Family businesses - make planning a priority

April 2012, No.3

The face of recycling in a green economy

More potential ahead for end-of-life tyres

Family businesses - make planning a priority

01 o 1 04-04-12 15:1

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V I E W P O I N T

Manfred BeckEditor

Some years ago, I was sitting at my desk when I

remembered a phone call that I had forgotten

to make. So I looked up the number and dialled it.

A man answered, saying: ‘Hello.’ I politely said:

‘Good morning, my name is Manfred Beck. Could

I please speak with Herman van Helst?’ Suddenly, a

manic voice yelled in my ear: ‘Get the right freaking

number.’ And the phone was slammed down on me.

I could hardly believe that anyone could be so rude

and, believe me, I’ve met some rude people in my

life. When I tracked down the correct number for

Herman, I found that I had accidentally transposed

the last two digits. After speaking to him, I decided

to call the ‘wrong’ number again. When the same

guy answered the phone, I yelled ‘You’re a klootzak!’

and hung up. (Now for those of you not familiar

with the Dutch language, the word ‘klootzak’ refers

to a delicate part of the male anatomy which can

hurt really badly when, for example, it takes a direct

hit from a soccer ball.)

I then wrote down the rude guy’s number with the

word ‘klootzak’ next to it and put it in my desk

drawer. Every couple of weeks, when I was paying

bills or was having a really bad day, I’d call him up

and yell: ‘You’re a klootzak!’ It always cheered me up.

When Caller ID was introduced, I thought my

therapeutic ‘klootzak’ calls would have to stop. So

I called his number and said: ‘Hi, this is Hans Smits

from the telephone company. I’m calling to see if

you’re familiar with our Caller ID programme?’ He

yelled ‘No!’ and slammed down the phone. I quick-

ly called him back and said ‘That’s because you’re a

klootzak!’ and hung up.

One day, I was about to pull into a parking space

when some guy in a black BMW cut me up and took

the slot for which I had patiently waited. I hit the

horn and yelled at him, but he ignored me. Then I

noticed a ‘For Sale’ sign in his back window, so I

wrote down his number.

A couple of days later, right after calling the first

klootzak (I had his number on speed dial), I thought

that I’d better call the BMW guy too. So I did, and

asked him: ‘Is this the man with the black BMW for

sale?’He said: ‘Yes, it is.’ I then asked: ‘Can you tell

me where I can see it?’ ‘Of course,’ he said. ‘I live at

34 Van Gogh Street in Amsterdam. It’s a red brick

house and the car is parked right out in front.’ I

asked: ‘What’s your name?’ He said: ‘My name is Don

Hansen.’ I asked: ‘When would be a good time to

catch you, Don?’ He replied: ‘I’m home every

evening after five.’ I said: ‘Listen, Don, can I tell you

something?’ He said: ‘Yes. What’s that?’ I yelled: ‘Don,

you’re a klootzak!’ Then I hung up and added his

number to those I had on speed dial. Now when-

ever I had a real problem, I had two klootzaks to call.

Then I came up with an idea. I called klootzak

number 1. He said: ‘Hello.’ I said: ‘You’re a klootzak!’

But this time I didn’t hang up. After a brief silence,

he asked: ‘Are you still there?’ I said: ‘Yeah!’ He

screamed: ‘Stop calling me.’ I said: ‘Make me.’ He

asked: ‘Who are you?’ I said: ‘My name is Don

Hansen.’ He said: ‘Is that so? And where do you live?’

So I said: ‘I live at 34 Van Gogh

Street in Amsterdam. It’s a red

brick house and I have a black

BMW parked out front.’ He

yelled: ‘I’m coming over right

now, Don. And you had better

start saying your prayers.’ I said: ‘Yeah, like I’m

really scared, klootzak.’ And then I hung up.

Then I called klootzak number 2. He said: ‘Hello?’

I said: ‘Hello, klootzak.’ He yelled: ‘If I ever find out

who you are, I’ll...’ ‘You’ll what?’ I asked. He

exclaimed: ‘I’ll kick your ass.’ I answered: ‘Well,

klootzak, here’s your chance because I’m coming

over right now….’

Immediately I began to feel much better. Anger

management really does work.

When you occasionally have

a really bad day and you just need

to take it out on someone, don’t

take it out on someone you

know. Instead, take it out on someone you

don’t know, but you know

deserves it…

Anger management

‘I’ll kick your ass, klootzak.’

03 o 3 02-04-12 14:4

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T H I S I S S U ECoverstory

A family affair / 20

There is a Burmese proverb which runs: ‘In time

of test, family is best.’ Many recycling firms

would doubtless subscribe to this

simple philosophy, having built their

businesses predominantly around

members of their immediate or

extended family - very often

with considerable success. But

what sets family-owned and

-run companies apart from

the rest? And how can family

businesses maximise the benefits

of what they have created?

Recycling International decided

to take a closer look.

Sections

3 Viewpoint6 Events Calendar10 News19 Product news82 Next issue

Markets Analysis

64 Ferrous scrap70 Stainless steel scrap72 Non-fer rous scrap76 Recovered paper77 Textiles

And also...

46 Interview - Zhao Hualin: ‘Towards a green and clean China’

52 Company profile - Saubermacher of Austria

56 Supplier - Sierra Europe 79 In the laboratory -

Automated recycling of LCDs

The days are long gone when a used tyre’s recycling

value was sorely limited. A recent ETRMA report

gives a promising update on the European market

situation for end-of-life tyres.

More potential ahead for end-of-life tyres

28

Plastics have been a key building block of the

European economy for a long time now, and it

seems this success story is far from over.

Some experts believe that shipbreaking could reach

an all-time high in 2012. However, there are

concerns that many of these vessels will be

dismantled according to ‘inappropriate’ practices .

Plastics: bright future for a valuable resource

Ship recycling - cash versus ‘green’ responsibility

6040

What exactly is the role of recycling in the pursuit

of a green economy and what does a green future

entail? A recent report of the European Environment

Agency sets out to answer these questions.

The face of recycling in a green economy

32

T H I S I S S U EA family affair / 20

There is a Burmese proverb which runs: ‘In time

of test, family is best.’ Many recycling firms

would doubtless subscribe to this

simple philosophy, having built their

businesses predominantly around

members of their immediate or

extended family - very often

with considerable success. But

what sets family-owned and

-run companies apart from

the rest? And how can family

businesses maximise the benefits

of what they have created?

Recycling International decided

05 o 5 04-04-12 15:21

6 April 2012

E V E N T S

29 May-1 June Rome (Italy)

BIR Spring Convention

Bureau of International Recycling

Phone: +32 262 757 70

Fax: +32 262 757 73

E-mail: [email protected]

www.bir.org

7-11 May Munich (Germany)

IFAT-Entsorga 2012

Messe München

Phone: +49 899 491 1358

Fax: +49 899 491 1359

E-mail: [email protected]

www.ifat.de

9-11 May Beijing (China)5th China International Metal Recycling Conference

MC-CCPITPhone: +86 106 522 0754Fax: +86 106 525 4154E-mail: [email protected]/recycling/en

5-6 June Rio de Janeiro (Brazil)1st Latin American Stainless & Its Alloys Conference

SMR - AMMPhone: +43 567 272 737Fax: +43 567 272 737 99E-mail: [email protected]

12-15 June Madrid (Spain)SRR Recycling and Recovery Trade Show

IFEMAPhone: +34 917 223 000Fax: +34 917 225 804E-mail: [email protected]

14-16 June Skelmersdale (UK)CARS

Complete Auto Recycling ShowNigel DovePhone: +44 797 073 3034E-mail: [email protected]

11-13 September Birmingham (UK)RWM Exhibition

EMAPPhone: +44 207 728 3724Fax: +44 207 728 4200

+44 207 728 4507www.rwmexhibition.com

This year’s IFAT-Entsorga, the world’s

premier trade show for innovations

and services in water, sewage, recy-

cling, waste and raw materials man-

agement, was fully booked five

months before the show’s opening.

Exhibition space will amount to 215

000 square metres - a new record for

the show - while exhibitor numbers

will exceed the 2730 that took part in

the last IFAT-Entsorga.

A total of 27 international joint stands

have been registered from 17 countries

compared to 18 international pavilions

from 13 countries in 2010. Canada,

Japan, Norway, Russia and Spain are

taking joint stands for the first time.

The show represents an opportunity

to network at the international level,

with forums offering platforms for

company presentations, panel discus-

sions, special country focuses, techni-

cal discussions and special events.

Trade associations and manufacturers

will hold practice-oriented live dem-

onstrations of machines and systems

at an open-air site.

For more information, contact: Messe München, Germany, Phone: +49 89 949 113 58, Fax: +49 89 949 113 59, E-mail: [email protected]

7-11 May Munich (Germany)IFAT-Entsorga 2012

11-13 September São Paulo (Brazil)Exposucata

Reciclagem ModernaPhone: +55 115 535 6695E-mail: [email protected]

12-14 September Amsterdam (the Netherlands)ICBR 2012

International congress for battery recycling - ICMPhone: +41 627 851 000Fax: +41 627 851 005E-mail: [email protected]

12-14 September Stockholm (Sweden)11th Stainless and Special Steel Summit

SMR - Metal BulletinPhone: +43 567 272 737Fax: +43 567 272 737 99E-mail: [email protected]

17-19 September Florence (Italy)ISWA 2012

The world solid waste congressISWAPhone: +39 064 740 589Fax: +39 064 875 508www.iswa.com

19-20 September Dallas (USA)E-Scrap Conference

Resource RecyclingPhone: +1 503 233 1305Fax: +1 503 233 1356E-mail: [email protected]

19-21 September Shanghai (China)World Scrap Metal Congress 2012

TerrapinnPhone: +65 622 283 08Fax: +65 622 632 64E-mail: [email protected]

28-30 October Barcelona (Spain)BIR Autumn Convention

Bureau of International RecyclingPhone: +32 262 757 70Fax: +32 262 757 73E-mail: [email protected] www.bir.org

6-7 November Warsaw (Poland)Identiplast 2012

Plastics EuropePhone: +32 267 532 97Fax: +32 267 539 35E-mail: [email protected]

13-16 November Guangzhou (China)Electronics Recycling Asia

Conference, exhibition and plant tours - organized by World Recycling Forum ICMPhone: +41 62 785 1000Fax: +41 62 785 1005E-mail: [email protected]

27-30 November Lyon (France)Pollutec 2012

Reed ExhibitionsPhone: +33 147 562 113Fax: +33 147 562 120E-mail: [email protected]

16-18 January Salzburg (Austria)IERC 2013

International electronics recycling congressICMPhone: +41 627 851 000Fax: +41 627 851 005E-mail: [email protected]

06 s 6 02-04-12 14:50

Naamloos-2 1 0 -02-12 0 :12

E V E N T S

advertisement

Schedule of meetings

RI_180x127_1/2 17/3/09 16:42 P�gina 11

C i i�

C M Y CM MY CY CMY K

Wednesday May 30 201208.30-18.30 Registration desk open 09.00-18.00 Exhibition and hospitality

area open09.30 Tyres Committee11.00 Non-Ferrous Metals Division 13.00 Tyres, Non-Ferrous and Stainless

Steel Luncheon14.30 Stainless Steel & Special Alloys

Committee16.30 Workshop on Waste Electrical

and Electronic Equipment (WEEE)19.30 Welcome Reception

�ursday May 31 201208.30-18.30 Registration desk open 09.00-18.00 Exhibition and hospitality

area open10.00 International Trade Council with

a special focus on theft and fraud11.30 General Assembly followed by

keynote session

13.00 Ferrous luncheon14.30 Ferrous Division16.30 Shredder Committee

Friday June 1 201208.30-17.00 Registration desk open09.00-14.30 Exhibition and hospitality

area open09.30 International Environment

Council 11.00 Paper Division 13.00 Paper, Plastics and Textiles

Luncheon14.30 Plastics Division 16.00 Textiles Division

For more information, contact: Bureau of International Recycling,Phone: +32 262 757 70,Fax: +32 262 757 73,E-mail: [email protected]

This year’s BIR Spring Convention will be held in the epic city of Rome and, as ever, the programme will com-prise a series of meetings featuring high-profile guest speakers. Further details of the event will be made avail-able at a later date and would-be del-egates are urged to pay regular visits to the BIR’s website for further updates.BIR expects to welcome more than 1000 delegates to the Italian capital.

All registered delegates, guests and spouses are invited to the BIR Wel-come Evening, which will be held on May 30 at the Villa Miani with its six-teenth century-style Venetian façade and several terraces, surrounded by a marvellous garden with high palm trees and exotic plants. The villa also accommodates a museum with some of the most famous Roman portraits of the sixteenth and seventeenth cen-turies by Piranesi and Vanvitelli.

29 May-1 June Rome (Italy)BIR Spring Convention

06 s 02-04-12 14:50

Stahlwerke Bochum GmbHCastroper Str. 228 · 44791 Bochum · GermanyPhone +49(0)234-508-2 · Fax +49(0)[email protected] www.stahlwerke-bochum.com

Ancient.

The life of the product decides to a large extent its economic value.Our high performance wear parts have this long life and thus secure

for our customers an especially economic solution.Stand C3/226

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Naamloos-3 1 23-01-12 15:52

10 April 2012

N E W S

The EU, USA and Japan have filed a legal challenge opposing Chinese restrictions on the export of 17 types of rare-earth metals as well as molybde-num and tungsten - some of which are widely used in green technologies such as wind turbines. According to EU Trade Commissioner Karel De Gucht, China has continued to restrict its rare-earth exports despite a World Trade Organiza-tion ruling last year.Speaking on this issue on March 13, US President Barack Obama explained: ‘If China would simply let the market work on its own, we would have no objec-

tions. But their policies currently are preventing that from happening. We’ve got to take control of our energy future and we cannot let that energy industry take root in some other country because they were allowed to break the rules.’China, however, sees the situation very differently, stating that the recent restric-tions are intended to preserve the coun-try’s natural resources, control illegal mining and protect the environment. ‘The fact that China has about a third of the world’s rare-earth resources and produces 90% of supply isn’t sustain-able,’ explains a Chinese foreign ministry spokesman.The European Commission is not per-suaded by this argument, claiming that export restrictions are not the right way to proceed. Instead, it insists that alter-native measures - focusing on environ-mental protection - would be far more effective.With China facing the threat of sanc-tions, Industry Minister Miao Wei has told state media agency Xinhua: ‘We are actively preparing to defend ourselves’. www.wto.org

China faces rare-earth legal challenge

The Japanese government plans to enact legislation requiring consumers to actively recycle used electronic products such as mobile phones and digital cam-eras. More efficient recycling would reduce demand for the rare earth miner-als and precious metals that Japan is currently forced to import. The govern-ment hopes a more secure supply chain will boost production of hybrid vehicles and precision equipment. The draft bill also encourages manufac-turers to review product design with a view to increasing the reuse of rare earths and precious metals. If it passes

into law, businesses and private consum-ers will be expected to separate used electronic products from other waste.Successful implementation will depend on the national government to set aside a budget to promote the new recycling system, while local authorities will need to take measures to enable separate col-lection of e-waste for subsequent deliv-ery to designated processors.New legislation would allow the govern-ment to seek data from recycling busi-nesses, and give it the power to impose fines of up to 30 million yen (Euro 278 000) if they file a false report.

During WeCycle’s ‘The Future Flows’ congress held on March 16 in the Dutch capital Amsterdam, a study was pre-sented that critically assesses the e-waste situation in the Netherlands. According to Dr Jaco Huisman, Scien-tific Advisor at the United Nations Uni-versity (UNU), this detailed investigation of waste flows can be used for improved data gathering across the world, noting that ‘the ability to determine what is regenerated is a vital starting point’.Finding ways to ‘treat more and collect better’ was the core objective of the study, says Mr Huisman. Building on information accumulated for the 2011 Dutch E-waste Quantification project, he was able to map

out the complicated landscape for waste electrical and electronic equipment (WEEE or E-scrap) by distinguishing the country’s true stock and export figures, aided by his put-on-market (POM) theory.This was no easy feat as the study reports that 17% of Dutch waste goes undocumented. Additionally, he discov-ered there is still widespread uncertainty as to when a product can actually be labelled as e-scrap. Mr Huisman explains: ‘A mechanical toy, for instance, is operated electronically but it doesn’t typically look like e-scrap, does it? This goes for a lot of items that contain batteries - and so not every item is accurately identified.’ www.wecycle.eu

Japan to introduce rare earth recycling legislation

E-waste study shows benchmarking potential

Indian recycling group scoops Innovation AwardIndian environmental research and action group Chintan has won America’s first-ever Innovation Award for the Empowerment of Women and Girls in light of its efforts to train waste pickers and eliminate child labour from recycling. The award was presented by US Secretary of State Hillary Clinton, who announced that each of the non-governmental organisations present at the ceremony would receive US$ 507 000 (Euro 380 000) worth of funds from the Rockefeller Foundation to help stimulate their valuable work. She said: ‘Chintan’s efforts have reached more than 20 000 waste pickers in India in the past five years. More than 2000 children have been pulled out of the trash heaps and put on a path toward education and opportunity.’ www.chintan-india.org

10 N 10 03-04-12 10:1

Joke of the Month

N E W SN E W S

Business

11April 2012

For more daily free global recycling news, visitwww.recyclinginternational.com

We recycle all kinds of metals and plastic shipping them to more than 15 countries

around the world“RECYCLING MEXICO INTO THE WORLD”

Bernardo Llaguno Garza

www.riisa.com.mxMonterrey Technology Park. Carretera Laredo Km. 25.2. Monterrey N.I. México

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Five massive boilers belonging to the Berkeley nuclear power station in the UK are to be transported to Sweden for dismantling and reprocessing. The 310-tonne boilers have remained on site awaiting disposal ever since the plant ceased operations in 1989. Now Magnox, the management and operations contrac-tor responsible for the site, has partnered up with Studsvik, the Swedish specialist in nuclear decommissioning and waste treatment, to organise their removal.

On arrival in Sweden, the boilers will be decontaminated. It is expected that up to 95% of the steel can be remelted. Low-level waste residues unsuitable for recycling will be shipped back to the UK for storage at a secure repository at Drigg in north-west England. Steve McNally, Berkeley site director for Magnox, said this was only the first stage of the process, since there were 15 boilers on the site in all. www.magnoxsites.co.uk

Technology giant IBM has opened the first facility in Shenzhen, China, where old computers can be refurbished for resale. This particular market in China is expected to become worth at least Euro 1.5 billion (US$ 2.1 billion) by 2014.Richard Dicks, General Manager of IBM Global Asset Recovery Services, had been negotiating the deal with the Chinese government for two years. ‘We’re the fi rst licensed facility, meaning we have a fi rst-to-market advantage,’ he remarks, add-ing that the potential for this market is ‘huge’. China’s rapidly-developing econ-omy and resulting e-waste growth explains the government’s move, accord-ing to Mr Dicks. With its latest Five-Year Plan designed to encourage recycling and remanufacturing so as to reduce landfilling, the Chinese authorities understood IBM’s argument that ‘it’s

really easy to buy a new computer but it’s really hard to get rid of one’.Located near an existing IBM factory, the remanufacturing plant in Shenzhen will be capable of processing approximately 100 000 servers and personal computers on a yearly basis. www.ibm.com

Nuclear plant boilers shipped to Sweden for ‘ultimate recycling

IBM helps China tap into computer refurbishment

It’s nut what you think…

A man walks into a bar after a long day at work. As he begins to drink his beer, he hears a voice say seductively: ‘You’ve got great hair!’ The man looks around but can’t see where the voice is coming from, so he goes back to his beer.A minute later, he hears the same soft voice say: ‘You’re a handsome man!’ The man looks around but still can’t locate the source of the voice.As he returns to his beer once again, the voice says: ‘What a stud you are!’ The man is now so baffl ed that he asks the bartender what is going on.The bartender replies: ‘Oh, it’s the nuts - they’re complimentary.’

Sponsored by

Sierra InternationalMachinery, Inc.

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eRecycling CorpsTexas-based mobile phone recycler eRecyclingCorps (eRC) will relocate its international headquarters to Brussels following its acquisition of Zone Impact, a provider of a similar phone trade-in service in the Belgian market. This move is aided by a fi nancial injection of US$ 35 million from from Kleiner Perkins Caufi eld & Byers. www.erecyclingcorps.com

IRG/United Resource Recovery Corp.New York-based GreenSteel has sold membership interests in its affi liate Inter-national Recycling Group (IRG) to fellow US recycler United Resource Recovery Corporation (URRC). Through the partnership, IRG will gain with access to URRC’s proprietary UnPET food-grade PET recycling technology. However, the specifi c terms of the transaction have not been disclosed. www.urrc.net

Eco Sustainable SolutionsHorse bedding produced by Eco Sustainable Solutions made from recycled whitewood chippings was named Product of the Year at the recent Wood Recycling Awards. Key to successful processing of the chippings is a metal detector from S+S Inspection that sits at the end of the production line and removes any present metal item, like nails and screws, thus assuring the product’s safety. www.sesotec.co.uk

Universal Scrap Metals Chicago-based Universal Scrap Metals (USM) has acquired assets in copper processor Premier Metals Recycling. With this move, USM aspires to add an extensive copper recycling capability to its portfolio. Former President of Premier Metals Recycling, Todd Fingerman, will head the new operation. www.universalscrap.com

Gneuss KunststofftechnikTwo Brazilian recycling leaders - Unnafi bras Textil and Nova Pack Embalagens - have recently purchased machinery from German manufacturer Gneuss Kunststofftechnik. The four lines Unnafi bras has installed will serve bottle-to-bottle recycling and pellet production, while Nova Pack has acquired a line to create packaging from 100% recyclable material. www.gneuss.com

10 N 11 03-04-12 10:1

IUT Beyeler CH-3700 Spiez

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Tel. ++41 33 437 47 44 Fax ++41 33 437 70 73

SCRAP SHEARS

FOR SHEARS , BALERS and CABLE-RECYCLING

Halle C 3

Stand 106

Naamloos-3 1 20-03-12 16:0

Business

Follow Recycling International on , and to get your latest recycling news. Or visit our website www.recyclinginternational.com for extensive daily news service.

