INVESTMENT PROPOSAL :

PET recycling to bottle to bottle

1. Brief description of project.

1.1. General

The raw material for all packaging plastics is ethylene. Ethylene is a gas derived from natural gas or from a
fraction of crude oil that has a composition similar to natural gas. Both natural gas and crude oil are products of
fossils and are therefore not renewable.
Once ethylene has been produced, it is combined with solvents, co monomers, additives, and other chemicals
that will participate in the planned chemical reactions. The mixture is then subjected to a chemical reaction
called “polymerization” that creates long-chain molecules. (“Mono” means “one” and “poly” means “many,” so a
“monomer” is a single molecule — like ethylene — that can be bound with other molecules into a “polymer.”)
The new polymer is extruded, pelletized, or flaked; the product is called a “resin.” Resin is sold, re-extruded,
and made into containers, films, and other products.
Only six resin types were used to make more than 92% of plastic packages.7 Their names and common uses
are shown in the following table:

Table 1: Plastic Packaging; Resin type; Uses

Recycling Code Plastic Type Common Uses

#1 Polyethylene Terephthalate (PET) soft drink containers

#2 High Density Polyethylene (HDPE) milk crates

milk jugs and beverage bottles
soft plastic margarine tubs

#3 Polyvinyl Chloride (PVC) auto parts

inflatable toys
insulation
pipes
phonograph records
shampoo bottles
shower curtains
some food containers

#4 Low Density Polyethylene (LDPE) trash bags and other films

#5 Polypropylene auto parts

housewares
pipes
screw-on caps
toys
yogurt and margarine tubs

#6 Polystyrene hot food containers

packing materials
plastic utensils
wall tiles

A number 7 on a plastic container indicates “other,” which typically means a combination of two or more of the
six main resin types.
The use of plastics is increasing in almost all sectors of the economy, but the most rapid growth is in packaging.
Globally, improved economic conditions tend to promote increased consumption and a corresponding increase
in packaging. Analysts predict steady increases in the sales of most packaging plastics, particularly PET, for the
foreseeable future.
A thermoplastic homo-polyester, PET is a tough material used mostly in the food packaging industry. PET can
be either amorphous or crystalline; however, most applications require semi or full crystallization to take
advantage of the dramatic increase in strength and toughness at high temperatures. Inherent viscosity (I.V.) is
directly proportional to molecular weight, therefore, the higher the I.V. the tougher the end product. Control of
acetaldehyde (AA) levels in bottle grade materials is of primary importance. PET is very hygroscopic and
unstable in the presence of H2O; therefore, it must be dried intensively before processing.

1.2. Reusing concept

Reusing containers is one of the most effective and inexpensive ways to reduce the environmental impact of
packaging. Some plastic containers can be made durable enough to be refilled and reused about 25 times
before becoming too damaged for reuse. Refilling and reusing plastic containers directly reduces the demand
for disposable plastic.
Accordingly, lowering demand for single-use containers reduces waste and energy consumption. Based on 2005
data, if glass and PET bottles were refilled and reused 25–35 times, the overall weight of beer and soft drink
container waste would be reduced by 73.6%. Significant reductions in waste and energy consumption can be
achieved with just 7–8 reuses of a single bottle.

One toxicity study investigating the use of PET for refillable bottles tested various toxic substances to see if
they would be absorbed into the PET plastic during one use, then released in the next use. After test
substances were removed and the plastic washed, the bottles were filled with food, and the contents were
analyzed. The analysis showed that none of the test substances was absorbed into the PET. This study
concluded that PET could be considered as a practical candidate for refillable containers. As discussed above,
migration of additives from the PET itself is still a problem.

As applied to plastic packaging, primary reprocessing produces new packaging; secondary reprocessing
produces new items that are usually not practically recyclable themselves because of reduced polymer purity
and the lack of collection infrastructure; tertiary reprocessing uses high heat or industrial chemicals to break
plastic products into their chemical components, some of which can then, in theory, be made into new
products.
 Figure 1: Comparison of Material Flows with Alternative Disposal Schemes

In theory, all six of the six resin types used to make packaging plastics are candidates for primary reprocessing.
In reality, however, primary reprocessing is rare.
Two chemical properties make it difficult. One is plastic’s sensitivity to heat and handling. Plastic molecules are
long and flexible, and they change structurally when subjected to thermal and mechanical stress during melting
and extrusion. The molecules interconnect and stiffen, and the plastic becomes weak and brittle. This type of
degradation is called “heat history” in the plastics recycling trade. The deterioration accumulates with each
reprocessing and is irreversible.
The second chemical property that makes primary reprocessing difficult is that plastics are very susceptible to
contamination. If sorting is imperfect, resins may mix with other kinds of organic debris when melted.
Mixing leads to defects and disruptions in the molecular structure which, in turn, leads to degraded properties.
In some cases, contamination leads to the total breakdown of the polymer. For example, even trace amounts
of polyvinyl chloride (PVC) destroy polyethylene when the two are melted together.
With plastics, however, potential contaminants are more plentiful and much more difficult to control. Separating
plastics is particularly problematic because there is little variation in physical properties (such as density and
solubility) to use in sorting. Also, the six basic types of plastic resin include multiple grades and colors within
each resin type, and often several resin types are used to make a single container.
Primary plastics reprocessing is therefore strongly limited by the chemical properties of the material.
Reprocessors that make plastic containers out of other plastic containers typically blend virgin resin with the
recycled resin to boost the product’s performance. One study reported that it is possible to make containers
with recycled contents of up to 50%, if the reclaimed containers used are themselves made of pure virgin resin.
At least one blow-molder was also able to produce a 100%-recycled content bottle with the desired properties
using a particular blend of postconsumer resins. However; large-scale reprocessors have found that using more
than 15% to 25% of post-consumer feedstock reduced the strength of their containers.

