GMP mining cash from electronic rubbish

The global financial crisis has failed to chill the sales of GISE-MBA New Plastics Technology Co (GMP), a three-and half-year-old plastics recycling firm in Guangzhou.

The firm, a 55:45 joint venture between Richmond, California-based MBA Polymers Inc and Guangzhou Iron & Steel Enterprises Group Co, GMP recycles plastics from electronic goods such as computers, fax machines, mobile phones, refrigerators and microwave ovens.

It then turns out plastic products including polypropylene, high impact polystyrene and acrylonitrile butadiene styrene, which can be used to form the plastic components of electronic goods.

The $15 million project in Guangzhou, Guangdong province, doubled its sales in 2007 and boosted them by 60 percent last year.

With a capacity to process 40,000 tons of mixed scrap plastics every year it started to make a profit last year, but expects earnings to be flat this year as a result of plunging commodities prices, general manager Eric Wang told China Business Weekly.

"The global economic downturn has had an impact on us, but we have been able to manage it. However to be successful, we will need to make significant investments in our technology and capacity.

"We are being increasingly recognized in this sector," he added.

Wang attributed the firm's performance to its stable quality and large processing capacity.

MBA Polymers claims to be the largest firm of its kind in the world, thanks to its proprietary technology which recognizes and separates plastics mechanically by type to allow for mass production. Plastics from durable goods are harder to recycle than those from bottles, for example, due to the complex mix of plastics in durable goods.

The economic downturn has triggered a consolidation in this industry in China and GMP is increasingly moving to the higher end of the market, Wang said.

Looking ahead, Wang sees robust demand in China as a major consumer of plastics.

The area within a 100 km radius of GMP's plant, dubbed the manufacturing workshop of the world, requires more than 5 million tons of plastics every year, including about 1.5 million tons from recycling, he said.

The Guangdong government expects the provincial economy to grow by 8.5 percent this year despite the slowdown.

"In the long term, environmental protection will not be a mere concept but something you must do as resources become scarce."

In March, the State Council, China's Cabinet, released rules for the management of e-waste in the country, which will become effective from Jan 1, 2011, as China has become a major manufacturing hub and market for electronics goods.

The government is encouraging technological research and development in e-waste recycling.

It will set up a special fund to subsidize the costs of dealing with e-waste, outlawing outdated treatment methods.

More than 200 million units of electronic and electric goods are disposed of in China every year, less than 20 percent of which are efficiently recycled or environmentally treated, according to a report from Xinhua News Agency on May 19, quoting Liu Qiang, vice-chairman of China National Resources Recycling Association.

GMP uses less than 10 percent of the energy needed in producing the same amount of virgin plastics, Wang said.

GMP sources most of the scrap plastics it uses from Europe, with the remaining coming from China, Japan and the United States.

The company is one of three plants of MBA Polymers, which also runs a venture in Austria and is currently building one in the United Kingdom.

MBA Polymers, a private firm founded in 1994, has attracted investment from companies such as American Industrial Partners, Flextronics, General Electric, SABIC and the International Finance Corp under the World Bank. Its local partner, Guangzhou Iron & Steel Enterprises Group Co, is one of the two firms designated in Guangzhou for recycling cars and has a unit for collecting waste for recycling.

(China Daily 06/08/2009 page6)