Marc-Antoine Dunais

1
Cost Benefit Analysis of Aseptic Carton Recycling
in Bandung, Indonesia

• Marc-Antoine Dunais
• Nicholas School of the Environment
• Duke University

2
Background

• In low-income Asian countries, a majority of MSW
  is inadequately processed
• Results in environmental problems
• affects the health of humans and animals
• causes economic and welfare losses

http//cache.daylife.com/imageserve/06RpfgW1cR3Mr/
610x.jpg http//a.abcnews.com/images/Technology/ap
_rat_080515_ssh.jpg http//www.puravidaatitlan.org
/images/index20trashdump.jpg
3
Background

• Bandung is Indonesias third largest city 6
  million habitants, 3 annual population growth
  rate, 8000 m3 of waste generated each day

Burnt (toxic fumes)
Recycled
Dumped (causes flooding,coastal pollution)
Processed to landfills
4
Aseptic cartons

• Allow liquid food to be safely stored at room
  temperature without preservatives
• Consist of
• paperboard (75)
• plastic (20)
• aluminum (5)

5
Aseptic cartons

• Packaging structure more complex than plastic
  bottles or magazines
• Recovery of all packaging components is
  challenging
• Only 1 of cartons recycled in Indonesia

• Lack of information on the recycling potential
  of these products
• Lack of efforts so far by the private recycling
  sector to recycle them

http//www.chinesemol.com/member/upload/product/63
375151/20077151781083849.jpg
6
Scope objectives

• Explore costs and benefits of recycling
  aseptic cartons at BBPK, a recycling plant in
  Bandung

• Objectives
• Determine cost of recycling cartons
• Assess 3 scenarios for carton recycling at BBPK
  through Cost Benefit Analysis (CBA)
• Provide a set of recommendations to BBPK

7
Methodology
1 Collect data on economic costs and benefits of recycling aseptic carton material at BBPK
2 Carry out CBA to determine the economic values of aseptic carton recycling
3 Apply sensitivity analysis to the CBA
8
About BBPK

• Center for Pulp and Paper parastatal body
• Focus on pulp, paper and environmental issues
• Activities research, equipment calibration,
  certification, consulting and recycling
• Supported by Tetra Pak to initiate aseptic carton
  recycling in Bandung

9
Methodology (scenarios)
Scenario 1Baseline/Business as usual Scenario 2 BBPK pays for the purchase of waste cartons in Bandung Scenario 3BBPK pays for the purchase of discarded cartons and sells polyfoil in addition to pulp
BBPK continues to receive financial support from Tetra Pak Potential scenario for BBPK starting in 2010 Long-term scenario
10
Results
Scenario 1Baseline/Business as usual Scenario 2 BBPK pays for the purchase of waste cartons in Bandung Scenario 3BBPK pays for the purchase of discarded cartons and sells polyfoil in addition to pulp
Negative cash flow (NPV - USD 58,618) Substantial negative cash flow (NPV - USD 426,790) Negative cash flow (NPV - USD 70,997)
50 increase in the amount of aseptic cartons recycled per year creates a positive NPV Sensitivity analysis for Quantity of Aseptic Cartons and Purchasing Price of Aseptic Cartons shows positive cash flow
11
Discussion

• Challenging for BBPK to achieve positive cash
  flow, even with Tetra Pak subsidy
• By increasing recycling capacity, BBPK can reduce
  cash flow gap
• Full extent of BBPKs negative cash flow
  requires further study

12
Recommendations

1. Increase recycling capacity, as there is enough
   raw materials to allow increased recycling rate
2. Sell pulp at a premium price to a niche market
3. Reduce Tetra Pak subsidy progressively

http//blog.inertiabev.com/wp-content/uploads/2008
/03/tetrapak.jpg
13
Conclusions

• Increase BBPK recycling capacity to reach more
  buyers who buy bulk sell pulp to niche market
  with price premium
• A slow-down in recycling will undermine market
  for collection and purchase of discarded cartons
• BBPK will falter if subsidy is not sustained in
  the medium term

14
Thank you!