N E W SN E W SFor more daily free global recycling news, visit

www.recyclinginternational.com

Smurfi t KappaSmurfi t Kappa is planning a three-year investment to equip its Townsend Hook papermaking facility in south-east England with a custom fi ve-metre, lightweight recycled containerboard machine. It is worth Euro111 million (US$ 147 million) and is due to be completed and operational by the end of 2014. www.smurfi tkappa.com

Metal Recycling Services/State LineMetal Recycling Services (MRS), which is owned by Nucor subsidiary David J. Joseph Company (DJJ), has purchased the assets and business of State Line Scrap Metal, which operates a full-service scrap processing facility - including a vehicle shredder - in North Carolina as well as a feeder yard in the same state. www.metalrecyclingservices.com

DuPont Using DuPont’s Fusabond modifi ers, Brazil is reporting continuing success with its award-winning closed-loop recycling process, named Virtuous Cycle. Through the initiative, launched by the National Agrochemical Producers Association in 2002, over 150 000 tons of multi-layer, plastic agrochemical bottles have been collected so far. www2.dupont.com

Israeli recycling leader celebrates half-centuryNon-Ferrous Metal Works Israel Ltd, the Israeli associate of major international group, is celebrating 50 years in business. Originally a producer of copper and aluminium alloy ingots, the collaboration has enabled it to grow to become its country’s main scrap metal processor. www.nfm.co.za

KPMG names MF Global creditorsFinancial administrator KPMG published on its website that the bankrupt brokerage fi rm MF Global owes a total of Euro 2.2 billion to some of Europe’s biggest players in the industry. The indebted party includes German scrap processor Scholz Recycling and Swiss ferrous and non-ferrous specialist Umcor. www.kpmg.com

Ohio welcomes new glass recycling facility IT asset recycling specialist Regency Technologies and Dlubak Glass Company have unveiled a joint operation, which will be focusing on the safe and environ-mentally sound breakdown, dismantling and recycling of any CRT glass-contain-ing device. www.regencytechnologies.com

Trek, the US bicycle manufacturer, faces the challenge of recycling up to 25 tonnes of carbon fi bre composite mate-rial per year to help meet its new zero landfi ll objective. A solution may now be in sight thanks to the company’s col-laboration with Materials Innovation Technologies (MIT) at its production plant in Waterloo, Wisconsin, USA.Bicycle producers worldwide rely on carbon fi bre for its strength and light weight, but it is considered diffi cult to reprocess successfully. One issue is that non-compliant moulded parts use car-bon fibre of varying grades, so any higher-performance material going into the mix will be downgraded.Trek is now chopping the material into 25mm square pieces which are fed into a patented pyrolytic oven. The virtually oxygen-free environment removes the binding resin without

destroying the properties of the fi bre. The technique is not perfect because of the multiple grades of material involved. Even though Trek is not yet ready to build high-end performance frames from reclaimed carbon fi bre, it is successfully reusing the material, initially just in the US, in secondary parts that don’t depend on continuous fi bre reinforcement. ‘We may need to set up similar programmes around the world to minimise the logistical dilem-ma,’ said James Colegrove, Trek Senior Composites Manufacturing Engineer. There could be cost savings as well as environmental benefi ts,although it is too soon to quantify this. ‘We know that the cost of reclaim fi bre is signifi cantly lower than the cost of producing raw material,’ Mr Colegrove added. ‘If you are making a part that uses chopped fi bres anyway, it makes a lot more sense to use reclaimed fi bre.’ www.trekbikes.com

Carbon bicycle recycling prospects blooming

HÖCKER POLYTECHNIK GmbH · www.hoecker-polytechnik.deD-49176 Hilter · Fon + 49 (0) 5409 405 - 0 · Fax + 49 (0) 5409 405 - 555 · [email protected]

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ATEX-compliantfilter systems

advertisementThe American Scrap Coalition has written to US Trade Representative Ron Kirk in response to a move by the Rus-sian government that is expected to inhibit the fl ow of steel scrap from the country. The coalition argues that the recent measures ‘could deny the United States the benefi ts of commitments Rus-sia has made in connection with its accession to the WTO’.Formerly a major exporter of steel scrap, Russia instituted an export tax combined with strict administrative policies in 2007 that resulted in a sharp decline in international scrap trade. However, upon joining the World Trade Organization (WTO), Russia agreed to substantially

reduce tariffs on exported steel scrap.But on February 13, Russia adopted a customs regulation which permits the export of scrap in the country’s far east-ern federal district only through the far northern port of Magadan - leaving the ports of Vladivostok and Nakhodka, where 90% of Russia’s scrap exports are handled in the region, completely out of the equation. The coalition warns: ‘The exclusion of Vladivostok, Nakhodka and St Peters-burg from the list of permissible shipping points represents a clear effort by Russia to erect yet more administrative barriers to exports of steel scrap.’ www.americanscrapcoalition.com

US scrap lobby concern over Russian restrictions

10 N 13 03-04-12 10:1

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N E W SN E W S

15April 2012


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The European Commission looks ready to approve end-of-waste criteria for paper, glass and copper this spring, based on recommendations published in its recent Joint Research Centre (JRC) report.The Commission, which believes the new criteria will boost market confi dence and facilitate trade, is expect-ed to agree on fi nal proposals at a meeting of its Tech-nical Adaptation Committee on 4 May. There appeared to be no obstacles in the way of this major decision, an EC spokesman told website letsre-cycle.com. ‘No new end-of-waste criteria have come into force since the metal scrap regulation in October last year,’ he said, adding that member states had been notifi ed of the date by which they must cast their votes. The JRC report estimates that 80% of glass collected will meet end-of-waste criteria after the appropriate sorting and treatment, excluding glass from commin-gled waste collectors that is not of suffi cient quality. Laminated waste paper is another exception on the draft list. In the copper category, the JRC proposes ceilings of 2-5% for the amount of non-copper materi-als that can be accepted. www.ec.europa.eu

M e t a l t h e f t insurance claims increased by more than 80% in the USA when compar-ing f igures fo r 2009-11 with those for the preceding three years - with some 25 083 claims lodged as compared to 13 861 in 2006-08, it is confi rmed in a report from the National Insur-ance Crime Bureau (NICB). The document reveals that in excess of 96% of the insurance claims related to thefts of copper. In addition to the frequency, it emerges from the NICB report that the severity of the thefts has also increased. Even the Federal Bureau of Investigation (FBI) has reacted to this crime wave, stating publicly: ‘Cop-per thieves are threatening US critical infrastructure and present a risk to both public safety and national security.’ www.nicb.org

End-of-life criteria for waste paper, glass and copper

Massive leap in US metal theft claims

UK-based plastics packaging fi lm producer Re Pet is set to expand its operations after receiving further sig-nificant financial backing, including Euro 120 000 ( US$ 160 000) from the WRAP Accelerating Growth Fund.The new funding means Re Pet has obtained total second round investment worth more than Euro 600 000 (US$ 801 000). It is also committing Euro 2 million (US$ 2.67 million) of its own funds to install

new recycled PET (rPET) processing equipment to help double its output. The company has so far spent around Euro 960 000 (US$ 1.28 milliopn) on extrusion plant that sandwiches an rPET layer between two layers of virgin material.Once the new equipment is on stream, the company will be able to process 100 tonnes of material per week. www.wrap.org.uk

WRAP invests in recycled film operation

Swedish home appliance manufacturer Electro-lux has unveiled five vacuum cleaners produced entirely of waste plastics collected from the ocean. The launch marks the next phase in the company’s international ‘Vac from the Sea’ sustainability project, launched in 2010.Electrolux incorporates materials that wash into the sea or are discarded there, including beverage cans, fi shing gear, fl ip-fl ops and beach toys, in its limited-edition vacuum cleaners. The devices themselves aren’t meant to be commercialised, but serve as a symbolic reminder of the great lack of ocean plastics recycling. The company is looking into auctioning off a single

‘concept vacuum’, and will commit the funds raised towards further research.. ‘As part of our commitment to researching new materials, we should explore how ocean plastic might be used in the future,’ says Cecilia Nord, Vice President – Floor Care Sustainability and Environmental Affairs for Electrolux. Fishermen and marine organisations have responded positively to the ‘Vac from the Sea’ initiative, and are making increasing effort to remove the plastics waste they encounter. The material that fi nds its way from the North Sea back to the Electrolux design centre in Stockholm requires extensive cleaning because of bleaching by the sun and salt water corrosion www.electrolux.com

Electrolux’s vacuum cleaners from ocean waste plastics

10 N 15 03-04-12 10:1

©Terex Corporation 2012. Terex is a registered trademark of Terex Corporation in the United States of America and many other countries

Rely on the best technology – stronger, smoother and cleaner than ever

FUTURE GENERATIONAt Terex® Fuchs, BlueEVOLUTION means a complete and intelligent plan of action. The most modern technology and the best quality ensure much more effi ciency on new paths. The new MHL350 machine augurs an in-creased performance with reduced emissions and lower

fuel consumption. With TIER4i/IIIB conformity, this machine is already starting to take responsibility towards the 2014 Emission Standard. Scrap handling is heavy work for machin-ery. That’s why you should rely on the strength and quality of the Blue Fox. This means comfortable handling, extremely high performance, a high lifting capacity across the entire slewing range, as well as an ergonomic and safe work position in the elevated cabin, and, of course, not forgetting the leg-endary reliability and ease of maintenance. Individu-ality goes without saying. On request, Terex® Fuchs will provide your material handling machine with all the extras which you personally need. Right up to a clean energy technology. Because we care. www.terex-fuchs.com

At Terex® Fuchs, BlueEVOLUTION means a complete and

The Terex® Fuchs programme: Material handling machines from 19 to 90 tons

weight and up to 22 meters reach

Complete solutions honed for your specifi c

purpose – we cover scrap, recycling, timber

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Special equipment: We equip each machine

according to your specifi c requirements

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and

Stand C3 209/310

Naamloos-4 1 2 -02-12 10:23

N E W SN E W S

Quote ~ Unquote

‘Everything should be made as simple as possible, but not simpler.’

17April 2012


The Government Offi ces Adminis-tration (GOA) of China’s State Council has unveiled a new recycling system covering all government offi ces, which have been called upon to play a more active role in conserving the country’s resources.At a launch presentation, the GOA urged the central state government to

take a lead in waste sorting and recy-cling by recycling 80% of its total waste this year.Following an agreement signed at the event, China Recycling Development Corporation and a GOA department will work in tandem with central govern-ment departments to realise this goal.

Together, they will attempt to build a network for sorting and recycling waste paper, plastic, hazardous waste and discarded electronic devices.China aims to recycle up to 70% of all recyclable waste by 2015, in line with a national target set out in an earlier State Council circular.

Chinese government to take the lead waste-wise

Around 20% of plastic waste gener-ated by the building and construction (B&C) industry was recycled in 2010, according to a study by trade association PlasticsEurope covering the entire EU as well as Norway and Switzerland. Given that the rate in 2009 was 15.8%, Plas-ticsEurope views the latest fi nding as ‘a signifi cant increase’. However, the fact remains that while the construction sector is the second largest user of plastics across Europe, accounting for 20% of total production, it is respon-sible for only 5.5% of volumes generated for recycling. This is mainly due to the low levels of use in the past in combination

with the long life-span of the materials in question, the study points out. Another issue surrounds the huge varia-tion in different countries’ waste-han-dling performance: Germany and the Netherlands, for example, recycled approximately 25% of their construction plastics in 2010 whereas Ireland, Bul-garia and Greece were stuck on zero. The study reveals that the overall recovery rate across the 29 countries, including both recycling and energy recovery, amounted to 56.2% in 2010, with the remainder heading to landfi ll; the recov-ery rate in 2009 was 51.9%.www.plasticseurope.org

Building sector gathers recycling momentum

Helped by relatively strong average prices, the US scrap recycling industry grew around 30% in size last year to nearly US$ 100 billion, according to a preliminary estimate from the Institute of Scrap Recycling Industries (ISRI). Figures compiled from the US Geological Survey, the Commerce Department, industry associations and other sources indicate the US scrap industry processed approximately 134 million tonnes of recyclables last year. This total includes 51.7 million tonnes of commodity-grade material that was exported to approaching 160 countries, the value of which was 32% higher than the corresponding figure for 2010 at US$ 39.2 billion, Census Bureau fi gures reveal. www.isri.org

Scrap: a US$ 100 billion industry for the USA

China generates around 360 million tonnes of household waste per year. ‘Love Boat’ sold for scrap The 19 000-ton ‘Pacifi c Princess’, which enjoyed centre stage during its run on Aaron Spelling’s hit television show ‘The Love Boat’, has been purchased by Turkish demolition company and shipbreaking specialist Cemsan. The 40-year-old cruise ship was sold for Euro 2.5 million (US$ 3.3 million) after fruitless attempts by its owners to auction off the entire vessel. It had been sitting idle in a dock in the Italian city of Genoa for nearly two years awaiting payment of a repair bill, reports Italian newspaper ‘La Repubblica’. Built in 1971 for Flagship Cruises, it was originally called the ‘Sea Venture’; however, the vessel was renamed upon joining the Princess fl eet. This new name was restored when ‘The Love Boat’ left TV screens in 1986.

TV-Captain Merrill Stubing in front of ‘his’ cruise ship in her glory days.

10 N 1 03-04-12 10:1

ENVIRONMENTAL TECHNOLOGY

HSM – More than a baler.A baler from HSM is more than just a product. Quality made in Germany, fast service,effi ciency due to energy saving and many innovations. Learn more about this at IFAT.We look forward to welcoming you at our stand. www.hsm.eu

IFAT Entsorga 2012May 7 – 11Munich, Germany, Hall C1

Made in Germany

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HSM GmbH + Co. KG · Germany · Tel. +49 7554 2100-0 · [email protected] · www.hsm.eu

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1 1 02-04-12 12:30

19April 2012

P R O D U C T S Case Construction excavators for big tasks

Mack orange peel grab for larger loads

Accent on efficiency with SPECTRO analysers

Shipping software for recyclers

Case Construction is releasing a new C Series Excavator, encom-passing three models suited to tackling larger jobs. Equipped with technologies including the Case Intelligent Hydraulic System, the re-designed engines and hydraulics are managed in an intelligent manner, thus greatly reducing fuel consumption while boosting lift capacity by 6%, according to the manufacturer. Other features include optimised fuel efficiency, increased cab space and air-conditioning performance, and excellent sound-proofing, including vibration refinement on the cab’s reinforced tubu-lar structures to create a quieter working environment with sound levels at a near-automotive level of 70 dBa. Case Con-struction insists it feels like ‘being in a car even when the excavator is running at full throttle’. The C Series also boasts a new control monitor that displays fuel consumption per hour and an advanced 500-hour engine oil change interval, along with

quick-change filters and gauges for daily service checks. Tier 4 Interim-certified cooled exhaust gas re-circulation tech-nology is designed for cleaner burning while delivering superior horsepower. The three models in the C Series from Case Construction offer 177, 207 and 266 net HP (132, 154 and 198 kW).

Case ConstructionRacine, Wisconsin, USAPhone: +1 866 542 2736E-mail: [email protected] www.casece.com

SPECTRO Analytical Instru-ments has released its newest generation of SPECTROTEST mobile metal analysers, all of which come with an efficient plasma generator and a cut-ting-edge UV probe. Its field-proven Intelligent Calibration Logic system closely monitors the state of the measuring system regardless of external influences, thus eliminating the need for time-consuming re-calibration while enabling analysis of a single con-trol sample. The device’s plasma generator is energy efficient such that hundreds of mea-surements can be determined with a single battery charge. As a result, the analyser can handle double the number of samples in arc excitation mode and four times as many when activating spark excitation mode. During this pro-cess, it is no longer necessary to change probes as the one can be used for both options. Its ‘pluggable’ nature and integrated UV optic feature enables the SPECTRO device to recognise non-standard mate-

rials that are usually hard to identify, such as low alloy steel. By incorporating a lightweight trans-port trolley, design engineers have cut the instrument’s weight by half. Ease of use is further supported by the fact that the software shows only the context-dependent functions required for the task at hand.

SPECTRO Analytical InstrumentsKleve, GermanyPhone: +49 2821 8920 Fax: +49 2821 892 22 00E-mail: [email protected] www.spectro.com

Mack Manufacturing has devel-oped an orange peel grab which is intended to help scrap and steel processors handle bigger loads.The five-tined OPSISCH-350-5 is a completely self-contained electric drive unit capable of getting a hold of any type of material ranging up to three metres in size. Its custom-engineered hydraulic cylinders feature technology specifically developed to maximise efficiency for electric overhead cranes

manoeuvring scrap in steel mills.Like all other Mack equipment, the grapple is fabricated using T1 steel, a heat-treated alloy with twice the struc-tural strength of standard mild steel to make it strong enough to withstand three times as much pressure before bending. Heat-treated steel pins and practically engineered shafts are also included for optimal service life.Furnished with replaceable bushings at all hinge points, all OPSISCH-350-5 grapple components are manufactured by well-known brands on the US market. Five- or six-tined versions are available - all of which are supplied either with or without hydraulic rotation and in sizes varying from 0.75 to 9 cubic metres.

Mack ManufacturingTheodore, Alabama, USAPhone: +1 251 653 9999Fax: +1 251 653 1365E-mail: [email protected]

In launching Recycling Opera-tions Manager (ROM), 21st Cen-tury Programming is making available a software tailor-made to cover all aspects of recycling companies’ shipping activities. ROM offers a comprehensive package designed for the seamless linking of the various complex business tasks, from pur-chasing, (NTEP-certified) scaling and inventory control to shipping out product. This ‘single entry system’ makes the new software highly suitable for recycling operations with multiple sites, it is argued. The software’s flexibility makes it useful for small or mid-size facilities, regardless of whether they handle metal, paper or plastic. The program’s transparent concept and touch-screen design boosts its user-

friendliness, ensuring all key personnel are fully included in the shipping process. Featuring extensive bar-coding capa-bilities, the program enables manage-ment of bookings and tracking of con-tainers going overseas. In addition to normal inventory control tasks, it can also be used to incorporate public cus-tomer cards, inbound inspection stubs and even ATM payments. In the last of these cases, the payment system is inter-faced directly into the program, ensuring secure transactions.Another benefit of the software is that it does not depend on the internet; instead, its consistent architecture allows remote plants to keep operating regardless of disruptions, subsequently synchronising all the data automatically once the connection is re-established.

21st Century ProgrammingLong Beach, California, USAPhone: +1 562 981 1030 Fax: +1 562 981 1040 E-mail: [email protected] www.21stcenturyprogramming.com

1 o N 1 02-04-12 15:30

20 April 2012

There is a Burmese proverb which runs: ‘In time of test, family is best.’

Many recycling firms would doubtless subscribe to this simple

philosophy, having built their businesses predominantly around

members of their immediate or extended family - very often with

considerable success. But what sets family-owned and -run companies

apart from the rest? And how can family businesses maximise the

benefits of what they have created? Recycling International decided

to take a closer look.

Four years ago, we marked the tenth anni-

versary of Recycling International with a

series of features recognising - and celebrating

- the key role that family businesses have played,

and continue to play, in the recycling industry.

In every major recycling country of the world,

it is possible to identify family businesses that

have helped shape the domestic industry and

that have gone on, in many instances, to devel-

op a substantial international profile.

The features we ran back in 2008 touched on

many of the factors that distinguish family-

owned businesses from their competitors - the

most apparent of which was the close inter-

personal bond that commonly exists between

the family members at the top end of the com-

pany management structure, exemplified by

quotes such as: ‘Running a family business with

your children is a great joy.’

However, family-run businesses can also be

vulnerable to issues, weaknesses and strains that,

in general, do not appear to affect other com-

panies either at all or to anywhere near the same

extent. For example, key matters can sometimes

go unaddressed - and, as a result, key decisions

can go unmade - because of strong interper-

F A M I L Y B U S I N E S S By Ian Martin

A family affairsonal relationships

and the related desire

to avoid triggering

unwanted emotions.

Sensitivities can be

particularly acute

when the time comes

to pass the business

on to the next genera-

tion or to sell it. For

this reason, we have

asked Björn Voigt - a

man with an intimate

knowledge not only of the scrap industry but

also of mergers/acquisitions involving family

firms - to share his unique insight into these

matters (see box on these pages and the interview on following pages).

A complex beastWith regard to running a family business and

to handing it on to the next generation, experts

are generally agreed that problems often arise

as a result of a lack of formal structure. In many

instances, what began as an entrepreneurial

entity with simple lines of communication and

management develops into a far more complex

George Stevenson: ‘Ownership and management are separate; (companies) have to plan to keep them separate.’

20 am l s ss-1 20 30-03-12 16:2

21April 2012

beast, especially when multiple layers of a fam-

ily have become involved.

One recommendation is that companies draw up

a family ‘constitution’ or agreement. Such an

approach is perhaps most useful for family enter-

prises layered in complexity and may appear

excessive for businesses in which, say, only a father

and son are involved, and in which the unwritten

but accepted intention is that the latter will take

over from the former at some future point. But

even in this latter case, problems can be avoided

down the line by committing such intentions to

print, especially when unforeseen circumstances

- such as illness or accident - intervene.

Need for flexibilitySpecialist UK-based consulting and training

organisation Family Business Solutions (FBS)

explains: ‘An increasing number of families -

those who like to plan for their future rather

than leave matters to chance - are supplement-

ing their unwritten constitution (“how we do

things around here”) with a bit more formality

and organisation. The process of creating the

constitution, as well as the final result, helps the

family to reach important decisions, sometimes

on sensitive issues, which, if left unresolved, can

too easily result in conflict.’ The constitution

should be a ‘very flexible’ document that can

be used ‘to record the overall governance of a

complex family enterprise’, representing the

combination of assumptions, understandings

and expectations that exist in every family,

explains FBS. It should clarify, for example, who

can own part of the family enterprise, and the

roles and responsibilities of those owners.

‘Very different’George Stevenson, an FBS consultant and the

founder several years ago of the Scottish Fam-

ily Business Association, reiterates that an

entrepreneur controlling all aspects of his or

her business means ‘short and direct lines of

communication’. But as soon as the business

makes the transition to, for example, ‘a sibling

partnership’, the issues become ‘very different’,

he insists. A common problem, he says, is that

sons and daughters expect to be allowed to

make their own decisions about the ‘family’

business with no recourse to anyone else.

In this new environment, the decision-making

process ‘needs structuring’, underlines Mr Ste-

venson. ‘They need to learn how to communi-

cate and make decisions. Ownership and man-

agement are separate; they have to plan to keep

them separate. This is what we (at FBS) spend

most of our time on.’ The overlap period when

the ‘controlling owner’ is joined in the business

by the next generation ‘can be hugely stressful to

cope with’, he also emphasises, adding that plans

should be laid down within companies ‘for when

the controlling owner is no longer there’.

Asked whether family business owners in tra-

ditional industries are reluctant to take on out-

side, specialist help in order to tackle these

issues, he acknowledges: ‘Yes. That can often be

the initial reaction.’

Involved and consideredA recently-released publication entitled ‘The

Family Constitution’, put together in the USA by

the Family Business Consulting Group in concert

with Palgrave Macmillan, argues that ‘the process

of developing a family agreement of this type is

more important than its contents’ because, for

example, it allows different family members to

participate and contribute, thereby enhancing

feelings of being involved and considered.

The publication also emphasises the valuable

function that advisors can perform in devising

an agreement as they are ‘outsiders and able to

look at family firm issues from a detached per-

spective and act objectively’. Most frequently, it

adds, they act as facilitators and as experts on

all relevant subjects, such as family business,

business law, tax and strategic management.

