Is Scrap Metals Selling Business Profitable In Kenya?
Scrap metal is a booming business in Kenya and will remain one of the most profitable businesses in the country in many years to come.
One thing many Kenyans, especially the most educated don’t realize is that you can make money without sitting in anyone’s office. Selling scrap metal is one of the easiest businesses you can conduct in Kenya regardless of education level.
How exactly do people start this business?
In order to start the business as a dealer you should have at least Ksh.200,000 as capital. This money will help buy scrap metals from the source. It will also cover business permits and licenses.
I will advise you, with time, to have your own vehicle to transport the metals.
Paul Mwaniki, 45, a scrap metal dealer in Ganjoni said that he makes averagely a profit of Ksh.5,000 per day or averagely Ksh.30,000 a week from the business of collecting and re-selling metallic material.
“Collecting waste metallic and electronic products through groups of individuals who go out to pick them is justice to mother nature. It leaves the environment clean and suitable for we humans and other living things,” he said.
The advantage that comes with this effort, Mwaniki says, is the creation of employment for the groups of people who go out to pick these materials and come to sell to him and other dealers.
“Majority of poor and vulnerable families depend on collection of metallic waste products from schools, homes, companies, hospitals and sites where construction works take place. They pick them as trash and come and sell to us, thereby making money,” said Mwaniki.
He observed that several youths were working in groups to collect the metallic waste and selling to them as part of their income generating initiatives.
“It is a cash in hand. It makes you dirty but it pays. And it does not need any qualifications for you to start,” Mwaniki explained.
He argued that, absence of scrap metal enterprises would leave the country’s environment clogged with metallic waste and many more people without sources of income.
According to Mwaniki, he buys 100 grams of scrap metal at Ksh.4 and sells it at 100% profit at Ksh.8.
“I also buy broken big containers such as plastic water tanks from waste collection points and individuals at Ksh.1,060. I resell it in quantities of kilogrammes and this could give me up to Ksh.40,000 if I resell to manufacturing companies like Kenplast,” he said.
In conformation to the law and as a responsibility to stop vandalism and theft of metals, Mwaniki explained that they do not buy material from Kenya Power like transformers, Railway and road rails, road signs and government branded equipment or car spare parts.
“We don’t buy what we have been forbidden by the law which includes Kenya Power, Telkom and road signs or rails. Buying such would be encouraging collectors to go and vandalise public utilities which is illegal and unacceptable by all standards,” he added.
Where to get scrap metals from
Scrap metals can be sourced from industries, factories, individual homes and garage.
He revealed that their greatest sources of waste metals included schools, hospitals, construction sites, garages and demolished buildings.
“We depend mostly on big projects such as building demolitions. There we can bulk material for resale rather than depending on the small scale collectors who depend on dumping sites,” he added.
Scrap metal collection, plastic bags, brown papers, plastic bottles have really saved marine ecosystems and human being themselves.
Requirements for scrap metal business in Kenya
The dealer said the business was not short of challenges like many other investments, and pointed out that the operation license costing over Ksh.50,000 was difficult to raise, especially for starters.
“It is not easy to own a scrap metal yard beginning from the license cost. You also have to be a member of Kenya Investors of Scrap Metals Association (KISMA). Membership costs Ksh.20,000 renewable annually,” the dealer outlined.
The business also requires averagely seven permits and compliance certificates from institutions like National Environment Management Agency (NEMA), Kenya Revenue Authority and security agencies like police.
Mwaniki disclosed that their yards were also targeted by robbers who would cart away their stock and resell at them after a short while, adding that a few rogue county askaris were fond of extorting them besides complying with rules of business operation.
“Our business premises are temporary and this makes it easy for burglars to break in and steal from us, only to come back and sell the metals to us.
In 2018, I lost material worth Ksh.250,000. The government needs to consider allowing us to set up permanent structures,” he expounded.
Where to sell scrap metals.
There are several industries in Industrial area who buy scrap metals. They buy in bulk and export abroad for recycling.
Alternatively, you can sell to jua kali artisans in Nairobi along jogoo road or any other town where jua kali industry is thriving.
Profits from scrap metal business
From the several srap metal dealers I have gathered information from, the business brings an average of Ksh.100,000 per month.
However, there are individuals who make as high as Ksh.500,000 per month.
Final Word
As we always tell you, there’s no marathon race that has ever been won by those who did not start the race.
If you like the idea discussed above and you have what it takes to actualize it…then don’t wait to start…just do it.
By
Timothy Angwenyi
Business Consultant
Justine Nyachieo
Business Man & Mentor
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