1.3. Recycling PET

PET recycling seems feasible in two aspects: one is that is the market need and second this market need is just
at the same direction with the environmental request to reduce the waste materials in the land fields or the
waste in general.

The PET recycling produces PET resin to be used for bottle to bottle, fiber and film forming. These are the end
processes of the PET recycle if we do not consider to process it further in secondary and tertiary processes
described briefly above.

Our project is considering the PET recycling for the final product to the bottle to bottle. The project itself would
be realized in the following steps:
 1. Collection of the PET bottles and process to PET bottle bales,
2. Process of PET bottle bales to PET flakes;
3. Process the PET flakes to PET granules;
4. Process the PET granules to PET bottles;

Each step is cost evaluated and the feasibility in each process is estimated. The first phase that is the collection
of the PET bottles would start first in order to create the raw material to be processed in the next steps.
Although the total cost investment is estimated to be around 2.5-3 million euro, the project itself would utilize
the financing step by step and have promising parameters to be financed by crediting itself.

The total project itself is considered to be realized in three stages: the first stage of preparing the PET flakes to
the food grade quality (that includes step 1 and 2), the second stage that process PET flakes to PET granules
through the process of change of intrinsic viscosity known as IV factor and PET crystallization and cut to
granules, and the final stage that makes PET bottles from granules obtained from the second stage and
additional virgin material.

Albania, Kosovo and Macedonia are collecting PET bottles but they do not process it further. Only in Albania
there is a potential of being collected about 6000 ton of PET bottles, which is only a small part of the PET
bottles that waste. In Albanian market is a supply of more than 300 ton/month that sales outside and Kosovo
with Macedonia provide together more than 400 ton/month. The actual estimated supply in Albania is 3600
ton/year.

2. Sponsorship, management & technical assistance:

2.1. History and business of sponsors, including financial information.

In Albania the PET recycling is not introduced yet. According to statistical data there could be about 6000
ton/year of PET bottles that could be collected. The municipality still is not encouraging the collection of the
trash materials in separate trash bins although a tax for cleaning garbage is collected. If partially this tax could
be used to finance this project or similar recycling projects, the local government could be a target sponsor for
such activity.

2.2. Proposed management arrangements and names and curricula vitae of managers.

The PET recycling requires 2.5 – 3 million euros to cover all the stages of recycling and process RPET to bottle
to bottle. The private company “Henry 2000” is a well known company in sanitarian materials being a leader in
this types of supply provided through imports from China and other countries as well as by having in the
regional market the brand names products of the company. The regional sale market includes Albania, Kosova,
Montenegro, Macedonia and extends as well in EC countries like Italy and France.

Mr.Ylli Xhakollari, is the owner of the company “Henry 2000” and owns it as a single owner. During 15 years of
work the company is increased rapidly having a capital of some million Euros and the share of the sanitarian
goods about 80%. The total capital cost of company is estimated to be worth of 8 million euro.

Considering the environmental impact of introducing the PET recycling, the company would like to be involved
and realize this project based in the analyze of success story of the company management.

2.3. Description of technical arrangements and other external assistance (management,

production, marketing, finance, etc.).

The company has finalized the feasibility study of the project. During this study the company is consulted with
engineers and technicians as well as with organisms that are responsible for environment like Ministry of
Environment and Regional Agency of Environment, and the local government.

Regarding the technological process and equipments the company has made contacts and offer requirements to
the leader companies in producing technological PET recycling lines in EC and in China. The selection of the best
offer is made for the lowest evaluated offer that meets both bottle to bottle requirements as well as
environmental requirements.

The product from the first stage of the project is PET flakes that are on demand from markets in EC and Asia.
On this stage seems that the product would be sold successfully and cover in reasonable time the initial
investment and generate funds for developing the next stages of the project.
The financing of the whole project would require 2.5 – 3 million euros in three stages that are PET recycling to
PET flakes food quality, PET flakes crystallized to PET pellets and PET pellets extruded to bottle flacons and
bottles for food purpose. This is the complete recycle of PET to bottle to bottle processes. The company would
like to start first with the PET recycling to PET flakes that meet the first grade quality. This product is highly
required in the market and also creates a good link for the second and third step of the whole project. Because
the company is big and in the present business it operates in the high rate of the cash flow, crediting by the
bank is the first option in developing the project stages. Therefore the company is looking to the banks and
other financial institutions that would like to be involved with credit financing in the project.

3. Market & sales:

3.1. Basic market orientation: local, national, regional, or export.

The latest data from PET recycling EU organisation Petcore shows that 40% of all PET bottles introduced to the
European marketplace were collected for recycling in 2007 – a 20% increase on the previous year. The
association says that European post sorting PET collection reached 1.13m tonnes last year. Petcore said there
was an overall estimated total mechanical reclamation capacity in the European region of 1.2m tonnes in 2008,
with approximately 100,000 tpa of extra capacity planned.

In Albania the collection of PET bottles has started and is located to two or three companies that simply collect,
pre select and process used PET bottles to PET bottle bales with max 300 kg/m3. Bales are wired by metal wire
or strap and make a shape of minimum dimensions 700x800x700 mm up to the maximum 800x1200x1000
mm. According to ITC (International Trade Statistics) the value of waste plastics of all kinds in Albania for years
2001-2005 was 3.29, 4.35, 4.39, 3.18 and 2.03 million dollars. And in all sorts of plastics PET and HDPE covers
about 95% of the total quantity.

