBCs staffing structures are similar to those of the medium operations, although they tend to have a more extensive logistics function. Their administration functions, while similar in contribution to medium BBCs, will include more sophisticated and complex roles.
Detailed information on role distribution for very large BBCs was excluded from the analysis as only one operation of this size participated in the study, which did not constitute a representative sample for this category in terms of roles.
Employment and related wage/salary contribution by the BBC sector in South Africa
The information gathered through the survey around total number of FTEs employed by BBCs was extrapolated to generate an estimated number of total FTEs employed by the BBC sector. It is estimated that there are approximately 15,500 FTEs employed by the sector in South Africa. The estimated distribution of FTEs in the BBC sector in South Africa is shown in Figure 7.
Estimated total FTEs employed by BBC category.
Based on the survey results, it is estimated that PET contributes approximately 19% of total waste handled by BBCs. Applying this to the total number of jobs in the BBC sector, PET would then directly contribute to creating approximately 3000 jobs.
The estimated number of FTEs employed by the BBC sector across various roles is shown in Figure 8. As expected, most of these roles (63.5%) are attributable to unskilled general labour and semi-skilled sorting jobs, supporting previous assessments by Barnes et al. (2022) and Viljoen et al. (2019). Interestingly, almost 13% of total jobs in the sector relate to logistics. This highlights the important role the BBCs play in physically transporting both input materials and consolidated waste, especially the medium, large and very large BBCs.
Estimated total number of FTEs in BBCs, per role.
The BBC sector is estimated to generate R1.664 billion in earnings (wages and salaries) for its full-time employees. Figure 9 indicates that 58% of the total earnings in the sector are attributable to skilled jobs (i.e. management, supervisors, administration, logistics and maintenance). Logistics staff generate the most income from the sector, earning a total of R439,000,000 per annum. Semi- and unskilled labour (weighers, sorters and general labour) together contribute R680,000,000 in wage/salary income per annum.
Estimated wage/salary income earned by the sector by role.
Assuming PET contributes 19% of total waste handled by the BBC sector, PET waste would be responsible for generating approximately R316,000,000 in salaries and wages at the BBC level of the value chain.
BBC economic models
Regardless of their size or operating model, all BBCs operate as profit-driven entities that derive their profits from the sale of collected and sorted recyclable waste. The findings of this research were consistent with previous studies (Barnes et al., 2022; Viljoen et al., 2012, 2019) confirming that all BBCs work with a portfolio of waste products and seldom, if ever, focus on only one or two material types. The BBCs adjust and balance the mix of the material types they buy and sell based on the market rates being paid by their customers for each material type.
In the case of PET beverage bottles, the price paid by recyclers fluctuates based on several factors, including the commodity price of virgin PET, as this is a direct competitor to rPET when being sold as resin to converters and other end-users. Seasonality also has a significant impact on both the availability and prices of waste PET beverage bottles. Although PET beverage bottles are generally recognised as ‘core’ items in informal collectors’ and BBCs’ portfolios, along with cardboard and often metal, if another material type becomes particularly attractive from a price perspective, they will adjust their mix accordingly.
Several other factors impact the prices paid by BBCs to collectors and other suppliers (e.g. smaller BBCs). Geographical considerations such as the level of competition between BBCs in a local area and the distances to recyclers from BBCs can affect pricing, as this directly impacts transport costs. 3 In addition, the level of work that is required by the BBC to prepare materials for resale can impact pricing. For example, one small BBC indicated that they pay informal collectors R2.20 per kilogram of PET, whereas they pay R3.00 per kilogram of PET to ‘mini-BBCs’. This difference was related to the fact that materials from a mini-BBC would likely be better sorted and cleaner than those from an informal collector. Another BBC indicated that they pay less for materials requiring collection than those that are delivered to them, and they would only purchase loose (non-baled) materials, if they are delivered to their premises.
An overview of the average buying and selling prices for PET beverage bottles in June 2024 is presented in Figure 10, highlighting the vast differences across provinces. Transport costs have a marked impact on prices, as well as issues such as population density.
Average PET beverage bottle buying and selling price (n = 23; June 2024).
One BBC interview respondent noted, ‘We have various prices and they change all the time. . . it’s like the stock exchange’. This further illustrates the complexity of this environment and makes economic modelling of this sector particularly challenging.
A high-level analysis of the buying and selling prices of PET waste by the various categories of BBCs (Figure 11) provided insight into the gross profitability of each category.
Gross margins per BBC category based on buying and selling prices (n = 23; June 2024).
Although there is a substantial difference between the gross profitability of very small and large BBCs, their net profitability will likely be much more closely aligned. Medium and large BBCs carry significant overheads, such as rental, physical infrastructure and human resource costs which the very small and small BBCs do not. As discussed above, the medium and large BBCs add significantly more value to the waste between the time it enters their premises and the time it reaches the recycler. This value-add requires infrastructure and capacity, which adds cost.
Given that a significant portion of medium and large BBC costs would be fixed, they are likely to be more heavily impacted on a net profit level by fluctuating prices from PET recyclers than very small and small BBCs would be.
