#02 Business
Leny van Oyen

Rwanda: A Young Entrepreneur in Plastics: From Making to Recycling

Gilbert left Rwanda to study in France in 1993, one year before the country’s genocide tragedy. After finishing his Bachelor’s degree studies in 2001 he worked in France for a telecom company. He initially had no intention to return to his home country to pursue his professional career there. Yet an article in the magazine Jeune Afrique triggered his idea to return to Rwanda. It described the case of a senior Rwandan banker working in New York who started his own business in Rwanda. Gilbert saw this as a “model” he would like to follow.

It was during a family visit in 2003 to the country that he decided to stay and join the businesses run by his parents: the manufacturing of plastic polyethene bags and films, sales of sports articles, and a dry-cleaning and laundry service.

Gilbert’s prime focus was on the family’s plastic bags business that was using outdated equipment and needed modernization. An investment plan was conceived and discussed with a local bank. However, just one week prior to the bank’s decision to award a loan to the company (2006) the Rwandan authorities decreed a ban on the import and use of polyethene bags as part of an environmental measure to lessen pollution. This decree created an immediate problem for the company and it was decided to refocus on plastic recycling (as the required raw material inputs could not be imported anymore) and to try making bags that were still allowed on the Rwandan market.

Co-incidently, Gilbert had met in Rwanda a representative of GROFIN, a risk capital company/fund based in Mauritius with operations in a number of countries. GROFIN’s vision is to support start-ups and existing small and medium enterprises (SMEs) with a combination of “money and mentoring” assistance. It was with GROFIN that Gilbert developed a new business plan for the family company. It was a long process of discussion and negotiation (more than 18 months) to understand their modus operandi, as GROFIN’s support is different from the usual financing schemes. Gilbert says he especially appreciated the advice he received (and continues to get).

In brief, some US$ 500,000 is currently being invested in the company’s modernization refocused on plastic recycling. Equipment to clean and process recycled plastic bags has been identified and purchased in China. Gilbert went there twice himself to first select the equipment and later on secure that the equipment with the required specifications was shipped. GROFIN advised him to hire a production manager. Gilbert put an advertisement in a Kenyan newspaper, got responses and selected a professional with hands-on technical knowledge of this sector who is now on board.

Getting the raw materials – bags to be recycled – was a problem that has led to an interesting solution. The company works with municipalities (for now 10, though the ambition is to be present country wide) and place containers in the respective locations that are supervised by the municipalities. Local associations take turns to fill the container and get paid by the company directly. The company thus buys from a group rather than individuals and for these associations filling the containers is an income-generating activity.

For now focus is on recycling of plastic bags, but the plan is to later also recycle plastic bottles (following the same process but requiring different equipment). The end product is plastic filament for local use or exports. The plan is to also find and buy raw materials for recycling in Rwanda's neighbouring countries.

In terms of challenges, access to a stable and reasonably priced electricity supply is an important issue for the company. The new investment includes a generator "out of necessity", even though it is a very expensive option considering the price of gasoline in this landlocked country. Gilbert does not think his company can compete with more advanced larger companies in other countries, but believes that the business has a chance if it specializes and focuses on certain niches.

Another challenge is the need to train people in the collection and sorting of plastic. In a way this goes beyond what the company can invest in and it is hoped that donor assistance can be secured to organize hands-on training in this field.

Gilbert has the characteristics of a social entrepreneur, putting emphasis on the involvement of local communities and being pleased to see suppliers of raw materials used by the company develop. As he states it: "I would not be able to think otherwise".

To conclude, we see here the case of a young entrepreneur taking the family business on a new path, driven by a government decree (that in principle meant the end of the operation) and supported in this modernization process by an innovative investment partner. A case that we hope develops according to the entrepreneur's vision and plans and becomes a model for others, just as he was inspired by the story of the Rwandan New York banker.