Tirana, Durresi, Vlora, Shkodra, Fieri, Elbasani, Korca are the cities with most consume of soda water and all
the commodities packed in the PET bottle. In these cities we have calculated that will get 90% of PET recycled
bottles.

The bottle collection is managed basically in the city waste land fields. Is less collection made in the clean PET
recycled that would be collected directly in the main consumers place.

All the PET bottle collectors export their product to Bulgaria and Italy.

3.2. Projected production volumes, unit prices, sales objectives, and market share of proposed
venture.

Considering that the rate of PET collection is still unknown and comparing with the data of the EU hitting to
40% collection rate, the capacity of the PET flake line would be 800-1000 kg/hour. Assuming 50 weeks of work
on 24/24 for 7 days, and the efficiency of 80%, the line capacity is optimized to be 1000 kg/hour that is an
input of 5000 ton/year or output of 4000 ton PET flakes of food grade.
a. The units prices considered for the first phase, collecting PET bottles and process to PET flakes are:
- PET bottles in bail 300 USD/ton
- working labor 50 USD/ton
- electricity 50 USD/ton
- depreciation cost 20 USD/ton
- total cost 420 USD/ton

b. The unit prices considered for the second phase, processing PET flakes in granules and viscosity change are:

- PET flakes 600 USD/ton

- working labor 10 USD/ton
- electricity 50 USD/ton
- depreciation cost 40 USD/ton
- total cost 700 USD/ton

c. The unit prices considered for the second phase, processing PET granules to PET bottels are:
 - PET granule 1000 USD/ton
- working labor 10 USD/ton
- electricity 50 USD/ton
- depreciation cost 40 USD/ton
- total cost 1100 USD/ton
Sales objectives are based on the market price search of products such PET bales, PET flakes, PET granules and
PET bottles. On our project these objectives are evaluated for each step along with net profit.
a. First phase: PET flakes
- PET flakes cost 420 USD/ton
- PET flakes sell 600 USD/ton
- Net difference 180 USD/ton

b. Second phase: PET granule

- PET granule cost 420 USD/ton
- PET granule sell 700 USD/ton
- Net difference 280 USD/ton

c. Third phase: PET bottle cylinder

- PET bottle cylinder cost 1100 USD/ton
- PET bottle cylinder sell 2000 USD/ton
- Net difference 900 USD/ton

Prices for recycled PET will continue to be tied very strongly to the fate of virgin PET. In the coming decades,
the PET industry will have to choose among several options for meeting the apparent persistent rise in PET use:
by adding virgin capacity, by participating in recovering more discarded PET, or by some combination of the
two. Continued low recovery rates for PET may force states and governments to add pressure in making that
decision.

3.3 Potential users of products and distribution channels to be used.

There are potential users of PET recycled products for each phase. In recycling the smallest net difference stays
in PET bottle collection to make PET bottle bails. Because the market supply of the EU is up to 40% with PET
recycled the demand from PET flakes producers byes the PET bottle bails. The project would start first
accumulating PET bottle bails to prepare the market and be prepared for the shortage of supply during
production.

Because of cost expensive processes of producing virgin PET material and the ecological laws that obliges the
countries to process their waste, the investment for establishing PET recycling to PET flakes are feasible.
Potential users of PET flakes are the EU countries like Italy and Germany that already are working in third
phase of PET processing by changing intrinsic viscosity (IV) and crystallization of recycled PET flakes to the final
product such as PET granule and PET bottle cylinders. COCA COLA and PEPSI are the main companies that
consume huge quantities of PET recycled material to make new bottles for their production.

In Albania we see potential users of our final product the mineral and soda water companies that are always in
need for confectioning their product in bottles. Also the increase of the local production of beer makes stronger
demand in the local market for the plastic bottles made with PET.

The evaluation of the offer and demand for PET resine in the region, EU and China makes the sale of the
products in each phase feasible.

3.4. Present sources of supply for products.

Present sources of supply we have considered to start are the waste collectors working in the land fields of the
main cities of Albania. Beside other materials they collect and bail PET bottles. Through the network sale that
our company has established in long working years, the company is planning to provide in the main collection
places the pressing and bailing machines. The same scheme we plan to use for the regional collecting. There
are companies in Kosovo and Macedonia already collecting and interested to sale their product. Also in Greece,
Thessaloniki seems to be an interesting source until the Albanian market of the PET collection would go
stronger.

3.5. Future competition and possibility that market may be satisfied by substitute products.

Bottling of liquid food materials uses mainly the confection in PET bottles, glass bottles and tetra pack.
However, tetra pack could not be used for confectioning liquids such are water, gas water, juices, Coca Cola
and Pepsi, food oils, etc, where the visibility of the color and clearance of the liquid counts on the taste and
selection of the buyer. Therefore tetra pack also for the future seems to be no competitor.

However, in question is the use of the PET versus the glass. The technical studies show that the energy
consumed to make glass confection or PET confection are quite equally. Beside the glass bottles are technically
recycled only by washing and not reforming like PET resins. Development and research made for PET recycling
is providing more energy efficient technologies like Vacurema, that process the recycled PET resins in the
friction reactors for increasing the intrinsic viscosity and crystallize in the proper length of polymer.

3.6. Tariff protection or import restrictions affecting products.

In Albania there are no tariff protection laws or import affecting products. The EU countries have forbidden the
import of PET bailed bottles. The European Community first introduced measures on the management of
packaging waste in the early 1980s. Directive 85/339/EEC (no longer in force) covered the packaging of liquid
beverage containers intended for human consumption. The directive however was quite vague and, as a
consequence, diverging national legislation appeared in several Member States. In 1992, the European
Commission came forward with a Proposal for a Council of the European Union directive on Packaging and
Packaging Waste and finally, in December 1994, directive 94/62/EC was adopted.