Discussion: Key insights and implications for waste management
The most important insight to emerge from this research is the stark differences between the various categories of BBCs operating in South Africa. There is a clear delineation between the very small and small BBCs versus the medium, large and very large BBCs.
As a result, it is proposed that a differentiated approach be applied to this sector going forward, with very small and small BBCs being termed ‘aggregators’ and medium, large and very large BBCs being considered ‘pre-processors’. This would support the development of a better understanding of which parts of the sector need to be grown and/or stimulated to improve collection and recycling, and therefore to inform investment strategies for the sector.
The very small and small BBCs add little value to the waste collected, acting primarily as waste aggregators or waste consolidators. This is a critical function to enable waste extraction from more difficult to reach areas. Their needs tend to be relatively basic and not particularly capital intensive. Areas where additional investment would benefit this group include providing sanitation facilities, health and safety and personal protection equipment and services, sorting tables and bags, weather protection for the waste, ensuring that non-recyclable waste is removed and taken to landfill to avoid illegal dumping and training to improve sorting. Such investments would improve working conditions and the cleanliness of the area surrounding the aggregator. They would also improve the effectiveness of sorting, resulting in a higher quality of input material to the larger pre-processors.
Medium and large BBCs provide a waste pre-processing service to the industry and are relatively capital-intensive operations. Baling equipment, conveyor belts, logistics infrastructure such as trucks and forklifts, and IT systems are all critical to their long-term success. Their businesses rely on optimal efficiency and as a result, investments in supporting improved efficiency and effectiveness will be valuable. This would result in increased tonnages being processed and higher quality input material being provided to recyclers.
The second insight from this study is the gap in research in South Africa regarding the ‘bakkie collectors’. They appear to play a critical role in facilitating waste transportation, especially in the informal sector, which still contributes a significant portion of recyclable waste collection in South Africa. It seems as if they are an essential link between informal collectors who do not have direct access to buyback centres, yet there is currently no focused research or literature on this sector. Only Goeiman and Rink’s (2025) research was conducted, suggesting the possibility that the bakkie collectors also act as small informal BBCs in the townships. 4 In order to make informed decisions around strengthening the South African recycling value chain, it is imperative that this sector is better understood, especially with regard to their relationship with BBCs. It is recommended that research be commissioned to understand this sector in greater detail and how it integrates into the rest of the value chain.
Finally, the study highlighted the importance of understanding that the collection, sorting and pre-processing for recycling sectors of the recycling value chain all approach business from a material portfolio perspective.
Regardless of the level of sophistication of the operation, all players in this part of the value chain adjust their mix of waste materials in line with fluctuations in the market prices for recyclate. In many instances, especially for PET, the recycled plastic price is closely linked to the global commodity price for virgin material. Although there are ‘staple’ products 5 within most players’ portfolios, the ratio of these relative to other material types fluctuate as market prices change.
To boost recycling rates for specific materials, it is crucial to begin by focusing on the demand side of the recycled material (recyclate) market. When there is strong demand for recyclate, it naturally creates a demand for input materials that recyclers need. It is essential to understand the economic factors along the entire recycling value chain, including collection, sorting, pre-processing and logistics across the chain. The prices paid at each stage of this chain must be balanced to ensure that all participants can operate profitably, especially in longer value chain that incorporate multiple levels of BBCs. In many cases, subsidies may be necessary to achieve this balance and make recycling economically viable for all parties involved.
Conclusions
This study investigates the complexities of the recycling value chain, with a specific focus on the BBC sub-sector, where formal and informal businesses coexist and interact. The findings underscore the pivotal role of BBCs in the waste and recycling economy.
An estimated 15,500 FTE positions are employed in the BBC sub-sector, generating approximately R1.664 billion in salaries and wages. Notably, approximately 68% of these jobs are classified as unskilled or semi-skilled, with labourers, sorters, and weighers accounting for nearly 10,600 FTE positions.
Given the significance of PET beverage bottles as a primary feedstock and product for BBCs, accounting for approximately 19% of the total waste handled, this material type is estimated to support over 3000 jobs and generate R316 million in salaries and wages.
The study proposes a categorisation of BBCs into two distinct groups: aggregators (small-scale operations) and pre-processors (medium- to large-scale operations). This classification can facilitate improved collection and recycling efforts, inform targeted investment strategies and enhance support for the BBC sector. Ultimately, this may lead to more effective recycling practices in South Africa.
A notable limitation of this study is the scarcity of auditable data 6 on material flows between producers and recyclers, necessitating reliance on assumptions, expert opinions and fragmented sources. This dearth of accurate data hinders industry modelling and strategic decision-making. Therefore, the study emphasises the need for further research into areas such as the bakkie collectors to develop a more comprehensive understanding of the industry.
Footnotes
Declaration of conflicting interests
The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The authors disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: The authors received funding from the Petco Producer Responsibility Organisation NPC and the DSTI/NRF/CSIR Chair in War.
