Hermann Erdmann wants to add a new verb to the English language: “REDISAize.” It means creating sustainable markets where there were none.
It’s a tough sell, but the German entrepreneur is no stranger to hard-won battles. Over the past two years, he’s built a flourishing circular economy in the South African tire market out of just the idea that waste streams can become profitable, job-creating mini-industries – if they are incentivized.
Erdmann, CEO of REDISA NPC (Recycling and Economic Development Initiative of South Africa), a FleishmanHillard client, said it was obvious to him that “everybody would recycle if there was enough money in it. Nobody leaves scrap steel lying around because the scrap is worth more than the virgin materials.”
While many countries are working to reduce their waste streams, those with the highest levels of government support have been the most successful. Countries where there is less federal government investment, such as the United States and Brazil, still struggle to reduce and recycle waste. The U.S. recycles roughly one-third of its municipal waste, according to the Environmental Protection Agency.
In contrast, the Netherlands’ goal is to recycle 60 percent of all household waste by the end of this year, according to a report by the European Environment Agency. Germans send less than 3 percent of their municipal waste to landfills. Last October, Germany opened what it claims is the largest aluminum recycling plant in the world. Even less developed economies such as China are working to reduce waste. Plastic recycling hits around 30 percent there, according to the China Plastics Processing Industry Association.
But only in South Africa has a new industry been created out of a waste product. Erdmann started REDISA with tires because that’s what the government wanted. Prior to 2014, he said, about 45 percent of used tires in South Africa were burned or thrown into rivers, polluting the country’s air and water. The rest were left to rot, creating countless breeding grounds for disease-carrying vermin and insects.
The country’s Department of Environmental Affairs charged Erdmann in 2012 with setting up a viable tire recycling industry within five years. He got it up and running in less than two. When REDISA launched, only 3 percent of South African tires – or tyres in local parlance – were recycled at the end of their useful lives. Within 18 months, REDISA had grown that number to 70 percent of all tires. Erdmann believes they should hit 100 percent by mid-2016. “It happened because we placed the money into it,” he said.
REDISA, a nonprofit, put money into scrap tires in several different areas. It’s funding research at South African universities to develop tires that are more recyclable, and to find ways to break down the chemicals in tires so they may be used as new building blocks in materials such as asphalt. REDISA also is working on a tire environmental rating that will let consumers know how sustainable their tires are. The idea is that more environmentally friendly tires will cost a bit less than poorly produced (environment-wise) tires. “That’s because the entire life cycle of the tire is built into the price, so ultimately, it costs less,” Erdmann said. “It’s turning waste into worth.”
Perhaps most important, REDISA set up a self-sustaining system to collect, sort and distribute scrap tires that so far has created 170 new small businesses and 1,700 new jobs. The system initially was funded by a small tax on manufacturers. A side benefit: “We’re cleaning up the townships,” Erdmann said.
“This guarantees you a steady supply of commodities,” he said. “We have shown that you can commoditize old tires. There is no waste that shouldn’t be REDISAized,” he said. Next, Erdmann wants to move on to general waste streams. “Pretty soon, REDISAizing your waste will be as vital as insurance, bigger than cell phones,” he predicted.
But it will take government intervention to get started, Erdmann said. “It has to be made viable by making it a (profit-generating) endeavor, and the government has to do that at the start,” he said.
Photo credits: REDISA