In December 2001, the European Commission put forward a proposal revising the EU Packaging and Packaging
Waste regulations. After many discussions between the European Council and the European Parliament, the
proposal was agreed in December 2003 and the Packaging Directive was finally amended in February 2004. The
Directive is now referred at with the following code: 2004/12/EC.

3.7 Critical factors that determine market potential.

4. Technical feasibility, manpower, raw material resources & environment:

4.1 Brief description of manufacturing process.

PET (also named PETE) is a kind of polyester material for fiber, injection molded parts, as well as blow-molded
bottles and jars. Special grades are offered with the required properties for the different applications.

Chemical formula of PET resine

PET is linear thermoplastic (long-chain molecule consists of repeating units shown as figure right), white but
bluish resin made from terephthalic acid and ethylene glycol through poly-condensation. PET is supplied by the
resin manufacturers in the form of small pellets, each about 0.05 gram. PET came into prominence in the 1950s
as a textile material. Its strength, temperature tolerance and wear-resistance made it an ideal replacement for,
or addition to natural fibers such as silk, cotton and wool.
It has good antiosmosis, low water absorbability and good toughness. PET film's tensile strength is similar with
aluminum film's, and is three times that of PC and PA film. PET film is transparent. It's tensile strength can
reach 1/3~1/2 of steel's if dealed by oriented draw. It's the toughest thermoplastic film. It will be burnt with
yellow flame and will burst when burning. And it will continue burning when away from fire.
Unlike simple polymers such as polyethylene, PET is not made by a single stage process, but by the reaction
between two chemicals, purified terephthalic acid (PTA) and ethylene glycol (EG). The availability of the first of
these has dictated the supply of PET resin in the past, but new capacity coming on stream this year will ensure
more than adequate supplies to meet the growing uses of PET over the coming years. Related polyesters are
polybutylene terephthalate (PBT) used mainly for engineering applications, and polyethylene naphthalate
(PEN). The latter offers significant performance improvements over PET, particularly in terms of barrier
properties and heat tolerance. Since PEN can be blended with PET a range of new 'alloys' is becoming available
for special packaging applications.

The process of PET recycling is made in three phases. The first phase has two steps: the processes of collecting
PET bottles and process them to PET bottle bails through processes of selection for the material and the color
and the second step transforming bails to PET flakes. Three types of selection are made in PET bail process;
bottles without color (transparent bottles), bottles with blue and green color, and dark bottles. Then the bottles
are pressed and bailed in the standard size of bails for transportation.

The second step is where the PET bail bottles are transformed to PET flakes. This process includes the sorting,
pre washing, washing, cutting, separation of labels and PVC from the PET, drying and packaging PET flakes in
the bags with around 1 ton per bag. This phase is important because the dirty and the PVC need to be cleared
away in order that the PET flakes are in the food quality grade.
The process is a combination of conventional mechanical methods and chemical recycling. The prime material
supplied to the plant consists of PET beverage bottles, sorted by colour. The bottles are supplied in the form of
compressed bales, each containing between 3,000 and 5,000 bottles. Each bale is given an electronic identity in
order to facilitate traceability in the material stream as well as automatic material storage and control. The
bales are loaded onto a conveyor belt and unstrapped to free the bottles, which are fed to one of two
shredders.
The material is shredded, in a dry state, down to a unified granule size. The resultant material is a mixture of
PET, labels and closures, which must be separated. The plastic and paper labels are removed from the stream
by an air blowing process. Any labels adhering to the PET with glue are subsequently removed by intensive
washing. In the next stage polyolefins (closures) and PET are separated using the difference in their densities.
The cleaned and sorted PET flake is now coated with caustic soda as it passes through a special washer and
dryer. The materials have to be dried as they enter the package unit.

The second step is to transform the PET flakes in to PET granules that has as nearest technical and chemical
properties as the virgin PET. This is archived by processing the PET flakes in the grinding reactor that changes
the intrinsic viscosity of recycled PET flakes by cutting and fractioning it. During this process is produced heat
that helps the process of making material more viscous or in the other terms regenerating the length of
polymer.
In the bottle industry, the length of the PET chains is usually described by the resin IV (Intrinsic Viscosity).
Bottle grades have IV values of about 0.65 to 0.85 dL/g, or about 100-155 repeating units per chain. Most
bottle grades of PET are copolymers, which means that a few percent of a modifier has been incorporated into
the polymer chain. Copolymers are easier to injection mold because the crystallinity behavior is improved.
A remarkable transformation takes place when injection molded PET is stretched at the right temperatures and
to the right extent. The long chains undergo strain-hardening and strain-induced crystallization, which gives the
properly-made PET bottle exceptional clarity, resistance to internal pressure, uniform wall thickness, toughness,
and a host of other features. To achieve these useful properties, however, care must be taken in choosing the
right grade of resin, as well as the right perform and bottle designs, and good molding practices. The best way
to recover the properties of the recycled PET is achieved using three reactors.
 The scheme of the process of viscosity change and crystallization of PET

The system of change IV and crystallization in three stages

The third stage is processing the PET granules to make PET bottle cylinders or process further to bottles if the
customer is nearby. The processes of this phase are as follows:
- Drying of PET
PET absorbs moisture from the atmosphere. This must be removed by a dehumidifying drying before
processing.
- Plasticizing the PET
Dried PET pellets are compressed and melted by a rotating screw.
- Injection Molding the PET Preform
Molten PET is injected into the injection cavity and cooled rapidly to form a “preform? (The test tube- like form
from which bottles are blown is known as a preform).
- Heating the PET Preform
The temperature of the preform is adjusted to the correct profile for blowing.
- Stretch Blow Molding the PET Container
The hot preform is simultaneously stretched and blown (thereby orienting the crystals of and strengthening the
PET*) into a shaped blow mold to form a tough, lightweight container. PET that is heated to a temperature
where its chain-like molecules are sufficiently mobile to uncoil instead of breaking when extended, can be
oriented by stretching. Stretching applied from two directions at right angles, as in stretch blow molding, gives
biaxial orientation. Oriented PET contains closely packed chains aligned in the directions of stretch. The material
is stronger because the molecules act together instead of individually. The tensile strength of oriented PET is
several times that of the unstretched material and the impact strength, barrier and chemical resistance are also
significantly improved, so bottles can be lighter without sacrificing performance.
- PET Container Ejector
The finished container is ejected.

