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Castricum, 1996; Dhanalakshmi and Iyer, 1999). The result has been that size of
material flows, turnover and profit levels are rarely established in studies on recycling
and recovery^12 , which makes discussions on their commercial and environmental
contributions very difficult. However, rare field surveys show that the final links in the
commodity chain, consisting of wholesalers and enterprises using recycled materials
as (a portion of) their raw materials, have sizeable turnovers in both volumes and sales
levels (cf. Dhanalakshmi and Iyer, 1999). In Chennai, the largest wholesaler in broken
glass buys materials from all over Southern India, and has a turnover of Rs 2 million
per month. In Bangalore, plastic recycling enterprises on average process 40 tonnes of
material per month, two glass factories use 861 tonnes per month, and metal producers
some 9 tonnes monthly (van Beukering, 1994).
Although their existence argues for the commercial viability of trade and recycling
enterprises using inorganic waste materials, their existence can be threatened by exter-
nalities. The use of waste materials as raw material can become less competitive, if the
price of imported virgin materials goes down or is no longer subject to high import
duties (as has happened in Nairobi with plastics; Karanja et al., this volume). Alterna-
tive waste flows of higher quality waste materials from abroad also push lower quality
domestic waste streams in developing countries out of the market. However, if the
demand for the materials remains higher than the supply, waste flows can continue to
grow (van Beukering, 1994). Economic viability is also influenced by other external
factors Lack or failure of power supply is a frequent problem, and many smaller recy-
cling enterprises and traders maintain a degree of ‘informality’ to avoid high tax costs
and time-consuming administrative regulations (van Beukering, 1994; Baron and
Castricum, 1996).
The large enterprises producing final goods at the end of the commodity chain deter-
mine the final composition of their product, and influence prices in the rest of the
commodity chain. When they reduce the price of waste materials, the negative effects
are fed back through the commodity chain to other more vulnerable groups.
Employment and income
Trading and recycling commodity chains also have an economic importance in the
employment and income created. At the collection stage, such activities have provided
a basic livelihood and a source of consumption goods for large numbers of poor urban
citizens picking waste materials off streets and dumpsites (Furedy, 1990, 1992; Hunt,
1996; Huysman, 1994; Baud and Schenk, 1994). These have included immigrants to
urban areas, (male) street children, and women without other employment opportuni-
- An exception is van Beukering, who found profit levels to increase up the commodity chain, with
recycling enterprises earning average monthly profits of around 25 percent in Bangalore, India. Trad-
ers lower in the chain had profits ranging between 4-6 percent (van Beukering, 1994).