As industry and manufacturing continue to grow in Egypt’s business landscape, so does the scrap market. To get an insight into a sector routinely absent from the investment limelight, EnterpriseAM spoke to notable players in Egypt’s scrap sector to find out why one person’s trash is another’s treasure.

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Local factories and contractors generate roughly 10 mn tons of scrap per year, amounting to EGP 200 bn worth of scrap annually, scrap marketplace platform Mrkoon CEO Mohamed Shalabi told Enterprise AM. The amount of local scrap produced is linked to the nation’s rising industrial ambitions, with recent government-led expansions in industrial hubs set to drive up resulting scrap volumes, Shalabi said.

This is good news for many who rack up large bills importing waste materials that are used in production, especially considering the heavy transport costs incurred from heavy scrap materials like metals and their relative worth. The issue is often not that the waste materials are not produced, but that until recently, the collection, sorting, and logistics of connecting suppliers to buyers had not been that commonplace.

It’s also good news for some notoriously waste-producing industries, with industrial factories, pharma players, automotive, and equipment manufacturers being some of the most prominent suppliers facilitated by Mrkoon. Added to this, the production of waste is often not costfree, with the option of selling waste helping to turn an expense into an additional revenue stream.

Business models — especially by startups — involved in or adjacent to scrap collection have strong economic viability and potential, waste recycler Bekia CEO Alaa Afifi told EnterpriseAM. Whether these nascent firms grow sustainably comes down to their scalability and their ability to source materials of high and consistent quality. Bekia’s model opts for incentive models—like cashback options—available via its digital platform.

Metals account for a significant portion of valuable scrap traded via Mrkoon’s platform, with higher-priced copper, aluminium, and iron being particularly valuable, Shalabi said. While not as valuable by weight, paper, cardboard, and plastics are good candidates for stable and scalable recycling projects — and as such are in high demand locally.

But not all types of scrap are readily available or lucrative, as electronic waste (e-waste) and cooking oil can prove relatively difficult to source reliably, Afifi said. E-waste entails steep repair costs and unsteady resale prices, whereas cooking oil’s quality can vary drastically from one supplier to the next.

Mrkoon’s platform connects upwards of 100 sellers — with whom the startup signs contracts — to around 6k prospective buyers encompassing 13 main categories of scrap, Shalabi told us. After listing scrap products, they are typically sold via digital auction within five and seven days. Bekia has managed to secure business partnerships with corporates whose scrap output is especially high in the food and beverage, engineering consultancy, and food storage container sectors, according to its leaderboard.

But other companies, including Bekia, rely more on Informal scrap collectors. A great many Egyptians collect scrap informally, with Bekia relying immensely on them, but they are not integrated into formalized recycling infrastructure. Official steps are yet to be taken to ensure better logistics solutions, fair pricing, and safe working conditions for freelance scrap collectors, with Bekia doing its fair share in supporting that side of the scrap sector, Afifi told us.

Despite the success of some waste collection startups, regulation remains a hurdle. Although regulation in the sector is improving, a few hurdles remain, Afifi told us. One hurdle is permits, which often add a layer of red tape that can stifle businesses.

The absence of financial incentives from the government is also curtailing the sector’s potential. The startup-led sector on paper seems like a perfect candidate for state support, with the work done by the companies aligning with the government’s sustainability targets, helping lower the import bill, and promoting private sector participation.

Your top green economy story for the week: Chinese solar tech player TrinaSolar is lookingto up its solar panel sales in Egypt by 20% y-o-y this year, to reach USD 600 mn.

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