4.2. Comments on special technical complexities and need for know-how and special skills.

As PET (bottle grade) is a kind of transparent, wear-resisting and corrosion-resisting plastics with high strength
and smooth finish, it is widely used for PET bottles of mineral water, juice, edible oil, pharmaceuticals,
cosmetics, etc.
PET products can be made crystallizable or non-crystallizable through controlling crystallization temperature
and cooling speed. Usually it's crystallinity is 0~50%. The higher IV value, the slower crystallization speed.
The key factors that effect PET bottles' molding process and performance are crystallization and orientation. If
PET’s moisture level is high, hydrolysis will happen while molding and it's IV value will drop which means
products' quality be affected. The main characteristics are:
Melting Temperature: 254-2560C
Crystallinity: >=45%
Carboxyl End Group: <=20mol/t
Acetaldehyde: <=3ppm (Ex-Work, related to drying & molding temperature)
For CSD bottle, <=9ppm required; for mineral water, <=4ppm required.
Density: 1.38~1.40g/mm3
Glass Temperature: 820C
In the bottle industry, the length of the PET chains is usually described by the resin IV (Intrinsic Viscosity).
Bottle grades have IV values of about 0.65 to 0.85 dL/g, or about 100-155 repeating units per chain.
Most bottle grades of PET are copolymers, which means that a few percent of a modifier has been incorporated
into the polymer chain. Copolymers are easier to injection mold because the crystallinity behavior is improved.
A remarkable transformation takes place when injection molded PET is stretched at the right temperatures and
to the right extent. The long chains undergo strain-hardening and strain-induced crystallization, which gives the
properly-made PET bottle exceptional clarity, resistance to internal pressure, uniform wall thickness, toughness,
and a host of other features. To achieve these useful properties, however, care must be taken in choosing the
right grade of resin, as well as the right preform and bottle designs, and good molding practices.
Some grades of PET have other modifications to improve the bottle barrier properties, the reheat characteristics
(for two-stage systems), or the generation of AA (acetaldehyde).

These qualities should be maintained and reformed during the good recycling process of PET. Therefore is
important that the process is maintained and supervised by trained engineer in the field of recycling PET,
chemical and physical analyses be performed in several steps of the process to assure the quality is meet and
the workers should be trained especially in sorting and maintaining the correct technological parameters.

4.3. Possible suppliers of equipment.

Possible suppliers of equipments are found all over world. For the project several companies from EC, US and
China are contacted and their offers are evaluated. The most sounded offers were received from the listed
companies:

- Hangzhou Fuxing Environmental Protection Machinery Co.,ltd., China

- Zhangjiagang Raidsant MachineryCo., Ltd.,China
- Kunststoff-Recycling Systeme, Germany
- Herbold Meckesheim GmbH, Austria
- SOREMA DIVISION OF PREVIERO N. srl, Italy

4.4. Availability of manpower and of infrastructure facilities (transport and communications,

power, water, etc.).

The PET recycling line on the capacity of 1000 kg/hour is expected to consume in the first phase energy 250
kw/hour, water 5 m3/hour, 15-18 persons divided in three shifts and covering the operation and maintenance.

In the last phase energy consumption would be 650 kw/hour, water 8 m3/hour, 18-20 persons divided in three
shifts and covering the operation and maintenance.
These requirements require that the power supply, water supply and discharge of industrial water, and
manpower to be in reasonable proximity with the PET recycle line.

Layout of the PET recycling line placement

The placement location that company has considered is showed in the above map. The line would be 10 km
from company headquarter and 17 km from Tirana. The settlement is already provided by the power electricity
lines that are providing energy to the bricks and other factories of the zone. Water supply would be provided by
well waters of the place or from the water supply of the zone. Discharge of treated industrial waters would be
made in Lana River that is not more than 600 m from the designed placement. Workers would be hired in the
nearby villages that are seeking for job opportunities.

4.5. Breakdown of projected operating costs by major categories of expenditures.

The working time of the PET recycle line to transform bottle to flakes in the food grade quality is given in
the table:

Item value

Working time in hours per year 8736

week no 52
week days 7
dayly hours 24
maintenance in hours 336
days/year 14
dayly hours 24
Total of working hours per year 8400
Personel
shift personnel for three shifts 15
maintenance personel 1
The inputs for a PET line that process 1000 kg per hour and the chemicals used are presented in the following
table:

Inputs per hour per year units

PET recycled bottels (kg/h) 1000 8,400,000 kg
waste in the recycled PET bottels (%) 20 1,680,000 kg
HDPE in PET recycled bottels (%) 5 420,000 kg
waste disposal (kg/h) 200 1,680,000 kg
Energy (kw/kg) 0.25 2,100,000 kw
Industrial water (lter/kg) 3 25,200,000 liter
Waste water (liter/kg) 3 25,200,000 liter
Steam(kg product/kg steam) 0.7 5,880,000 kg

