Do you want to start a waste oil recycling company? If YES, here is a detailed sample waste oil recycling business plan template & FREE feasibility report.
Waste oil is simply oil that has been contaminated with substances that may or may not be hazardous. Waste oil is considered a valuable resource. However, presently, with improvement in technology these oils can be recycled and reused. Aside from helping the environment and promoting sustainability, it is a good way to earn a good income.
Although it is capital intensive and requires a lot of effort and patience, it is recession proof with a lively market aided by the growing awareness of environmental sustainability and Waste Management. The best way to earn in this business will be to provide customers with the finest and best quality of product.
A Sample Waste Oil Recycling Business Plan Template
1. Industry Overview
According to industry reports, macroeconomic factors such as growth in the GDP in North America and Europe, gradual recovery of the industrial sector in these region, and increase in the energy demand of the rising population across the world are expected to drive the global waste oil market in the near future.
Developing economies offer significant growth opportunities to the market, as penetration of equipment with advanced technologies is less in these countries.
According to reports, the automotive sector witnessed a rebound in 2017, owing to the rising energy demand of the every growing population, particularly in developed economies. This can be attributed to robust economic growth in Asia Pacific and Europe.
In North America, market expansion and increase in the demand for re-refining created favourable conditions last year. These are expected to continue during the forecast period. Note that economic recession and political instability across the globe are likely to delay or discontinue infrastructure development activities for waste oil in the next few years.
Nonetheless, increase in industrialization and rise in demand for sustainable energy in most regions of the globe are projected to boost the global waste oil market. Although high installation cost of waste oil plants is likely to constrain adoption of waste oil by small industries with low capital investment.
Waste Oil is commonly used in the automotive and industrial sectors for re-refining applications. Experts project more investments in automotive activities coupled with rapid industrialization and urbanization to grow demand for waste oil.
Once waste oil is used, it can be collected, recycled, and re-used. Asia Pacific is projected to emerge as a market leader for waste oil in the next few years.
High environment-consciousness in Europe and North America is expected to drive the waste oil market in these regions in the near future. A large number of alignments between manufacturers and technology developers are likely to propel the global waste oil market in the next few years. The global waste oil market is highly competitive. Leading players dominate the market.
2. Executive Summary
Penchant Oil® Waste Oil Recycling, Inc.® Waste Oil Recycling, Inc. is an innovative waste management company that creates high-grade fuel oil made from waste oil, using a self-cleaning filter that reduces labour by 75 percent, maintenance by 50 percent, in 60 percent less production space.
According to research, over 200 million gallons of used motor oil are improperly disposed of by being dumped on the ground, tossed in the trash (ending up in dumpsites), and poured down storm sewers and drains.
Penchant Oil® Waste Oil Recycling, Inc., a Houston, Texas based firm will be renowned for our rich experience in the waste/Used Lube Oil re-refining with related activities, production of high grade fuel oil, blending of waste lube oil to convert it to different grades of automotive engine oil & industrial oil, processing of light hydraulic oil and de-odorized low aromatic white spirit.
Penchant Oil® Waste Oil Recycling, Inc. will also offer advanced, easy operative, most economical and highly profitable technology and expertise for the production of all our products and services. We anticipate that Trans Ocean Supplies will provide the majority of all equipment contract and supplies.
Our facility will result in the employment of a construction workforce averaging 12 people and an initial operational workforce of seven to 10 employees. With the enforcement of environmental legislation in Houston, Texas, there is a growing need for wastes generated in the course of industry to be effectively treated prior to disposal using best available technologies.
Efficient environmental management, especially in terms of waste management, has become necessary company practice due to legislative impacts and the expectations of the corporate sector and the entire city. Industries are currently mandated to meet their obligations for due diligence in their activities and maintain a duty of care for the environment.
At Penchant Oil® Waste Oil Recycling, Inc., we believe the industry in the whole of Texas would benefit from the existence of a state-of-the-art treatment facility that would act as a catalyst for future industry growth in the area. Our proposed facility will perform crucial roles in automotive oil waste management in the whole of Houston and the surrounding area.
