Industry Projects

The Subsidy Mechanism

Since the recycling of PET (as with many other waste streams) always competes with, for example, the price of virgin materials, economic support through incentives or subsidies is often required to sustain the end-use, demand-side market. This is experienced not only in South Africa but also internationally, and so the possible incentives proposed through the Department of Environmental Affairs’ National Pricing Strategy are very encouraging in supporting future recycling markets. Currently these incentives are provided by PETCO through the voluntary EPR fee collected from manufacturers and importers of PET raw material.

The key to sustaining supply with demand is to ensure that the value chain remains viable, especially during periods of low commodity prices, which are largely influenced by the volatile economic market, oil price, the highs and lows of virgin polymer and staple fibre prices, and other competing textiles. A viable supply chain attracts further investment in demand capacity, which in turns spurs the development of supply capacity. PETCO incentivises PET recyclers who collect bottles and process them into rPET in preparation for the manufacture of new products. This is necessary to support recyclers during these adverse cycles to ensure long-term viability of projects. As part of our strategy, we continue to focus on stimulating investment in infrastructure and innovation in the development of new end markets for rPET, as well as the stimulation of existing markets. We are positive about the fostering of innovation, as well as closing the gap between research and business development and look forward to realising the vision of the Waste Research, Development and Innovation Roadmap for South Africa.

We invest all our funds in ensuring and encouraging visible recycling through:

Here is how it’s done:


Around 70-80% of our annual budget is spent on financially supporting our recycling projects to ensure that we achieve our annual volume targets. We do this so that we can sustain the interest in PET bottle recycling capacity, develop the end-use markets, and reduce the volume of post-consumer PET in the waste stream.

Our support is in the form of a recycling fee, which is paid to our recycling partners for every kilogram of post-consumer PET that they buy from collectors – this ensures that the only way they can receive financial support from us is through consistently buying post-consumer bottles and re-processing them into new feedstock material.

The level of support we give to our projects depends on a number of things, and we carefully monitor these to make sure that the funds are always spent in the most efficient manner.

Projects are also independently audited on a quarterly basis by Watson Inc. to ensure that all checks and balances remain in place.

Image below:
Bales of post-consumer PET ready for processing.


PETCO’s Recycling Projects

Between 70 and 80% of the PETCO budget is spent assisting volume driven projects that support recyclers who have an end-use market in their value chain. Both the number and capacity of our recycling partners has grown significantly since inception in 2004.

Our volume driven project partners are the investors in new plants and equipment that is required to deliver the tonnes of PET recycled each year. They support collection through training, equipment and access. They invest in testing equipment, quality control, and the development of new end-use markets.

PETCO provides funding in support of these partners to ensure that their volume targets are met and that, through adverse economic cycles, these programmes are sustained. Our contracts with the recyclers give them the confidence to also invest downstream – in collector training, provision of baling machines and support of SMME’s.

PETCO closely monitors the market prices and major cost variables in its on-going assessment of recycling fees, and adjusts these accordingly to ensure no over-subsidy occurs and that its partners do not stall against the odds so often stacked up against those involved in recycling activities.

In order to ensure that funds are distributed as efficiently as possible, mechanisms follow market dynamics closely and automatically determine the level of financial assistance to be provided to a particular end-use.

The cost of the PETCO model to the consumer currently averages at approximately 1 cent per bottle, an amazing achievement by any standard.

PETCO recycling partners include:

Collectively these contracted partners purchase post-consumer PET bottles on a nationwide basis, with their footprint growing all the time.

Image below:
Mpact’s state of the art Bottle-2-Bottle facility.


Joint Venture Projects

PETCO embraces partnerships and sees the value of collaborative efforts. We undertake a range of projects, from in-kind donations and joint-cause marketing campaigns, to joint ventures with government, other industry bodies, our paper and packaging partners and our voting members.

Below are some examples of the remarkable joint venture projects that have been undertaken to date:

The International Labour Organisation (ILO) EnterPRIZE Development Challenge

For the last three years, the International Labour Organization and PETCO collaborated with partners in the uMhlathuze Municipality about 180 kilometers north-east of Durban, to host the Responsible Tourism Challenge. The Challenge is a sector specific business plan competition implemented with public and private sector partners and is designed to support SMME development and job creation. Under the banner of responsible tourism practices, businesses in tourism and waste sectors were invited to present their business ideas.Three waste businesses in the uMhlathuze Municipality won prizes that included both financial and non-financial support.