Chemical additives 1000 kg/kg year inputs

caustic sode (1000 kg product/kg sode) 20 168,000 kg
detergent (1000 kg product/kg detergent) 13 109,200 kg
foam stopper (1000 kg product/kg ) 2 16,800 kg
TOTAL 294,000 kg

Based on the above tables of the working time, personnel, and normative (inputs) the cost tables are
calculated:

Runing Costs 1000 kg/kg Cost/year

Cost of PET recycled bottels(1000 kg) $300.00 $2,520,000
Cost of HDPE recovered (1000 kg) $400.00 $168,000
Cost of waste disposal (1000 kg) $12.00 $20,160
Cost of energy (kw/h) $0.13 $273,000
Cost of water (m3) $0.50 $12,600
Cost of waste water treatment (m3) $1.00 $25,200
Cost of steam (kg) $0.03 $147,000
Cost of maintenance (% of investment) 3 $25,772
Cost of person (hourly cost) $1.64 $71,832
Cost of maintenance (hourly cost) $2.00 $672
Cost of caustic soda (price/liter) $0.02 $67
Cost of detergent (price/liter) $1.10 $120,120
Cost of foam stopper (price/liter) $2.50 $42,000
Cost of packaging (price/1000 kg product) $10.00 $84,000

The product is packed in the plastic bags that are filled approximately with 1000 kg of PET flakes in the bags
that cost 10 USD/piece. Because the PET recycled bottles are dirty with remaining liquids and part of solid
waste in contact with them, there is the loss on the output that reflects the waste materials removed from the
PET bottles and flakes loss on washing process. We have calculated this factor by using the efficiency coefficient
of 90%.

Furthermore we calculate the investment cost including all necessary investments. From investment value are
calculated the depreciation values on each investment and the total investment. For the investments like the
land, building and the PET line, in formula calculation the life span of 7 years is used for all and the scrap value
or remaining value is considered zero. That modifies the formula of depreciation value calculation as the rate of
total investment cost to the life span of seven years. The effect in the calculation would be that the depreciation
value would be higher and the gross margin lower. However that would be a reasonable approximation
considering the risk of investment. The following tables present such calculations:
Investment Cost USD
Cost of land $200,000
Cost of building $350,000
Cost of the PET recycling line for flakes $300,000
Cost of the PET recycling line ansambling(%) $9,000
Cost of utilities $80
TOTAL investment cost $859,080

Depriciation cost USD/year

Depriciation of land 50 years $28,571.43
Depriciation of building 15 years $50,000.00
Depreciation of PET line 7 years $42,857.14
Depriciation of utilities 7 years $11.43
TOTAL depriciation $121,440.00

total cost value %

depriciation $121,440 3.5
input material cost $2,520,000 73.5
labour cost $71,832 2.1
chemical additives $294,000 8.6
steam $147,000 4.3
maintenance $25,772 0.8
electricity $273,000 8.0
waste $20,160 0.6
waste water $25,200 0.7
packaging cost $84,000 2.5
water $12,600 0.4
HDPE -$168,000 -4.9
total cost $3,427,004 100.0

cost/kg $0.41
production cost/kg $0.11

sale $4,536,000.00
gross margin $1,108,995.60

year production 7560 ton

 total production cost

HDPE

wat er

packaging cost

wast e wat er

wast e

elect ricit y

maint enance

st eam

chemical addit ives

labour cost

input mat erial cost

depriciat ion

-$500,000 $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000

4.6. Source, cost, and quality of raw material supply and relations with support industries.

The only sources for raw material supply that in our project is defined as PET used bottles are the waste
collection companies and individual collectors. They operate both in the land field and with preselected waste in
main consumers of the PET bottles. The cost of collecting PET used bottles from individual collectors is 200
USD/ton not bailed and preselected bottles and from the collection companies is 300 USD/ton for bailed bottles.

There is no relation between individual and companies that work in waste collection with industries of PET
recycling in Albania. However, the PET bailed bottles collected in Albania until now in an amount of 300
ton/month are exported to PET recycling industries of China and Bulgaria.

4.7. Import restrictions on required raw materials.

There are no import restrictions in Albania for the raw materials in the recycled PET industry. Also the small
market of PET bailed bottles is operating only with countries that do not have the import restrictions. The EU
has the import restrictions for the raw materials that come from waste.

4.8. Proposed plant location in relation to suppliers, markets, infrastructure, and manpower.

The location the company has chosen to develop the PET recycle industry is between Tirana and Durresi. The
distance of 17 km from Tirana and the distance of 10 km from company headquarters optimize the distance
from suppliers. The location has already the infrastructure that allows transportation in and out for the raw
materials and products as well as for access from workers and maintenance. Power supply and water supply are
also in place. Villages in proximity would provide manpower that would be trained and paid according to the
qualifications that meet the PET recycle production.

The first product that would be PET flakes would be shipped through Durresi port that is 23 km far from the
location of the PET flakes line. Also the second product that would be PET granules would require the shipment.
The request of the Asian markets and European markets guarantee the sale of these products.

4.9. Proposed plant size in comparison with other known plants.

The plant size is chosen by considering that the company is planning to develop the collection to provide up to
6000 ton of PET bailed bottles. The offers provided from PET line producing companies are listing the input
rates from 400 kg/h to 3500 kg/h. For further increase is recommended adding a parallel line and double the
production. The PET flake lines in EU are in the range of 1000 kg/h to 2000 kg/h and the more capacity is
realized by adding the parallel lines. That scheme provide to be very efficient considering that in summer time
it is a increase offer for the PET used bottles and in winter the quantity drops quite half.

The company has made the choice of using 1000 kg/h and having in the beginning an unused capacity of about
30% and during the time reduce it. Also is thought that this is the capacity that would fit for several years until
in Albania the rate of recycling of PET increases.

