COST BENEFIT ANALYSIS OF ASEPTIC CARTON RECYCLING IN BANDUNG, INDONESIA
Abstract
Growing populations, rising incomes, and changing lifestyles contribute to severe
waste management problems in many urban centers around the world. In low-income Asian
countries, a majority of municipal solid waste is inadequately processed, leading
to environmental problems that affect the health of humans and animals, and cause
economic and welfare losses. However, in many countries there is neither infrastructure
nor market incentives for managing household waste such as aseptic cartons usefully.
This research explores the costs and benefits of recycling aseptic cartons at BBPK,
a recycling facility in the Indonesian town of Bandung, and provides recommendations
for improving the facility’s profitability.
The results of the cost benefit analysis from a business perspective demonstrate that
the costs of operating the recycling facility generally exceed revenue. The negative
operational cash flow occurs despite funding provided by aseptic carton-maker Tetra
Pak to support BBPK’s purchase of raw materials. However, the cost benefit analysis
demonstrates that under certain market conditions, recycling activities could become
profitable. The prospects for such a scenario will ultimately depend on the sustained
availability of external funding in the short to medium term, and capital investments
in the facility’s recycling operations in the long term.
Hence, it is opportune for Tetra Pak to extend financial support to BBPK for the purchase
of raw materials until market conditions for recycled pulp have stabilized. Working
with BBPK, Tetra Pak could develop a roadmap that would envisage a gradual phasing-out
of its funding subsidy. By demonstrating that BBPK can become financially viable by
operating independently, Tetra Pak can demonstrate to other recycling facilities that
aseptic carton recycling, despite its challenges, is worth considering in Indonesia.
Type
Master's projectPermalink
https://hdl.handle.net/10161/978Citation
Dunais, Marc-Antoine (2009). COST BENEFIT ANALYSIS OF ASEPTIC CARTON RECYCLING IN BANDUNG, INDONESIA. Master's project, Duke University. Retrieved from https://hdl.handle.net/10161/978.Collections
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