Q&A: Rajnish Sinha, General Manager, Horizon Technologies

10 August 2010

The concept of recycling is gaining ground in the UAE

MEED: The recycling industry in the UAE is in its early stages. How reliant is the sector on awareness campaignsand do the municipalities support recycling?

Rajnish Sinha: The recycling industry in the UAE is in a nascent stage. Interest is picking up locally, not just on a government level, but also on an individual level. Awareness campaigns have been very good.

Margins are very tight. Our main source of raw material is Dubai, but the quality of input varies

Horizon Technologies is also helped by its investors and shareholders based in Oman such as National Mineral Water Company, Sabco and Oman & Emirates Investment Holding Company.

We are still heavily dependent on the municipalities’ waste systems. Almost all the emirates have their own waste sorting houses such as Fujairah, Abu Dhabi, Sharjah, and Ras al-Khaimah.

We would like to see the scale of recycling in the UAE increase over the next 5-10 years, but we don’t want to compromise on the quality of the recycling that we do.

How involved has the local population been in the recycling sector in the UAE over the past few years?

The concept of recycling has gained ground in the UAE. I think the world average for those involved recycling is around 21- 22 per cent. In the UAE, it is about 8-9 per cent of the population.

Are you too reliant on volume of waste material to make a profit?

Margins are very tight. Our main source of raw material is Dubai, but the quality of input varies. It is a big variable so we can be hard pressed to make decent margins.

The market price at which we buy raw material from the municipalities currently fluctuates from $350-400 a tonne so we cannot afford any mishaps.

Our transport costs are also high, with customers in Europe, the US, India and China. But the overall aim of the recycling sector is to be environmentally friendly – that is the bottom line.

What are the main threats and risks to your business?

The biggest risk is the availability of raw material. We are dependent on local sources and we are not able to increase capacity to more than 55 per cent.

Raw material is tightly controlled and we are not allowed to use any material from outside the UAE. To mitigate this risk we have tie-ups with the municipalities and also with Dubai-based Masafi and Abu Dhabi-based Al-Ain Mineral Water Company.

What are the latest developments on Horizon Technologies’ electricity supply?

This is a major issue for us. Since the company was established we have had to use generators for electricity. We are still operating from generators and need a connection with Federal Electricity & Water Authority (Fewa).

I don’t know what the problems are, but it is draining our resources. Fewa has said they are aiming to get a connection next year. but this issue needs government support.

What are the current export prices for rPET chips and PET flakes?

They are doing well, rPET export prices are roughly anything between $50-$100 a tonne, while PET flakes start at around $900-$2,000 a tonne. But of course the price will depend on the quality of the products you produce.

What is the biggest challenge facing bottle recycling firms in the UAE?

The biggest challenge facing the sector is the need for government support. Although we can export products we are not allowed to import raw materials for recycling so we are totally dependent on local materials.

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