4.10. Potential environmental issues and how these issues are addressed.

PET containers are 100% recyclable. However, it is not only their recyclability quality that makes them
environmentally friendly. Being extremely light, they help diminish the formation of packaging waste while at
the same time they reduce the emission of contaminants during their transport. Furthermore, since they
require less fuel during transport, they also help saving energy.

In order to give birth to a new product, used PET containers must first and foremost be collected. Nowadays,
the majority of European cities have set into place a collection scheme to recover recyclable items.

The second step into recovering used PET bottles entails collected material to be sent to a sorting plant where
materials are separated according to their nature.

Recovered PET bottles are then punctured and baled (that is: compacted in a bundle) and are sent to a
reclaimer. The reclaimer, is a factory that turns used bottles into PET flakes, the raw material at the base of
recycled PET products. The first thing the reclaimer has to do is de-baling the bundles. To make sure the final
product will be as pure as possible, the de-baled bottles are sorted once again then they are pre-washed and
are shredded into flakes. The flakes are washed and dried in their turn, and then they are stocked and sold. It
is when the flakes are sold that the actual recycling sets into action: the flakes, the raw material, are melted
then manufactured into a new product.

The PET plastics recycle industry emphasizes the positive contributions that plastics make. The largest single
use for plastics is packaging. Because packaging has a short lifespan, it makes up a large portion of the
plastics waste stream.

In general, the data from World Environmental Protection Agency says that in the early 1990s about 80
percent of all municipal solid waste was sent to landfills, 10 percent was incinerated and 10 percent was
recycled. While more and more plastic is being recycled, the EPA estimates that plastics make up about 20
percent of the solid waste that is land filled.

Most consumers think that the slow degradation of plastics is the primary reason that plastics should be
recycled. However, research has shown that other waste, such as paper, wood and food wastes, also degrade
very slowly in landfills.

The more serious problem with plastic waste concerns the additives contained in plastics. These additives
include colorants, stabilizers and plasticizers that may include toxic components such as lead and cadmium.
Studies indicate that plastics contribute 28 percent of all cadmium in municipal solid waste and about 2
percent of all lead. Researchers don’t know whether these and other plastic additives contribute significantly
to products leached from municipal landfills.

How toxic are plastics that are burned? Researchers don’t know that, either. Plastics that contain heavy-
metal-based additives may also contribute to the metal content of incinerator ash. The EPA is looking for
substitutes for lead- and cadmium-based additives.

One additional concern relates to use of petroleum products. All plastics began their lives as petroleum. By
increasing plastics recycling, scientists and engineers are able to reduce dependence on petroleum.

On concrete items in PET recycling the output waste are 20% of impurities as solid, paper, glue and
remaining liquids in the bottle. The other waste is waste water that simply would clean up to the
environmental parameters by filtration and pH change.

Thus the environmental impact of PET recycling is very positive because it removes the PET bottle from
municipal waste, reducing the quantity of the hazards that would be produced if the material is leaved for
slow degradation.
5. Investment requirements, project financing & returns:

5.1. Estimate of total project cost, broken down into land, construction, installed equipment,
and working capital, indicating foreign exchange component.

The total project cost on three phases is presented in the table below:

No. Project cost item Value (USD)

Preparation Land acquisition 200,000
Construction of plant facility with future capacity to host three 350,000
phases of the project (5000 m2)
First phase Collection of PET bottles, bail PET bottles and create the 50,000
collection network
PET recycle line for flake production 390,000
Second Construction for second phase 50,000
phase PET recycle line processing flakes to change density and 910,000
prepare granules of food quality.
Third Construction for the third phase 30,000
PET line for processing recycled granules to PET bottle 780,000
phase cylinders that are used to make PET bottles
TOTAL 2,560,000

The foreign exchange is calculated to be 1 USD = 100 lek.

5.2. Proposed financial structure of venture, indicating expected sources and terms of equity
and debt financing.

5.3. Type of IFC financing (loan, equity, quasi-equity, a combination of financial products,
etc.) and amount.

5.4. Projected financial statement, information on profitability, and return on investment.

 5.5. Critical factors determining profitability.

6. Government support & regulations:

6.1. Project in context of government economic development and investment program.

In the context to the Government economic development and investment program the project finds support in
the national strategy program as part of the poverty reducing and life quality increasing because the project
would provide the local development in the local area where the plant would be located. Beside in the phase of
the creating the collection market of the PET bottles, the project would impact more in the pressure made for
municipality regulations on collecting and processing wastes in the environmental way.
Ministry of Environment has addressed the issue of waste treatment on the document “ Sectorial Strategy of
Environment” published in 2007 where the chapter 1.2.11. is dedicated to the urban waste and emphasizing in
the ways to deal with urban wastes by processing the post consumer waste in environmental technologies.
(Riciklimi i mbeturinave është i pakët. Metoda kryesore për trajtimin e mbetjeve është ajo vëndmbulimeve
(landfill) ndonëse duhet theksuar se këto vendmbulime nuk janë të ndërtuara në mënyrën e duhur nga ana
inxhinierike dhe shkaktojnë ndotje të vazhdueshme të mjedisit.)

And in several laws and regulations the Government of Albania, through Ministry of Environment
encourages processing the recycle of waste with appropriate technologies. The technology our project
presents is the approved one in the EU and fulfills all the environmental requirements.

6.2. Specific government incentives and support available to project.

6.3. Expected contribution of project to economic development.

6.4. Outline of government regulations on exchange controls and conditions of capital entry
and repatriation.
7. Timetable envisaged for project preparation & completion.

