Waste management in Peru's construction industry – a niche with room to build

Companies in the Peruvian construction sector are looking to adopt environmental, social & governance (ESG) standards to reduce their environmental impacts, access benefits associated with more sustainable building practices and position themselves in the market as more responsible players.

This paves the way for businesses that are specialized in improving waste management and optimizing energy use in the industry, aiming for construction companies to see them as strategic partners. These changes can be applied to various economic sectors, giving rise to significant economies of scale.

BNamericas speaks with Roger Mori, founder and technical manager of Ciclo, a Peruvian company that handles construction waste and manufactures products from recycled materials.

BNamericas: What is the main focus of Ciclo's line of business?

Mori: It's a company engaged in the comprehensive management of construction and demolition waste, and the manufacture of materials from the recycling we carry out at our treatment plants. The company started operating in late 2019, and our objective is to position ourselves as a partner to improve the sustainability indicators of the construction sector.

BNamericas: You have a plant in Lima's Cieneguilla district, what is its operating capacity?

Mori: In terms of waste treatment, the plant has the capacity to process around three tonnes per hour. We also produce around 3,000 paving stones for construction per day, reaching annual output of 500,000 stones. Waste management currently represents 65% of our business, but we want to increase the production of construction materials.

We have the goal of having a second plant by 2024. Tripling or quadrupling production [of paving stones] would be a good figure to meet the demand we're seeing today. We aim to double that, at least.

BNamericas: How have you approached companies to advertise your services?

Mori: We were just focused on construction companies at first, but now we have clients of all kinds and particularly contractors. Almost all of them meet two criteria: they're trying to comply with existing regulations and they have high ESG standards. This favors business models such as that of Ciclo and positions us as a partner.

Since conventional solutions cost almost the same, we provide the value of improving the ESG indicators of companies, because we're authorized to issue certificates for the percentage of waste reused. We're a company registered with the environment ministry and we're allowed to carry out collection, transport and final disposal of materials.

BNamericas: Who have you worked with?

Mori: We've worked with Grupo Cobra, a contractor for Enel Perú, where we handled almost 2,000 cubic meters of construction waste and the conversion rate exceeded 70%. We've also developed projects at Aceros Arequipa's Pisco plant and carried out work for Perú LNG, a consortium that processes Camisea gas in Pampa Melchorita to the south of Lima.

With respect to the paving stone unit, we've worked with Besco, a real estate company focused on the development of social and sustainable housing. In this sector you have to achieve certain indicators and use certain materials to obtain the corresponding certifications, so we have an opportunity there.

BNamericas: How has 2022 been for you?

Mori: We're going to end the year a little better than 2021. Lots of projects have progressed slowly in terms of operations and we did see a little contraction and repercussions of inflation. We're seeking financing to expand our operating capacity and improve the final product. We were in talks with an investment fund, but the agreements were put on standby due to the economic situation.

Although the figures won't be what we initially expected, we're ending the year with a larger range of clients, around 50, and we’re more consolidated.

BNamericas: What's the outlook for 2023, since the economic slowdown is expected to continue right?

Mori: We're looking at 2023 optimistically. We have a project with a transnational company that's going to give us a strong boost in both lines of business. It's a renewable contract for a minimum of one year and it will give us good revenues. 

We also have an agreement with another company for whom we'll manage waste, and we've developed a special aggregate for its production materials.

Although the economic situation will be difficult, the market trend for sustainable solutions favors us. We hope to double our turnover in 2023 and start the project for the new plant in 2024.