One of the publication’s main messages tallies

with that delivered by most other experts in this

field: when it comes to plotting the future

course of a family business, the planning stage

can never begin too early.

Selling a family-owned business - 10 tips

Björn Voigt, former Managing Director of German scrap giant TSR Recycling and now Managing Partner in Germany-based S&P Mergers and Acquisitions, offers his personal top 10 tips when it comes to selling the business or passing it on to the next generation.He says: ‘If the decision is taken to sell the busi-ness, the owner/entrepreneur must always proceed systematically and with determination. Procedure and timing are very important when selling a company.’

1 Make a critical check of the strengths and weaknesses of your business.

2 Carefully check your personal situation: age; health; fi nancial risk provisions; and successor and co-shareholder status.

3 Create a precise picture of the scope and freedom of action enjoyed by your company product-wise, technically, fi nancially and from the perspective of your age and health.

4 Think of companies in your own country or from abroad which could be considered potential buyers.

5 Determine the possible effects of synergy through a partnership with another company.

6 Think of the price that you would like to realise, but also the price you probably could realistically achieve through a transaction.

7 Think of how you can reinvest the realised sum.

8 Once this is done, balance the results of your investigations and decide on the best course for your company, ie full sale, sale of only part of the business, management buy-in or management buy-out.

9 Bring in an experienced (and international) M & A expert to help you in your decision-making processes as well as in initiating and conducting the optimal transaction.

10 Do not wait for something to hap-pen - work towards the sale of the company in a direct and sys-tematic way.’

10 Do not wait for something to hap-

A family affair

20 am l s ss-1 21 30-03-12 16:2

22 22 02-04-12 12:30

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Naamloos-2 1 2 -02-12 12:04

24 April 2012

Björn Voigt achieved a high profile during his 20

years in the recycling industry, many of them spent

as Managing Director of German scrap giant TSR

Recycling. He is now Managing Partner in S&P Mergers and Acquisitions

GmbH. As such, he is perfectly placed to comment on the specific issues

facing recycling companies - both large and small - when it comes to

selling the business or passing it on to the next generation.

Could you tell us more about your company and its connections to the recycling industry?‘S&P Mergers and Acquisitions GmbH - one of

the leading M & A consultancies in Germany

- has been active in this field since 1989. During

the past 10 years, it has initiated and conducted

close to 130 transactions, including many

involving businesses in the recycling industry.

F A M I L Y B U S I N E S S By Ian Martin

Björn Voigt - Make planning a priority

S&P is founding member of M & A Europe, the

global network for mergers and acquisitions.

The partners in S&P are highly specialised in

international ‘cross-border’ transactions. All 11

of them have been former managing directors

of major companies, conglomerates or banks,

or were private owners of family businesses and

were therefore entrepreneurs themselves. This

means that they have a strong affinity with, and

knowledge of, the realities of being family busi-

ness owners, especially in the recycling and

environmental sectors.

Two of S&P’s partners - myself and Thomas

Funcke - held top management positions for

15 to 20 years within major international met-

als recycling companies, covering yard manage-

ment, international trade, environmental

issues, leadership and management. Over the

course of our whole careers, we have been deal-

ing with family businesses.’

How has the large proportion of family businesses in the recycling industry contributed to the development, success and character of this sector?‘Family businesses have always been, and

remain, at the backbone of the recycling indus-

try. Together, they recycle and ship millions of

tons of metals, paper and other recyclables

every year. Typically, they contribute entrepre-

24 am l s ss-2 24 02-04-12 15:4

25April 2012

neurship and an unshakeable commitment to

the recycling sector, and to the success of their

family business within it. They bring flexibility

and the capacity to make quick decisions. Also,

by their very nature, family businesses have the

highest motivation for success and for growth.’

So what is the main problem that family businesses tend to encounter?‘In many cases, family businesses are blessed

with great vision. Over the course of many years

and sometimes generations, they have grown

to understand the sector in which they operate

and have used this knowledge to innovate and

expand. However, patriarchal leadership can

sometimes stifle the vision of others within the

family set-up; the person or persons heading

the business can be resistant to fresh ideas, or

simply ideas that are not their own. In effect,

there is no real management besides the owner,

with the result that the management develop-

ment of the younger genera-

tion and of other members of

staff is held back. I have seen

many situations in which, even

when the owner is in his seven-

ties, he is still not ready to con-

sider leaving the reins to the

next generation.

Also, when just one person is in total control of

a company, this can lead to impulsive decision-

taking. Many family businesses would benefit

from having advisors - or even an advisory

board - as a safeguard.’

What other problems have you witnessed when it comes to family ownership and leadership?‘Other difficulties often faced by family busi-

nesses include: a lack of finance and/or financ-

ing options; inadequate organisational struc-

tures; hidden pitfalls relating to, for example,

taxes and business practices; sales to only a lim-

ited number of outlets; inorganic growth, or a

company expanding too fast beyond its core

strengths; and excessive investment related to

weak financial planning and control. When all

or many of these problems are rolled together,

a family company can become almost ‘untrans-

ferrable’, especially if potential buyers believe

the main value of the business is locked up in

the experience, expertise and contacts of the

retiring entrepreneur.

From what I have said, it might sound as

though the negatives outweigh the positives for

family enterprises, but I should add that prob-

ably three quarters of family businesses I have

encountered are professionally driven and led.’

What part does - or should - planning play when selling a family business or passing it on to the next generation?‘In terms of passing on ownership, the owner

often has not planned for this and is not ready

to do so. It is believed that about 25% of all

company transactions in the family business

sector are due to unexpected illness or to an

accident. And a surprisingly large number of

family-led companies have not considered what

would happen in terms of leadership succession

in the event of the departure of one or more

owners. Lack of time then tends to become the

enemy because a decision must be made quick-

ly; also, there is often a lack of knowledge of the

possibilities and of the procedure. They often

address issues like this too late in the day.

Such difficult situations can be prevented by a

more organised approach to succession such as

making provision for a replacement at the head

of a business. Tax payments can also be reduced

by making the next generation an owner at an

earlier stage. Other possibilities to consider

when planning the future of a business could

include: marital contracts; provisions in wills;

and other financial provisions.

There have also been plenty of examples, par-

ticularly in larger companies, where an entre-

preneur has external advisors like a board or

banks, and so is often given advice on such mat-

ters before even seeking it. For smaller enter-

prises in which, say, only a father and son are

involved, it would still make sense for the

former to inform someone officially - for exam-

ple, a notary - that his intention is to pass the

business on to his son. This could avoid unnec-

essary problems, for example, in the event of a

sudden death.’

Would it be fair to say that selling on a business can be a particularly painful and difficult exercise when it’s a family enterprise?‘The best entrepreneurs and traders find them-

selves in a completely alien situation when they

come to the point of selling their businesses. It

is in nearly every case a once-in-a-lifetime

negotiation. His reputation and pride, the

realisation of substantial gains for his future or

for that of his heirs, the prospect of ‘his’ com-

pany falling under new owner-

ship and a host of other factors

make it a unique and emotion-

ally draining exercise. Agreeing

the right terms for the transac-

tion, including social consid-

erations and an appropriate

price, makes this process very

complex. Experience shows that the gap

between the price ideas of the seller and the

purchaser can be quite substantial. In these

circumstances, a negotiator or moderator can

be of great help.

The sale of a company should never be con-

ducted solely by the owner. The involvement of

a first-class mergers and acquisitions specialist

is essential due to the complexity of the transac-

tion. The advice and mediation of a profes-

sional and experienced M & A consultant will

be based on both a national and international

perspective. For example, an overseas rather

than a domestic buyer might help in maintain-

ing a company’s independence and in realising

a better price because of the higher ‘market

entry’ fee. In effect, the buyer is paying for the

existing set-up’s knowledge and expertise of a

market, as well as for its existing market share.’

‘Family businesses have always been, and remain, at the backbone

of the recycling industry.’

Björn Voigt - Make planning a priority

24 am l s ss-2 25 02-04-12 15:4

MeWa Recycling Maschinen und Anlagenbau GmbH D-75391 Gechingen · Tel. +49 (0) 7056 [email protected] · www.mewa-recycling.com

Performing your success. MeWa RecyclingTechnology.

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26 26 02-04-12 13:26

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which operate in

concert with the big

conglomerates world-

wide. When talking about

free economies rather than

about countries in which recycling

is controlled by the state, family busi-

nesses will always be important.

Some family businesses will sell

up, others will grow,

while some will

be broken

up and

others,

in some

ver y rare

instances, will

even disappear.

All this is part of

the economic and

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Where can companies go to obtain additional help and guidance? ‘They should look beyond the help of their

established family advisors. Given that this is a

special situation, they should engage an expe-

rienced mergers and acquisitions specialist -

and if possible, one with international experi-

ence and with an international network in

order to enlarge the options for marketing the

company. Laws surrounding takeovers, owner-

ship, social issues and tax vary from one coun-

try to another, so an advisor with internation-

al expertise is also useful in this regard.

A successful transaction can prove to be one of

the most satisfying moments in a family entre-

preneur’s life through realising a sales price

which increases the provision for his old age,

boosts the family fortune and/or secures the

long-term future of the business.’

What do you think the future holds for family-led businesses in the recycling industry?‘A huge proportion of the collection and recy-

cling of secondary raw materials is conducted

by individuals and family-owned businesses of

For more information:For further information about S&P Mergers and Acquisitions GmbH, visit www.s-and-p.de and also www.m-and-a-europe.com

24 am l s ss-2 2 02-04-12 15:4

28 April 2012

Yet more potential ahead for end-of-life

tyresThe days are long gone when a used tyre’s

recycling value was sorely limited. Setting out

to demonstrate exactly what progress has been

made over recent decades, the European Tyre

and Rubber Manufacturers’ Association has

released a report which gives a promising update

on the market situation for end-of-life tyres.

Over the last 17 years, global recovery rates

for end-of-life tyres (ELTs) have increased

dramatically, especially in Europe, Japan and

the USA. Meanwhile, much greater efficiency

in management structures and new recovery

routes have rendered the recycling of these tyres

significantly less expensive. According to a

report from the European Tyre and Rubber

Manufacturers’ Association (ETRMA), this

positive gear-shift can be interpreted as a sign

that ELT-derived products such as crumb and

powder should be more widely acknowledged

as ‘both a legitimate and valuable secondary

raw material’.

Figures for 2010 show that Europe proc-

essed around 3.3 million tonnes of used

tyres in an environmentally responsible

manner - including tyres for retread-

ing and for reuse/export; this repre-

sents broadly the same quantity as in

2008 and an increase of 2.2% com-

T Y R E S

By Kirstin Linnenkoper

tyres that ELT-derived products such as crumb and

powder should be more widely acknowledged

as ‘both a legitimate and valuable secondary

raw material’.

Figures for 2010 show that Europe proc-

essed around 3.3 million tonnes of used

tyres in an environmentally responsible

manner - including tyres for retread-

ing and for reuse/export; this repre-

sents broadly the same quantity as in

2008 and an increase of 2.2% com-

2 l 2 03-04-12 10:15

29April 2012

0%

20%

40%

60%

80%

100%

201020092008200620042002200019981996

Landfill Energy recovery Material recycling Retreading Reuse/export

49%

4%

20%40%

38%

8%

10%

11%

12%

18%

Historical recovery rates estimates for ELTs

1995 2000 2005 2010 Sources: ETRMA, JATMA & RMA figures, adjusted to calculate harmonised ELT recovery rates

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

100%

ELT

Reco

very

Rat

e

Japan adjusted to remove exports and retreadsEurope adjusted to remove retreads and exportsUSA (old methodology) adjusted to remove exports and second-hand tyresUSA (new methodology) adjusted to remove exports and second-hand tyres

Evolution of recovery routes

pared with 2009. Looking back in time, Europe

has made a huge leap forward: with a mere 20%

recovery rate in 1994, the figure climbed all the

way to an average of 95% in 2010.

This rapid progress is predominantly owed to

the ‘huge advancements’ in both existing and

cutting-edge ELT applications, says ETRMA’s

Secretary General Fazilet Cinaralp. She empha-

sises that a professional approach on stand-

ardisation is also a noteworthy factor in the

success of ELT management - not least because

of solid support originating from the recycling

industry itself. Mrs Cinaralp comments: ‘I am

glad people seem to recognise this is the future,

so as clear standards are developed, we know

we are also realising the intent and wishes of

those involved. That is very encouraging.’

Not just an additionFurthermore, as a recently-conducted life-cycle

assessment has demonstrated, traditional mate-

rials can be easily replaced by ELTs in many

scenarios. According to the ETRMA’s Secretary

General, this is hardly a surprising discovery.

‘This has been going on for quite some time

now, and on a large scale too,’ she says. ‘It seems

that more people around the world are discov-

ering that ELTs definitely have a lot to offer as

an alternative for virgin materials, not just as

an addition. Because they have a high calorific

value and barely cause pollution when com-

pared to other fossil fuels, these tyres are green-

house-friendly, commonly seen as an equiva-

lent of good-quality coal.’ Higher oil prices and

the growing need to conserve resources could

stimulate substitution rates even further in the

short term, it is believed.

Such developments boosted EU recovery and

recycling rates to such a degree in 2010 that it

resulted in the achievement of an all-time high:

a more than five-fold increase in volumes

recovered over the past decade. However, there

are also millions of tyres that are illegally dis-

posed of or stockpiled throughout Europe, thus

somewhat tainting the picture. The numbers

for stockpiles reached historic highs last year,

when they hit an estimated mark of 5.7 million

tonnes. ‘This issue only concerns a small part

of Europe where the EU Landfill Directive is

obviously lacking effective enforcement,’ offers

Mrs Cinaralp, who believes that the recovering

economic performance of the tyre business will

ultimately militate in favour of more effective

ways of tackling this problem.

Producer responsibilityWhat stands out is that nearly all countries that

have operated under a so-called ‘producer

responsibility system’ for more than 10 years

(such as Finland, the Netherlands and Sweden)

have completely eliminated their stockpiles, and

are closing in on a 100% recovery rate too. This

increasingly popular framework assigns the main

responsibility to the tyre manufacturers and

importers, requiring them collectively to organ-

ise the management of ELTs. ‘Like those involved

in the industry, I strongly prefer this new system,’

the ETRMA’s Secretary General states, adding

that it is generally described as a ‘robust method

that is well-suited to address long-term goals’.

Despite all the successes with producer respon-

sibility, the fact remains that each member state

of the EU is free to establish its own national

initiatives, as long as they are in harmony with

overall EU legislation. As a result, not all tyre

ETRMA’s Secretary General Fazilet Cinaralp:

‘We are trying to obtain an end-of-waste

status for their tyre derived products.’

Since 1996, more than 24 million tonnes of end-of-life tyres (ELTs) have been recovered either through energy or material recovery. This has led to a consid-erable decline in landfi lling over time; a phenomenon which has been accelerated since 2000 further to the implementation of the Landfi ll Directive and due to the proactive industry initiative of establishing

national Producer Responsibility schemes. As a result, only 4% of the used tyres arisings are tipped today in landfi lls or have unknown recovery routes while recycling, recovery, reuse and retreading now con-tribute to a substantial 96% of used tyres recovery.In the last decade, tyre industry, dealers and ELT operators have substantially improved ELT utilisa-

tion. Europe has built up a real experience of three types of ELT management schemes, i.e. Tax model, although very limited, Free market model and Pro-ducer responsibility model. The rapid improvement of the performance of the ELT management has been reached through a sustained deployment of the Producer responsibility model.

2 l 2 03-04-12 10:15

Naamloos-12 1 15-03-12 0 :15

31April 2012

1

61465

38

51

79

41

60381

426

292

35

57

239

111010

23

11 33

20

8

49

465

82

50 30

92

Arising: 3.3 Mt (2010)

kt/y

■ 0-50■ 50-200■ 200-350■ 350-500■ > 500

T Y R E S

manufacturers have adopted this approach,

relying instead on a free market (such as in the

Republic of Ireland and in Germany) or, in rare

cases, on government control (such as in Den-

mark and the Slovak Republic).

‘Cascading effect’An important and interesting example of the

latter is to be found in Hungary, where the gov-

ernment has only recently set up a tax-based

system. This is aimed at replacing several exist-

ing collective producer responsibility schemes

which had been operating quite smoothly for

several years. Apart from diminishing the

chances of growth in its domestic market, the

ETRMA fears that such a drastic move - while

made at a time of economic turmoil - might

have ‘a cascading effect’ on neighbouring coun-

tries and could even endanger the very existence

of the collective producer responsibility model.

This could swiftly ‘cancel out’ all of the collective

efforts made to date, Mrs Cinaralp reasons.

Efforts to formalise responsibilities with regard

to ELTs represent a major step towards gaining

recognition of the intrinsic qualities of used

tyres and towards obtaining end-of-waste sta-

tus for their derived products, which is a shared

objective that many European tyre manufactur-

ers have been actively pursuing for some time.

Currently, these materials must still be man-

aged as ‘waste’ even though they are to be recy-

cled or remanufactured - often sooner rather

than later. This is a ‘serious burden’, the

ETRMA’s Secretary General warns, because it

adds a substantial cost compared to disposal,

which in turn erects a barrier on the road to

improved resource efficiency.

Realising a balance A hands-on approach in terms of end-of-waste

criteria - as outlined in the EU Waste Framework

Directive - might resolve this issue. ‘Availability of

new standards is an absolute pre-requisite for

trading products, demonstrating the existence of

a market for ELTs,’ explains Mrs Cinaralp. ‘Validat-

ing the test methods into a full-fledged European

standard and developing criteria for new physical

and composition properties of ELT-derived mate-

rials will definitely help that recognition process.’

Apart from realising an industrial, economic and

pragmatic balance, the ETRMA anticipates sev-

eral other significant benefits, including higher

ELT reliability and durability. As the legal and

industrial landscape improves for ELTs, the mar-

ket for new applications will be opened, promot-

ing exchanges of latest know-how. Already wide-

ly used to create artificial reefs, avalanche shelters

and sound barriers, the number of ELT applica-

tions continues to grow. Today, ELTs are frequent-

ly used in the artificial turf seen, for example, on

football pitches. And with the world increasingly

embracing their elasticity and noise-absorption

characteristics, roads made from rubber-modified

asphalt are also gaining in popularity. ‘So far, only

Spain and Portugal have made recommendations

that at least 30% of newly-constructed roads must

contain rubber, so this useful application is still

heavily under-utilised,’ notes Mrs Cinaralp. ‘I can

only express the hope that this will change in the

time to come.’

Optimism for the futureThermal treatment technologies represent

another way to recover value from ELTs. Pyroly-

sis, for instance, involves the thermal decompo-

sition of ELTs into intermediate substances like

gas, oil and charcoal. However, the financial

viability of this alternative route is questionable

due to the fact that the prices obtained for the

by-products do not justify the processing costs,

thus making pyrolysis ‘unattractive for the mar-

ket’, says Mrs Cinaralp. According to the ETRMA,

further successes eventually depend on tackling

three main challenges: professional standards;

producer responsibility; and overall sustainabil-

ity. ‘All of these are serious issues,’ insists the

Secretary General. ‘Luckily, we have already

made major achievements over the last couple

of years, apart from the fact that there are ever-

going new projects in the pipeline for all indus-

tries to make use of. Judging by that, I remain

very optimistic about the future.’

There are still millions of tyres that are illegally disposed of or stock-piled throughout Europe.

According to UK-based company PYReco, pyrolysing of just 50% of Europe’s annual rubber waste would produce approximately 7.5 million barrels of semi-refined diesel oil.

At tyre recycling company Peatec Oy in Finland, old tyres are shred-ded before feeding them into the recycling process.

ELTs cover various applications, such as sound barriers.

In 2010, Europe faced 3.3 million tonnes of used tyres.

2 l 31 04-04-12 13:15

32 April 2012

The face ofrecycling in a green economy

Recycling has many impacts on

our day-to-day lives - some of

them quite industrial and others

more social in nature. But what

exactly is the role of recycling in

the pursuit of a green economy?

And, not unimportantly, what

does a green future entail? A

recent report ‘Earnings, jobs and

innovation: the role of recycling

in a green economy’, published

by the European Environment

Agency, sets out to answer these

questions.

Many European countries have placed

recycling at the heart of their policies.

Over the last 15 years, the EU’s to-do list has

grown to include a wide array of environment-

related subjects, from demolition waste to end-

of-life vehicles. Furthermore, modern objec-

tives and legislation have brought benefits for

both the industry as well as for the people

working in this sector.

‘Promoting recycling offers various important

economic and social benefits, like generating

economic growth, fostering innovation, help-

ing secure access to critical resources and boost-

ing employment,’ says Özgür Saki, Project

Manager on the European Environment Agen-

cy (EEA) report.

Employment increase‘Although it is difficult to judge employment

results in the recycling sector because Eurostat

employment data don’t focus in detail on recy-

E C O N O M Y By Kirstin Linnenkoper

cling, for as far as we can document a signifi-

cant increase has developed,’ notes Christian

Fischer, Chief Consultant at the Denmark-

based European Topic Centre on Sustainable

Consumption and Production (ETC/SCP) and

EEA report Task Manager. ‘Employment rates

have grown very steadily, from 422 inhabitants

per million in 2000 to 611 in 2007, which is an

increase of nearly 50%.’

Apart from employing more and more people,

the recycling industry has also had a very

positive effect on the type of jobs created. ‘The

waste business as such may not be character-

ised by high-skilled jobs but, unlike landfills,

recycling does actually manage to create jobs

on a medium and even high-skilled level,

ranging from material collection, handling

and processing to engineering and maintain-

ing products,’ explains Mr Fischer. This can

be seen as one of the benefits of better waste

management.

32 - o 32 03-04-12 10:13

33April 2012

which simultaneously improves the economy.

Considering the noteworthy social benefit that

is at stake, it isn’t surprising to find that reve-

nues from recycling are not only substantial but

also are growing rapidly. The EEA study shows

that, from 2004 to 2008, turnover in the seven

main categories of recyclables increased by

almost 100% to the sum of Euro 60 billion (US$

79 billion). Due to chaos across the financial

landscape, turnover in the recycling industries

showed a sharp decline at the end of 2008,

although it recovered remarkably in the second

half of 2009 and beyond.

The Asia factorMeanwhile, global demand for secondary mate-

rials keeps growing, especially in booming

Asian economies. This has boosted European

recycling figures considerably, again resulting

in elevated raw materials prices. In addition to

this, Asian industries consuming recyclables

have recovered faster from the violent econom-

ic downturn than those situated in Europe. In

turn, this has resulted in a fairly substantial

number of manufacturing jobs moving outside

the EU since the onset of the global economic

and financial crisis in September 2008.