No Activity Time
1 Land acquisition January 2009
2 Building construction February-May 2009
3 Start creating network of collection and collection March 2009
4 Procure and finalize the contract for buying the line for January 2009
processing PET bailed bottles to PET flakes
5 Install and test the line for processing PET bailed bottles to PET May-June 2009
flakes
6 Start normal production of the PET flakes July 2009
7 Create the network for buying bailed PET bottles from abroad March 2009
(Kosovo, Makedonia and Greece) to complete the working
capacity and sale network of the PET flakes in EU countries and
China
8 Evaluate the quantity/quality of production and check the year July 2010
net profit
9 Start preparation for second phase by evaluating the offers for March 2010
processing PET flakes to PET granule
10 Procure and finalize the contract for buying the line for May 2010
processing PET flakes to PET granule
11 Install and test the line for processing PET flakes to PET granule June-July 2010
12 Create the sale network for PET granule September 2010
13 Evaluate the quantity/quality of production and check the year July 2011
net profit
14 Procure and finalize the contract for buying the line for May 2011
processing PET granule to PET bottle cylinders
15 Install and test the line for processing PET flakes to PET granule June-July 2011
16 Create the sale network for PET granule September 2011
17 Evaluate the quantity/quality of production and check the year July 2012
net profit
18 Check and balance of the existing production capacities September 2012
19 Check the prospective of the increase of collection/production October 2012
COST CALCULATIONS FOR FIRST STAGE + SECOND STAGE

Item value value value

total cost value % value % value %
Working time in hours per year 8736 8736 8736 depriciation $134,297 3.6 $140,000 2 $118,571 2
week no 52 52 52 input material cost $2,520,000 67.6 $5,980,325 91 $6,544,000 92
week days 7 7 7 labour cost $206,640 5.5 $82,656 1 $82,656 1
dayly hours 24 24 24 chemical additives $294,000 7.9 $0 0 $0 0
steam $147,000 3.9 $0 0 $0 0
maintenance in hours 336 336 336 maintenance $28,553 0.8 $30,219 0 $25,602 0
days/year 14 14 14 electricity $273,000 7.3 $273,000 4 $273,000 4
dayly hours 24 24 24 waste $20,160 0.5 $0 0 $0 0
waste water $25,200 0.7 $25,200 0 $25,200 0
Total of working hours per year 8400 8400 8400 packaging cost $84,000 2.3 $0 0 $0 0
water $12,600 0.3 $12,600 0 $12,600 0
Personel HDPE -$16,800 -0.5 $0 0 $0 0
shift personel for three shifts 15 6 6 total cost $3,728,651 100.0 $6,544,000 100 $7,081,630 100
maintenance personel 1 1 1
cost/kg $0.44 $0.78 $0.84
Inputs hourly inputs year inputs production cost/kg $0.14 0.07 0.06
PET recycled bottels (kg/h) 1000 8,400,000 kg 1000 1000
waste in the recycled PET bottels (%) 20 168,000 kg sale $4,536,000 $8,232,000 $16,464,000.00
HDPE in PET recycled bottels (%) 5 42,000 kg gross margin $807,349 $1,687,999.73 $9,382,370.30
waste disposal (kg/h) 200 1,680,000 kg
Energy (kw/kg) 0.25 2,100,000 kw 2,100,000 2,100,000 year production 7560 ton flakes 8232 ton pellet 8232 ton bottle cylinder
Industrial water (lter/kg) 3 25,200,000 liter 25,200,000 25,200,000
Waste water (liter/kg) 3 25,200,000 liter 25,200,000 25,200,000
Steam(kg product/kg steam) 0.7 5,880,000 kg

Chemical additives 1000 kg/kg year inputs

caustic sode (1000 kg product/kg sode) 20 168,000 kg
detergent (1000 kg product/kg detergent) 13 109,200 kg
foam stopper (1000 kg product/kg ) 2 16,800 kg
TOTAL 294,000 kg

Packing volume(kg) 1000

Runing Costs 1000 kg/kg year costs

Cost of PET recycled bottels(1000 kg) $300.00 $2,520,000
Cost of HDPE recovered (1000 kg) $400.00 $16,800
Cost of waste disposal (1000 kg) $12.00 $20,160
Cost of energy (kw/h) $0.13 $273,000
Cost of water (m3) $0.50 $12,600
Cost of waste water treatment (m3) $1.00 $25,200
Cost of steam (kg) $0.03 $147,000
Cost of maintenance (3% of investment) $28,553
Cost of person (hourly cost) $1.64 $206,640
Cost of maintenance (hourly cost) $2.00 $16,800
Cost of caustic sode (price/liter) $0.02 $67
Cost of detergent (price/liter) $1.10 $120,120
Cost of foam stopper (price/liter) $2.50 $42,000
Cost of packaging (price/1000 kg product) $10.00 $84,000

Investment Cost USD USD USD

Cost of land $200,000
Cost of building $350,000 $50,000 $30,000
Cost of the PET recycling line for flakes $390,000 $910,000 $780,000
Cost of the PET recycling line ansambling(3%) $11,700 $27,300 $23,400
Cost of utilities $80 $20,000 $20,000
TOTAL investment cost $951,780 $1,007,300 $853,400

Depriciation cost USD/year USD/year USD/year

Depriciation of land 50 years $28,571.43
Depriciation of building 15 years $50,000.00 $7,143 $4,286
Depreciation of PET line 7 years $55,714.29 $130,000 $111,429
Depriciation of utilities 7 years $11.43 $2,857 $2,857
TOTAL depriciation $134,297.14 $140,000 $118,571

eficency 0.90 0.98 0.98

Sale price (1000 kg) $600.00 $1,000 $2,000
Buying price(1000 kg) $600.00