We strongly believe that the protection of the environment is the responsibility of the whole community and that Penchant Oil® Waste Oil Recycling, Inc. can work closely with the government of Houston to achieve the goal of Ecologically Sustainable Development (ESD).
We believe that the establishment of this facility capable of offering best available technology should greatly reduce uncontrolled environmental impacts from waste automotive oil. Additional benefit will include total management of wastes, reduction in contaminated sites and a reduction in long-term risks to the Government and the general community.
3. Our Products and Services
Penchant Oil® Waste Oil Recycling, Inc., a waste management recycling company based in Houston, Texas, reclaims used motor oil and filters, along with industrial commodities. Though waste oil is required for reuse in much of united states, we at Penchant Oil® Waste Oil Recycling, Inc. want to capture an underserved market niche for a higher grade fuel oil (Base Oil SN 150/ 300/ 500), made from processed waste oil.
We will also blend oil with additives to produce different grades of motor engine oil and industrial oil. We also plan to process diesel to produce light hydraulic oil and process kerosene oil to produce different grades of de-odorized low aromatic white spirit.
4. Our Mission and Vision Statement
- Our vision at Penchant Oil® Waste Oil Recycling, Inc. is to produce unique and affordable products from waste oil that are properly re-refined into lubricants, processed into fuel oils, and used as raw materials for the refining and petrochemical industry.
- Our mission at Penchant Oil® Waste Oil Recycling, Inc. is to establish a waste oil recycling facility that will utilise proven, appropriate technology to minimise environmental impacts from the treatment, transport, storage and disposal of motor oil.
Our Business Structure
Our facility will be designed to minimise any impacts on the surrounding environment. The operational procedures will be developed to ensure that the facility is managed and operated in accordance with company and legislative requirements. The parameters and procedures have been selected from best practices adopted by a handful of top companies throughout the United States.
The auditing programme documented in the facility’s management plan will ensure that the highest safety and environmental standards will be maintained throughout the operational life of the facility. A summary of the management commitments and responsibilities to ensure the development of an environmentally responsible facility is outline below.
- Chief Executive Officer (Owner)
- Company Manager
- Human Resources and Admin Manager
- Facility Operations Supervisor
- Facility Operator
- Facility Maintenance Mechanic
- Recycling Technician
- Facility Maintenance Helper
5. Job Roles and Responsibilities
Chief Executive Officer
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counselling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
- Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Tasked with fixing prices and signing business deals
- Tasked with providing direction for the business
- Tasked with signing checks and documents on behalf of the company
- Evaluates the success of the organization
- Tasked with overseeing the smooth running of the company
- Makes sure that quality is maintained at all times
- Maps out strategy that will lead to efficiency amongst workers in the company
- Tasked with training, evaluation and assessment of the workforce
- Make sure operation of equipment by completing preventive maintenance requirements; calling for repairs.
- Make sure that the company meets the expected safety and health standard at all times.
Human Resources and Admin Manager
- Tasked with overseeing the smooth running of HR and administrative tasks for the organization
- Defines job positions for recruitment and managing interviewing process
- Carries out staff induction for new team members
- Tasked with training, evaluation and assessment of employees
- Oversees the smooth running of the daily business activities
Facility Operations Supervisor
- Ensures Health and Safety is the number one priority by complying with all safe work practices, policies, and processes and acting in a safe manner at all times
- Performs multiple site-specific plant operations, including but not limited to, drum pumping, drum dumping, truck offloading/loading in compliance with DOT segregation requirements, scanning applications for waste tracking, loading trucks and conveyor belts, and warehousing
- Supervises multiple employees including operators and foreman to ensure safety and production goals are achieved in plant operations
- Ensures that employees follow and maintain all applicable Health and Safety Standard Operating Procedures
- Ensures that plant-specific permit and compliance standards are maintained at all times
- Works under the direction of the Plant Operations Manager
- Follow and support all safety policies and procedures
- Ensure all waste or by-products are disposed of according to relevant rules and regulations
- Perform material sampling
- Conduct sample analysis
- Record sampling results
- Inform Supervisor of any variances
- Maintain accurate and neat records and production samples as required
- Monitor wastewater prior to discharge or treatment
- Clean and maintain operating area per daily/weekly/monthly cleaning schedule
- Perform daily/weekly/monthly maintenance as directed
- Clean and calibrate sampling probes
- Identify process challenges and coordinate troubleshooting efforts with Supervisor
- Record inbound & outbound weights of materials throughout unit operations
- Record shipping/receiving information
- Record all quality or inspection data as instructed
- Record all production data as instructed
Facility Maintenance Mechanic
- Responsible for daily directing and performing preventative and routine maintenance on a variety of facility equipment including, but not limited to: pumps, compressors, vehicles, basic instrumentation, heat exchangers, pressure vessels, and other equipment.
