When an investor or business owner is selecting recycling equipment, the comparison usually goes something like this: “Here’s a cheaper option, here’s a more expensive one, and this one is more powerful.” The problem is that in recycling, the highest cost is often not the purchase price, but rather operating costs: downtime, consumables, the quality of the output fraction, logistics, and the human factor. That is precisely why “gut feelings” almost always lead to a false conclusion about payback.

Below is a simplified but practical economic model that helps you compare options fairly. It doesn’t require a finance department, but it provides concrete figures to help you decide which equipment will generate more revenue with fewer risks.

1) Start with the product, not the equipment: what are you selling in the end?

In recycling, you don’t make money “per metric ton of shredded material,” but rather on the final product—its quality, consistency, and price. That’s why the first part of the calculation is what you’re actually selling.

Determine:

• what the final product is (fraction, granules, crumbs, recycled material, etc.)
• market requirements for uniformity (size, purity, moisture content)
• the selling price per metric ton or per kilogram
• Possible seasons or price fluctuations
• discounts for impurities or inconsistent quality

If two equipment options produce different-quality fractions, then “cheaper up front” may mean “always cheaper to sell.”

2) CAPEX: What is included in the investment, aside from the price of a shredder or crusher?

CAPEX is often calculated as the “cost of equipment.” But the actual investment is almost always higher, and this is where the first error in comparison arises.

CAPEX should include:

• main equipment (shredder, crusher, screens, separators)
• conveyors, hoppers, steel structures, service platforms
• Electrical systems: cables, automation equipment, control panels, variable frequency drives
• exhaust, filters, ventilation, noise protection (if necessary)
• Installation, commissioning, staff training
• Shipping logistics, customs fees (applicable to the EU)
• Initial supply of consumables (blades, screens, repair kits)

Rule: If the calculation includes only the “price of the machine,” it is not CAPEX, but a marketing figure.

3) OPEX: What It Costs to Operate Each Month

Operating expenses are what systematically “eat into” profits. In a simplified model, 6–7 main expense categories are enough to see the difference between the options.

OPEX includes:

• electricity (kW·h per metric ton or per hour of operation)
• staff (operators, technician/mechanic, shifts)
• consumables (blades, screens, bearings, lubricants, belts)
• Scheduled maintenance (maintenance according to the schedule)
• repair work (unscheduled, worn-out components)
• rental/maintenance of the premises (if applicable)
• disposal of waste and dust, if required by regulations

It is important to calculate not based on “averages,” but in relation to productivity: how much it costs to process 1 metric ton of raw materials.

4) Stops: The Main Invisible Enemy of Profitability

Most often, people mention them only after the system has been launched: “Everything seems to be working, but we keep having to shut it down.” A shutdown isn’t just about repairs. It also means a loss of productivity—people are idle, energy is wasted on restarting the system, and defects and frustration mount.

When developing the model, it is important to consider:

• scheduled stops (blade replacement, cleaning, maintenance)
• unplanned stoppages (contaminants, blockages, emergencies)
• Repair time (diagnosis + repair + startup)
• Availability of spare parts and consumables (days/weeks)

Here’s an easy way to calculate it:

• Enter your planned monthly working hours
• Subtract the scheduled stops
• Get “actual hours worked”
• multiply by actual productivity

Payback is always calculated based on actual hours, not on the hours listed on the work permit.

5) Defects and quality losses: they reduce revenue, not just add to costs

Waste in recycling isn’t just “trash.” Often, it’s:

• price reduction due to impurities
• fines or return of the shipment
• re-grinding/re-sieving (additional energy and time)
• instability within the faction, which makes it unsuitable for the next stage

Include the following in the model:

• percentage of defects or rework (%)
• by how much the price falls (UAH/t or EUR/t)
• additional costs for reprocessing

In many cases, the difference in “fraction quality” yields more revenue than the difference in equipment price.

6) Logistics: The cost per metric ton begins even before the production line is launched

Logistics in recycling has a greater impact on profit margins than it might seem, especially if raw materials are transported over long distances or across borders.

In a simplified model, it is sufficient to:

• Delivery of raw materials (euros/metric ton or hryvnias/metric ton)
• Delivery of the finished product (EUR/metric ton or UAH/metric ton)
• warehouse expenses (if necessary)
• additional costs for packaging/big bags/containers

Sometimes it makes more sense to have slightly lower productivity but a more reliable product that is easier to sell and cheaper to transport.

7) The benefits of maintainability: a return on investment based on repair time, not “the aesthetics of the design”

Maintainability means that equipment isn’t just “durable”—it can also be quickly restored to operation without costly and lengthy downtime.

In economics, this means:

• fewer hours of downtime for component replacement
• lower repair costs (off-the-shelf parts, standard components)
• Projected expenses (and clear guidelines)
• less dependence on “unique” replacement parts

An example of the logic of influence:

• If downtime is reduced by at least 10–15% per month, actual productivity increases without requiring additional kW or extra staff.
• This directly increases gross revenue and speeds up the payback period, even if the initial cost of the equipment is higher.

8) The Benefits of Modularity: Scaling Without Having to “Throw It Away and Buy a New One”

Modularity is the ability to:

• Add a unit (separator, screen, additional conveyor, hopper)
• change the configuration to accommodate a different material
• switch to another faction without completely replacing the line

In the calculation, this is reflected as follows:

• a lower risk of “misjudging the market”
• Cheaper scaling as volumes increase
• faster launch of new products

For investors, this reduces risks and makes the project more flexible.

Simplified Payback Period Formula (for quick comparison)

1. Actual monthly processing volume (metric tons/month) =
   (Scheduled hours – downtime) × actual productivity (metric tons/hour)
2. Monthly revenue =
   Actual volume × price of the output fraction × (1 – defects/quality losses)
3. Monthly expenses =
   OPEX (energy + personnel + consumables + maintenance + repairs) + logistics
4. Monthly profit =
   Revenue – Expenses
5. Payback Period (months) =
   CAPEX / Monthly Profit

That’s enough to “sort through” two or three options and see where the real money is and where the illusion lies.

Get a payback period calculation template (table) and a request for technical specifications

To avoid starting from scratch, you can download a ready-made spreadsheet template for calculating payback (CAPEX, OPEX, downtime, consumables, energy, personnel, logistics, fraction price, scrap) and a request form for technical specifications.

Please send us your contact information and basic details about your project — we’ll provide a template and a brief list of the information needed to accurately compare options tailored specifically to your business.

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