Feasibility study of paper and cardboard recycling project in Jordan

Executive Summary

The Paper and Cardboard Recycling project in the energy and environment sector in Jordan targets a promising market opportunity. With an investment of ٧٥٬٠٠٠ JOD, it achieves a net present value of ؜-٢٥٨ JOD, an internal rate of return of ٩٪, and a payback period of 4 years.

Assumptions and Basis

The figures in this study are based on project data, the nature of Jordan's energy and environment sector, and local market indicators, according to the following assumptions:

Basis of Assumptions: These figures are based on estimates for a medium-sized paper recycling project in Jordan, considering initial operating costs, raw material and recycled product prices, and corporate tax rates in Jordan.

Project Description and Opportunity

The paper and cardboard recycling project in Jordan is an industrial project aimed at collecting and processing paper and cardboard waste to convert it into new, usable products. The opportunity is based on increasing environmental awareness and demand for sustainable products, in addition to the urgent need for waste management in the Kingdom. The business model relies on purchasing paper waste from various sources (companies, schools, printing presses, commercial stores), then sorting, cleaning, pressing, and re-processing it to produce paper pulp or other paper products (such as cardboard, packaging paper). The project initially targets local factories that use recycled paper as a raw material, packaging companies, and institutions interested in environmentally friendly products.

Market and Demand Study

The paper recycling market in Jordan is experiencing significant growth driven by increasing demand for sustainable paper products and companies' shift towards sustainability. The packaging and paper sector in Jordan is approximately 1.55 billion USD in 2025, with local industry meeting 77% of total consumption. Estimates indicate that the average Jordanian produces about 50 kilograms of paper annually, representing a huge amount of waste that is not fully recycled. There is growing awareness of the importance of recycling among consumers and producers, and the Jordanian government supports circular economy projects and waste management.

Market Sizing (TAM / SAM / SOM)

The market sizing methodology relies on analyzing the volume of paper and cardboard waste generated in Jordan, and the current and future demand for recycled paper products. Total Addressable Market (TAM) is estimated based on the total value of the paper and packaging sector. The Serviceable Available Market (SAM) is determined by estimating the quantity of recyclable paper and cardboard waste that can be collected. The Serviceable Obtainable Market (SOM) focuses on a realistic percentage of available waste that the project can acquire, considering the project's operational capacity and competitors' share.

Basis of Sizing: Market sizing is based on the size of the packaging and paper sector in Jordan, and an expected share of the total paper and cardboard waste that can be collected and recycled locally.

Unit Economics

Measures the profitability of each sales unit/customer — the most accurate feasibility indicator:

Competitive Analysis

There are a few paper recycling companies in Jordan, some of which focus on collecting and sorting paper for sale to local factories or for export. This industry faces challenges such as high fuel costs, which have led some of these industries to migrate to neighboring countries in the past. The sustainable advantage of the project lies in focusing on the quality of the final product, building strong relationships with suppliers (waste generators) and buyers, and providing integrated solutions for paper waste management. The project can also benefit from the government's direction to support the circular economy and provide incentives for investment in this sector.

Market Entry and Pricing Plan

The market entry plan involves building a strong network for collecting paper and cardboard from companies, factories, educational institutions, and commercial centers. Marketing will be conducted through direct channels via sales representatives to communicate with potential factories and buyers, and by participating in industrial and environmental exhibitions. Products will be priced competitively, taking into account product quality and operating costs, with the possibility of offering long-term contracts to key buyers. There will also be a focus on building a strong brand that emphasizes sustainability and quality.

Capacity and Operations

The project's production capacity starts with processing 25 tons per month in the first year and gradually increases to 40 tons per month by the fifth year, with a focus on operational efficiency to ensure the quality of the final product.

Daily operations involve receiving paper waste, sorting it manually or automatically by type and quality, then feeding it into processing lines. The paper is then shredded and pulped with water to remove impurities and inks, followed by paper pulp formation and drying. Quality control is emphasized at every stage to ensure the final product meets the required specifications for buyers. Equipment will be regularly maintained to ensure production continuity and reduce breakdowns.

The technical aspects of the project include selecting a suitable location in an industrial area away from population density, with easy access to transportation. The project requires equipment for sorting and collection lines, shredding and tearing machines, pulping tanks, impurity and ink removal units, forming systems, and thermal dryers. Equipment suppliers will be chosen based on quality, efficiency, and availability of after-sales services. Contracts will be made with local companies for collecting and supplying paper waste, and government initiatives can be leveraged to enhance waste collection.