However, demand is not the only factor shaping

the recycling landscape. On the supply side, there

has been an obvious increase in the amount of

recyclables collected separately or sorted from

mixed waste that are made available to the mar-

ket. In the period 2004-2009, the volumes of the

seven main recyclable groups entering the mar-

ket grew by at least 15%. This change can be

partly attributed to the EU’s keen and proactive

attitude towards waste-related regulations, such

as the landfill, e-scrap, packaging and end-of-life

vehicle directives, to name but a few. In establish-

ing these directives, the EU wishes to create

an obligation to recycle or recover a maximum

proportion of materials from the waste.

Ripple effectFurther economic ripples are made by the plen-

tiful technical innovations that are currently

crowding the sector. ‘Of course, as we require

more complex technology, we require more

educated employees,’ Mr Fischer reasons. In

direct relation to this, salaries in the recycling

industry are recorded as being much higher on

average than those in the landfill sector, for

example, ‘because all the intricate work that

needs to be done automatically adds value to

both the products and the people involved in

the production process’.

A recent US study points out that recycling has

roughly twice the economic impact of burying

the same amount of material in landfills, calcu-

lating that recycling 900 kg of waste, for exam-

ple, will pay around Euro 77 more in wages than

disposing of it in a dump. And so it is clear

to see that moving up the waste hierarchy

- from landfilling towards recycling - creates jobs

32 - o 33 03-04-12 10:13

www.macpresse.com

34 34 02-04-12 12:26

35April 2012

Endangered assetsThe EEA report also raises a familiar red flag,

reminding industry and policy-makers that the

so-called ‘critical metals’ - gallium, indium,

germanium, neodymium and platinum - are

likely to become a bottleneck in the near future

because demand for these rare commodities is

increasing so rapidly. In particular, these metals

support complex infrastructural designs and

pioneering technology.

Today, emerging economies as well as industr-

ialised countries are battling for control over

these scarce materials, thus reinforcing their

position on the list of endangered natural

assets. If there is no change soon, the repercus-

sions in terms of economic and technological

development will be potentially devastating,

the report says.

‘There are three weak points at the core of this

issue,’ Mr Fischer says, ‘the first of which is that

the collection of e-scrap is not sufficient and has

to be improved quite drastically.’ The abysmal

recycling rates for germanium, indium, neo-

dymium and tantalum - estimated at less than

1% - are a testimony to the urgent need for

change, especially since recycling rates for met-

als like cobalt, palladium and platinum occupy

the comfortable 60-70% range at the moment.

There has been recent agreement by the Euro-

pean Parliament and the European Council of

Ministers to increase collection rates of waste

electrical and electronic equipment (WEEE) in

the new WEEE Directive. ‘So hopefully we will

see some progress soon,’ says Mr Fischer.

Leaving much to be desiredThe second of the ‘weak points’ identified by

Mr Fischer concerns the need to create better

circumstances for the recycling of these

important metals. ‘At the moment, a large

volume of valuable e-scrap is exported out of

the EU, mostly to African countries,’ he con-

tinues. ‘This kind of export is illegal but slips

past the borders because the companies ship-

ping them claim they are merely exporting

containers full of used electronics and that

they have not done anything wrong.’ How-

ever, suspicions exist that buyers are only

interested in these televisions, computers and

other such devices for their indium-based

components. The ETC/SCP Task Manager

hopes that stricter directives will help to pre-

vent any dubious practices.

The way electrical and electronic equipment is

treated leaves much to be desired, according to

the EEA report. Copper and aluminium, for

instance, are much more sought-after metals

whereas a rare commodity such as indium is

barely recycled at all because it appears in the

components of these devices in only very small

quantities. Mr Fischer explains: ‘You could say

that more money is made by recycling the tra-

ditional metals, as they are much easier to find,

so that is where the efforts are made. In short,

from a business point of view, rare metals are

just not that interesting to pursue.’ As a result,

there are only three advanced recycling plants

in Europe where critical metals can be sepa-

rated successfully from scrap.

E C O N O M Y

‘Moving up the waste hierarchy creates jobs which simultaneously

improves the economy.’

Approaching a green economy at a steady rate, recycling will continue to employ people at a medium and even high level.

0

10

20

30

40

50

60

70

2004 2006 2007 2008 2009 2009*

Other metals Precious metals Iron and steel

Copper, aluminium and nickel

Plastic Paper and cardboard Glass

Bill

ion

EU

R in

cu

rren

t p

rice

s

Based on Eurostat, 2010d; JRC, 2009 and Prognos, 2009

Note: The methodology for calculating the turnover is described in detail in ETC/SCP, 2011.

‘Precious metals’ include silver, gold and platinum. ‘Other metals’ include lead, zinc, tungsten, molybdenum, tantalum, magnesium, cobalt, bismuth, cadmium, titanium, antimony, manganese, beryllium, chromium, germanium, vanadium, niobium, rhenium, gallium, indium and cermets.

* The 2009 calculation is based on the values for only the second half of 2009. Despite the huge decline in commodity prices at the beginning of 2009 due to the economic downturn, the total turnover of recyclables recovered markedly in the second half of 2009.

0

10

20

30

40

50

60

70

% w

aste

mat

eria

l

Eurostat, 2010c and 2010e; Prognos, 2009

Note: The calculation of EU consumption is described in detail in ETC/SCP, 2011. The reference year for concrete is 2004.

* The current and potential contribution figures are both based on the infrastructure available in 2006. Future changes in collection rates, improved recycling structures and market conditions could significantly influence the potential contribution figures.

Iro

n a

nd

stee

l

Pap

er a

nd

card

bo

ard

Oth

erm

etal

s

Gla

ss

Alu

min

ium

Co

pp

er

Co

ncr

et

WEE

E

Plas

tics

Current contribution

Potential contribution450

400

350

300

250

200

150

100

50

0

Ind

ex c

om

par

ed t

o c

urr

ent

pro

du

ctio

n

Based on ISI/IZT, 2009; and Elsner et al., 2010

2006

2030

Gal

lium

Ind

ium

Ger

man

ium

Neo

dym

ium

Plat

inu

m

Tan

talu

m

Co

bal

t

Palla

diu

m

Ru

then

ium

Global demand for rare metalsTotal turnover of recycling Current recycling results and potential

32 - o 35 03-04-12 10:13

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37April 2012

Design for recyclingAside from not always being lucrative enough

in commercial recycling terms, critical metals

such as indium are very difficult to extract and,

what’s worse, are often not even known to be

present when introduced to the recycling proc-

ess. ‘Often, the dismantlers and recyclers do not

know where in the e-scrap or in which compo-

nents you can find the critical metals,’ notes Mr

Fischer. ‘Furthermore, the relevant parts have

to be manually removed. This takes a lot of

work, so if the person responsible for this

doesn’t know where to look for the metals

because the products aren’t labelled properly,

the precious materials are simply wasted.’ And

these aren’t isolated events either, but rather are

indicative of a trend that will not be reversed

without intervention.

Designing electrical and electronic devices for

ease of dismantling the discarded products and

components could prove to be a significant part

of the solution, as better sorting at the pre-

liminary stage is another pivotal step in the

recycling loop. Development of new recycling

technologies for critical metals, especially

regarding dismantling and pre-processing, is

in all likelihood another piece of the puzzle.

According to Mr Fischer, the EU has an impor-

tant role to play in implementing this type of

intelligent technology. All in all, even while facing

a serious risk of inadequate supplies of critical

metals, he describes himself as an optimist when

asked about his thoughts on the future, noting

‘the first steps have already been made’.

Grim pictureIronically, the move towards a green economy

will ultimately cause a significant increase in

demand for particular materials. This phenom-

enon applies even more pressure on the natural

resource base. In an attempt to gain more insight

into the matter of high-risk supply, the EU Com-

mission assigned a special group with the task

of identifying the materials that are under the

most demand strain. So far, 14 critical raw mate-

rials have been highlighted, many of them met-

als, and these were subsequently assessed from

a 10-year perspective. Here, the EEA report

paints a grim picture: for example, demand for

gallium is projected to rise from 18% of global

annual output in 2006 to 397% by 2030 (in other

words, four times worldwide production in

2006); similarly, demand for indium in 2030 is

projected to equal 329% of 2006 production.

One way of maintaining control over future sup-

plies is by limiting the consumption of materials.

Although it is preferable first to seek opportuni-

ties to improve recycling in order better to sat-

isfy the consumption rate, it is a widely accepted

fact that on-going massive demand for materials

threatens to undermine a sustainable future. ‘As

the EEA report states,’ says Mr Fischer, ‘we have

to face the fact that an ideal, entirely closed-loop

society is not possible - not on a global scale, nor

on a European one. Not even if all the available

materials are successfully recycled.’

Utmost importanceWith the exception of paper/cardboard and

steel/iron, recycling would at best meet less

than half of the total demand in Europe. ‘This

means that, if we keep going at this rate, we will

eventually run out of resources,’ Mr Fischer

adds. And sooner rather than later, it is sug-

gested. That’s why it is of the utmost impor-

tance that efforts extend beyond simply explor-

ing the possibilities of recycling. ‘We also need

to take a long and critical look at our social

construction to prevent increased consump-

tion,’ insists Mr Fischer. ‘Otherwise, this issue

will never be resolved.’

E C O N O M Y

‘Dubious practices concerning electrics and electronics may

be prevented by devising strict and thorough policies.’

Designing electrical and electronic devices for

ease of dismantling the discarded products and

components could prove to be a significant part

of the solution, as better sorting at the pre-

liminary stage is another pivotal step in the

recycling loop. Development of new recycling

technologies for critical metals, especially

regarding dismantling and pre-processing, is

in all likelihood another piece of the puzzle.

According to Mr Fischer, the EU has an impor-

plies is by limiting the consumption of materials.

Although it is preferable first to seek opportuni-

ties to improve recycling in order better to sat-

isfy the consumption rate, it is a widely accepted

fact that on-going massive demand for materials

threatens to undermine a sustainable future. ‘As

the EEA report states,’ says Mr Fischer, ‘we have

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40 April 2012

The conundrum of cash versus ‘green’ responsibility

Some experts believe that shipbreaking could reach an all-time high in 2012. However, there is a general acceptance that a large proportion of these vessels will be dismantled according to practices widely deemed to be inappropriate. These concerns are outlined in this article by Sea2Cradle, a Dutch company engaged in preparing ship recycling plans designed to serve as an A-to-Z guide on how to clean,

de-construct and dispose of a ship and its waste.

S H I P R E C Y C L I N G By Erwin Jager, Sea2Cradle

Ship recycling

Erwin Jager of Dutch company Sea2Cradle.

40 l 40 02-04-12 15:33

41April 2012

Ships are the largest moving structures on

earth, transporting more than 80% of all

consumer goods and doing so with an environ-

mental performance second to none.

The economy of scale is being pushed to the

limits with ever-larger ships being built in the

search for even more efficiency. In addition,

constant innovation in aspects such as more

slippery hull forms, more efficient machinery,

closed ballast water systems and more precise

routing instruments would tend to indicate the

shipping industry is doing everything it can to

minimise its environmental footprint. Or is it?

While this new equipment is truly innovative and

impressive, and while there is no doubt it is more

efficient to ship goods over the sea than by air or

train, there is one aspect that is grossly over-

looked when judging the impact of shipping on

the state of the seas: the recycling of old vessels.

Toxic substancesShips are relatively easy to recycle because up

to 97% of their weight is steel. The problem,

however, is the remaining 3%. Ships usually

serve a life of 25 to 30 years before either the

technical or economic lifespan is reached. This

means that shipbreakers are often dealing with

substances that are now banned in newly-built

ships: asbestos, PCBs, TBT, freon and mercury

are but a few of the either toxic or otherwise

dangerous materials usually found in ships

destined for recycling.

For a layperson, it is therefore hard to believe that

most ships are run ashore on a beach and torn

apart without any apparent methodology and

without regard for the safety of the workers and

the protection of the environment. These prac-

tices are however not as distant as they may seem:

one can simply look on Google Earth and search

for popular beaching sites such as Alang in India

or Chittagong in Bangladesh to see aerial photo-

graphs. These photos tell only a part of a gruelling

story that involves toxicity, fire hazards, explo-

sions and, in some cases, child labour.

Shipbreaking is mainly carried out in the Indi-

an subcontinent, with India, Pakistan and

Bangladesh having been by far the biggest ship-

breakers since the 1970s when, for the first time,

large-scale shipbreaking capacity was needed

to deal with the consequences of economic cri-

sis, much as we now see a boom in shipbreaking

activity. These countries employ tens of thou-

sands of workers to compensate for the lack of

suitable machinery.

Re-flaggingSo why is it that such shady practices are not

yet banned and what can be done to stop them?

The most common answer is one that recycling

experts will have heard all too often - money.

Since steel is in high demand in most develop-

ing countries, to them scrapping vessels is a

very effective way of getting cheap steel. As

ships can weigh up to 80 000 tonnes when

empty, and with steel prices of more than

US$ 500 per tonne, even a redundant ship is

worth tens of millions of dollars. There is no

comparison to shipbreaking in port cities in

developed countries where a ship owner may

be happy if the demolition work breaks even to

the price received for the ship.

Looking deeper, one will find that a complete

lack of effective regulation means that - so far

- ship owners cannot be held responsible for

the consequences of their decisions regarding

scrapping. In fact, the original owner is not the

owner any longer as the ship will be sold to a

so-called ‘cash buyer’ who will, as the name

suggests, hand over the cash and take over the

ship. If the ship is flagged* in a country with a

stringent export regime on hazardous materi-

als, it can easily be re-flagged to another, often

third-world country to avoid any legislation

getting in the way. The cash buyer will then sell

the ship on to one of the breaking yards where

it will be ‘delivered’ on high tide so as to get it

as close to the shoreline as possible. As it legal-

ly is no longer a ship, only local legislation is

applicable which can be either extremely loose

or not maintained in any way.

Pressure on operatorsIn today’s tough financial climate, ship owners

have to sell their vessels purely to avoid short-

term payment obligation to prevent bankrupt-

cy; in other words, the economic lifespan has

become far shorter than the technical lifespan.

Add to that most of the world fleet is financed

with the help of investment banks, public

bonds, etc. and the pressure on the ship opera-

tor is high as he has to give the investors the

maximum return possible. This easily leads the

ship owner to the highest bidders, which in this

case usually means the lowest standards.

Some companies, however, are willing to accept

a lower price for their old tonnage to avoid

involvement in such dismal practices. These are

usually large, high-profile shipping companies

or oil majors who have a more direct connec-

tion to consumers.

Regulatory problemsAs noted earlier, effective regulation has yet to

be introduced. With no specific regulation made

for recycling, it has always been a grey area only

marginally touched by the Basel Convention on

the transport of hazardous materials.

This is partly because maritime law has various

levels. At the top, there is the International

Maritime Organization (IMO), a United

Nations special agency whose primary purpose

is to develop and maintain a comprehensive

regulatory framework for shipping. The IMO’s

* Flag states. Ships must have a ‘home country’ where they are registered. This country will levy taxes and impose some form of legislation. After World War II, however, there has been a huge increase in the use of so-called ‘fl ags of convenience’. But ships can very easily be re-fl agged to avoid regulation or to reduce costs. This does not mean that all ships operating under a fl ag of convenience are sub-standard.

‘Adoption of the Hong Kong

Convention looks as far away as the day

it was ratified.’

Shipbreaking is mainly carried out in India, Pakistan and Bangladesh, where most ships are run ashore on a beach and torn apart without any apparent methodology and without regard for the safety of the workers and the protection of the environment, says Sea2Cradle.

40 l 41 04-04-12 15:22

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Hall C3,Stand 140

3023 l a o al 11 2012 1 03-04-12 11:16

43April 2012

laws are applicable to any ship, but in true UN

style changes are made very slowly. However,

ship recycling has been addressed by the IMO,

leading to the Hong Kong International Con-

vention for the safe and environmentally sound

recycling of ships from 2009, in which Sea2C-

radle was involved in providing information

and suggestions on improvements to be made

to the recycling process.

Adoption of the convention will require a rath-

er radical departure from current scrapping

practices and, as a result, meets significant resist-

ance from many shipbreakers and flag states.

Although the text of the convention was adopt-

ed two years ago, enforcement is not to be

expected in the years to come. The convention

will not be ratified until a complex procedure

has been carried out during which the majority

of UN member states have to approve it, and in

which each country

is weighed by its

scrapping capacity

and its share of the

world merchant

shipping fleet as a

f lag state. This

means that the con-

vention will not

enter into force

without support

from the large scrap-

ping countries -

India, Pakistan and

Bangladesh - and the major flag states, namely

Panama, Liberia and the Marshall Islands.

The current situation is that countries benefit-

ing most from a lack of regulation must

approve regulation which will seriously hurt

their industry. As a result, adoption of the Hong

Kong Convention looks as far away as the day

it was ratified.

A step forwardIn addition to the IMO’s worldwide laws, the

flag state of a ship will also impose rules and

regulations. However, not much is to be expect-

ed on this front as the re-flagging of a ship is

very easily done, which unfortunately means

that the flag state has little or no say in what

happens to an old ship.

Finally, the country in which the ship operates

may also maintain a regulatory framework. This

has in the past never led to any problems for the

ship owners, but recent developments in Bang-

ladesh shed a whole new light on this issue. The

Bangladesh Supreme Court has closed the

beaches a number of times in recent years, deny-

ing ships which did not meet requirements

regarding the presence of hazardous materials.

Although it was not always maintained strictly

and there have been a number of cases reported

where documents were handed over stating that

ships were absolutely clean while they were

definitely not, it is clearly a step forward.

Chinese momentum China is a relatively new player in the shipbreak-

ing world, but it is gaining plenty of momentum

as the country’s steel demand is ever-growing.

In China, Dutch company Sea2Cradle found a

reliable partner for a strategic agreement that

would reinvent shipbreaking and turn scrapping

into true recycling. That was 10 years ago and,

since then, more than 60 ships have been recy-

cled without any accident. These ships varied

from small survey vessels to ordinary container

vessels, and even huge LNG tankers. This

allowed the team to grow a set of standards and

a framework that has largely been incorporated

into the Hong Kong Convention.

One of the key differences is the way Sea2Cra-

dle prepares the process, namely by making a

ship recycling plan (SRP), including a complete

inventory of hazardous materials. Furthermore,

the company has connections with only the best

yards providing the equipment which is essen-

tial to do a proper job.

One requirement when the Hong Kong Con-

vention is enforced will be that all ships sold for

scrap must have a ship recycling plan; this plan

is an A-to-Z guide on how to clean, de-con-

struct and dispose of a ship and its waste.

An essential section of the SRP will be an up-to-

date inventory of hazardous materials (IHM).

S H I P R E C Y C L I N G

‘If a ship is flagged in a country with a stringent export regime on hazardous materials, it can easily be re-flagged to another country to avoid any legislation

getting in the way.’

Under the 2009 Hong Kong International Convention for the safe and environmentally sound recycling of ships, beaching is out of the ques-tion; the preferred method is to let the ship fl oat alongside a quay at the yard, according to Sea2Cradle.

An ‘antique’ store in the shipbreaking area north of Chittagong in Bangladesh. Al kinds of items are removed from the ships and resold through dozens of stores that line the highway near the yards.

Section removal.

Removal of hatch covers.

40 l 43 02-04-12 15:34

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45April 2012

This IHM has to be drawn up by certified sur-

veyors and maintained throughout the life-time

of the ship. It states where and in what quantities

hazardous materials are present. This is valuable

information for the shipbreaking yard regarding

exactly when to hire sub-contractors for special-

ist work such as coolant removal. It will also

help with storage management, with ensuring

that asbestos can always be stored indoors and

sufficiently wrapped, and that there are enough

respiratory masks, filters and other equipment.

When the Hong Kong Convention is finally

adopted, all ships will be required to maintain

an IHM which has to be updated periodically

by certified surveyors.

Record within reach?This year is eyed with mixed feelings. Accord-

ing to maritime newspapers, 2012 might be a

record-breaking year for shipbreakers. The

previous record of 41 million DWT dating

back to 1985 will be within reach as freight

rates are at their lowest points in years. Unfor-

tunately, most of the ships will still end up at

the highest bidders in India or Pakistan. But

as supply of old ships will be near endless and

the beaches will be at full capacity, the usual

price differential between China and the

Indian subcontinent will hopefully shrink,

making China a much more viable economic

alternative. This presents the ship owner with

a chance to add serious value to his environ-

mental policy at much less extra cost than

before. So far, however, China’s own ship own-

ers are also reducing their fleet sizes, meaning

that Chinese breaking yards are not eager to

raise their scrap bids.

S H I P R E C Y C L I N G

Sea2Cradle’s global reach

Rotterdam-based advisory fi rm Sea2Cradle, one of very few capable of managing the entire ship recycling process, traces its roots to the Maersk shipping fi rm. The company produces ship recy-cling plans (SRPs) and also offers an inventory of hazardous materials (IHM) programme for ship owners, which includes surveys of the entire fl eet and all documentation. This also has benefi ts for sea-farers still sailing ships that are loaded with hazardous materials.However, the SRP goes much further. Before a ship is docked at the breaking yard, specialists will have looked at the general arrangement of the vessel to determine where the tanks are located, what they hold and what has to be cleaned and fumigated before hot work commences. Fumiga-tion is of great importance as explosive gases may have formed in tanks while the ship was at sea.When Sea2Cradle recycles a ship, a rigorous pre-clean is conducted on the entire vessel. Anything of worth in its interior, such as furni-ture or electronics, is carefully removed and is put up for sale at a shop near the yard. Subse-quently, all hazardous materials and cabling are removed, and all fluids left on board are pumped out. Only when the ship is deemed to be clean are the blowtorches put to work and the ship is carefully dismantled, lifting off all sections using dockside cranes. Heavy machin-ery that is considered in good condition will be sorted and put on sale as well. It usually takes 12 to 14 weeks after the ship is moored before it is fully dismantled. Sea2Cradle will also put requirements on the yards in terms of infrastruc-ture, lay-out and personal protective equip-ment. Beaching is out of the question; the preferred method is to let the ship fl oat along-side a quay at the yard. So far, scientifi c research on the subject of ship recycling has not been conducted. However, Sea2Cradle is actively involved in setting up a joint research programme with Delft University of Technology in the Netherlands and Tianjin University in China. It is too early to say what specifi c topics will be addressed, but the goal is to set up a multi-disciplinary programme which will have a broad focus on the entire chain involved in ship recycling.

For more information on Sea2Cradle or ship recy-cling in general, visit: www.sea2cradle.com

Torch cutting of a ship section.

Steel, the main end product of ship recycling.

40 l 45 02-04-12 15:34

46 April 2012

Zhao Hualin

Just before 10 o’ clock on a mid-winter Sunday

morning, I arrive in a taxi outside of the modest,

green-tiled headquarters of China’s Ministry of

Environmental Protection (MEP). On the eighth

floor of the building, despite being a Sunday,

offices are full and meetings are taking place.

I am taken into the modest office of Zhao Hua-

lin, Director-General of the ministry’s Office

of Pollution Prevention and Control. He offers

me a chair and invites me to ask him anything

that I like.

