Interestingly, the recycling of scrap metals prevent air, water and soil pollution, saves energy and raw materials and reduces greenhouse gas emissions while also conserving space in landfill sites.
Worn out metal scraps products are either discarded or recycled for use in other products or projects. Because metal is a resource that can be recycled over and over without any loss in quality, recycled materials are just as useful to manufacturers and builders as freshly mined and forged metals. Thanks to this element’s unique trait, collecting scrap metal for profit is a common and sometimes profitable endeavor.
Recycling is one of the businesses of the future that one must invest in now if the resources are available. As the green awareness trend and eco-consciousness increase, the demand for recycled products or items will also increase.
This opens an avenue for smart entrepreneurs to capitalise upon to make a living and amass wealth. Now, for those who are yet to understand the concept of recycling and potential it holds, here are a few tips to guide a potential investor.
Benefits of scrap metal recycling
Scrap metal recycling is a very lucrative business and there is a huge market for its end products. Running a scrap metal recycling plant is cheaper and uses less energy, especially when compared to the manufacturing or extraction of metals from their ore or raw state. The scrap metal recycling business is a trending business with more potential in the future because as people become more eco-conscious and the government implements policies targeted at environmental protection, the business will grow spontaneously.
As a metal recycling entrepreneur, you are contributing your quota in the campaign for natural resources conservation. You will also reduce environmental degradation, pollution and greenhouse gas emissions as the production of metal from virgin ore releases far greater amount of greenhouse gas when compared with recycled metal.
Investment and lending in the metal Scrap recycling company contributes largely to global economy with respect to the Gross Domestic Product (GDP) and also create job opportunities for many, both directly and indirectly.
Investment and Lending in the Metal Scrap Recycling Company: What to expect
If you are in for investment into a new Metal Scrap recycling industry, it should be born in mind that the business is capital intensive. It takes effort, time and resources to set up and run a recycling plant. If you believe you are up for the challenges involved, you then need to decide whether to open a general metal recycling facility or a recycling Centre that focuses on just one or a few targeted metals.
If you are going to focus on a single metal, which would it be? Gold, aluminum, copper, among others? Of course, opening a metal recycling Centre requires significant investment in land and equipment, so you must be up for it.
Scrap metal recycling is a bit time consuming. This is because it takes time to gather the scrap metals, transport them to the recycling plant and finally have them recycled. It is also a capital intensive business as you will need to purchase some heavy duty machinery. It is not a business you can run alone, so you will need to employ helping hands.
Funding the Metal Scrap Recycling Company
Starting up and funding a metal scrap recycling are capital intensive and you may not have the capacity to self-finance it, so you have to figure out a way to raise money for the project. For scrap metal recycling, the minimum take-off capital is around NUS$1 million while Return on Investment (ROI) is about 60 per cent. Are you going to raise capital from angel investors, venture capitalists, government agencies or NGOs? Or would you rather take a bank loan? The choice is yours.
Contribution of Metal Scrap Recycling to the steel sector
Iron ore is one of the most important minerals today. By weight, iron and steel accounted for 88.6 per cent of metal supply and by value, they accounted for 27.7 per cent.
The calculated statistics and estimated annual per capita consumption of a global steel is increasing astronomically ranging from 500kg in 1968 to 750kg in 2012. Unfortunately, this increase in the demand for steel products has not been met by domestic production despite the abundant iron ore, coal and limestone reserves in the globe.
Attention has now been focused on the use of metal/steel scrap for the production of reinforced bars by the 20 rolling and mini steel mills. A recent study revealed that 83–86 per cent of scrap metals recovered.
Metal Scrap Recycling: Environmental Benefits
Metal Scrap recycling may not currently be as profitable as it once was, there are still plenty of upsides to collecting scrap metal for recycling. One of the main benefits of recycling is that it helps keep unused items from landfills and lessens the need to mine and process new metals, which preserves resources.
Recycling metals like aluminum, for instance, requires 95% less energy than it does to produce it from raw materials. It also reduces the metal industry’s carbon footprint.3 In 2013, the Environmental Protection Agency estimated that recycling prevented around 186 million metric tons of carbon-dioxide-equivalent gasses from being released into the atmosphere. That was the equivalent of keeping 39 million vehicles parked for a year.
Structure of the industry
The structure of the scrap metal industry can be compared to a pyramid. At the bottom are lots of small itinerant dealers who collect scrap door to door from householders and small businesses. These dealers used to be referred to as totters or rag and bone men. Traditionally they did not have a yard but collected scrap until they had filled their vehicle, at which point they sold it on to a larger scrap metal dealer. Although plenty of small and part-time dealers still operate like this, now there are fewer of these itinerant collectors and many dealers have a yard where they are able to roughly sort the different metals and perhaps stockpile them until they have collected a reasonable quantity to sell on to another larger merchant.
Are you looking out funds to start up a Metal Scrap Recycling business, Havelet Finance Limited will assist you to get 100% investments, lending and finance you need. Contact us today.