Projected Income Statement (٥ Years)

Investment Cost Structure

Cash Flow and Break-even Point

Estimated break-even point at annual revenue ≈ ١٠٨٬٣٣٣ JOD (~٩٦٪ of first-year revenue), with a contribution margin of ٤٥٪. Cumulative cash break-even in Year ٥.

Funding Structure

Sensitivity Analysis (Revenue × Operations)

The impact of changes in revenue and costs together on Net Present Value:

Scenario Analysis

Expected Present Value (Weighted): ٥٨٣ JOD.

Risk Analysis and Management

Organizational Structure and Team

The project's organizational structure will consist of a General Manager, an Operations Manager, a Procurement Officer (for raw material collection), a Sales Officer, and a team of technicians and operating staff. Experienced personnel in recycling and industrial machinery operation will be hired, and necessary training will be provided to workers to enhance operational efficiency and reduce waste. The project can create green job opportunities and contribute to supporting local communities.

Legal and Regulatory Aspects

The project requires obtaining necessary licenses from the Ministry of Environment and other relevant government entities in Jordan, including an industrial activity license, waste management licenses, and occupational health and safety licenses. The legal framework for waste management in Jordan is based on Waste Management Law No. 16 of 2020, which supports the transition towards a circular economy.

Expansion and Sustainability Plan

Future expansion of the project can be achieved by increasing production capacity to process larger quantities of waste and expanding the scope of paper collection to cover wider geographical areas. It is also possible to expand into producing different types of recycled products, or to enter into partnerships with other factories to leverage expertise and technology. Export opportunities for recycled paper products can also be explored, as there is increasing global demand.

Environmental, Social, and Governance (ESG) Impact

The project directly contributes to reducing the amount of waste sent to landfills, preserving natural resources (reducing deforestation), and decreasing energy consumption and greenhouse gas emissions. The project also supports Jordan's circular economy goals, which focus on resource reuse and waste recycling. The project has a positive social impact by providing job opportunities, supporting local communities, and increasing environmental awareness.

Conclusions and Recommendations

The paper and cardboard recycling project in Jordan is a promising investment opportunity that combines profitable economic returns with a positive environmental impact. Given the increasing government support for the circular economy and growing demand for sustainable products, the project has strong economic viability and the ability to achieve sustainable profits. It is recommended to proceed with this project, focusing on operational efficiency, building strong relationships with suppliers and customers, and exploring future expansion opportunities.

Frequently Asked Questions

Is paper recycling profitable in Jordan?

Yes, paper recycling is considered profitable in Jordan, with expected profit margins ranging between 20% and 40% of revenues, due to continuous demand for recycled paper products and the relatively low cost of raw materials.

How much does it cost to set up a small paper recycling plant in Jordan?

The cost of setting up a small paper recycling plant in Jordan ranges from 75,000 Jordanian Dinars for startup projects, and may increase depending on the production capacity and type of equipment.

What licenses are required for a paper recycling project in Jordan?

The project requires licenses from the Ministry of Environment, an industrial practice license, and occupational health and safety licenses, in addition to compliance with Waste Management Law No. 16 of 2020.

What products can be produced from recycling paper and cardboard?

A wide range of products can be produced, including cardboard sheets, newspaper and magazine paper, tissue paper rolls, paper bags, and printing and packaging paper.

Are there government incentives for recycling projects in Jordan?

Yes, the Jordanian government supports recycling and circular economy projects through national plans and investment incentives to encourage the private sector to expand in this field.

What is the size of the paper recycling market in Jordan?

The paper recycling market in Jordan is part of the packaging and paper sector, which had local sales of 1.55 billion US dollars in 2025, and there is increasing demand for recycled products.

Sources and Disclaimer

• Reports of the Jordan Chamber of Industry
• Specialized feasibility studies for recycling projects in the region
• Data from the Jordanian Ministry of Environment
• Reports from the World Bank and the International Monetary Fund on the Jordanian economy
• Interviews with sector experts and recycling companies in Jordan

Disclaimer: This is a guiding study that provides financial analysis according to approved sector standards; verify the figures locally according to your project's reality before any investment decision.