Starting a car recycling business
Discussion
Posting on behalf of a friend who is toying with the idea of setting up a car recycling business (breakers yard?) in one of the more remote parts of Asia. Apparently they don’t really exist as yet as cars haven’t been common for that many years, so the main source of vehicles would be crashed rather than old and broken. He understands the dismantling and resale of spare parts side, but has no idea of what to do with the final remains of the (presumably crushed) vehicles.
Anyone out there in the business able to offer any advice please? Where do the crushed cubes get sent off to for melting down and reuse? China? Japan? Somewhere else?
I know the price of scrap varies from year to year but any thoughts on whether this is a viable business? Plenty of crashed cars around, land and staff are cheap, but he has no idea on the value of a crushed car.
Sorry if this is posted in the wrong forum, and I hope this question isn’t “how long is a piece of string”..... any thoughts from those in the business very welcome. Many thanks.
Anyone out there in the business able to offer any advice please? Where do the crushed cubes get sent off to for melting down and reuse? China? Japan? Somewhere else?
I know the price of scrap varies from year to year but any thoughts on whether this is a viable business? Plenty of crashed cars around, land and staff are cheap, but he has no idea on the value of a crushed car.
Sorry if this is posted in the wrong forum, and I hope this question isn’t “how long is a piece of string”..... any thoughts from those in the business very welcome. Many thanks.
Asia's a big place. The more advanced parts will have stringent ELV (End of Life Vehicles) regulations that make ours look whimsical. They're very heavily regulated and enforced but with the upside of existing supply and customer chains for the materials separated and reasonably good and stable values. And thus also, a somewhat crowded market.
Other areas will have no regulation with material markets less viable and those that are, controlled robustly by mafia type operations, corrupt authorities and the like - best avoided.
Geographically remote operations will also suffer from the added transport costs of getting the separated materials to the customer as well as the irregularity of supply. Most operators tend to be the traditional scrap merchant - accept anything and everything. Very dirty, hazardous and unregulated.
If your friend is not beholden to a specific country, I would suggest he looks at Indonesia. There's some early developments being made there on waste sector reforms. If you want to connect me to him, I'd be happy to provide a few pointers.
Other areas will have no regulation with material markets less viable and those that are, controlled robustly by mafia type operations, corrupt authorities and the like - best avoided.
Geographically remote operations will also suffer from the added transport costs of getting the separated materials to the customer as well as the irregularity of supply. Most operators tend to be the traditional scrap merchant - accept anything and everything. Very dirty, hazardous and unregulated.
If your friend is not beholden to a specific country, I would suggest he looks at Indonesia. There's some early developments being made there on waste sector reforms. If you want to connect me to him, I'd be happy to provide a few pointers.
Thank you so much, he is looking at either southern thailand or Central Java in indo. The regulatory part of it is certainly something he will need to look into, and a connection to yourself would be very welcome, thank you for the offer.
I have travelled extensively in both areas and it just seems to be the crashed cars are dumped at the local police stations, there is one near where I live that has over 20 of them lined up behind it - some have been there for years. Looks like the mafia types haven’t been involved to date, but if they see a foreign run business making money, I am sure they will jump in pretty quickly
I will suggest he looks into the regulations urgently before making any further plans, really appreciate that.
I have travelled extensively in both areas and it just seems to be the crashed cars are dumped at the local police stations, there is one near where I live that has over 20 of them lined up behind it - some have been there for years. Looks like the mafia types haven’t been involved to date, but if they see a foreign run business making money, I am sure they will jump in pretty quickly
I will suggest he looks into the regulations urgently before making any further plans, really appreciate that.
the shells will be sold as scrap of whatever that days price is for the metal they are made of i.e steel or alloy etc
the prices can fluctuate hourly.
He would likely sell them via a waste broker, so a best point of call is to google waste broker <whatever country he is in> or find a European based one with a global reach
My clients that do this literally build up stocks of each metal (can be shells or anything else) and monitor the prices and sell at an opportune price.
the big job is that once you have stripped the useable parts, is separating them into types of metals, plastics, oils etc ready to sell......there is as much money to be made in this as the rest of the car parts
the prices can fluctuate hourly.
He would likely sell them via a waste broker, so a best point of call is to google waste broker <whatever country he is in> or find a European based one with a global reach
My clients that do this literally build up stocks of each metal (can be shells or anything else) and monitor the prices and sell at an opportune price.
the big job is that once you have stripped the useable parts, is separating them into types of metals, plastics, oils etc ready to sell......there is as much money to be made in this as the rest of the car parts
livinginasia said:
I will suggest he looks into the regulations urgently before making any further plans, really appreciate that.
From your reply, it sounds like he's a Brit not a local. If so, he'll need to look into the regulations surrounding a foreigner setting up a local enterprise. Most places forbid outright foreign ownership so he'll need to partner with a local who'll retain at least 51% ownership.It would be worth him first making contact with his local Department of International Trade rep'. They're very good and can sometimes access some support funding to get you started.
One angle worth looking at is to partner with an NGO. There are many out there and getting something going that would create livelihoods and opportunity would be looked upon favourably by local governments and the various grant-givers. It sounds a bit 'Guardian / Sandals and Lentils' but it can be a very good way to establish a credible business in some of these parts.
Across the poorer parts of south east asia, there a not many scrapyards because anything with wheels in recycled extensively and will stay on the road, regardless of condition. The crashed cars at the police station are off limits. The idea of a scrapyard is great, there is a huge market for the parts, but I doubt you would be able to source them in the same market your friend wants to supply.
cashmax said:
Across the poorer parts of south east asia, there a not many scrapyards because anything with wheels in recycled extensively and will stay on the road, regardless of condition. The crashed cars at the police station are off limits. The idea of a scrapyard is great, there is a huge market for the parts, but I doubt you would be able to source them in the same market your friend wants to supply.
Yes. Good point!OP: You mention Indonesia. As I alluded to earlier, the country is undergoing the early stages of waste sector reform from the ground up. There's a DiT trade mission being planned for September (which I will be part of) that's focused upon UK waste management expertise. This is a good opportunity to leverage a bit of influence on shaping policy there to support commercial endeavours.
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