Electronics Recycling The Buzz


For large electronics companies, an overabundance of outdated products is cause for concern. For some of these companies, electronic recycling is -- and will continue to be -- an essential part of company protocol.

The website of electronics recycling firm Hobi International explains that the problem is not just shrinking landfills -- it's also the heavy metals in electronics, such as lead and mercury, which present a hazardous threat to the environment.

"We are a society of out with the old, in with the new, which creates a huge potential for recycling," states Robert Fox, president of California-based Fox Electronics.

Not only can electronic recycling help dispose of these materials -- with very little going to a landfill -- but often, companies can receive a percentage of revenue obtained from the reselling of their useful components on the market. In fact, most electronics recyclers will sell up to 30 percent of these "trashed" items for use in the construction of new products.

Rosy Future for Recycling

Another factor that bodes well for this segment of the recycling industry is that many electronics companies are producing more and more high-tech solutions for their customers.

"When taking into account the growth of related industries, particularly in the computer industry, the expansion of the sheer number of units being sold, as well as the related value of the inner components of the computer, one can assure an excellent return on investment," says J.A. Stuart, president of RBC Ltd., a recycling firm.

Craig Boswell, the Texas manager for Hobi International, predicts a positive future for companies like his own. "Two factors contribute to growth," he explains.

"The first is rapid obsolescence of information technology products. The second is an increasing awareness of electronic recycling as the proper means of disposing outdated equipment."

Not everyone is as positive about the future of the industry. Kelly Taylor of Hy-Tech Sal, a small recycling company, has run into numerous cases of bureaucratic red tape.

"The most abundant items that I run across are made of plastics, such as monitors and terminals, that are largely unrecyclable -- 60 to 70 percent of their weight is from plastics," Taylor says, adding that many companies will not take the plastic back to recycle into new products.

Room for More

"There are hundreds of companies advertising themselves as recycling companies," says Boswell. "Yet they are processing under a million pounds of material a year. There are only a few dozen companies processing over a million pounds a year, yet these are the only full-service companies."

Taylor would like to see more people join the industry, but on the client side. "I break down equipment and separate materials. It's been a tough road dealing with plastic manufacturers who won't take their plastics back. I'd really like to see people start businesses that design new products using recyclables only."

Value in the Garbage

How do these companies make money? The breakdown of precious metals, such as platinum, palladium, gold and silver, offers one revenue stream. Another way that many companies pull a profit is by reselling complete systems and other useful items, such as integrated circuits recovered from printed circuit boards.

Offering a variety of services to clients is what makes a company profitable, adds Fox. "Fox Electronics is not just a recycling company. We provide a broad range of services for manufacturers worldwide, including providing logistics for trade-in, take-back and certified destruction programs. We provide database management for manufacturers in relation to these programs."

Integrity Comes First

"My company provides services to the high-tech industry, where they trust us with proprietary information, products and designs. This material can never make it back into the mainstream of society or irreparable harm could be caused to the provider of this information," explains Fox.

Boswell adds, "There are many opportunities to take advantage of a client's trust, but there are few that will survive in the long term doing this."

To operate a successful business, Fox insists that you don't need a lot of money, just a good track record. He says that clients are seeking recyclers that they can trust to destroy proprietary design information (like company secrets). "I was actually profitable as a one-person operation out of my garage back in 1984," he says.

While Fox may have started his business with little more than $800, he admits that his company now owns more than $2 million worth of capital equipment -- and just spent another $400,000 on upgrades and new services.

"Even if you have that kind of start-up capital and set up the perfect model of a recycling facility, how do you get accounts to knock on your door?" Fox asks. "We get referral accounts now because of our reputation and length of time in the industry."

A Business With Impact

Besides being responsible for the destruction of proprietary information, the electronics recycler has a moral obligation to find creative alternatives to landfills when it comes to discarding non-saleable items.

In the past 20 years, landfills have received scrap electronics equipment in excess of hundreds of millions of tons, according to DMC Electronics' website.

"Most of the upper-tier companies can quote recycling rates in excess of 93 percent," states Boswell.

Fox's company also aims for limited landfill usage. "We process approximately 900 tons of material a month and less than three percent of that goes to landfill. This usually consists of packaging material that is not recyclable."

However, to become an upper-tier company, Stuart advises prospective owners to grow into a business. "Quality of work, fairness in pricing for returned products, and excellent communication skills will allow a company to start small and grow to a level that meets their long-term goals."

For those who take the time to truly learn the business, there is definitely treasure in the trash -- not only in profits, but also in the knowledge that recycling helps turn back the clock on our aging environment.

Links

Hobi International
Learn about responsible e-waste disposal

Entrepreneur Seeks Order in Fragmented Field
How one man started an electronics recycling company