Brunel University Student starting a Trading company at 23 years old — Who do I think I am?
What I found.
This was hard to title.
For four months, I have been building a business from the ground up. Starting with market analysis then calling suppliers, building a website and setting up a Trading company. All without any revenues only dedication.
I employed a university mate to help with a promise of 1% if the deal was a success. All this effort because someone came to me with a buyer. They were apparently looking for 30,000 metric tons of LDPE scrap plastic.
A total order for 30,000 mt of LDPE, what is that worth you might be asking. We already worked it out so you don't have to :) “they’ll pay $275 per ton, so the whole deal is worth $8,250,000” after we heard that we got fixed to finding a supplier. Also, what is the tax on income like that? A lot for a 23-year-old to handle.
This was in March of 2021, the polymer index price had skyrocketed, there was a shortage in LDPE around the world. Businesses had started to re-open, establishing new trading partners was on everyone's mind. Big orders were thrown around the world with people trying to make a quick buck and I was one of them.
This sorry state of affairs got me strung up all summer. Some advice my dad gave me is to see the best in people. Yet even I have a limit. The first deal did not happen, I paid my friend £100, as we continue on.
At 23-years-old I am starting my first serious business. I say “serious”, business because, previously, I ran an e-commerce company that did moderately well. Elon Musk said “starting a company is like eating glass and staring into the abyss”, it is becoming clear how true this is. Now as Elon's quote goes throw my head I am starting to think he has another thing right. Get in an industry that solves a world problem and get into the manufacturing business.
When dealing with manufacturing, particularly the plastics business, they must meet the growing demands of consumers. We have found that most pelletising business uses an average of 25 metric tons of material to run a standard set-up at best performance. The business runs on the scale of how many mechanics is in the set-up. This business offers a range of opportunities to modulate the creation of plastic goods. From waste (mostly post-industrial LDPE film) to the product's packaging in the shops. With the capital, you can choose how to position with vertical or lateral integration models to gain an advantage over the competition. With modern designs, these mechanics are becoming cheaper and the market for the products keeps growing.
Plastic recycling has been a hot topic this year. Since March the world's governments switched policies on imports and exports law around polymer waste. Coupled with covid’s effect on the supply chain, shortages in the market sent the polymer price index up a cliff.
Polymer Price Index below — BPF Brilliant source of reliable data and papers.
This is what we call price inflation.
Prices are holding high for the moment. Some people might call this a hockey stick.
As an idea of how much data we gathered about LDPE:
- The global low density polyethylene market reached a value of US$ 35.6 Billion in 2020.
- The global linear low-density polyethylene (LLDPE) market size is expected to reach USD 85.95 Billion in 2028
- Also register a CAGR of 4.8% during the forecast period
Turkey made a U-turn in their imports from the UK. Simon Ellin, chief executive of the Recycling Association, told MRW that, “it is potentially good news for the UK recycling industry.”. This saved the UK from having a build-up of the waste the UK does not properly recycle. With this cycle, the waste needs sorting, selling and then melting to get turned into new products. For now, Turkey is still agreeing to take in the ships we are sending.
Additionally, South Africa implements EPR (Employer Product Responsibility) for plastics packaging. It is their aim to increase internal collections and repurposing. This is the tip of the iceberg.
I called a UK expert for some advice about getting into the business. He told me “I wouldn’t do it! Not now”, this didn’t fill me with hope about securing to deal.
Still thinking this is a good idea. Rodrigo and I are working diligently learning all that is needed to run a Trading company. We have deciphered new terms like CIF, Sales agreement contracts, Bill’s of lading, along with accounting tasks. We go on.
Here are a few sources we found useful:
https://www.grandviewresearch.com/industry-analysis/global-plastics-market
Fill in the form to get a PDF Paper: https://www.360marketupdates.com/enquiry/request-sample/18678979
Up till this day we haven’t seen real profits. Along the way, I will record my thoughts and findings. In part to help others in the future, in another part to keep me motivated to go on.
By making these thoughts reviewable I am making myself accountable to build this body of work and give value to the market.
The list of tasks keeps growing. I am here giving time to write about this journey, I hope it will keep the momentum high as I find a prosperous path.
Fact sources:
Turkey’s U-turn. https://www.mrw.co.uk/news/uk-recyclers-relief-over-report-of-turkey-u-turn-on-plastics-ban-13-07-2021/
South Africa EPR. https://www.icis.com/explore/resources/news/2021/04/29/10634055/south-africa-implements-mandatory-epr-for-plastics-packaging-from-5-may