During the key early stages of regulating China’s

waste and recycling industry, Mr Zhao spent

three years in far western China, working as

Deputy Director of the Environmental Protec-

tion Bureau in the Xinjiang-Uighur Autono-

mous Region. Then, in 2005, he was recalled to

Beijing where he was named Director-General

of the Department of Total Pollutants Control

at the State Environmental Protection Admin-

istration (later re-named the Ministry of Envi-

ronmental Protection), where he was responsi-

ble for the daunting national pollution

reduction goals for the 11th Five-Year Plan end-

ing in 2011. Specifically, he was charged with

effecting a 10% reduction in SO2 and COD

(chemical oxygen demand) emissions by 2011:

SO2 emissions are generated by coal, and COD

is generated in the paper-making process.

I N T E R V I E W By Adam Minter

Towards a green and clean China

When it comes to formulating policies and issuing

regulations governing China’s waste and recycling industry,

there are few CVs more impressive than that of Zhao Hualin

of the country’s Ministry of Environmental Protection. One

of his responsibilities, for example, is personally to issue

and sign permits for the import of recyclables. Recycling

International was recently granted the opportunity to

interview him in depth about a host of issues, including

recyclables imports, regulating the paper industry, and

China’s new domestic recycling programme for

waste electrical and electronic equipment.

46 ao al 46 02-04-12 15:4

47April 2012

No decent figures exist for just how much of

China’s world-beating paper-making industry

runs on recycled fibre, but it is significant. Equal-

ly significant, many of the most polluting mills

(recycled and otherwise) were located in remote

areas and often had local government ownership.

According to Mr Zhao, this presented him with

some of his gravest challenges as a regulator.

‘At the beginning of 2007, when statistics on

emission reductions were reported by local gov-

ernments, the two targets in question dropped,’

he explained. ‘But when those same emission

reduction statistics were reported by departments

of environmental protection, they rose. The fric-

tion between the local governments and depart-

ments of environmental protection was really

serious. Of course, I was well aware that the local

government statistics were inflated, and some

were even false. So, at that rate, the goals of the

11th Five-Year Plan were bound to be unmet.’

‘A big fight’In response, Mr Zhao and his team at the min-

istry created a set of statistical and observa-

tional tools that gave them the

means to measure emissions

independently of the local gov-

ernment authorities. Once

they had the correct numbers,

they were in a position to con-

front local government offi-

cials. Looking back upon the

meetings at which he and his staff would con-

front the local government officials with actu-

al data, Mr Zhao laughs. ‘It was a big fight! But

we did it,’ he proclaims.

The result was a serious culling of the Chinese

paper industry - again, recycled and otherwise

- that has continued into 2012. In 2011 alone,

599 paper lines were shut down, accounting for

8.196 million tonnes of capacity.

In the case of China’s paper mills, size really

matters. ‘We’ve already phased out a lot of the

small paper recyclers,’ he notes. ‘Now we only

have the large companies, and only they can get

a permit from us.’

He continues: ‘I think paper recycling is no

longer a big problem. Before, though, it was

very serious. One small paper recycling factory

could contaminate a river, a long river. We don’t

allow this to happen anymore. The volume of

paper produced has improved but the number

of companies has been reduced. That means

only the large companies are operating.’

Small recyclers ‘eliminated’Mr Zhao, however, is unwilling to take much

credit for the shift. Rather, he credits others - in

particular, local environmental bureaus that

have been empowered with the tools that he

and his team created.

‘The local Environmental Protection Bureaus

(EPBs) are not happy with the small recyclers

- they actively eliminate them,’ he says. ‘And the

local government mayors, they don’t like the

small paper mills because the mills are pollut-

ing. If the small mills pollute, the locals will

become angry with the local government. A

small company can cause big unrest and pol-

lution. So the manager of a small company goes

to the local EPB and says “I want to import

waste paper”. The local EPB says “You are so

small and you don’t have the equipment to do

that work”. So the municipal EPB and the pro-

vincial EPB put an end to it. I don’t think it’s a

big problem in China.’

Pollution reduction goalsBy the end of the 11th Five-Year Plan in 2011,

COD emissions had been knocked down

12.45%, far and away exceeding the 10% target

that had been assigned to Mr Zhao. Today, Mr

Zhao oversees the Department of Pollution

Control, and is responsible for achieving the

nationwide pollution reduction goals woven

into the 12th Five-Year Plan, including 8-10%

reductions in SO2, COD and ammonia.

In the meantime, Mr Zhao is intimately involved

in the formulation of China’s waste and recycling

policies, including policies related to waste elec-

trical and electronic equipment (WEEE). Our

two-hour conversation ranged widely over these

topics, some of which are excerpted below.

I started out by asking him to clarify the roles

of the Ministry of Environmental Protection

and the Department of Pollution Control in

regulating the scrap recycling industry:

Exporters of scrap materials to China often don’t understand the role of the many agencies involved in regulat-ing China’s recycling industry. AQSIQ, Customs and the MEP - all of them are important, but it’s often unclear to foreigners what specific roles they play. Could you help us to understand MEP’s role, specifically, in the import/export trade?‘Sure. The Ministry of Environmental Protection

is responsible for issuing licences for the import

of waste from foreign countries for recycling. I

personally issue the permits and sign them. We

have a solid waste management

division that is responsible for

oversight of new licences. If a

company in China wants to

import waste materials, they

first have to make an applica-

tion to our agency. We check the

material type that they want to

import, and if the materials meet the standards

published by our ministry, we issue a notice on

the types and volumes of material to be import-

ed, and the port to which it can be imported. We

also issue a notice on how it is to be managed.

We follow it, cradle to grave.’

Recently, it seems that the regulations have been enforced in a more forceful manner. Guangdong has become stricter, for example.‘No, no. MEP isn’t responsible for the imple-

mentation of regulations. We’re just responsible

for the environmental regulation standards.

MEP issues the regulation. AQSIQ is responsible

for inspecting the businesses. And then Customs

‘The environment has become more important than economic

development.’

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49April 2012

implements and enforces the regulations. MEP

first, then AQSIQ, then Customs. Off hand, I

would say there are currently maybe some 1000

permits. It’s difficult to check all of them

because they’re checked on the local level. The

relationship between my agency and the local

agencies is that we issue the permit and then the

local Environmental Protection Bureau checks

whether the companies follow the laws.’

Implementation on-goingIn 2010 and 2011, China began the roll-out of

its WEEE recycling programme. The concept

is simple - producer responsibility and con-

sumer take-back form its core - but implemen-

tation is an on-going process, especially as that

implementation places the programme in

direct competition with a polluting informal

electronics recycling sector.

I’d like to ask you about China’s new domestic WEEE recycling programme.‘We are encouraging the people to recycle. But

first we need to pay more attention to environ-

mental protection. We can’t just pay attention

to recycling, right? Recycling can sometimes be

polluting. So we have started to implement a

producer responsibility programme for com-

puters, televisions and other appliances. We

established a foundation to co-ordinate this

process, and in each of the provinces we have

three to five factories that receive the waste and

recycle that. Our agency sets the standards for

how that work is done. The recycling demon-

stration factories need to get permits from the

Ministry of Environmental Protection.’

Could you tell me about the standards for the demonstration factories? What are you looking for?‘We already have regulations for emissions, and

the enterprises need to follow those. The most

important issue for a demonstration factory is

the equipment used, and the overall site plan.

They need to submit a plan for their operations,

and how they are going to recycle the waste.

MEP will assess that. The model we’ve used in

regulating the paper industry - eliminating

small for big - is also the model we

want for e-waste.

But e-waste doesn’t

just come from

foreign countries.

We also produce

e-waste in China.

So the reason that

we are setting up

large companies to do this work is that the peo-

ple, the individual Chinese people, like to use

unsafe methods to recycle e-waste, like burning

it. So we only allow mid-sized and large com-

panies to recycle that waste. Those companies

have the correct technologies.’

It’s a slow process, obviously.‘But in China, if the government pays attention

to an issue, we can effect change. That’s differ-

ent from what happens in most foreign coun-

tries. In a very short time, we can concentrate

our money and effort to do big things.’

Of course, where there’s e-waste, there’s also a plastic. In my experience, plastics are probably the least developed of China’s growing recycling sectors. Would I be right in that assessment?‘Yes, yes. Ten years ago, people would go to the

waste transfer stations, pick the plastics, and send

them to the recycling plants. But now, a lot of the

plastic is going into the garbage, and going to the

landfills, and into the incinerators. The recycling

rate drops for this kind of material. But as you also

know, the recycling standard has been improving.

So in Shandong, near the capital city of Jinan, they

have Zhangqiu City, a small city. There, they have

a very large waste plastics market that’s been oper-

ating for at least 30 years. A lot of the solid waste

from central China goes to this market. After it’s

sold, they wash it, and then they extrude it. The

locals make more than one billion per year from

this. But it causes a lot of pollution problems. So

the government recently shut it down.’

Wen’an, near Beijing, was also recently shut down. (Editor’s note: until late-summer 2011, Wen’an handled most of the waste plastics generated in Beijing and Tianjin, as well as a significant volume of imported material.)‘Yes. Environmental protection regulations, and

their enforcement, are much stricter than

before. Ideas are changing very fast. The deci-

sion to shut down the plastic markets in Zhong-

qiu and Wen’an were made by the local govern-

ments. In Guangdong, in Nanhai City, the local

government has also phased out a lot of the

small plastic factories due to a lot of problems.

Very difficult, though.’

Ten years ago, the priority would have been saving jobs in Nanhai. Now, the priority is saving the environment.‘Yes, the jobs were the first concern of the local

government. Before they go forward with these

shut-downs, they’re already thinking about

what to do with the workers. Otherwise, people

will go to the local government buildings, sit

there and say “I need money, I need a job”. Many

of the scrap workers are migrant people, not

local, and they can go to other factories.’

‘We follow the import of waste materials from

cradle to grave.’

I N T E R V I E W

Zhao Hualin, Director-General of the Ministry of Environmental Protection’s Office of Pollution Prevention and Control in China.

46 ao al 4 02-04-12 15:4

N l -4 1 03-10-11 1 :33

51April 2012

Shifting balanceFrom the earliest days of China’s economic

reform in the late 1970s until quite recently,

economic development was favoured over envi-

ronmental protection. However, that balance

began to shift during the period of the 11th

Five-Year Plan (2006-2011), as evidenced by

Mr Zhao’s work on COD emission reductions.

I think one of the challenges you must face in your job is finding some balance between the economy on the one hand and the environment on the other.‘No, no, no. The Chinese econo-

my has developed to a good stage. So now we want

to focus on the environmental problems of China.

That’s the biggest issue in China right now. The

environment has now become more important

than economic development. We believe that we

can continue improving the Chinese environ-

ment, even if the economy slows. We can make

the environment better. There is certainly a dif-

ference between what the agency could do 10

years ago and today. For instance, it’s easier to

implement environmental protection measures.’

You have more support from the upper levels of the government?‘From the central government. They agree that

we need harmonious development in China, that

we should have sustainable development. You

see, 10 years ago, the Ministry of Environmental

Protection was just the State Environmental

Protection Administration (SEPA). When the

State Council had a meeting, SEPA was not in a

position to go and speak at it. But now, when a

central government council wants to create new

national regulations, they also need and want

some opinions and ideas from MEP.

As China’s wealth grows, there’s a lot more waste. How about residential recycling systems in China?‘The growing waste streams are a problem, and

residential recycling systems are a complicated

problem. At home, I separate plastic and paper

into different boxes. But the collection system

doesn’t differentiate. They have a cart for the

garbage and they put the plastic into the cart.

And the people say: “You tell me to recycle and

then you put it together and send it to the land-

fill.” It’s a difficult thing in China, but Nanjing

wants to be a demonstration city and collect

from the home and the landfill. They want to

do some demonstrations first, and the govern-

ment is watching them.’

There is more and more talk of incineration of trash in China. But it seems to me that labour should remain cheap enough to still allow for sorting of recyclables from the waste stream.‘It’s different now. The labour is not cheap, espe-

cially recently. The people have other, more

lucrative options for work. They don’t like going

to the landfill and picking through the trash.

You know, even in factories the labour is not

cheap now. So we think in the future that the

incinerator is the best option, especially in the

south, where there’s very little land available for

landfilling. Of course, the people think that

incineration causes a lot of air pollution. But if

you do it right, if you use good technology, it’s

not a big problem.’

And you are doing demonstrations and issuing permits right now?‘Yes. We are doing some tests, including for

dioxins. It’s not a problem. The ash will then

be sent to cement factories. In some cities -

outside of China - they use cement factories

to treat solid wastes. That’s a good method. I

just came back from Japan where they have a

facility called the Pacific Cement Institute. It’s

a company, and they treat waste in a cement

factory. So this is the direction China will go:

using the cement factories to treat waste. I will

push this.

Could you summarise, then, your objectives over the next Five-Year Plan?‘First is pollutant reduction: COD, SO2, nitro-

gen (ammonia) should be reduced by 8-10%.

It’s a big challenge for us, this first one. Next,

we want to improve overall envi-

ronmental quality. Third, we

want to prevent environmental

accidents. Fourth, we want to

improve environmental services

in the city and the rural areas. To

do this, we need to set up equal

standards between the urban

and rural areas. We will establish many envi-

ronmental protection facilities in the 12th

Five-Year Plan, including water treatment and

garbage collection in the rural areas. The local

governments will pay and the central govern-

ment will help. The budget will exceed 1 tril-

lion yuan.’

I N T E R V I E W

‘We’ve already phased out a lot of the

small paper recyclers.’

Adam Minter is a Shanghai-based journalist who writes about business and culture for US and European publications. He also maintains a blog at:www.shanghaiscrap.com

Scale of waste problemPerhaps the most serious, overlooked environ-mental issue in China today relates to the grow-ing volume of waste being generated by its increasingly wealthy consumer class. Currently, China generates around 360 million tons of domestic waste per year - and that grows at 8% annually. As a result, construction of new waste facilities is an important priority in the new Five-Year Plan, and Mr Zhao will play a key role in choosing and implementing them.

China is planning to build more waste incineration plants in future.

46 ao al 51 02-04-12 15:4

52 April 2012

Putting raw material in its right place‘I know I cannot change the world on my own, but I would like to try

to make a contribution every day to help secure an environment worth

living in,’ says Hans Roth, co-founder and Chairman of Austrian firm

Saubermacher. This largely sums up his green vision based on the

cornerstone of ‘acting responsibly’ that lies at the heart of his recycling

company. Defining waste as ‘raw material at the wrong place’, his aim

is to put that right wherever possible.

Saubermacher was founded in 1979 as Roth-

Umweltschutz GmbH by Hans and Mar-

gret Roth. Headquartered in Graz, Austria, the

couple originally intended to operate exclu-

sively in the waste collection business but soon

saw the potential of recycling and realised

merely arranging the logistics wasn’t enough.

They decided to branch out and gradually

transformed themselves from a modest dis-

posal contractor into a big-time raw material

supplier, even handling waste of a hazardous

and medical nature.

Today, Saubermacher represents Austria’s third

largest recycling player, generating an annual

turnover averaging Euro 320 million while

processing roughly 2.8 million tonnes per

annum. Equipped with a 700-strong fleet of

vehicles, the company serves a total of 400 local

authorities and 25 000 customers within indus-

try, commerce and trade. And its operations

aren’t limited to the Austrian market; in fact,

Saubermacher has gone to great lengths to

establish an international portfolio.

Eastern European footprintOver the past 33 years, Saubermacher has

become one of only a few Austrian recyclers

to successfully leave its home country borders

behind. Currently with over 40 joint ventures

abroad - in Slovenia, Hungary, the Czech

Republic and Romania - it has certainly left

its footprint on Eastern European soil.

‘Together, we want to position Austria as the

number one environmental country abroad,’

remarks Chairman Hans Roth, emphasising

the urgency attached to expanding the com-

pany beyond its own domestic potential.

Looking back, he still considers its first oper-

ation abroad (which opened in Hungary in

1991) as one of the company’s milestones.

According to him, three letters are well worth

remembering when learning about Sauberma-

cher: PPP, standing for Private-Public Partner-

ship. Such 50%-50% ventures led by a city and

a recycling company represent a particular busi-

ness model which Saubermacher has brought

to life in several of its locations, both domestic

and abroad. Villacher, situated in Southern Aus-

tria, got the scoop in 2001 when the debut of the

new enterprise grabbed quite some headlines.

Such a strong reaction is ‘only natural’, says Mr

Roth, who explains that this approach has

allowed operational costs to be cut by 20%. ‘This

form of co-operation serves as an example of

how, by working together, an improved public

service can be provided, both in stronger and in

weaker economic times,’ he adds.

Considering that Western European markets

are nearly saturated, Saubermacher will - at

least for the time being - continue to focus its

expansion drive on markets in Eastern

Europe. First contact has already been made

with unexplored Balkan countries and is sure

to be followed up in the years ahead. Croatia,

for instance, remains a country that is on the

company’s wish-list for geographic expansion,

although the past attempts to start an enter-

prise there have not proven fruitful on the long

term. According to Mr Roth, there is reason

enough for perseverance as this remains an

‘interesting market’ which he recognises as

‘one of the largest in our trading area’. First,

however, ‘the atmosphere must fit’, he notes.

C O M P A N Y P R O F I L E By Kirstin Linnenkoper

Saubermacher

Saubermacher sees each tonne of waste as a challenge.

In 2010, Saubermacher opened a special e-cycling park.

Saubermacher’s headquarters is located in Graz, Austria.

52 om a o l a ma 52 02-04-12 15:25

53April 2012

Putting raw material in its right place

Strategy-driven companySaubermacher’s COO Frank Dicker shares this

vision for expansion. ‘We are a strategy-driven

company,’ he says. ‘That means we invest both

time and money in taking the right future-

oriented decision.’ He adds that the company

has high hopes of attaining a top three ranking

in these developing markets in the years to

come. This doesn’t mean that the Austrian recy-

cler doesn’t flirt with prospects lingering

beyond the horizon. ‘Currently, we have no

direct plans to cross oceans, starting business-

es in the UK or USA, for example, but if there

would happen to be promising co-operations

and projects overseas, we will of course con-

sider them,’ the COO insists.

However, there is one exception: the company

has already been fostering aspirations for sev-

eral years of building a modern waste manage-

ment industry in the United Arab Emirates and,

additionally, in the Gulf area. Aware that exist-

ing collection and recycling systems required

thorough modernisation before any deal could

be drafted up, Saubermacher’s ambitions in the

region remained largely conceptual until the

necessary advancements were made. When the

criteria were finally and successfully met, the

recycler placed a winning bid covering the col-

lection and transportation of residual waste, as

well as street cleaning, in Abu Dhabi. This move

was enabled by funds secured from Ittihad

International Investment and, not unimpor-

tantly, with the co-operation of West Coast

Company. The contract with the latter was

signed on February 19 of this year and is to

produce a joint venture named West Coast Sau-

bermacher International.

Each defeat is a challengeIn whatever direction the future decides to take

the Austrian company next, and no matter what

exotic chapters will be added to its history, Mr

Roth paints a very clear bottom line. ‘Our atten-

tion goes mainly to recycling of material - waste

incineration and landfilling are of the lowest

priority to us,’ he states. ‘So basically our phi-

losophy is: each tonne of waste which we do not

recycle is a defeat, yet at the same time it is also

a challenge. That’s why the topic of resource

efficiency, in addition to reducing greenhouse

gases, is of prime importance in our eyes.’

To improve the status quo, Saubermacher has

been working closely with universities for years,

above all with Austria’s Montan Universiät

Leoben which specialises in mining, metallurgy

and processing raw materials. ‘Waste can be

defined quite simply as raw material at the

wrong place,’ Mr Roth says. He is certain that

this can be corrected - through hard work, of

course. ‘Partnering up with the university pro-

vides us with the necessary resources and also

adds a valuable external viewpoint, which allows

Saubermacher’s Chairman Hans Roth explains the concept of the e-cycling park.

To support innovation, Chairman Hans Roth (second from the right) hands out a special recycling award each year.

‘Resource efficiency is of prime importance

in our eyes’

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55April 2012

us to innovate, break the mould and work

towards reaching common goals in the waste

disposal industry,’ the Chairman elaborates.

Owing to rising electric car numbers and the

consequent increase in lithium-ion batteries,

work at present is focused on e-mobility inno-

vation. New information in this area is of great

significance to Saubermacher as it also takes in

industrial devices and batteries. In collabora-

tion with the University of Leoben, attempts

are being made to improve the current recy-

cling rate of 80% and to utilise lithium in an

eco-friendly manner.

To speed advancements along, a special

e-cycling park was built in 2010 near the Sau-

bermacher headquarters. Mr Roth states that

this is the first treatment plant for electronic

devices in the Alpine-Adriatic area. At present,

around 15 000 tonnes of electronic devices are

recycled each year, including batteries from

e-bikes and electric cars, together with their

derived recyclable materials. ‘In order to stay at

the forefront of innovation, a sum of Euro 6

million (or US$ 7.9 million) has been injected

in WEEE-related operations over the last couple

of years,’ says Alois Grinschgl, Saubermacher

Engineer and Manager of E-Cycling Services.

‘A laboratory of large dimensions’To keep track of possible recycling break-

throughs from up close, Mr Roth saw to it that

an in-house laboratory was created at Trofaia-

ch in Austria, known as the Saubermacher

Technical Centre. With machines at its dis-

posal such as macerators, air separators, gen-

erators and various types of metal cutters, the

Chairman calls it ‘a laboratory of large dimen-

sions’. According to him, the practically-orient-

ed research and customer-specific waste analy-

ses performed at this laboratory - geared

towards identifying new potential for raw mate-

rial - perfectly illustrate the overall character of

the company. At the same time, he notes, this

technological drive is the ingredient that makes

Saubermacher ‘different’ from other recyclers.

A recent example of this quest for information

and innovation is the BLUBOX research

project, which centres on the recycling of fluo-

rescent lamps and LCD screens. Joining forces

with Swiss waste specialist Air Mercury, Sau-

bermacher was able to develop its own recycling

process which was executed in a special facility

built by the two new partners in Vienna.

According to Mr Grinschgl, all material devoid

of liquid mercury can be successfully handled

here. He adds: ‘Approximately four tonnes of

fluorescent lamps and four tonnes of flat-screen

TVs are recycled every day.’

‘Return what we have taken’Apart from acting in a practical and strategic

manner, the Austrian recycler strives to step up

its ‘green’ credentials as best it can - by acting

responsibly. Seeking balance by adhering to the

rule of ‘returning to the soil what we have taken

away from it’, the company hopes to contribute

its fair share to protect nature and to ‘help shape

the future’, says Mr Roth, who believes respon-

sibility and efficiency can definitely go hand in

hand. According to him, creating a ‘future worth

living in’ does not automatically come at the

expense of offering a virtually seamless waste

disposal chain - which remains one of his com-

pany’s key objectives. It simply takes a little more

time and effort to get it right.

