JO Magazine

Entity Green Training is building its business model on something everyone has and no one wants: garbage. and they've got some grand ideas about how to 'recycle' the profits.

Words by This e-mail address is being protected from spambots. You need JavaScript enabled to view it and Ramsey Tesdell. Photography by Joseph Zakarian.

THERE’S AN OLD ENGLISH saying that goes: “Where’s there’s muck, there’s brass.” In other words, there’s always money to be made in jobs that no one wants to do.

This belief has been enthusiastically adopted by Entity Green Training, an idealistic young company that believes it has found a potentially lucrative market in recycling Jordan’s garbage, while at the same time undertaking development projects that have long been the reserve of not-for-profit NGOs.

“Where people see trash, we see opportunity,” said Majed Jaber, who manages the day-to-day running of the company’s flagship recycling program.

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To the untrained eye, the huge stacks of plastic bottles, cardboard and paper piled high at EGT’s headquarters appear to be worthless garbage, the messy by-products of an increasingly throw-away culture. But for those in the know, the tons of waste stored at the Ein Al Basha site just north of Amman can be converted into hard cash.

EGT was set up in 2008 as an independent, for-profit construction contractor, to help Habitat for Humanity build affordable homes in Jordan after the international NGO had found it difficult to find the expertise they needed locally.

The company has since branched out to undertake other development projects, such as vocational training for Iraqi refugees. EGT managers said the firm is breaking even, but that it could greatly boost its income by expanding its recycling scheme.

Even though global market prices for many recyclable materials can fluctuate wildly, leading to questions about the activity’s long term cost effectiveness, EGT believes the lack of competition domestically means it can quickly dominate the unexplored sector.

And it seems EGT has got its work cut out for it. The World Bank reported that during 2007, more than 730,000 tons of solid waste was collected in Amman. On average, the report estimated that each city resident produced almost 1 kilogram of solid waste per day. Even compared to the United States, whose citizens have the highest waste production rate in the world at 2 kilograms per day, the amount of rubbish Jordanians chuck out is quite high, and it can and should be reduced.

EGT has clinched contracts to collect recyclable waste from luxury hotels, schools and foreign embassies. The terms of agreement differ from organization to organization; a hotel, for example, will usually have an EGT employee earning between JD300-400 a month to work full-time on the premises, collecting and sorting trash.

The waste is then sent to the Ein Al Basha site to be sorted. Most of it is sold on to middle men, who in turn trade it on to factories and businesses at home and abroad for recycling.

Some of the plastic waste winds up in recycling plants in Sahab, southeast of Amman, while the paper and aluminum cans may find their way to places like Dubai and Saudi Arabia. EGT even manages to sell large bags of thrown-away bread for between JD2-3; they’re dried out and bought by farmers for animal feed.

EGT’s general manager and co-founder Wajih Ireifej said the recycling side of the business isn’t profitable yet, but he’s convinced this will change as more clients are secured.

“Right now, recycling is on the verge of becoming a huge business for us. … It’s a volume business. If we increase the volume, we get a better price and then we stop dealing with middle men,” he said.

At the moment, he estimates a typical five-star hotel in Jordan produces about 100 tons of waste a month. Once EGT begins work on-site, they usually aim to find a way to recycle or reuse about five tons of that monthly waste load. Ireifej says the company earns about JD300 for five tons of waste.

The next target is to recycle about 20 percent of the hotel’s waste within six months, which is the point at when Ireifej said a given account starts becoming profitable. EGT’s ultimate goal for any account is to be recycling 40 percent of the total waste within 12 to 18 months.

So how are they faring so far? Ireifej said his firm has managed to reduce waste at the Sheraton by around 18 percent since it signed a contract with the hotel in July 2008. EGT has also signed up the Mövenpick and Marriott hotels at the Dead Sea, as well as the Marriott and the Landmark in Amman.

“EGT appears to offer a comprehensive solution for most of our waste. Plus they promise to train our staff on the importance of reusing and recycling, which is important for me,” said Mary Nazzal-Batayneh, who’s the Landmark hotel’s deputy chair, and also responsible for its corporate social responsibility program.

Ireifej said other hotels are increasingly beating a path to his door for help.

“Within the first quarter of 2010, we’ll probably have all the five-star hotels in Jordan as customers,” he said. “If we work and service these 18-20 hotels, that’s a significant amount of customers and those alone can support the 30-40 people working for us—and that’s a great business to be in.”

ENTITY GREEN HAS NO shareholders, and Ireifej said he hopes to plow most of the income generated by the recycling back into other development projects. One of these is the construction of much-needed affordable housing in Amman.

EGT built about 20 homes for Habitat for Humanity, and another 13 since the firm decided to go it alone, using its own loan system.
“A problem people here face is that they may have a little bit of money, or no money at all, and want to start a family and be independent,” explained Ireifej. Most banks aren’t interested in lending such low-income people money, he said, and the much-vaunted microfinance model is too small-scale to fund the building of a house.

