Cuba’s Recycling Industry: Slowly Requested by Foreign Investors

In 2007, the comprehensive “Study on Integrated Management Plan Final Report of Municipal Solid Waste in Havana City“ put it to the point: “The recycling activity in Cuba is being fully managed and controlled by UERMP (Association of Enter­prises for the Recovery of Raw Materials) […]. The recyclables are presently collected and sold to markets solely by UERMP.“

Figures from 2003 show that ferrous scrap recovered in Havanna comprised to 2,335 tons, aluminum 84 tons, glass 127 tons, plastic 119 tons, lead 100 tons, while paper and cardboard reached 369 tons. The recovered iron and steel was processed and turned to new metal structures, non-ferrous metals were consumed in non-ferrous foundries, paper was used to replace virgin pulp, and glass containers were simply refilled.

A complex scrap problem

On the other hand, “the directives for waste management in Cuba are mostly vaguely defined and integrated into other decrees what makes them confusing. As a consequency of this insufficient implementation of a sustainable ecological dimension into economical development plans there is no integrative management program for municipal waste countrywide“, an expert from the Havanna waste disposal company is cited. The German postgraduate Thomas Ammerl summarized the situation: “The complex scrap problem of Havanna reflects the relationship between Cuba`s economic crisis and its ecological consequences. The storage of waste in the households, its removal and final disposal on landfills is of importance, because processing, recovery and utilization of waste does not exist, with very few exceptions.“ It was estimated that 72 percent of the regional waste derived from households, the remainder from different institutions, trade and industry.

Encouraging increased recycling

The tide changed in December 2011. The Council of Ministers approved Article 235 of Cuba’s recycling policy – as part of the implementation of guidelines drawn up during the 6th Congress of the Cuban Communist Party – aiming at “encouraging increased recycling and added value of recovered products, prioritizing activities of greater economic impact and fewer resources and their re-capitalization, as permitted by the economy”. According to The Cuban Handshake online-magazine, this started an era of reviewing the performance of the recycling sector, renewing the appropriate law and setting prices.

In July 2014, first results were available on the country’s potential output of recycling materials, the installed capacity for industrial processing and the opportunities that the sector can offer foreign investors to create new recycling capacities. The figures not only gave cause to the planning of a local ship disassembling plant and a new recycling plant of plastic materials. They also showed the need of new plant equipment to disassemble large and idle industrial facilities for the treatment of metal scrap.

Exporting or selling to the local market

At that time, the Cuban recycling sector still acted insufficient and unsystematic, nonetheless it saved 120 million US-Dollar by exporting or selling to the local market 420,000 tons of recycling material like steel, iron, bronze, aluminum, paper, plastics, textiles and e-scrap. This was not at least the merit of pilot projects in Artemisa, Mayabeque and Camaguey, where recycling was partly taken over by the private sector: Mostly the governmental cooperative dealed with purchasing and selling of the material that was – stipulated by contract – collected by self-dependend employees. According to Granma, the Official Voice of the Communist Party of the Cuban Central Committee, the Artemisa company surpassed its targets in the first half of the year by 20 percent and recovered over 13,600 tons of raw materials. Rum and beer bottles, paper, cardboard, aluminum, copper, sacks, medicine bottles, lead batteries, scrap steel and cast iron were and are the recyclables destined for the domestic industry, among others. Meanwhile, copper, aluminum, stainless steel, bronze and electronic scraps are destined for export, marketed by the Equipment Dismantling Company.

Need of biogas plants

Opposite to recyclable waste, the general treatment of organic and biodegradable matter – comprising minimum 50 percent of the municipal solid waste – stayed in dispute. In 2008, scientists suggested in a study a theoretical amount of organic waste reaching 1 million tons per year, leading to the production of about 0.5 million tons of compost every year. Composting was then estimated as the “suitable solution“ for the organic fractions of municipal solid waste. In 2014, another comprehensive study analyzed a number of waste-to-energy technologies and found a combination of dry anaerobic digestion with biogas capture and gasification to be the best. By anaerobic digestion, the bio-generator could obtain biogas from the biodegradable fraction, followed by two different processes: one stream recovered by a composting process, the other pretreated for recovery and recycling of materials and then sent to a gasification plant.

However: Cuba then discovered a great demand for the treatment of organic waste. In June 2015, the online-magazine E&E news reported Cuba having 1,818 biogas digesters and a need of additional 7,000. And the vice minister of the Ministry of Energy and Mines, Raúl García Barreiro, underlined the general need of “500 industrial-sized biogas plants using the residue of distilleries, canning factories, sugar mills, slaughterhouses and pulping factories“.

Opportunities for foreign investment

In November 2014, the Cuban Minister for Foreign Trade and Investment, Rodrigo Malmierca, provided a list of 246 projects looking for foreign financiers. According to him, all ventures included some sort of feasibility studies to ease the transaction. But the investors stayed expectant, especially as the capital expenditure requirements were partially unclear. In contrast, the official “Cuba Portfolio of Opportunities for Foreign Investment 2015“ offering “Cuba: A Place for Foreign Investment“ marked a further step to market opening. Concerning main products for the domestic and export markets, the paper had to admit that Cuba is “distinguished by our comprehensive system of recycling scrap metal and non-metal waste that adds value and allows us to reduce the costs of our products“. But it “invites foreign investment to develop and update its technology and to achieve productivity and competition levels for its products according to international standards and thereby increase its exports“.

The “portfolio“ offered even more. The “metal / mechanical business group“ consisting of the three fundamental sectors – metalworking, recycling and mechanical/machinery production – was seeking strategic alliances: It is “prioritizing investments associated with steel and container production, products for agriculture, transportation, production and rational use of energy and the manufacture of consumer goods, etc.“. And the implementation of a “Solid urban waste handling integrated system“ wanted not only to gradually reduce total volumes of generated waste to minimum levels, but also to build plants to generate electricity and heat and produce organic fertilizers – second raw materials for the domestic market. The estimated investment of this joint enterprise: one billion US-Dollar, in the first phase with fixed capital of 401.2 million US-Dollar to be undertaken in Havana.

Growing demand of foreign investors

The demand of foreign investors began to grow. In March 2016, the Swedish Trade & Invest Council reprinted the conditions of the above-mentioned “Solid urban waste handling integrated system“ in its “Business Opportunities for Swedish Companies in Cuba“. And in June 2016, the Cuban News Agency reported that Cuban authorities were analyzing proposals from 28 foreign companies willing to invest in a management project of urban solid wastes generated in the country. Orlando Lopez, specialist of Industrial Policy Board of the Ministry of Industries, underlined “that the requests for investments came mainly from European nations and Canada“.

Cuba seems to have come to a point as The Cuban Handshake has already described in 2012: “The new policy stipulates the development of industrial processing through the introduction of new technology and of course through the encouragement of foreign investment in the sector.“

Photo: pixabay

GR42016