How To Start Used Oil Recycling Business In Nigeria Or Africa: A Guide

How To A Used Oil Recycling Business In Nigeria Or Africa: The Complete Guide | Image: EnergyLogic

Petrochemical companies have recently adopted the option of refining and recycling used oils rather than producing fresh virgin oils for use. The attempt at recycling used oils stems from the growing global consciousness of the state of nature and how much damage is caused by un-recycled materials. As a case study, reckless oil disposal causes multifaceted harm to crop yield, sealife as well as humans. Recycling, therefore, becomes a matter of saving the earth as well as maximizing the limited resources available.

An interesting dimension to the save-the-planet efforts is that it constitutes a massive industry. In 2017, the global recycling market at large was valued at almost $265 billion and the waste oil recycling industry, which has been estimated to grow at a 6.3%, contributes a large share to this market size. Brazil, China, Denmark, India and Russia are some of the biggest contributors to the used oil recycling industry.

Despite being a major oil-producing country, Nigeria has low oil management culture. No thanks to unavailability of a used oil disposal policy in Nigeria, much of the used oil extracted from automobiles by individual car owners, from domestic and commercial generators as well as vehicle workshops are disposed on the soil or on refuse dumps. With a proper spent oil collection system and a legislation guiding the disposal of used oil, the country could generate enough used oil to make her one of the biggest used oil markets in the third world.

However, the little attention that the used oil recycling industry endures in the country is a positive indication that with the right factors put in place, Nigeria could be home to highly successful used oil recycling businesses which will enjoy business monopoly for a very long time. Therefore, if you’re looking to start a successful recycling business in Nigeria or anywhere in Africa, the used oil recycling business is yet a hidden treasure for insightful investors! You will find a detailed guide to help you start a waste oil recycling business in this post.

What Is Used Oil?

Used oil is basically the spent oil derived from vehicles, generators, machines and other mechanical devices that require oil to function. After a period of use, the virgin or refined oil poured into these devices becomes impure and is no longer useful. This post-consumer oil is collected as used oil.

What Is A Used Oil Recycling Business?

A used oil recycling business describes the process of collecting, recycling and commercializing used oil. Spent oil is refined into reusable oil products.

Business Opportunities In Used Oil Recycling Business In Nigeria And Across The World

1). Used Oil Collection, Handling And Management:

The basis of the used oil recycling process lies on the original collection of used oil from vehicle repair shops and other designated points. Collection of oil requires the services of trained personnel in order to avoid spillage and waste of oil. Lots of businesses across the world focus on collection of spent oil and they benefit maximally from it.

2). Used Oil Processing And Recycling:

Perhaps the major lucrative aspect of used oil recycling is the actual processing of spent oil into re-refined oil. This stage requires the expertise of trained personnel, engineers and professionals in the refining field.

3). Refined Oil Sales And Distribution:

Beyond processing, opportunities lie in the sales and distribution of refined oil products. This is perhaps the largest sector of used oil recycling in terms of market participation. There are lots of large companies, small businesses and individual retailers, among others who distribute and sell repurposed oil products across the world.

Facts And Benefits Of Recycling Used Oil

Recycling oil is a great way to prevent the environment from pollution.
It also saves energy used in producing base oil.
Motor oil never wears out!
A single gallon of oil not disposed properly is enough to contaminate 1 million gallons of sea water.
Hydraulic oils, vegetable oils, synthetic oils and transmission oils can all be recycled.
Used oils are not just liquids. They contain metals and toxic chemicals.
Brazil, China, Denmark, India and Russia are some of the biggest contributors to the used oil recycling industry.
Not up to 40% of used oil in the United States is properly disposed.
It takes just a single gallon of recycled used oil to produce the amount of lubricants that 42 gallons of crude oil will produce.
Two gallons of recycled oil are enough to power up an average residence for 24 hours.
Over two hundred million of used oil is laid to waste through improper disposal.
Most people across the world practice DIY oil change. In other words, they change their vehicle and device oil by themselves.

Types Of Used Oil

1). Conventional Oil:

Conventional or standard oil refers to the vehicle oil refined from natural crude oil. After processing, they could be refined and later re-refined into different oil types such as hydraulic oil, transmission oil or engine oil.

2). Synthetic Oil:

Synthetic oil, on the other hand, is an artificial oil derived from chemical processes. Although there is a standing debate between conventional and synthetic oils, the latter can equally be used for the production of several oil types meant for use in vehicle engines, gears, transmission, etc.

3). Vegetable Oil:

Vegetable or cooking oils occupy a different category because they are produced for human consumption. They can also be refined and repurposed for the production of new oil products.

How To Start A Used Oil Recycling Business In Nigeria: A Step-By-Step Guide

1). Conduct Enough Research:

For a start, you should arm yourself with enough information on the feasibility of a used oil recycling business in your remote area. Conducting a detailed research keeps you in the know of which type of oil you can easily collect in the area, and which type will drive more sales after refining.

2). Write A Business Plan:

Equipped with all necessary information on the success rate of a used recycling industry in your region, you should draft a comprehensive business plan you can always refer to as a guide at each decision-making point of starting your business.

3). Create And Register A Business Entity:

For your used oil recycling business to garner enough recognition, you should brand it by making it into a complete separate legal entity. Register with the necessary bodies, get your recycling license and possibly register for insurance as well.

4). Get A Business Site:

Setting up a business site for a used recycling business is not as demanding as a site for a solid waste recycling company. In this case, you simply need a storage space or warehouse with an administrative office.

5). Purchase Necessary Equipment:

There are several factors that influence the kind of equipment to get. They include the type of used oil you intend to focus on, your intended scale of business operation, collection plan, and so on. However, the most basic items you need are barrels for storing oil, trucks for transportation and oil filters.

6). Employ Staff:

Especially for used oil collection, you would need the services of a couple of strong young workers. They will also undertake sales and distribution services, accounts and other basic business activities.

7). Network With Used Oil Sources:

Finally, to get used oil, you need to contact the major sources of your selected oil type. Used oil is commonly found at repair shops, workshops, and other automobile repair companies.

Challenges Of Used Oil Recycling Business In Nigeria

High startup capital.
Poor used oil management culture.
Lack of funds for interested businesspersons.
Poor attitude towards recycling in Nigeria
Low government support for the used oil recycling industry.
Fluctuation in market prices of used oil.
Difficulty in getting quality refining materials.
High cost of processing used oil into re-refined oil products.
Difficulty in sourcing used oil.
Unfavourable international market policies.
Distrust between distribution service personnel and used oil collection businesses.

To Sum It Up

The used oil recycling business in Nigeria can be a lucrative and profitable venture to start-up, due to its vast market demand and on your ability to build a wide network. If youre looking for a lucrative business to venture into, the used oil recycling business in Nigeria is a great option to explore.

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