- Advises plant personnel on maintenance equipment related concerns.
- Ensures that all safety practices are followed during maintenance activities Communicates immediately to the Supervisor any safety issues which cannot be immediately resolved at his level.
- Is responsible for the daily scheduling and prioritization of Maintenance activities
- Initiates purchase orders for consumable supplies.
- Identify and remove non process-able material from a moving conveyor.
- Visibly identify potential hazards or items that may affect the operation of the line and stop the process until such hazards can be removed.
- Complete other tasks as requested by the MRF Supervisor and plant management.
Facility Maintenance Helper
- Perform all maintenance operations in accordance with technical specifications and safety regulations.
- Help maintain equipment such as: feed systems, conveying systems, scrubber systems, shaker systems, classifying systems, discharge hopper systems, weigh systems, cement storage systems, central mixer systems, load carrying systems, drive systems, water systems, air systems, electrical systems, crusher systems, hydraulic systems, recycling systems, structural systems, and other miscellaneous equipment.
- Assist with periodic inspections in accordance with the company Prescribed Inspection Schedule.
- Perform all pre and post-trip inspections and complete daily inspection reports.
- Operate vehicles and equipment in a safe manner. Follow proper procedures and complete required documentation if an accident or injury occurs. Notify manager or Safety Department as required.
- Understand and comply with all safety rules set forth by the company and governmental regulatory agencies.
- Other duties as assigned
- Assist in the hydro blasting of plant equipment
- Clean-up of plant process areas
- Conduct inspections of equipment’s integrity.
- Clean-up hazardous waste spills by vacuum trucks, pump carts, absorbent material, pressure washer, steam cleaner and other means.
- Handle materials that are flammable, toxic, corrosive, and reactive.
- Enter confined spaces to clean tanks and vessels.
- Perform Lockout, Tag-Out (LOTO) and energy isolation as required.
- Follow all safety procedures and take an active role in personal safety and the safety of those around them.
- Operate a forklift, man-lift, vacuum truck, backhoe, and other heavy equipment.
- Perform other daily duties as assigned with little supervision.
6. SWOT Analysis
We at Penchant Oil® Waste Oil Recycling, Inc. due to our zeal for excellence have been able to contact some of the finest business consultants in Houston to look through our business concept.
Together we were able to accord ourselves the second chance to be sure that we have what it takes to run a standard waste oil recycling facility that can compete favourably in the industry. Outlined below is a of the result of our SWOT Analysis conducted for Penchant Oil® Waste Oil Recycling, Inc.:
- Vast Industry Experience
- Regulatory Agencies Increasingly Engaging in Initiatives in Educating about the Vast Health Hazards of the Inadequate Disposal of Used Motor Oil
- Houston motor market
- Rising Supply of Counterfeit Engine Oil Product
- Government Regulations Regarding the Emission are Anticipated to Restrain the growth of this Market
- Growing Demand for Re-Refined used Oil in a Petroleum Refinery is also Boosting the Automotive Oil Recycling Market
- Increase in Government Regulations on Automotive Oil Recycling Market During the Forecast Period
- Issue Related Towards the Content of the Highly Toxic Material While These Oils are in the Processing
7. MARKET ANALYSIS
- Market Trends
Our raw material, waste oil and petroleum products originate from crankcase and lubrication wastes generated during the normal maintenance of motorized vehicles and machinery. These oils may be used directly without reprocessing as road oils for dust control, or may be mixed with virgin fuel oil for use in boilers for heating or electrical power generation.
