There is a growing volume of used oil at automotive garages and industrial plants across the country. In combination with a growing population and economic activities such as transportation, construction, and mining operations, there would be a steady increase of waste oil in the future.
This article will expose you to the potential waste oil recycling opportunities in Tanzania, the risks, and how to mitigate those risks.
- Waste Oil Recycling Plant.
A recycling plant is required to capitalize on the used oil potential available in Tanzania. For example, you can set up a used oil recycling plant to process low-grade industrial heating fuel.
The initial investment capital for this project is approximately USD 2–5 million for a plant with the capacity to produce 30,000 MT per year. Suitable regions for this kind of facility are industrial areas in regions such as Dar es Salaam, Mwanza, Arusha, Mbeya, and Pwani.
In addition to that, there is potential for the establishment of a used oil plant that turns used oil into high-quality lubricants oils such as engine oils.
- Waste Oil Collection Facility.
Waste oil is collected only in small quantities, mainly from small and informal automotive garages and industrial plants. With increased industrialization and economic activity, Tanzania needs organized and adequate waste oil collection.
Setting up a formal company that involves procurement, establishment, and operation of waste oil facilities will be one of the potential investments in the waste oil market.
Read: Eight Profitable Business Opportunities in the Petroleum (Energy) Sector in Tanzania
Potential Risks
Like any other market, despite its massive potential, waste oil recycling has several potential risks which might impact the long-term success of your investment venture.
Supply of Raw Materials: The sufficient availability of raw materials such as waste mineral oil is key to success in the waste/used oil recycling market. To mitigate this risk, you should conduct research so you can be sure of the existence of sufficient raw materials and how many tons of raw materials can be found per month or per year, and at what prices. Establishing contracting agreements with reliable suppliers who can provide used oil at affordable prices is crucial in reducing the risks.
Operational Complexity: Coordinating used oil recycling might be complex, especially in establishing your supply chain of procuring waste oil and storing it.
Conclusion
Waste and used oil recycling presents a high-potential investment opportunity in Tanzania, driven by low recycling rates, increasing industrial activity, and growing environmental awareness. By investing in recycling plants and organized waste oil collection facilities, entrepreneurs can generate strong financial returns while contributing to environmental protection and sustainable industrial development.
Read also:Five Profitable Business Opportunities in the Petroleum (Energy) Sector in South Africa
Although challenges such as raw material supply and operational complexity exist, these risks can be effectively managed through proper planning, research, and strategic partnerships. With the right approach, the waste oil recycling sector in Tanzania offers both economic and environmental benefits for long-term investors.