The Thinana Recycling and Waste Management Primary Co-operative
The Thinana Co-operative was recently announced as one of the winners of the 2015 SEED Awards. This cooperative comprises of five women who collect recyclable waste in the village of Senwabarwana (Limpopo). They use donkey carts and trolleys to collect used plastic bottles (PET), cans and glass. In partnership with the P.E.A.C.E Foundation, PETCO played an important role in supporting the Co-operative through training and by supplying collection trolleys and a manual baling machine.
Kruger National Park
PETCO partnered with Plastics|SA to sponsor a PET baling machine to the Kruger National Park to ensure that post-consumer PET used in the southern parts of the Park can be baled and transported to the nearest buy-back centre. PETCO then sponsored a 2nd baling machine to service the northern parts of the Park. These baling machines have reduced incineration in the Park by an estimated 70%.

Developing the end-use market

A balance must be maintained between the collection of post-consumer PET bottles on the one hand, and the demand for recycled end-use products on the other. This balance between supply and demand, and installed recycling capacity is critical to keeping the bottle collection and recycling chain intact and to ensuring that the financial benefits continue to reach collectors on the ground. In South Africa, post-consumer PET bottles are collected and recycled into two types of end-use products for the local and export market:

Bottle-2-Fibre (B2F)

The largest end-use market for post-consumer PET bottles in South Africa is currently the polyester staple fibre market. Polyester staple fibre/filament is used to manufacture apparel (clothing), home textiles (duvets, pillows and carpeting), automotive components (carpets, sound insulation, boot linings and seat covers) as well as industrial applications (geotextiles and insulation).


Bottle-2-Bottle (B2B)

A growing end-use market is that of recycling bottles back into packaging. This can, to some degree, be ascribed to the growth in acceptance on the part of many companies of the concept of Extended Producer Responsibility (EPR), as well as the possibility for savings and reputational benefits associated with the use of recycled materials. The use of recycled resin in food-grade PET packaging entails compliance with extremely stringent standards for health and safety and product quality.

Non-food-grade recycled PET is therefore often applied as an input material in the manufacture of packaging and bottles for personal, homecare, pharmaceutical and other uses.

In the food-grade sector, recycled PET resin has been blended with virgin PET in various ratios since 2009 for use in the manufacture of containers and bottles such as sandwich containers, trays, tubs and non-carbonated beverage bottles.


The demand for food-grade rPET resin continues to exceed supply by significant margins. This demand is further exacerbated by commitments of many organisations, both local and global, to have more rPET content in their PET packaging instead of closing the loop. In 2019, however, we had challenges with the Bottle-to-Bottle recycling capacity because of Mpact Polymers’ closure. This impact has seen the PET waste collection for the purpose of producing food-grade resin declining by just under 5%. Extrupet’s food-grade line expansion will see their current capacity increasing by 20 000 tonnes of bottles collected in 2020, and their total Bottle-to-Bottle capacity increasing substantially in the next few years.

PETCO anticipates that the majority of the future growth in South Africa’s end-use markets for recycled PET will come from the Bottle-to-Bottle market, particularly as the awareness grows amongst brand owners of the benefits that can be achieved through the use of recycled PET products. In this regard, we anticipate significant opportunities for investment in Bottle-to-Bottle recycling facilities in South Africa in the coming years.

Other end use applications

While PETCO encourages the processing of post-consumer PET bottles in South Africa in order to promote value addition and employment creation in the local market, we remain aware that, in certain instances, the exchange rate of the Rand against international currencies makes the export of post-consumer PET an attractive proposition.

PETCO is, on an ongoing basis, actively seeking to develop alternative end-use markets for recycled PET products. As a result, we have been actively collaborating with commercial product developers, academic institutions and research organisation such as the Council for Scientific and Industrial Research (CSIR), in investigations into the technical and commercial viability of various end-use products and markets. We trust that some of these products and markets will in the future take up an increasing percentage of the post-consumer PET bottles collected in South Africa.


Membership Workshops

PETCO hosts nation-wide member workshops, specifically designed to be useful to members’ businesses and of benefit to their employees. These workshops help to ensure that members are up to date with the latest offerings from government and the private sector. They are packed with relevant case studies, and information on a range of topics relating to PET plastic recycling and relevant new products.

View our upcoming workshops or view our resources for all the presentations from our past events.