Experts suggest the emissions of heavy metals and other related environmental problems should be carefully evaluated before burning or otherwise recycling waste oil. Indeed the process of refining waste oil to produce lubrication oils or fuel oils is technologically possible and currently is being practiced in many areas.
But hindrance in removing impurities of lead, dirt, metals, oxidation products, and water, along with environmental standards and product specifications, have negatively affected the widespread practice of recycling in the past.
However, the improvement of recycling technology, coupled with economic incentives, may aid the resurgence of recycling petroleum products in the near future. Waste oil and its impurities pose potential threats to the environment, whether the waste oil is indiscriminately dumped on land or into watercourses or burned.
Notably, even the refining process may produce acid sludge and contaminated clays that must be disposed of in a way that is safe environmentally. Economic and environmental benefits in using waste oils to produce BD are emphasized when it is sourced, produced, and sold locally.
Presently, heterogeneous acid-catalysed was found to be the most merit sustainable technology among available BD production technologies as it offers low energy requirement and easy separation and purification technology of BD and glycerol.
Meanwhile, there are still opportunities for developing other technologies to tackle the problem in handling such oil stock with an unpredictable composition as well as enhancing the revenue from BD and its by-product. Finding compact technology to prepare and process waste oils into BD can provide a flexible way to optimize the economic and environmental feasibilities of the BD production from waste oils.
8. Our Target Market
Aside from the refining and petrochemical industry we plan to serve, our business location, Houston, provides us with adequate supply of raw materials and a viable market for our products. Houston remains the most populous city in the U.S. state of Texas, fourth most populous city in the United States, most populous city in the Southern United States, as well as the sixth most populous in North America With an estimated 2018 population of 22,325,502.
Unlike most places, high oil and gasoline prices are beneficial for Houston’s economy, as many of its residents are employed in the energy industry. Houston is the beginning or end of numerous oil, gas, and products pipelines. The city is considered an automobile-dependent city, with an estimated 77.2 percent of commuters driving alone to work in 2016, up from 71.7 percent in 1990 and 75.6 percent in 2009.
According to research, another 11.4 percent of Houstonians carpooled to work in 2016, while 3.6 percent used public transit, 2.1 percent walked, and 0.5 percent bicycled. A commuting study estimated that the median length of commute in the region was 12.2 miles (19.6 km) in 2012.
Our Competitive Advantage
At Penchant Oil® Waste Oil Recycling, Inc., our competitive advantage is our revolutionary approach to the re-refining of waste oil. All wastes directed to our facility will be assessed to determine the most appropriate treatment and disposal process.
We will encourage generators to segregate waste at the source wherever possible to ensure waste treatment costs are left to a minimum. We will also provide scientific and environmental advice to industries in our region to optimise processes, minimise waste and assist generators to meet cleaner production targets.
We make use of the Wiped Film Evaporator (WFE), a Short path distillation; followed by Solvent extraction or Mild Hydro fining finishing process involved for the recycling (Re-refining) of Waste Oil to Base Oil group I, group II and group II+ with zero environmental waste: no air, no solid and no liquid pollution.
The WFE is ideally suited to process hard-to-handle, heat sensitive and viscous materials. These are just some of the many and varied products that the WFE processes. It is designed to carry out deodorization, distilling, concentration, re-boiling, solvent recovery and stripping, then re-refined oil is ready for oil blending stage.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Penchant Oil® Waste Oil Recycling, Inc. is an innovative waste management company that creates high-grade fuel oil made from waste oil, using a self-cleaning filter that reduces labour by 75 percent, maintenance by 50 percent, in 60 percent less production space.
We will generate revenue by producing and selling high-grade fuel oil (Base Oil SN 150/ 300/ 500), made from processed waste oil. We will sell oil blended with additives to produce different grades of motor engine oil and industrial oil. We also process diesel to produce light hydraulic oil and process kerosene oil to produce different grades of de-odorized low aromatic white spirit.
10. Sales Forecast
From our extensive market research, we believe Penchant Oil® Waste Oil Recycling, Inc. will be having exceptional sales in our first year of operation. We believe that our direct unit costs include the costs for the waste oil forces that will collect and supply the oil we will be re-refining.
