Context & Objectives
The target is EcoCycle Plastics (Lagos, Nigeria) with a factory capacity of 12 ktons/year PET recycling.
It generates USD 4.2M revenue (80% rPET sales, 20% government grants).
On the other hand, GreenHorizon fund has made commitments to reduce plastic waste and job creation in Africa.
Objectives
GreenHorizon has mandated Astragal to assess the ESG risks/opportunities, validate the ESG alignment and the financial upside of the target.
Our Approach
In addition to financial and legal aspects, the assignment covered the following ESG topics:
Environment
Recycling efficiency, energy/water use, regulatory compliance.
Social
Worker conditions, community relations, informal labour integration.
Governance
Anti-corruption, ESG policies, supplier assessment.
And required:
- Site visits.
- Interviews with management, workers, and NGOs.
- Comparison to peers in Nigeria/Ghana.
Outcomes
Findings
Topics | Strengths | Risks | Opportunities |
|---|---|---|---|
Environmental | 82% recycling yield | 20% pellet contamination rate | Securing 30% energy consumption via solar |
0.8 kg CO₂/kg rPET | No wastewater treatment | 15% premium for ISCC-certified rPET | |
Social | 120 direct jobs + 300 informal workers | High churn rate for informal workers | Formalize 50% of pickers in 2 years |
LTIFR 1.2 (vs. 3.0 regional avg.) | Community odour complaints | Partner with Lagos Recyclers Association for best practices sharing | |
Governance | No corruption incidents | No ESG-linked KPIs | Achieve EcoVadis Silver in 18 months |
Transparent LAWMA permits | Lack of knowledge about tier 1 suppliers
| Sustainable procurement policy |
Financial & Impact projections
Metric | 2024 Baseline | 2027 Target | Δ |
|---|---|---|---|
Revenue | USD 4.2M | USD 5.8M | +USD 1.6M |
EBITDA Margin | 18% | 25% | +7% |
Jobs Created | 100 direct | 200 direct + 500 formalized pickers | +600 |
Waste Diverted | 12,000 tons | 20,000 tons | +67% |
CO₂ Avoided | -24 ktons | -40 ktons | -16 ktons |
Recommendations
Pre-Acquisition:
- Confirm LAWMA permit renewal and no pending fines.
- Secure management commitment to USD 1.5M capex (solar, wastewater treatment) and waste picker formalization.
Post-Acquisition:
- Install 500 kWp solar system: $100k/year savings.
- Pilot waste picker formalisation: 75 contracts per year.
- Launch ISCC certification: 15% price premium.