Indian recycler opens new aluminium factory in Togo

Indian recycling company Gravita has expanded its operations in Africa with the opening of a new aluminium recycling facility in the West African country of Togo. The plant began commercial production of aluminium casting alloys from scrap products in December. The aluminium produced is mostly for exports to Asian automotive and consumer goods manufacturing firms.

Gravita has been sourcing scrap from Togo for the past three years and has established a strong collection network before setting up the plant. Aluminium scrap can include used car parts, appliances and packaging materials. The company invested approximately US$1.3m in the plant, which is expected to generate an additional U$7.2m in annual revenue with a gross margin of 26%.

The Port of Lomé in Togo serves as a strategic transhipment hub for the landlocked countries of Mali, Niger, and Burkina Faso and to the northern areas of Nigeria. It is reasonably well connected to the rest of West Africa.

Gravita was founded in 1994 and is listed on two Indian bourses – the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). The firm began as a lead recycling plant in the western Indian city of Jaipur. In 2007, Gravita established a lead recycling unit in Ghana, and the following year it set up similar facilities in Mozambique and Senegal. In 2019, the company also started with the commercial recycling of lead in Tanzania. The firm has over the years diversified its operations to include aluminium and plastic recycling and has established factories for these materials in the African countries where it operates.

Africa accounts for about 30% of Gravita's total revenues, but more than 60% of profits. According to research from Emkay Global, Gravita has been successful in Africa due to the plentiful availability of inexpensive scrap, favourable government policies and duty benefits for exports. It has also been helped by the fact that the benchmark price for aluminium has risen 60% this year (2022) due to a combination of strong demand and concerns over disruptions to the Russian supplies. Europe’s energy crisis and the war in Ukraine have exposed serious fault lines in the supply chain for aluminium. These risks are particularly acute in Europe where soaring gas prices have made producing aluminium very expensive. China, which is the third biggest producer of aluminium has also been forced to cut production due to lower-than-expected rainfall and strict Covid restrictions on workforce.

Meanwhile several organisations have identified untapped opportunities in Africa's recycling industry. For example, Manufacturing Africa, a UK government-funded programme, has highlighted the potential for recycling lithium-ion and lead-acid batteries in Nigeria, paper and plastics in Rwanda, and hard plastics in Ethiopia to provide raw materials for local manufacturers who currently rely on imports. According to the strategic consultancy firm McKinsey there is potential for establishing mechanical recycling plants across Africa – mostly for recycling PET flakes into polyester fabric for the textiles industry. The International Trade Centre has also reported on opportunities for recycling used vehicles and their components. However, the industry in Africa faces challenges such as inefficient waste collection systems and lack of large-scale sorting centres.

 

References

‘Gravita Tanzania Limited commences commercial production of lead from its plant situated at Tanzania, East Africa’, Gravita, 20 April 2019

‘Packaging landscape in Ethiopia’, Manufacturing Africa, November 2020

‘Second life batteries market assessment’, Manufacturing Africa, May 2021

‘Africa’s green manufacturing crossroads: Choices for a low-carbon industrial future’, McKinsey & Company, 27 September 2021

‘A recycling major in the making’, Emkay Global, 21 December 2021

‘Sustainable packaging - Rwanda opportunity’, Manufacturing Africa, 2021

‘Made by Africa’, International Trade Centre, November 2022

‘Gravita starts aluminium recycling plant in Togo-West Africa’, Gravita, 06 December 2022

‘Lomé Container Terminal’, Terminal Investment Limited, Accessed 22 December 2022

‘Annual report 2021-22’, Gravita, 2022