In various official terms in Indonesia, waste is often defined as residual material that its function and benefit has decreased to the minimum level. Meanwhile, increasing demand of raw materials drives higher cost of supply due to increasing extraction cost and limited supply. This situation encourages industries to be more innovative to reuse and recycle used materials. This research aims to analyze economic and environmental potential of municipal solid waste as a source of raw materials for industrial sector, especially in recycling industries. A recycling case study is conducted at a waste treatment unit in Depok, Indonesia where recyclable materials are highly variable in types and amount. One of key finding to increase percent of recyclable materials is to encourage waste separation at source either encouraging it by economic incentives or increasing environmental awareness among the households. Thus, this would simultaneously increasing amount and quality of wastes being recycled and at the end their price.