“We look at their situation and how much money they have, and then we provide a loan program for three to five years that basically allows them pay back the money based on their income situation.”

The homes themselves usually cost no more than JD10,000 to construct. Most consist of two bedrooms, with a kitchen, living room and bathroom, and they vary in size from 60 to 120 square meters. EGT provides a construction manager to coordinate the process and subcontracts with local specialists and laborers to complete each house.

Ireifej, who’s worked extensively in the construction industry in the United States, said the occupants of the homes have been meeting their loan repayments, but this only comes to JD850 a month in total—not enough to make the scheme profitable. So for the moment, home-building is largely on the back burner, until a time when EGT can afford to set up a dedicated housing fund.

“We’d like to create a mid-level fund where we can fund the construction ourselves, and the repayment of the loan would fund a revolving door of sorts that would go to fund more homes,” said Ireifej. So far he has 90 people on a waiting list for affordable homes in Ein Al Basha alone.

While recycling and housing have yet to turn a profit, EGT is relying on its biggest contract—with the NGO International Relief and Development—to continue operating.

EGT has a set up classrooms and workshops at its Ein Al Basha site to provide s Ein Al Basha site to provide training, mainly for Iraqi refugees but also including Jordanians, in such varied fields as commercial painting, electrical and plumbing installation, repair and maintenance, IT, catering, and mobile phone and automotive repair. Besides teaching valuable skills, each three-month course also aims to boost the self-esteem of the trainees by making them feel more productive.

IRD Deputy Country Director for Jordan Dawn Greensides said she was very happy with the results of the program so far.

“Over 600 men have been given the skills and experience that are necessary for the local work force, and we have seen the graduates integrate well into the Jordanian community, with a significant number of them reporting an increase in personal income after the training,” she said, without giving further details.

EGT Program Manager Aaron Bouchane said the goal as far as the Iraqis was concerned was to teach them skills that would be useful after they return to Iraq or are resettled in third countries. He added that he was hopeful his firm would get another year of funding from IRD, but that after that, EGT would likely have to find other viable revenue streams to continue operating. In all likelihood, this will mean focusing heavily on the recycling project.

“It’s the thing now with the most traction,” Bouchane said. “The vocational training has been around for a while and it has been keeping us afloat, but long term, the recycling is where the majority of the EGT’s business will come from.”

Regardless of what happens, EGT managers are convinced they’ve hit upon a sustainable business model that can succeed where traditional NGOs have arguably failed.

“We’ve built a company that operates in the development industry, that is helping more beneficiaries and leaving something behind, whether it’s a recycling, construction or a training business; [a company] that can be sustainable and that doesn’t basically stop when the funds run out,” Ireifej said. “We’re trying to give donors alternatives; we can probably stretch their money further and do more [than a traditional NGO].”

The benefit of using a private business as a vehicle to make life better for people was also something Bouchane stressed.

“The social development sector in which we operate has traditionally been run by NGOs—that’s the case in Jordan and that’s the case in a lot of parts of the world. The fact is that these NGOs really haven’t achieved too much, and what they have achieved takes them a long time,” he said. “I think that’s how we’re trying to set ourselves apart. We have a social development mission, but we hope to use the efficiencies of business to achieve those statements a little bit quicker and in a better quality than traditionally has happened in this country.”

Development consultant Winkie Williamson said EGT appears to have hit on a pragmatic formula that works.

“In the end, donors want an organization that can deliver to meet client needs, and EGT seem to do this,” she said.

But Williamson, who has 12 years of experience working in Jordan, still struck a note of caution about using private business for development projects.

“I think what’s important is: What do they do with their profits? People have to come before profits in development. It’s the ‘do no harm’ basic philosophy,” she said.

FOR THE FUTURE, EGT would like to see its work kick-start a whole “green” industry in Jordan by using the firm’s expertise and existing facilities to teach a raft of new trainees how to make a living in fields like composting and solar power.

“Maybe traditional vocational training isn’t necessarily a growth business. Now we’re looking at renewable energy training to create green jobs,” Ireifej said. “This sector is going to require skilled people.”

He might be on to something. According to a report published in December 2009 by the independent think tank Next 10, green jobs in the US state of California increased by 36 percent from 1995 to 2008, while total jobs expanded only 13 percent. As the economy slowed between 2007 and 2008, total employment fell by 1 percent, but green jobs continued to grow by 5 percent.

But while there appears to be greater environmental awareness among organizations in Jordan, convincing more individuals in the Kingdom to take up measures like recycling will take some time.

“It’s a relatively new concept. Getting people on board and getting them to understand what it’s about is a key challenge,” said Bouchane.