C O M P A N Y P R O F I L E

Some Saubermacher milestones

1979: Upon founding Roth-Umweltschutz GmbH (later renamed Saubermacher) in Graz, Austria, the fi rst waste disposal contracts were received from regional municipalities.

1986: The presentation of the company’s fi rst sewer sanitation vehicle in Austria, fol-lowed by the nationwide introduction of a three-container system (separating glass, paper and other discards).

1991: The opening of the fi rst chemical and physical plant for the treatment of haz-ardous waste. In the same year, Sauber-macher crossed the border, extending its operational scope to Hungary.

1993: Saubermacher opened its fi rst locations in the Czech Republic.

2003: The offi cial launch of the ThermoTeam plant, one of the world’s largest for the production of alternative fuels.

2006: The takeover of international company Rumpold with more than 1000 employees.

2011: The kick-off of operations at ECOPORT headquarters, which serves as an open platform for waste management, envi-ronmental protection, innovation and sustainability.

‘Partnering up with universities allows us to break the mould’

Alois Grinschgl, Saubermacher Engineer and Manager of E-Cycling Services.

The ECO PORT was built to ‘help shape the future’.

52 om a o l a ma 55 04-04-12 15:25

56 April 2012

‘Size doesn’t always matter’Scrap shear and baler manufacturer Sierra Europe used the economic

recession to invest aggressively in its R&D programme. The result: the

introduction of many new machines, including hammer mills and

shredders. Recycling International talked with Sierra’s CEO Marco

Garuti about new machines and new markets.

While many manufacturers of recycling

machinery have cut production and

have put development of new products on the

back-burner since the onset of the financial

and economic crisis in September 2008, Sier-

ra Europe has bucked the trend by intensifying

its R&D efforts.

‘We have even added staff to our R&D depart-

ment; currently, we are at eight people,’ notes

Sierra Europe’s CEO Marco Garuti. ‘In the

past, we designed one big new machine per

year, but in recent years we have developed

many new ones. In this way, we can react very

quickly to the market’s and customers’ needs,

and become a one-stop shop. With all the new

developments, I think we are well prepared to

meet the competition that, no doubt, will

come from Asian countries in the near future.’

New shredder lineThe reason why Sierra started building its own

line of small to mid-size shredders was that

customers asked for a machine with more

throughput. ‘Sierra’s Tor 500 rotary shredder

is basically based on two systems which can

also be sold independently,’ explains Mr Garu-

ti. ‘It is a product close to our regular shears

because it will produce sheared No 2 scrap in

high volumes. A regular shear can produce

around 20 tonnes per hour whereas the Tor

will produce 40 tonnes.’

He continues: ‘So it’s a high-productivity

machine which will also allow sorting - which

a shear cannot do because it produces a dense

package which you will not be able to sort

afterwards. The rotary shredder can be cou-

pled with a sorting system to roughly separate

the ferrous from the non-ferrous metals – or,

with a higher level of efficiency with a hammer

mill shredder. It’s an easy way to get the bigger

pieces of metal out of the ferrous.’

It is Mr Garuti’s belief that, in future, many

companies which today are traditional buyers

of shears in the 550- to 880-tonne range will

be potential buyers of a rotary shredder or a

hammer mill, especially in the smaller seg-

ment. ‘It’s in line with what Sierra has always

been manufacturing – smaller and mid-sized

machines,’ according to Mr Garuti. Sierra has

never produced shears of more than 1100

tonnes, and as for shredders, it has no inten-

tion of producing large systems. ‘We will stop

short of the size of a car shredder,’ he says.

Given that Sierra has achieved great success

manufacturing smaller machines, this begs

the question whether size matters. Mr Garu-

ti laughs and responds: ‘Size doesn’t always

matter. For us, a small to mid-size machine

works better.’

Shredder versus shear?But now that the company is also building

shredders, isn’t it competing with its own

gamut of scrap shears? ‘The answer is yes and

no,’ Mr Garuti says after a second’s hesitation.

‘We are convinced that the shear market will

head that way. Today, it is very easy to export

ferrous scrap; in the past, it was never export-

ed. Back then, smaller scrap companies would

take their material to big businesses which

S U P P L I E R By Manfred Beck

Sierra Europe

Sierra’s CEO Marco Garuti. Marketing Manager Irene Piacentini.

AL 500 baler processing car bodies.

S5 Evolution ELV and light scrap baler.

56 l a 56 30-03-12 16:2

57April 2012

operated a large shear and delivered the proc-

essed material to local steel mills. When fer-

rous scrap became an export commodity, it

gave way to the rise in popularity of smaller

shear-balers and, as a result, smaller compa-

nies which bought such a machine could

deliver directly to the mills.’

He continues: ‘With the rise of China, we see

that yards which in the past had never export-

ed sheared No 1 and 2 and shredded qualities

of scrap are now doing it. But when they

noticed what the global markets really

demanded, they also started producing proler

- small fragments of ferrous - which, until

then, was a material produced and sold only

by selected large scrap companies. I think that

what happened in the past, with the big

2000-tonne-plus shears getting competition

from the smaller 750- to 850-tonne shears,

will now happen in the shredder market, and

that’s why we’re investing in the future now.’

Designing a shredderDesigning a shredder is completely different

from designing a shear because the concepts

of processing scrap differ utterly, so Sierra had

to start from scratch with its Tor and HM

shredders.

The company hired someone who had spe-

cific knowledge of designing shredders. And

in the design stage, the company co-operated

with the Technical University of Ferrara

which is located across the road from Sierra’s

European headquarters. ‘They helped us

when we had to do stress calculations,’

explains Mr Garuti. ‘In-house, we have our

own software for doing finished element

tests, but sometimes there is a need for a sec-

ond opinion.’

Sierra had to grasp not only the concept of the

shredder and of the HM 800 hammer mill

itself, but also how to separate the material,

how to get the metals out and get clean proler.

‘What we have been doing over the last year

with our R&D people is visiting large shredder

operators all over the world to see what they

were experiencing, what difficulties they ran

into when producing proler,’ Sierra’s CEO

notes. ‘The interesting thing was that although

many operators were using the same type of

shredders, they had different views about how

to get a good final product. In the end, we

incorporated all views and comments into

designing our HM 800 hammer mill.’

Turn-key plantSierra has also developed a complete plant for

crushing scrap metal and end-of-life vehicles,

which includes its new HM 800 hammer mill.

In addition, its Tor shredder operates in the

plant as a pre-shredder. The whole concept

took the company about one year to develop.

‘After a shredder or hammer mill, you need

integrated sorting systems, but that’s a cus-

tomer preference,’ says Mr Garuti. ‘We install

what the customer wants and deliver the plant

completely turn-key.’

The Sierra CEO describes the company’s new

800 HP hammer mill as a ‘diesel or electric-

powered machine that can process around 20

tonnes of scrap per hour - so basically a low-

production, low-investment machine which

will produce high-quality material’. Potential

customers are ‘companies which currently use

an 800-tonne scrap shear’, he adds.

Serving a purposeOne of Sierra’s advantages when manufactur-

ing shears, balers and shredders is that Sierra

USA operates a scrap yard in Bakersfield,

California. ‘What our customers understand

is that our machines serve a certain purpose

and if you build a shear, you have to under-

stand why someone wants to shear and bale

scrap,’ insists Mr Garuti. ‘At Sierra, our start-

ing point is the scrap, the proler. Everything

we design is aimed at producing high-quality

proler.’ So far, the company has sold two

shredder plants.

Inclined shearUntil recently, Sierra produced only standard,

(semi) mobile and stationary scrap shears, but

recently - after only a few months of design

activity - the company introduced an inclined

shear, the Hawk 715. It is available in two con-

figurations: stationary or semi-mobile on

hydraulic lifting legs.

‘We developed it because our customers asked

for it,’ Mr Garuti reveals. ‘They required a

shear with a different loading system. We

think that the Hawk is a logical extension to

our current shear line.’

For Sierra, a standard shear is a shear-baler: a

shear head with a pressing box attached. When

the box is filled, a hydraulic cylinder pushes the

material under the blade. With an inclined shear,

gravity makes the slide under the blade. ‘The big

advantage is that you can continuously feed the

Sierra hydraulic scrap shear at work in a yard of Finland-based Kuusakoski.

A semi-mobile T550R scrap shear.

Sierra REB multi-material baler.

56 l a 5 30-03-12 16:2

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Naamloos-13 1 15-03-12 0 :1

59April 2012

‘We have developed a full line of high-speed,

fully-automatic balers which are designed to

operate 24/7 at manufacturing plants for

processing production scrap,’ Mr Garuti

explains. ‘These balers require no operators

and are integrated into the production line.

That was a completely new development for

us, but has helped us to diversify within our

industry. These balers are purchased notably

by manufacturers such as aluminium produc-

ers they ship their scrap directly and efficient-

ly to the foundries.’

S U P P L I E R

shear, although in smaller volumes,’ says Mr

Garuti. ‘The productivity of any shear can be

measured in the number of cuts. The number of

cuts with a standard shear is between 120 and

140 per hour, whereas an inclined shear can

reach 180 to 200 cuts per hour.’

Balers for manufacturersSierra has also introduced machinery which is

not targeted at scrap yard operators, but instead

at manufacturing plants such as steel mills,

can makers and the automotive industry.

In-house fi nancing

In February, Sierra Europe started up a new service for its customers to fi nance equipment. ‘To my knowledge, we are currently the only manufac-turer in this industry that can offer in-house fi nanc-ing,’ says Mr Garuti. ‘We offer this in-house fi nanc-ing for a period of up to fi ve years. Basically, we fi nd for our customers the machine they need and, in addition, the money to fi nance it. Although we co-operate with banks, of course, the whole screening process is done in-house by a new divi-sion we have set up: Sierra Financial Services.’ Mr Garuti adds: ‘In late February, we presented this new service at the international ferrous and non-ferrous metals forum of the Russian Metal Scrap Federation in Moscow, and we got a huge response. We have already been able to convert customers in Russia and South Korea from used to new equipment or from medium-sized to larger machines.’

New launches

In little over a year, Sierra Europe has introduced several new machines, of which some are high-lighted below:

80 2C XL automatic baler The 80 2C XL model has been developed for every-day scrap yard work. It has the same characteristics as the 80 2C model in terms of bale dimensions and productivity, but thanks to its large loading inlet and to its larger-dimension compacting box, it can admit in a single charge all the material moved with a 600-litre grapple. Sierra says it is the fi rst model on the market that combines the advan-tages of high-density bale production with practical loading and high productivity.

S5 Evolution ELV and light scrap baler Due to its light structure and reduced dimensions despite a 5-metre compacting box, the S5 Evolu-tion baler is ideally suited to: transporting with a roll-on and roll-off system, processing small and medium-sized vehicle scrap, and processing mixed scrap metal. It can be fi tted with a bale ejection door or crane.

Hawk 715 inclined shear The inclined shear models meet the requirements to process long but resistant material, with the pos-sibility of continuous loading, says Sierra. Productiv-

ity varies according to the power of the shearing cylinders and to the

loading box capacity. This range is suit-

able for yards

with a high production of long sections of homo-geneous material and, as a result, for the require-ment to process materials continuously with low operating costs.

HM 800 hammer mill Sierra’s fi rst line of scrap metal and car body process-ing plants with a hammer mill is described as ‘a series of solutions developed for bringing these products to both yards with high production levels and yards with fewer needs’. The models in this range can be either diesel- or electric-powered and are available with conveyor belts and metal separators, or with a pre-loading box. The system is especially suited to treating pre-processed vehicle scrap of up to 1200 mm in width and 500 mm in height, as well as elec-trical household appliances and scrap metal of similar dimensions. The plant comes complete with, among other things, conveyor belts, separator belts and dust exhauster. The heart of the system is the 800 HP hammer mill. The mill is capable of producing 6 to 18 tonnes per hour, depending on the type of power supply and on the kind of input material.

Tor 500 shredder The Tor 500 consists of a range of semi-mobile and stationary double-shaft industrial shredders, which are suited to processing any type of scrap metal and vehicle scrap without the need for pre-pro-cessing with shears or balers. They have been designed for processing even the most resistant materials, such as entire, large vehicle parts. They have a high hourly productivity of 20 to 40 tonnes of material. The shredders offer different custom-ising options for the sorting of processed ferrous scrap metal.

For more information: www.sierraeurope.com

Standard layout of a complete plant with 8ooHM hammer mill.

80 2C XL automatic baler.

56 l a 5 04-04-12 15:2

60 April 2012

Plastics have been a key building

block of the European economy for a

long time now, enabling growth

and innovation in multiple industries

- ranging from the automotive

sector to packaging and construc-

tion. Considering global plastics

production witnessed an increase of

15 million tonnes (6%) in 2010

when compared to 2009, it seems

this success story is far from over.

P L A S T I C S By Kirstin Linnenkoper

Biodegradable plastic utensils, a modern take on cutlery.

60 las s a a l 60 02-04-12 13:4

61April 2012

Over the past 20 years, a long-term growth

trend, equivalent to almost 5% every

year, has come to characterise the plastics

industry. Examining the world of plastics fur-

ther, it becomes apparent that 2010 was no

exception to this rule.

Europe accounted for 57 million tonnes

(21.5%) of global output, with China estab-

lishing itself as the biggest producer on 23.5%.

However, while global per capita demand is

almost certain to grow by 4% each year, con-

sumption rates in Asia and new EU member

states are forecast to be significantly below

those of developed industrial regions where

growth rates are expected to remain slightly

above GDP, signifying that there is plenty of

room left for future growth.

Impact on the big fiveIn terms of plastics types and applications,

growth results in 2010 varied greatly among

the different categories.

Engineering plastics

showed the highest

growth rate, with acry-

lonitrile butadiene sty-

rene (ABS) rising 13%

and polyamide 20%.

This can be attributed to

a combination of gener-

ic growth and a healthy

bounce-back from the

sudden drop caused by

the economic crisis.

I n t he me a nt i me ,

demand for the more commonplace plastics,

frequently called ‘the big five’, displayed mild-

er increases of between 1.4% and 8% in total.

This group of market-share giants makes up

around 75% of overall plastics demand and

includes: low-density polyethylene (LDPE),

linear low-density polyethylene (LLDPE) and

high-density polyethylene (HDPE); polypro-

pylene (PP); polyvinyl chloride (PVC); poly-

styrene (solid PS and expandable PS); and

polyethylene terephthalate (PET). Market-

wise, the top three resin types are ranked

in the following order: PE 29%, PP 19%

and PVC 12%.

Important net exporterThe EU has traditionally been an important

net exporter of plastics and plastic products,

and will continue to be so. This trade surplus

grew by some 100% between the years 2000

and 2010, reaching a total of Euro 15.7 billion

in the year before last.

The European plastics industry remains a key

contributor to the EU’s trade surplus, despite

a shrinking workforce and the fact it has

recently lost the number one production posi-

tion to China. Unsurprisingly, the biggest

export markets for plastics raw material

remain China (including Hong Kong), Turkey,

Russia and Switzerland, whereas extra

EU exports consisting of converted products

went predominantly to Switzerland, Russia

and the USA.

Leaving landfill behindDue to continuous improvements relating to

plastics end-of-life management in combina-

tion with ever-growing public awareness, the

volume of plastics ending up in landfills is

constantly decreasing, even when taking into

account the increase of 2.5% in post-consum-

er plastic waste in 2010. The additional waste

was balanced out by the fact that overall

demand from the converting/processing

industry reached 46.4 million tonnes for an

increase of 4.5%.

Compared to 2009 levels, post-consumer

waste rose slightly in 2010, by 2.5%, reaching

a total of 24.7 million tonnes, of which nearly

half (10.4 million tonnes) was disposed of and

14.3 million tonnes was recovered. Thanks to

the increased engagement of citizens, packag-

ing collection schemes and recycling compa-

nies, the volume of material that was able to

be recycled increased by 8.7%.

Apart from improved recycling results, the

quantity of plastics that was used in energy

recovery rose by nearly 10%. Also worthy of

note is that approximately 9% more post-

consumer plastics was recycled and used for

energy recovery in 2010, creating a further

dent in landfilling figures.

Valuable solutionPart of the solution to the plastics waste man-

agement issue lies in the realisation and accept-

ance by society that resources should be used

efficiently and, more importantly, that plastics

form a valuable resource that should not be

wasting away in landfills. Luckily, the top nine

performing countries (Switzerland, Germany,

Austria, Sweden, Denmark, Belgium, Luxem-

bourg, the Netherlands and Norway) already

have tight restrictions concerning landfilling.

If their levels of performance were to be extend-

ed to the rest of Europe, strong drivers would

be created to help increase recycling and recov-

ery levels towards the 100% ideal.

However, it must be said that recycling and

energy recovery rates between 2006 and 2010

differ widely between

the various EU mem-

ber states. On average,

recycling perform-

ance ranges between

15 and 30% in most

countries, while ener-

gy recovery levels vary

between zero and

75%. The biggest

i m p r o v e m e n t i n

recovery rates has

been achieved in Esto-

nia (+29%), followed

closely by Finland on 27%. A number of other

countries - such as, for instance, Hungary,

Germany and Slovakia - have increased their

recovery levels by approximately 15%.

Close attention to packaging The steady increase in the recycling and recov-

ery rate of around 5% every year indicates that

many EU member states still need to invest

more time and money for greater success in

diverting their plastics from landfills. On a

bright note, both recycling as recovery rates

for plastics packaging are higher at 66% as

against 58% for all plastics, thus reflecting the

collective attention paid to developing better

options in this particular area.

A closer look at European plastics figures

reveals quite an optimistic picture. In several

countries, the recovery of plastics is approach-

‘Tight restrictions concerning landfilling will help increase recycling

and push recovery levels towardsthe 100% ideal.’

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62 62 02-04-12 13:1

63April 2012

P L A S T I C S

ing the 100% mark, with the following nine

nations recovering more than 90% of their

post-consumer plastics: Switzerland, Germany,

Austria, Denmark, Sweden, Belgium, Nether-

lands, Norway and Luxembourg. The first five

countries on the list have managed to surpass

95%, thereby significantly reducing their

dependence on landfill.

At the bottomHowever, they are leaving other European coun-

tries far behind them - including most particu-

larly France, Bulgaria, Romania, Cyprus, Greece

and Malta which score very low by comparison,

with less than 20% plastics recovery and still a

massive reliance on landfills. Currently, Malta is

occupying bottom place on the list by recovering

only 10% of its plastics. These disappointing

results are explained by the fact that some coun-

tries still have no - or limited - energy recovery

solutions, while some Northern European mem-

ber states have overcapacity in energy recovery.

Another challenge is of a social kind: the indus-

try still has a long way to go in educating the

public on the potential of energy recovery. The

public’s current perception of energy recovery

is very poor and, even worse, is in many cases

based on outdated facts. This negative attitude

often results in strong opposition to plans for

building new capacity (known as the NIMBY

or not-in-my-back-yard attitude). To add to

the problem, few of today’s benefits and suc-

cesses resulting from energy recovery are out-

lined in public debate. As a result, the plastics

industry will need to spread the message that,

by supporting efficient energy recovery, a com-

plement to recycling can be established in tack-

ling the pressing problem of landfilling.

Exploring plastics’ special projects

Slimming down with plasticsEnvironmental considerations aside, plastics have also made a signifi cant contribution to science and innovation. The automotive industry, for instance, is undergoing a big change with the develop-ment of zero-emission and lightweight cars, requiring plastics to play an increasingly critical role in this sector. With car makers expecting that a 5% weight reduction may result in an average fuel saving of 3%, the scene is set for ‘slimming down’ electric vehicles. It is said that, in combination with other materials, plastics can reduce the weight of car parts by up to 70% in comparison with conventional materials.Innovative technology also holds promising prospects for the plastics sector: new techniques are making it possible to use both plastics and metals together, thus combining the advantages of the two materials. Also, because more and more bodywork parts are bonded instead of welded nowadays, a further reduction in weight and, not unimportantly, an improvement of a vehicle’s stability and strength can be achieved. Bonded front and rear windshields, for example, enable the construction of increasingly aerodynamic cars. Applying plastics in such an innovative way is likely to lead to an additional boost to demand.

Far-reaching architectural benefi ts The European Commission has established another ambitious goal with relevance to plastics: it aims to have all new buildings designed to achieve a zero-energy consumption level by 2020. Plastics can make a substantial difference in achieving this target through their use not only in new buildings but also in existing buildings, as well as through thermal insulation and heating/cooling systems. If applied in architecture, it is argued that plastics could end up saving approximately 5500 litres of heating oil in just 50 years, while saving emissions of some 19 tonnes of carbon dioxide and other pollutants.

Smart packaging lends a handLast but certainly not least, the packaging industry has shown a high degree of innovation, creating new opportunities for an already-popular material. Apart from ensuring effi cient packaging, a lot of effort has been made to develop ‘smart packaging’. Examples of this include the nitrogen barrier plastic packaging which prevents any contact with oxygen, prolonging the shelf life of the product, and the integration of Radio Frequency Identifi cation (RFID) chips into conductive polymer packaging, giving consumers useful information on the quality and status of their products. Moreover, smart packaging will help to improve recycling rates as the industry is working towards creating packaging that is fully recyclable or recoverable. In order to help consumers act responsibly and dispose of their packaging in the most appropriate way, an RFID chip could be incorporated into the packaging to assist the sorting process at home, as well as during industrial sorting. And thus, the packaging sector of tomorrow won’t merely lend the public a helping hand; it will above all prove meaningful to recycling.

‘The industry still has a long way to go in

educating the public on the potential of

energy recovery.’

60 las s a a l 63 02-04-12 13:4

64 April 2012

M A R K E T A N A L Y S I S

Ferrous

‘Even the volatility is volatile’

Having moved slightly higher immediately following our previous report, ferrous scrap prices have been heading south in more recent weeks. Trailing US prices by typically US$ 10 per tonne, latest cfr indications for shipments from Europe to Turkey are as follows: US$ 425-430 per tonne for standard quality HMS I/II 80/20 scrap; US$ 430-435 per tonne for shredded; and US$ 405-410 per tonne for the HMS I/II 70/30 mix.

