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Their income levels are higher than those of pickers, but remain susceptible to adver-
sity. Many small dealers become pickers again if their businesses fail. Wholesalers are
fewer in number, but make higher profit levels by maintaining an oligopolistic posi-
tion. The study in Chennai showed wholesalers with distinct differences in size of
turnover and market control (Dhanalaksmi and Iyer, 1999).
Such networks were also found in the plastic waste recycling trade and small enter-
prises processing waste materials as intermediate products for the enterprises using
secondary materials as sources of raw materials mixed with virgin materials. Jordens
(1996) indicates that vertical family networks are set up in the plastic trade and recy-
cling sector, in order to keep a firm control over quantities and prices of the waste
materials collected and utilised for processing. Such small enterprises are the only
‘true’ recycling enterprises, as the large enterprises always combine virgin materials
with secondary materials to produce their final products.
Medium and small enterprises or co-operatives collecting waste in Latin America
have been formed by people from slum neighbourhoods. In a number of countries,
they perform basic collection services (cf. Arroyo Moreno et al., 1999). A number of
medium scale enterprises/co-operatives have also carried out trade of secondary mate-
rials. They have different financial models, receiving payments either directly from
their customers, or through municipalities. These models limit their profit margins, as
municipalities set limits. They also face a restricted market for their recovered mate-
rials, in which large buyers and end-users set the price (Arroyo Moreno et al., 1999).
Co-ops working directly with private customers show the best results financially.
Very little is known about the enterprises using secondary materials for their produc-
tion. This constitutes a major gap in our knowledge, as these enterprises determine the
extent to which secondary materials are utilised again, and the prices paid for them to
other economic agents in the commodity chain.
The commodity chains described here can be spread geographically within a city
(waste pickers, itinerant buyers and retail traders), but also include units that cover
much wider areas (wholesalers collecting scrap from a whole region of the country).
However, the base of the recovery sector can also be termed an ‘industrial district’, in
that local recyclers work together pro-actively within a limited geographical area to
promote their businesses. In Dhaka, Maqsood Sinha and Nurul Amin have studied
neighbourhoods where small recycling industries are heavily concentrated, and have
argued that this constitutes an ‘industrial district’ (1995). In fact, their study also indi-
cates linkages with businesses outside the city putting in orders for recycled materials.