The costs we believe are roughly 35 percent of all direct costs each month. Our sales projections at Penchant Oil® Waste Oil Recycling, Inc. was analysed from two main revenue streams: the public, and the petrochemical and automotive industries.
We believe that our sales projections for the second year of operation will be based on a modest growth rate for sales. We are projecting a growth rate of 20 percent, believing our advertising will bring in new clients daily. Outlined below are the sales projections of Penchant Oil® Waste Oil Recycling, Inc.:
- First Year: $795,000
- Second Year: $2,400,000
- Third Year: $6,000,000
Note: it is worthwhile to note just like we stated above that this forecast was done based on what is obtainable in the industry and with the believe that none of the threats we mentioned above will be a hindrance or may likely appear.
- Marketing Strategy and Sales Strategy
At Penchant Oil® Waste Oil Recycling, Inc., we will market and supply our unique products to refining and petrochemical industry and to motor users who need our green innovative products. Our plan is to aggressively focus first on local markets, and then on export options.
We plan to emphasize the reliable year-round output of our recycling company and hardworking workforce as well as our ability to produce good reliable by-products of waste oil.
We know the importance of marketing in this industry, and we understand the need to reach our prospective customers and leverage all available sources, which is why we will also develop a website and advertise on the Internet, although these future marketing avenues are not included in this plan.
11. Publicity and Advertising Strategy
Our publicity strategy will be based on giving our clients the products they need for the right price. We plan to maintain an extensive marketing campaign that will ensure maximum visibility for the business in our targeted market. Below is an overview of the publicity and advertising strategies for Penchant Oil® Waste Oil Recycling, Inc.:
- Establish relationships with petrochemical and automotive businesses within the target market.
- We hope to place adverts on both print (community based newspapers and magazines) and electronic media platforms; we will also advertise our on automotive magazines, waste management and other relevant environmental sustainability programs on radio and TV
- We will also sponsor relevant community based events/programs
- We also plan to make use of various online platforms to promote the business. This will make it easier for people to enter our website with just a click of the mouse. We will take advantage of the internet and social media platforms such as; Instagram, Facebook , twitter, YouTube, Google + et al to promote our brand
- We also plan to mount our Bill Boards on strategic locations all around Houston, Texas.
- We also plan to distribute our fliers and handbills in target areas
- We plan to make sure that all our workers wear our branded shirts and all our official vehicles are well branded with our company’s logo et al.
12. Our Pricing Strategy
Our pricing at Penchant Oil® Waste Oil Recycling, Inc. will be based on serving our customers with expert service and product knowledge, to build our marketing plan to reach diverse individuals and industries, while also maximizing profits.
We believe that to get the right pricing for our products, we need to make sure that we choose a good location for our business, choose our suppliers wisely, and reduce the cost of running our facility to the barest minimum. Also, make sure we attract buyers to our business, as against taking our products to buyers; with this, we would have successfully removed the cost of transporting the goods and other logistics from the equation.
- Payment Options
After our extensive research and thorough discussion, we understand that different customers prefer different payment options as it suits them but at different times and ways. We plan to make sure that we provide them with payment options that will make their transactions less stressful and very open. Listed below are the payment options we at Penchant Oil® Waste Oil Recycling, Inc. plan to be making available to our customers:
- Payment via bank transfer
- Payment with cash
- Payment via online bank transfer
- Payment via check
- Payment via bank draft
We have also chosen to collaborate with a known bank in the United States in order to give our customers the best they can ever get in the agricultural sector of the United States.
13. Startup Expenditure (Budget)
We hope to maintain an average gross margin at or above 60 percent, generate an average of $1,000 of sales each business day of each month, and realize an annual growth rate of 10 percent in Year 2. Our unique management believe that these objectives and goals are very much achievable.