Closed: March 29 2012

Ferrous scrap prices are in gentle retreat as Recycling International

heads for press - despite a lack of avail-ability prompting a fight for material among European shredder operators, and moderate product sales for Turkish steelmakers. And immediate prospects remain mired in uncertainty, prompting one expert to comment: ‘People don’t know what they are going to face in the coming weeks - it’s like driving in fog. Even the volatility is volatile.’Having bought significant quantities in recent weeks, Turkish scrap purchasers are currently testing the market with lower bids, pulling down the top prices

paid for European and US shredded to, respectively, around US$ 435 and US$ 445 per tonne. Against the backdrop of complaints in Europe of a shortage of scrap reaching shredding plants, eyebrows have been raised in some quarters about the scale of US ferrous scrap bookings to Turkey during the course of March (the num-ber of deals concluded in the first three weeks of the month is thought to have numbered around 20).For shipments of scrap into Turkey, Feb-ruary had ended with prices on a rising course as purchases re-gathered momentum after a period of relative

quiet in which adverse weather condi-tions had dampened activity levels. Turk-ish mills are understood to have booked well over a dozen cargoes in the final full week of the month, with at least some of those orders valuing HMS I/II 80/20 scrap at over US$ 450 per tonne.However, buying showed distinct signs of cooling in early March, with one of the few cargoes bringing a US East Coast supplier around US$ 455 per tonne for shredded. Russia and Roma-nia, meanwhile, were offering A3 scrap at between US$ 445 and US$ 450 per tonne on cfr basis in the early days of the same month.

Quick out of the blocksAn upturn in deep-sea booking num-bers developed as mid-March approached; these priced shredded scrap from the USA at just below US$ 450 per tonne cfr while shipments from Europe were understood to be fetching less than US$ 440 per tonne cfr for HMS I/II 80/20. More latterly, cargoes from the USA have attracted around US$ 440 per tonne for HMS I/II 80/20 and typically US$ 5 more for shredded.According to Commerce Department statistics, US exporters were certainly

quick out of the blocks in 2012, record-ing a 16% increase in overseas sales in January when compared with the same month last year - despite China slashing its order by around 36% to 134 000 tonnes. Leading buyer Turkey took approaching 370 000 tonnes of the 1.4 million tonnes of US ferrous scrap sold over-seas in the first month, outstripping its January 2011 purchases by almost 150 000 tonnes (also see box). But South Korea registered an even more impressive increase in more than tre-bling its order for US ferrous scrap from just over 80 000 tonnes in January 2011 to around 245 000 tonnes in the corresponding month of this year. The second-biggest buyer of US scrap in January - Taiwan - upped its require-ments to around 260 000 tonnes from 252 000 tonnes in the opening month of last year.

‘Indifferent’ to exportsRichard Teets, President and COO of steel operations at Steel Dynamics Inc. as well as Vice President of the US Steel Manufacturers Association, has told the US House of Representatives’ steel caucus that many of the country’s policy-makers ‘are seemingly indiffer-

64 al s s o s 64 02-04-12 16:1

65April 2012

Ferrous

ent to unprecedented growing pur-chases of US ferrous scrap by foreign steel producers’. These are ‘hollowing out’ domestic scrap supply at a time when other countries’ scrap export restrictions ‘distort markets and dis-courage the development of needed recycling networks’, he argued. Governments that provide subsidised investment and control the movement of raw materials through trade barriers directly violate World Trade Organiza-tion agreements, he continued. Mr Teets identified the ‘troubling example’ of the Russian Customs regulation adopted in February which permits the export of scrap in the country’s Far Eastern Federal District only through the far northern port of Magadan. ‘This regulation prohibits scrap exports through the ports of Vladivostok and Nakhodka, even though those ports handle nearly 90% of Russia’s scrap exports in the Far East,’ he said.According to a report in Platts Steel Business Briefing, meanwhile, several Algerian ferrous and non-ferrous scrap merchants are bidding to develop a new metal recycling association. One of its key aims, it is suggested, will be to fight the scrap export ban imple-mented just over three years ago which

has led to a substantial differential between domestic and international steel scrap values. Annual ferrous and non-ferrous scrap production in Algeria has been estimated at 600 000 tonnes while unsold scrap stocks are thought to total around 1 million tonnes.

Container backlogIn South East Asia, deep-sea bookings of ferrous scrap were a relative scar-city in early March. Small volumes of US and European material were booked by Malaysia and Vietnam at prices similar to those commanded in early February. Prices into the region gained around US$ 5 per tonne as March progressed, such that HMS I/II 80/20 from the USA and Europe was yielding anywhere between US$ 445 and US$ 455 per tonne cfr. The increas-es were said to reflect a need among many mills to replenish stock levels.Meanwhile, over recent weeks, a sig-nificant backlog of containers carrying imported ferrous scrap has reportedly built up at four ports in Indonesia - namely Jakarta, Medan, Semarang and Surabaya - after more than 100 con-tainers arriving in January reportedly tested positive for hazardous waste contamination. More exhaustive check-

ing of containers by customs officials has led to clearance delays.Elsewhere, Tokyo Steel Manufacturing in Japan increased its scrap buying prices by some US$ 6 per tonne with effect from March 22 deliveries. And several Chinese mills using electric arc furnaces reported during March that the high cost of scrap had forced them to cut consumption, as well as steel production. It is believed that, at that point, supplies from the USA were commanding some US$ 460 per tonne cfr China, or the equivalent of US$ 30 more than domestic material. However, there was subsequently some evidence of domestic mills being prepared to accept an increase in scrap prices.

Margin weaknessIn other news, leading US steel pro-ducer Nucor expects results for the first quarter of 2012 to be ‘at the low end of our expectations’ owing to ‘a flattening in the favourable pricing and margin trends for all steel mill products that began mid-quarter and unexpected margin weakness in our raw materials business’. It adds that a ‘seasonally atypical’ reduction in raw material costs, for both scrap and iron ore, contributed to buyer uncertainty and negatively impacted steel mill consumer buying patterns. However, Nucor goes on to insist that steel demand ‘continues to improve in most end markets’, with the strongest among them being manufactured goods - including heavy equipment, energy and automotive.Also recently, Steel Dynamics said that, for the first quarter, ‘sequential quarterly financial improvements are expected in both the company’s steel and metals recycling operations’. How-ever, this performance has been ‘tem-pered by unexpected margin compres-sion that began to occur mid-quarter’, adding that flat-roll steel markets moderated more quickly than the price of raw materials such as scrap metal. ‘Reduced steel customer buying activ-ity seemed linked to an anticipation of lower scrap pricing, despite the con-

tinued strength in demand associated with energy, construction equipment, agricultural and automotive sectors,’ it noted.

Competing commoditiesAfter a slight improvement in iron ore values in the dying days of February, prices of 63.5% Fe content Indian fines were becalmed in the first half of March at just below US$ 150 per tonne cfr China. Around the middle of the month, the price range edged into US$ 150 territory on the back of slight-ly higher demand but, overall, the past few weeks have been characterised by almost complete price inertia.According to CLSA’s Commodities Strategist Ian Roper, iron ore prices will be supported by relatively slow supply growth this year and are likely to aver-age US$ 135 per tonne. However, he foresees demand slipping behind sup-ply from the second half of 2013, prompting a long-term CLSA price fore-cast of US$ 70 per tonne after 2016.The China Iron & Steel Association (CISA) is somewhat more bearish about medium-term price prospects. Speaking at Metal Bulletin’s recent China Iron Ore conference in Beijing, the organisation’s Vice Chairman Wang Xiaoqi suggested slower demand and increasing supply would keep the aver-age price in the range of US$ 110 to US$ 130 per tonne for this year. But he also warned: ‘If China’s steel market continues to contract, spot iron ore prices could fall below US$ 110 cfr.’Between now and next year, around 380 million tonnes of additional iron ore supply will become available to the market - in many instances with a pro-duction cost of below US$ 80 per tonne. Therefore, he told delegates, iron ore ‘has a lot of room to fall’.

SteelWorld crude steel production followed up a fall in January with a year-on-year increase of almost 2% in the following month to 119.183 million tonnes. Thus, after two months of 2012, the global production total was 0.6% higher than

64 al s s o s 65 02-04-12 16:1

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Naamloos-6 1 03-04-12 16:2

67April 2012

Ferrous

for the corresponding period of 2011 at 241.409 million tonnes, according to latest stats from the World Steel Association (WSA). The drop in Asian production during the fi rst month of the year was more than rectified in February with a 2.3% increase to 77.42 million tonnes, giving a two-month total some 0.9% higher than in 2011 at 156.557 million tonnes. The January-February total for China showed an increase of 2.2% to 112.616 million tonnes while South Korean pro-duction advanced 4.6% year on year to 11.223 million tonnes. India and Japan, however, recorded output declines of 0.7% and 7.3%, respectively.In February itself, Chinese production climbed an estimated 3.3% to 55.883 million tonnes when compared to the same month last year, while South Korean output surged 7.6% to 5.449 million tonnes. In contrast, production in India edged an estimated 0.6% lower to 5.7 million tonnes while the decline in Japan was a more pro-nounced 3.7% to 8.608 million tonnes.

Positive resultsWhile EU-27 production fell 3.8% in February and 4.6% across the fi rst two months of this year, production in most of the other major steelmaking countries and regions of the world returned more positive results. Focusing fi rst on Febru-ary, US production was 8.5% higher than in the same month last year at 7.26

million tonnes while Russia’s total nudged up 0.4% to an estimated 5.575 million tonnes. Turkey failed to match its 3 million tonnes-plus production perfor-mance of January but still recorded a year-on-year output gain in February of 12.3% to 2.762 million tonnes. Helped by a 3.4% production hike in Brazil, the South American total as a whole rose 1.8% to 3.828 million tonnes.Combining WSA fi gures for January and February, the following crude steel production totals were registered: USA 14.967 million tonnes (+7.8% year on year); Russia 11.523 million tonnes (+0.4%); Turkey 5.897 million tonnes (+13.4%); Brazil 5.589 million tonnes (+2.5%); South America 7.656 million tonnes (+2%); Africa/Middle East 3.151 million tonnes (-1%); and Ocea-nia 1.006 million tonnes (-26.3%).The world crude steel capacity utilisa-tion rate for the 59 countries reporting to the WSA was 79.7% in February this year - an increase of 3.1 percentage points over January 2012 but a decline of 2.8 percentage points when com-pared to the same month last year.Platts Steel Business Briefing’s latest annual listing of the world’s largest steel-producing companies has a familiar look, with Chinese enterprises occupying the four places immediately below the world’s top steelmaker in volume terms, namely ArcelorMittal. Indeed, the list for 2011 indicates that nine of the world’s 20 largest steel producers were Chinese.

Records continue to fall in Turkey

While Turkey was importing an all-time record 21 million-plus tonnes of ferrous scrap last year, it was simultaneously consuming substantially more domestic material, according to a report from the Turkish Iron & Steel Producers Association. The country’s mills received 9.33 million tonnes from local sources last year compared to 6.06 million tonnes in the previous year to yield a total consumption fi gure of 30.79 million tonnes. However, the Turkish Statistical Institute (TUIK) has reported that, when compared to December last year, the country’s scrap imports fell almost 30% in January to around 1.5 million tonnes, which was equivalent to a decline of 12% when set against the total for the fi rst month of 2011. The USA was the leading supplier with 275 376 tonnes, followed by Russia on 233 363 tonnes. TUIK has also revealed that the country’s imports of pig iron more than doubled last year - from 557 398 tonnes in 2010 to 1.138 million tonnes, with the Ukraine and Russia establishing themselves as easily the largest suppliers with totals of, respectively, 497 659 tonnes and 494 511 tonnes.

Promising early signsMeanwhile, it has been suggested to Metal Bulletin that Turkey’s crude steel production could rise by upwards of 15% to as much as 39 million tonnes this year from 34.1 million tonnes in 2011 - a total which itself was 17% higher than the 29.1 million tonnes of 2010. The early signs in 2012 were promising: World Steel Association statistics for January reveal that Turkey produced a record 3.135 million tonnes of crude steel during the month for a 14.4% increase over the 2.741 million tonnes of January 2011.With new projects and expansion plans in the pipeline, Turkish crude steel production could amount to around 55 million tonnes per annum as early as 2015, it has also been indicated.

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69April 2012

Ferrous

Ferrous Scrap Prices Reference date: April 2, 2012

A M J J A S O N D J F M A A M J J A S O N D J F M A


HMS 1 heavy steel scrap (1/4 Inch) composite price delivered at mills

USA Domestic Scrap Prices (US$/GRT)

HMS 80/20 heavy steel scrap

Fob Rotterdam Export Prices (US$/t)

400

450

500

550

350

350

400

450

500

300

HMS 1, heavy steel scrap (1/4 Inch)

USA Export Prices (US$/GRT)

400

450

500

550

350

S2 / E2, steel scrap (3 mm) Delivered at mills

Average German Scrap Prices (e/t)

300

350

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450

250

359

351350

344

370

384

335

335

317

342 345

324

345

470

448 449

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460470

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395405

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465

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460

455

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440455

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420415

425410 405

425410

430

425415 415

465

– Fob East Coast price– Fob West Coast price

– Highest price– Lowest price

Additional challengesComing up to date, low prices and a weak sales performance propelled a dozen of China’s major steelmakers to financial losses in January, according to CISA. And China’s crude steel pro-duction could edge only slightly higher this year to 700 million tonnes as a result of new steel supply from South Korea and ‘slack’ demand from the EU, the recent Umetal conference in Chongqing was told by CISA Vice Chairman Zhang Changfu. He under-lined the additional challenges faced in a steel product export market which, for China, grew around 15% last year

to approaching 49 million tonnes.In contrast, US raw steel production recently exceeded levels last seen at the outset of the global economic crisis. The nation’s output totalled 1.959 mil-lion net tons in the week ending March 10 this year for a capacity utilisation rate of 79.3% - the highest weekly level since the end of September 2008. In the following week, however, pro-duction fell 2.3% from this high to 1.913 million net tons - but was still 4.3% higher than in the corresponding week in 2011 as capacity utilisation came in at 77.4%. This meant a year-to-date capability utilisation rate of

77.7% in 2012, up from 74.5% in the same period in 2011.In Latin America, meanwhile, latest figures show that apparent steel con-sumption climbed 2.2% to approxi-mately 59 million tonnes last year and is expected to top 60 million tonnes in 2012 before surging to 66.6 million tonnes in 2013, according to steel association Alacero.

OutlookWith so many major preoccupations circling at present, many of them com-pletely beyond the control of the scrap and steel industries, the market has

rarely been so difficult to call. Two par-ticular concerns appear to be: the on-going impact of the sovereign debt crisis in Europe; and the fact that currency exchange rates are becoming an increasingly decisive factor in determin-ing whether business is workable or not. At least in part because Turkey has bought quite strongly in recent weeks such that many of the country’s steel-makers have satisfied their near-term requirements, many believe that April could see a handful more dollars trimmed from average scrap values and perhaps continuing downward pres-sure in early May.

64 al s s o s 6 04-04-12 15:31

70 April 2012


Nickel & Stainless

16000

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60

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30

2009 2010 2011 2012

– LME stocks (x 1000 metric tonnes)– LME prices (in U.S. dollars/MT)

Nickel (global)

2000020000

Closed: April 2, 2012

Reality Call A depressed stainless steel market in China and weakening order books in Europe and across Asia can-not be compensated by the continuous strong business in the USA. The nickel market swings from defi cit in the Q1 to a surplus in Q2 and probably for the rest of the year 2012 which is expressed in falling prices. However 15.500 $/t is a powerful resistance line as most Chinese NPI producers would leave the market there.

©copyright SMR GmbH 2012www.smr.at

Closed: April 2 2012

Scrap mirrors downward nickel spiralStainless steel scrap prices have lost their upward momentum in recent weeks. Having advanced to US$ 2050-2090 per tonne at the time of our previous report, the 304 grade has dropped to US$ 1930-1970. Over the same period, 316 material has tumbled from US$ 2850-2890 per tonne to US$ 2660-2700. Prices for 430 and 409 chrome scrap remain unaltered at, respectively, US$ 570-600 and US$ 490-520 per tonne.

The high expectations and confi -dence that ruled the markets in

the first two months of 2012 have been lost to the stainless steel industry in the second half of March, leading to a decline in stainless steel scrap prices. At the time of writing, the 304 quality is being quoted at US$ 1930-1970 per tonne while 316 material has plum-meted to US$ 2660-2700. Chrome scrap prices have been far more stable, with the 430 quality continuing to command US$ 570-600 per tonne while 409 material is still attracting US$ 490-520 (the US dollar/Euro exchange rate was 1.332 at the time of writing).

20% value lossAfter having fl own at high altitude, nickel came down to earth with a bump, losing more than 20% of its value in nosediving from US$ 22 000 per tonne to reach US$ 17 850 by early April. There are several reasons for this: • According to research conducted

by the International Nickel Study Group (INSG), a market surplus of more than 100 000 tonnes is expected this year;

• The INSG research also points to new mining capacity in Brazil (Santa Rita with 20 000 tonnes per year), Finland (Talvivaara with 30 000 tonnes) and Papua New Guinea (Goro with 60 000 tonnes);

• A number of large nickel projects are in early start-up mode, such as

Barro Alto (30 000 tonnes per annum) and Onca Puma (55 000 tonnes) in Brazil, while others are scheduled to start up shortly, such as at Ambatovy in Madagascar and Koniambo in New Caledonia (both 60 000 tonnes per annum).

• Nickel stocks in LME licensed ware-houses have climbed to almost 100 000 tonnes;

• There was a decline in demand from stainless steel service centres after the re-stocking phase came to an end, and stainless steel produc-tion dropped correspondingly.

NPI impactAlso important are nickel pig iron (NPI) developments in China. It is diffi cult to pinpoint exactly how much capacity is available today, but some have esti-mated this to be between 400 000 and 500 000 tonnes per annum - and more

is still being built. A nickel price below US$ 18 000 per tonne may hit these new capacities, however.For the time being, no shortage of nickel is expected unless production is disrupted by, for example, strikes, tech-nical problems or natural forces.After surprisingly strong stainless steel requirements in the EU-27 at the begin-ning of this year, demand has slowed in the last four weeks. Consequently, scrap prices responded to the decline in the nickel quotation and to the lack of demand from the steel mills. Mean-while, it has been calculated by Heinz H. Pariser Alloy Metals & Steel Market Research of Germany that EU-27 crude stainless steel production edged 0.7% higher last year to 7.5 million tonnes.

Ferro-chromeFerro-chrome benchmark talks are on-going in Europe at the time of writing.

There were no signifi cant changes in ferro-chrome or chrome ore prices during the latter weeks of March. While some high-chrome-content charge chrome was offered at over US$ 1.15 per lb, there were few buyers owing to the stag-nation in incoming orders for stainless steel producers. European consumers are closely monitoring the situation in South Africa where state-owned energy pro-vider Eskom has announced energy price increases of 16% from April 1. South Africa is the main supplier of charge/HC ferro-chrome with an EU-27 market share of nearly 65%. South Africa’s ferro-chrome production fell 7.8% last year to 3.354 million tonnes, according Heinz H. Pariser. At the same time, exports of chrome ore to China picked up signifi -cantly, enabling the Asian giant to boost its own ferro-chrome production and to become a major competitor for South Africa on markets globally.

By Gerhard Teborg et al

0 al s s a l ss 0 02-04-12 15:24

Nickel & Stainless

g i v i n g e a r t h i t s s e c o n d n a t u r es s e c o n d n a t u r eggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggg iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii nnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnn ggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggg eeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr ttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttt hhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii ttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttt ssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssg i v i n g e a r t h i t s s e c o n d n a t u r e

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EuropeDuring March and early April, the nickel market turned in a weaker per-formance when compared to the other base metals. The fall was induced in part by the uncertainty surrounding prospects for the stainless steel indus-try which accounts for some 70% of global nickel use. Speculative hedge

funds appear largely to have with-drawn from the nickel market for now. Nickel cathode prices in Germany recently stood at US$ 19 437 per tonne. Nickel scrap prices improved slightly as many buyers used the rela-tively low values as an opportunity to build up their stocks. Also in Germany, V2A (304) scrap was recently yielding

Minor metals

Chinese tungsten export prices have declined as a result of reduced buying interest in the West. Indeed, European buyers are looking for much lower prices. Nevertheless, the price for ferro-tungsten has been very stable and stood recently at US$ 52-52.50 per kg W. With most ferro-vanadium producers well sold under contracts, spot buyers are paying higher prices for nearby material, raising the level to US$ 25.20-25.60 per kg V. Ferro-titanium prices fell to US$ 7.70-7.80 per kg Ti (maximum 4.5% Al). LME cobalt fluctu-ated between US$ 30 000 and US$ 30 500 per tonne - equivalent to some US$ 2000 lower than four weeks earlier. Volumes of molybdenum traded on the LME are negligible and its price has hovered in a range from US$ 30 000 to US$ 31 000 per tonne.

US$ 1950 per tonne while V4A (316) scrap was trading at US$ 2737. In the Netherlands, INOX 18/8 scrap has been fetching US$ 2115 per tonne of late and INOX 316 nearer US$ 2776.

China and elsewhere in AsiaAccording to China’s Customs Office, its refined nickel and alloys imports fell almost 16% to 24 940 tonnes in the first two months of this year. The decline is attributed to a ‘flat’ domestic demand for stainless steel which continued throughout March. In terms of raw material purchasing, most mills have adopted largely a wait-and-see policy.The nickel price has dropped on the Shanghai Yangtze spot market from Yuan 140 000 per tonne to nearer Yuan 133 000. Neverthelss, most traders still appear reluctant to enter the market. Based on feedback from China’s National Bureau of Statistics, the country’s production of nickel and its alloys climbed more than 36% to

43 231 tonnes in the first two months of 2012. But a decline is anticipated given the lifeless demand in the stain-less steel market.

North AmericaIn the USA, domestic stainless steel scrap sales made a bright start to 2012 on the back of consumers’ decent order books but buying activity has faded in recent weeks, partly because of uncer-tainty over nickel values. The fall in nickel has prompted a number of the large US stainless steel producers to lower their surcharges for April.When compared to the same month in 2010, US consumption of stainless steel leapt 26.6% to 191 682 short tons in December last year, according to figures from the Specialty Steel Industry of North America. Using the same comparison, US stainless imports fell 16% to 54 190 short tons.Compared with the same month in 2011, US nickel scrap exports climbed 4.8% to 2594 tons in January this year.

0 al s s a l ss 1 02-04-12 15:24

72 April 2012


Non-Ferrous

Chinese demand termed ‘lifeless’

In Europe, the metals markets have been moving mainly sideways as experts describe volumes of scrap as sufficient to meet demand (see Eurometrec statement in this article’s accompanying box). Meanwhile, lacklustre demand is reported in China for a number of non-ferrous metals. As per March 29, LME cash prices were at the following per-tonne levels: aluminium US$ 2137.50; copper US$ 8480; lead US$ 1986.50; zinc US$ 2006.50; and tin US$ 22 400.


AluminiumIn Europe, the aluminium processing industry is said to be largely optimistic about the future, forecasting that it will need more metal than in previous years and that supply will rise throughout 2012. Meanwhile, scrap prices have been relatively stable in recent weeks, with aluminium wire scrap (Achse) being quoted recently at US$ 2181 per tonne while aluminium turnings (Autor) have been yielding around US$ 1375. In the UK, prices of commercial pure cuttings were standing of late at between US$ 1414 and US$ 1520 per tonne, mixed alloy/old rolled cuttings

occupied the US$ 1150-1229 range, and commercial turnings were fetching US$ 1018-1123. In North America, aluminium orders increased in February and are expected to maintain their forward momentum in the coming months. Entering the final stretch in March, secondary aluminium prices were relatively static in the USA at, typically, 74-77 cents per lb for old sheet and cast, a similar range for sid-ing, and 79-81 cents for MLC. Despite falling 2.7% to 184 613 tons in December last year, US exports of alu-minium scrap ended 2011 some 11.7% higher than in the previous year at

approaching 2.204 million tons. Latest Commerce Department stats also reveal that US overseas shipments of aluminium beverage cans soared more than 52% last year to 46 654 tons. And a more recent update confirms that US alumini-um scrap exports jumped 11% year on year to 162 176 tons in January 2012. Chinese imports of primary aluminium soared 137% to 122 607 tonnes in January-February 2012 when compared with the same period last year, while the country’s own output jumped 14% to 301 300 tonnes. March figures are expected to show a continuation of this upward trend in both totals given that this is traditionally China’s high con-sumption season for the light metal. In recent weeks, the aluminium price on the Shanghai Yangtze spot market has hovered around Yuan 16 000 per tonne (US$ 2539) as ‘lifeless’ downstream consumption convinced smelters to adopt a conservative buying approach.

CopperAlthough prices have remained fairly stable, a far greater sense of optimism has pervaded the copper market in recent weeks, according to experts in Europe. Indeed, many market watchers are antic-ipating that prices will gain considerable

ground during the course of 2012 as demand for the red metal is likely to lead to a shortage of supply. Once again, some analysts believe copper prices could exceed US$ 10 000 per tonne at some point this year. As for scrap values, bright wire scrap (Kabul) has been stable in Germany of late at around US$ 8158 per tonne and copper granules 1a (Kasus) have been fetching around US$ 8277, while non-alloyed bright wire scrap (Kader) prices have mounted a slight improvement to US$ 7920.Copper scrap exports from the USA jumped around 20% from 1.129 million tons in 2010 to 1.355 million tons last year, according to figures from the Com-merce Department. And compared to January 2011, US copper and brass scrap exports leapt more than 16% in the first month of this year to 106 691 tons. Fig-ures from China’s Customs Office sug-gest the country’s total imports of refined copper in the first two months of 2012 soared 76% on a year-on-year basis to 711 311 tonnes. Also, Chinese purchas-es of copper scrap approached 400 000 tonnes in February for an increase of 3.5% from the same month a year ago. The total purchased from overseas in the first two months of this year also edged 3.5% higher to 630 000 tonnes.

2 al s s No - o s 2 03-04-12 13:34

Non-FerrousNon-Ferrous

73April 2012

Owing to rising exchange stocks and relatively lacklustre domestic demand, volumes purchased from other countries are expected to drop in the coming months. A strengthening US economy is also expected in some quarters to lead to a reduced fl ow of copper scrap into China. Copper prices on the Shanghai Yangtze spot market have been around the Yuan 60 000 per tonne mark (US$ 9523) during March. Most traders have been reluctant to sell at this price level while many downstream users have proved to be unwilling to pay this much given their current order situation. China’s refi ned copper output in the fi rst two months of this year was around 870 000 tonnes - equivalent to a jump of 6.9% year on year, notes the country’s Bureau of Statistics. According to the lat-est statistical review released by the International Copper Study Group (ICSG), the global refi ned copper market showed a production surplus of 41 000 tonnes in December last year ‘despite record-high Chinese apparent usage’; this was because consumption was weak in the other major consuming regions due to the year-end holiday period. For the whole of 2011, however, there was a production defi cit of 358 000 tonnes compared to a shortfall of 377 000 tonnes in the previous year. World usage of refi ned copper climbed around 3% or 610 000 tonnes last year to some 20 mil-lion tonnes, principally owing to increas-es in apparent usage in China and Russia of, respectively, 7% and 60%. ‘Growth in the United States and the European Union weakened as the year progressed,’ the ICSG adds. Overall, usage grew by 0.1% in the USA and declined by 1.3% in the EU, while Japanese usage fell 5%. On a regional basis, usage increased in Africa by 1%, in Asia by 3.5% and in Europe as a whole by 5.5%. There were decreases of 1% in the Americas and of 7% in Oceania. World refi ned copper production increased by 3% last year: primary production gained 2.3% where-as secondary production from scrap jumped 8.2%. The refi ned production capacity utilisation rate of 79.7% was essentially the same as that in 2010. On

a regional basis, refined production increased in Africa (+11%), Asia (+6%), Europe (+4.5%) and Oceania (+12.5%) but dipped in the Americas (-3.5%).

Lead Global refi ned lead supply outstripped demand by 9000 tonnes in January as a 5.6% increase in output to 892 000 tonnes more than compensated for a 5.5% upturn in consumption to 883 000 tonnes. Chinese demand made a gain of 12.3% when compared to the same month last year whereas usage in Europe dropped 7.1%. US consumption was broadly unchanged, according to preliminary fi gures from the Interna-tional Lead & Zinc Study Group. China’s refi ned lead imports slumped more than 36% when comparing January-February 2012 with the corresponding period last year. However, domestic demand for lead is expected to improve with the onset of the high consumption season. On the Shanghai Yangtze spot market, lead fl uctuated around Yuan 16 000 per tonne (US$ 2540) throughout March - a month in which transacted volumes were quite low. Lead smelters are being cautious in their outlook and have placed business only in line with existing order levels. China’s refi ned lead output increased 2.3% in the fi rst two months of this year to 579 000 tonnes. Mean-while, the country’s recycled lead output dipped around 1% last year to 1.35 mil-lion tonnes and accounted for some 29% of the country’s total lead output versus 32.2% in the previous year, it has been reported by the China Nonferrous Metals Industry Association. The decline is attributed to more stringent environ-mental checks carried out last year.The lead market in Europe is continuing to suffer from abundant supply and rather weak demand. The relatively mild winter weather conditions in many parts of Europe had the effect of reduc-ing demand for lead accumulators to levels signifi cantly below those wit-nessed in previous years. Spot prices for new soft lead in Germany have changed little over the course of the past few weeks and stood recently at

EU scrap experts report mill demand decline

With many consumers choosing to restrict their expenditure because of wider economic worries, the EU manufacturing sector’s order books have thinned and, as a result, the region’s scrap collectors and processors have witnessed ‘a signifi cant reduction’ in demand for their secondary raw materials from mills and foundries, according to a statement from the European Metal Trade and Recycling Federation (Eurometrec) following its recent General Assembly in Brussels. ‘Prices of scrap have weakened as a consequence, thus providing a disincentive in some instances to collect and process scrap because of the more unattractive margins,’ it adds.Eurometrec’s President Robert Voss is quoted as saying: ‘There is concern that demand for our materials from our European consumers may be weakening, which is likely to refl ect on the viability of those companies continuing to expand their operations and could have an adverse effect on investment in their infrastructures, which is so vital at this time.’He continues: ‘The relationship between the thousands of companies represented by Eurometrec and the European smelters has always been a close one and I hope that their demand will remain strong, encouraging our member companies to continue to increase the processing and recycling of our vital raw materials.’The meeting in Brussels, which attracted representatives from all of the major national trade associations from EU-27 member states, heard reports of a signifi cant decline in volumes of manufacturing scrap becoming avail-able in the EU as a result of production cutbacks triggered by reduced demand for fi nished products. ‘In contrast,’ says the statement, ‘there has been no evidence of a shortage of obsolete scrap owing to, at least in part, the strenuous and on-going efforts of the recycling industry to grow its collection rates.’Eurometrec’s members are national federations from EU member states representing the interests of commercial fi rms that are primarily involved in the collection, sorting, trade, processing and recycling of non-ferrous metal scrap.

2 al s s No - o s 3 03-04-12 13:34

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75April 2012

Non-Ferrous

Contributing to the Non-Ferrous Metals Market Analysis:• Ralf Schmitz, German

non-ferrous trade association VDM, Europe

• Lili Shi, journalist and consultant, China





Aluminium Copper

Lead Zinc



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3500

Non-Ferrous Scrap Prices Reference date: April 2, 2012

US$ 2287 per tonne, whereas soft lead scrap (Paket) values climbed some US$ 50 to trade at around US$ 1720.

ZincProvisional data from the International Lead & Zinc Study Group indicate that world refined zinc supply jumped 23 000 tonnes ahead of demand in the first month of 2012. ‘Higher production in China and India were the main driv-ers behind an overall increase in world output of refined zinc metal of 6.1% (to 1.13 million tonnes),’ says the organisa-tion. The 9.8% increase in global refined zinc usage to 1.107 million

tonnes owed much to demand hikes of 20.2% in China and 12.5% in the USA. The usage increase in Europe was a more conservative 3%. When compared to January-February 2011, the volume of refined zinc flowing into China in the first two months of this year leapt more than 73% to 85 717 tonnes. However, weak demand on China’s domestic market has since curbed the appetite for imports. Meanwhile, the country’s refined zinc production dipped 1.9% in the first two months of 2012 to 772 000 tonnes when compared with the same period last year. Throughout March, there were few

major movements in the zinc price on the Shanghai Yangtze spot market as it hovered around Yuan 15 500 per tonne (US$ 2460). Most traders are not opti-mistic about the future direction of the market: in effect, the market is being squeezed by the twin fundamentals of a surplus of supply and weak demand.But during the final week of March, Europe witnessed a noticeable improve-ment in demand for zinc and, as a result, buyers used the opportunity to replenish their stocks at price levels which are still considered relatively low. However, this upturn in market interest has applied principally to primary metal;

by comparison, the scrap business has been rather slow and prices have been somewhat more stable. In Germany, for example, the price of old zinc scrap (Zebra) has been hovering around US$ 1388 per tonne. US zinc scrap exports tumbled almost 19% to 4551 tons in January this year.

2 al s s No - o s 5 03-04-12 13:34

76 April 2012


PaperClosed: April 3 2012

Containers become contentiousWith Asian customers in the market for fibre, a lack of container space has been a particularly contentious issue in recent weeks for European exporters to this region - and also for their US counterparts. If the situation persists and material that would otherwise have been exported remains in Europe, a price reaction may be seen in the coming weeks, experts believe.

EuropeFairly good demand In general, demand for recovered fibre has shown some improvement over the last month, although production is not huge and paper mills have continued to complain of a lack of profitability. Incoming volumes of the lower grades of recovered paper are still not very high, according to feedback from mer-chant processors. There is not much availability of either OCC or mixed papers, and stocks continue to be low in Europe. Most European mills have held prices steady in March - although some spot lots sold at higher levels. Demand is fairly good in general, but particularly so for export.

However, exporters to the Far East have been hit by a lack of container options, with reports suggesting that very limited shipping space was given over to recyclables this month. As a result, old orders have remained unshipped and new ones cannot be made for the same reason, they say. There are fears that the situation will be even worse in April, leading to expectations of stock growth and a price reaction in Europe.Freight rates into Asia have been charting an upward course of late, partly because some of the shipping lines have taken vessels out of service. But even though lines have been

demanding higher rates, they have continued to be frugal with the con-tainer space they are prepared to offer. Demand for deinking material has been decent in both Europe and Asia, and prices have been stable in March. India has made a return to the market at reasonable prices, but here too ship-ping has been a problem because of the dearth of containers available. The same applies to the middle grades, with India joining other Asian countries in providing competition for European customers. Prices in Europe have sta-bilised or edged slightly higher against a backdrop of relatively low incoming volumes. As for the higher grades of

recovered paper, there is not much material available at a time of

gently improving demand, prompting a slight upward

move in prices. With rising virgin pulp values,

these grades are expected to maintain their positive price

momentum in the coming weeks.

North AmericaGeneration remains low

Within the past month, export buying prices for OCC started to decline. In

early April, export pricing has stabi-lised and, as usual, China is the major influence on what happens in the mar-ket. Overall, it is believed the market might “limp” through April, perhaps suffering somewhat from declining markets in various European countries.There are problems at various ports in obtaining enough containers, and at times space on vessels is limited. Ship-pers need to have more than one book-ing at a time so they can continue to make daily shipments to the port by bouncing around from one booking to another, it is argued. Domestic prices are holding and mills are continuing with their attempts to increase inventories even though gen-eration remains very low.Woodfree deinking grades are moving steadily at stable prices in both the domestic and export markets.Meanwhile, Census Bureau figures suggest overseas demand for US recov-ered paper jumped 14% in value terms last year to around US$ 3.8 billion.

AsiaSwitch of buying focusThe big issue in the months of March and April can be summed up in just two words: container availability. Through the early part of this year, availability of containers for shipments out of Europe

6 al s s a l s 6 04-04-12 11:16

Paper

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Contributing to the Recovered Paper Market Analysis:• Melvin de Groot (Van Gelder

Recycling, the Netherlands)• Mariëlle Gommans

(Bel Fibres, Belgium)• Steve Vento (Vipa Lausanne

SA, Switzerland)• George Chen

(G&T Trading Intl., USA)


has been declining from week to week; and for April, it is claimed to be ‘impos-sible’ to arrange containers for certain destinations such as Indonesia. Some other destinations, such as main port China, are a little easier; but in circum-stances where containers are available, prices have been rising to sky-high levels. According to reports, increases are varying from US$ 300 to US$ 700 per container, leading to major prob-lems for mills in Asia, many of which are unable to afford these hikes and so have switched their buying focus from Europe to more local markets, the USA and the Middle East.Expectations are that container avail-ability will improve in May, but for the time being it seems unlikely that much material will be shipped from Europe to the Far East or to India/Pakistan.The impact of this year’s early Chinese New Year celebrations appears to be refl ected in recovered paper import fi gures for January. According to cus-toms statistics, volumes sourced from overseas by China totalled just 1.774 million tonnes in the first month of 2012 for a year-on-year decline of around 25%.

Solid 2011 for UK exports

In 2011, the UK maintained its position as Europe’s largest exporter of recovered fi bre, while at the same time bucking the generally downward trend in the continent’s paper and board production. Despite a diffi cult December in which overseas shipments fell 11.4% year on year, total UK exports of 4.444 million tonnes in 2011 as a whole represented an increase of 2.1% over the 2010 fi gure of 4.352 million tonnes. From the historic perspective, the 2011 tally has been exceeded only twice - by the 4.658 million tonnes of 2007 and the 4.847 million tonnes of 2008.UK exports of corrugated & kraft climbed 7.7% to 2.381 million tonnes while overseas deliveries of the high grades surged 32% to 182 106 tonnes. Newspapers & maga-zines registered an export decline of 3.3% to 998 420 tonnes while shipments of mixed papers dropped 9.2% last year to 882 138 tonnes. The Chinese laid claim to almost two-thirds of UK exports last year in ordering 2.843 million tonnes compared to 2.673 million tonnes in the previous year. Indonesia increased its imports of UK fi bre from 256 000 tonnes in 2010 to almost 362 000 tonnes, whereas India’s purchases declined from 280 000 tonnes to just short of 250 000 tonnes. Leading European customers were the Netherlands on 260 000 tonnes (247 000 tonnes in 2010), Germany on 223 000 tonnes (296 000 tonnes) and Sweden on 130 000 tonnes (168 000 tonnes).As a footnote, it has been confi rmed that China was the destination for approxi-mately 400 000 tonnes of the bumper 500 000 tonnes-plus of recovered fi bre exported by the UK in January this year.

Slight collection growthMeanwhile, domestic UK usage of recovered fi bre dipped 0.1% last year to 3.758 million tonnes, according to the Confederation of Paper Industries. Domestic collection volumes fell almost 9% in December but the total for 2011 of 8.036 million tonnes outstripped the 8.003 million tonnes of the previous year by 0.4%. As reported last month, there was a decline of around 2% last year in paper and board production across the 19 member countries of the Confederation of European Paper Industries. In contrast, UK output edged 1% higher to 4.341 million tonnes thanks to year-on-year increases of: 4.9% for sanitary & household; 2.7% for news-print; and 4.6% for the ‘all other paper and board’ category. Conversely, domestic production of printings & writings fell 0.2% while packaging papers/boards record-ed an output drop of 2.4%.

Positive year for German textile recyclers

The German textiles recycling market was largely stable in 2011 - a year in which col-lections fell by 0.8%, according to the sector’s domestic federation FTR. The organisation is estimating that collection volumes in 2012 will witness a further decline of around 1.4%. Sales of sorted used clothing to Eastern Europe and Africa were positive last year, it continues, while orders for shoes were also consistently good at high price levels. As a result of booming industrial activity, mean-while, orders for wiping cloths and recycling grades were suffi ciently healthy that, in some instances, demand exceeded supply to result in higher sales prices. Sales of bed feathers also improved in 2011 although the price levels of some years ago were not regained, according to FTR. A major problem for the used textiles industry remains the declining quality of collected clothing as a result of cheap imports from Asia consisting mainly of synthetic fi bre. But strong European demand for original material - which was regularly in short supply last year - created artifi cially high prices despite this decline in quality, it is argued. Illegally-placed containers are becom-ing increasingly prevalent in used clothing collection and represent another threat to the commercial prospects of established textiles recyclers, FTR goes on to say. In other devel-opments, FTR has lobbied the European Com-mission in Brussels to stop moves to grant end-of-waste status to used textiles on the grounds that at no point are these ‘waste‘. The commission has informed the organisa-tion that it has made no plans to issue a regulation on end-of-life textiles. www.bvse.de

6 al s s a l s 04-04-12 12:26

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I N T H E L A B O R A T O R Y . . .

bin also containing diffuser sheet mate-rial. As this is entirely plastics-based, it is seen as likely to present the recycling industry with a promising asset.

Real urgency The offers of collaboration coming from multiple mercury-handling specialists and key stakeholders in the recycling sector are proof, Dr O’Donoghue thinks, that there is a clear gap in the market for this new type of technology, as a result of which ‘there is also a very real urgency for such technology to be made available as soon as possible’. Taking into account the fact that UK organisation Working Together For A World Without Waste has dismissed tra-ditional shredding of LCDs as ‘expensive, potentially unsafe and slow’, automation is seen as a potentially more viable approach that is well worth pursuing.

Liquid crystal displays are much in demand in today’s world, resulting

in an estimated Euro 80 million in Euro-pean sales in 2010 alone. Knowing much was to be gained from advancing the safe and effi cient removal of hazardous materials contained in LCD screens, Ire-land’s Environmental Protection Agency (EPA) gave a grant of Euro 350 000 to Dr Lisa O’Donoghue and her team from the University of Limerick to undertake ground-breaking research in this area.Shortly after going live in January 2009, a unique process for recycling LCDs was devised. The team came up with a fully-automated prototype to demonstrate the commercial potential of the research. The University of Limerick research team also formed an on-campus spin-off company called ALR Innovations to take the tech-nology to the market. Dr O’Donoghue describes the ALR Inno-vations development as ‘a fully-auto-mated process which safely removes the hazardous mercury-containing cold cathode fl uorescent tubes (CCFLs) and the liquid crystal panel from LCD screens

tal-bearing components with a surface area greater than 100 square centimetres must be removed from the LCD products. ‘However, this is still mostly done manu-ally and this, in essence, is creating a restrictive bottle-neck,’ reasons Dr O’Donoghue. The manual method is ‘fi nancially restrictive’, she adds.

Free of contaminationThere are three distinct and separate waste streams produced by ALR Innova-tions’ LCD equipment, the fi rst being the LCD shell with the CCFLs and LC panel removed. ‘A clean waste stream,’ insists Dr O’Donoghue. ‘Free of contamination so it can either be sold on to recyclers or be immediately directed to an in-house shred, tumble or disassembly process, making it a very cost-effective and effi -cient route to quickly release the valu-able content of the LCDs.’The other two waste streams comprise the isolated hazardous fl uorescent tubes and the liquid crystal panel, the fi rst of which are stored in a dedicated waste bin, with the liquid crystal panel waste

that have an internal array backlighting structure’. With a process throughput of 80 LCDs per hour as opposed to a mere three products processed by a factory worker, and handling an average mass of 14 kg at a time, the machine is described as ‘extremely effi cient.’

Hidden valueDr O’Donoghue stresses the importance of improving current approaches in this field, stating: ‘Materials contained within LCD screens hold significant fi nancial value. In addition, many recy-cling organisations actively promote the need for an opportunity to better recy-cle screens.’ As it stands, this value is clouded because the complex nature of these particular components makes it hard to retrieve them successfully. Although industry was aware of the need to increase innovation around LCD tech-nology, further urgency was added by a new directive from Brussels. The Waste Electrical and Electronic Equipment (WEEE) Directive stipulates: any mercury-containing components and liquid crys-

Advancing the automated recycling of LCDsBeginning its efforts in 2008, a research team supervised by Dr Lisa O’Donoghue of the University of Limerick in the Republic of Ireland submitted a research proposal to the country’s Environmental Protection Agency in the hope of boosting much-needed innovation in automated LCD recycling technology.

By Kirstin Linnenkoper

RESEARCH

TEAM

FUNDING

LCD recycling

University of Limerick

FUNDINGUniversity of LimerickUniversity of LimerickUniversity of LimerickUniversity of LimerickUniversity of Limerick

Ireland’s Environmental

Protection Agency

Every month, Recycling International highlights a promising recycling-related research project with a global technical, economic or social impact. If you know of an interesting project which meets these criteria, contact our editorial team at [email protected]

For more information:Dr Lisa O’Donoghue, University of Limerick, Ireland: [email protected]

Dr Lisa O’Donoghue urges that manual handling of mercury- or liquid crystal containing components is ‘fi nancially restrictive’.

la o a o 03-04-12 10:11

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JMC Recycling Systems 34Komptech 18KW-Generatoren 36Lefort 78Levand 15Lindner Recyclingtech 48Macpresse 34Mayfran 66Metalradar 54Metso Recycling 84MEWA Recycling Anlagen 26Moros (Industrias Hidráulicas) 8Pallmann 30Protec 44

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In the May issue

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In

• Recycling in Italy• Review: ISRI Convention in Las Vegas• E-scrap: the views of Robin Wiener and Jim Puckett• Sensor-based sorting technologies• Round-up of the IFAT exhibition in Munich• China: government and the recycling business

Extra circulation!

Additional copies of the May 2012 issue of Recycling International will be on display at:

BIR Spring Convention29 May-1 JuneRome (Italy)www.bir.org

Copper Recycling Conference13-15 JuneBrussels (Belgium)www.metalbulletinevents.com/Events

CARS - Complete Auto Recycling Show14-16 JuneSkelmersdale (UK)www.atfprofessional.co.uk

Ship Recycling Conference19-20 JuneLondon (UK)www.informaglobalevents.com/FKT2365RIWL And, of course, our regulars:

Viewpoint • News • Product News • In-depth Market Analyses covering ferrous and non-ferrous metals, nickel & stainless, paper and textiles • In the laboratory

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