That is the main why we are being very detailed about all information associated with our facility. We have also decided on the possible factors to spend our start-up capital and they include:
- The price for incorporating our farm in United States of America – $750
- Our budget for key insurance policies, permits and business license – $40,000
- The cost of acquiring/leasing our facility and land – $345,000
- The budget for preparing our facility – $25,000
- The price for acquiring the required working tools and equipment/machines et al– $1,000,000
- The price of Launching an official Website – $600
- The budget for paying our workers for 1 year – $500,000
- Other business requirements (Business cards, Signage, Adverts and Promotions et al) – $2,000
- Miscellaneous – $50,000
From our detailed cost analysis above, we will need approximately $2million to start Penchant Oil® Waste Oil Recycling, Inc..
Generating Funding/Start-up Capital for Penchant Oil® Waste Oil Recycling, Inc.
Indeed having the necessary finance for our business will go a long way to ensure we achieve our fragility goals and vision. We also understand that funds are very important factor when it comes to building any successful business anywhere in the world. Penchant Oil® Waste Oil Recycling, Inc. is a business owned by four partners and they hope to keep it that way with the funding and decision-making.
This is why they have decided to leave the means of generating funds for the business in these following ways until further notice.
- Raising part of the startup capital from personal savings
- Raising part of the startup capital from family members and friends (soft loans and gifts et al)
- Raising a larger chunk of the start-up capital from the sale of shares and equity
14. Sustainability and Expansion Strategy
It is important to note that our company technology employs “hydrodynamic cavitations”, an industrial phenomenon, produced by pressure variations and obtained using the geometry of the system creating velocity variation. Cavitations itself is seen as “a technology of future.
Our conventional techniques of biodiesel production at Penchant Oil® Waste Oil Recycling, Inc. typically utilize temperatures in the range of 70 to 200°C. also, pressures in the range of 6 to 10 atm and reaction times of up to 70 hours for achieving conversions in the range of 90 to 95 percent based on the type of raw material used (usually mixtures of fatty acids obtained as waste).
We believe that the use of hydrodynamic cavitations decreases reaction time and temperature to 70 min. and 30C respectively. Therefore, use of cavitations reactor for production of biodiesel allows us to save up to 10 times on electricity.
Meanwhile, we require land zoned as General Industry with sufficient area to accommodate our proposed development and allow for future expansion if required. Our subject land complies with these zoning and size requirements.
Our site in Houston affords geographical and commercial advantage for the local industries, the Houston – Texas petrochemical activities and the local community. Access to the site is satisfactory for six wheel, eight wheel and semi trailer and B-double vehicles. The site is in close proximity to nearby highways.
It is assumed that the volumes of liquid waste, especially waste oil, will increase with the advent of stricter environmental laws, tighter regulation on trade waste discharge to the sewer, industrial development and expansion of Greenfield sites that will be subject to more stringent planning and assessment requirements, and increased public environmental awareness and accountability of companies.
The availability of a facility capable of providing industries with a safe and responsible means of waste oil management using cost-effective, environmentally sound treatment processes will form an important element in the life cycle stewardship of waste oil.
Potential impacts on the environment from our facility, once operational, include risks from the handling, storage and treatment of used motor oil, atmospheric emissions, and management of potentially contaminated storm water and contamination of the environment from spill or leaks.
Nonetheless, our proposed facility has been designed to mitigate the potential for occurrence of incidents that could lead to impact on the environment. This will be reinforced by strict adherence to operational procedures.
Notwithstanding, the construction of Penchant Oil® Waste Oil Recycling, Inc. will provide industry and the Houston community with a viable, safe and economic alternative for waste oil disposal in line with government legislation. Overall, the city and environment will benefit from the reduction in exposure to the risks posed by the illegal or improper disposal of waste oil.
- Business Name Availability Check: Completed
- Business Incorporation: Completed
- Opening of Corporate Bank Accounts : Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Conducting feasibility studies: Completed
- Leasing, renovating and equipping our facility: Completed
- Generating part of the start – up capital from the founder: Completed
- Applications for Loan from our Bankers: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents: In Progress
- Design of The Company’s Logo: Completed
- Printing of Promotional Materials: Completed
- Recruitment of employees: In Progress
- Purchase of the Needed software applications, furniture, office equipment, electronic appliances and facility facelift: In progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business (Business PR): In Progress
- Health and Safety and Fire Safety Arrangement: In Progress
- Establishing business relationship with banks, financial lending institutions, vendors and key players in the industry: In Progress