Recycling company World Metal Recovery has seen an average annual growth rate of 45% since its founding in 2007, reports TAM YU LING
Life could have been easy for Darius Loke had he chosen to join his family business, but the founder and managing director of World Metal Recovery wanted to strike it out on his own for an ‘added sense of accomplishment’.
One of the 15 finalists in Emerging Enterprise 2011, World Metal Recovery is a company that engages in the recycling of metals.
Using industrial waste supplied by their clients, World Metal Recovery extracts the metals in industrial waste and converts them into products such as metal plates, beams, and coils. The products are then sold to clients from the shipping, manufacturing, and construction industries.
Since its formation in 2007, the company has seen an average annual growth rate of 45 per cent. Annual turnover for the company closed at $5 million last year. This year, World Metal Recovery’s turnover has more than doubled to $13 million. The exponential growth rates of the company is a dream come true for Mr Loke, given its modest origins.
After finishing his GCE ‘O’ Level examinations, Mr Loke took on part-time positions in various industries. During his stint in food delivery, he worked the morning shift which meant that afternoons were kept free. Rather than idle his afternoons away, Mr Loke decided then to take on a second shift as a rag-and-bone collector.
However, he faced intense competition from the elderly working in the same industry. They were more likely to collect the recycling materials as most households were more sympathetic to their plight.
Mr Loke then decided to change tactics by trading industrial materials bought from construction sites, as the heavyweight nature of such materials posed a higher barrier to entry for the elderly karang guni man who has to expend more energy to transport the materials.
Combining the profits generated from the sale of industrial materials with his personal savings, he officially founded World Metal Recovery at the young age of 23.
Although his family is also in the recycling business, they were primarily focused on the recycling of paper and plastic materials. Mr Loke chose the metal recycling industry as the heavyweight nature of the material ensures greater profitability as compared to plastics or paper.
‘If we have to collect a huge amount of materials for processing, we will require more land area and consequently pay more for rental. Also, having to process more materials means the need for additional manpower. Both will increase operating costs significantly.
‘On the other hand, the recycling of metals requires less volume to generate the same amount of profit due to its heavyweight nature. This then reduces overhead costs for us.’
Given Singapore’s small local market and multitude of recycling companies, Mr Loke notes that competition is intense within the industry. To overcome these challenges, he is looking to overseas expansion.
As of now, World Metal Recovery has engaged in joint venture projects with steel mills from Asia. By partnering with the local partners in Indonesia, Malaysia, China, Taiwan, Japan, and Korea, World Metal Recovery now has a bigger client base to tap into, says Mr Loke.
‘Our contracts with our joint venture partners overseas has also helped to ensure a steady flow of orders coming in. This has helped to tide us over difficult periods such as the global financial crisis in 2008. Despite the global economic downturn, I am proud to say that we were able to post a net positive profit during that period.’
Its clients also welcome the cost savings generated by using recycled materials produced by World Metal Recovery. ‘On average, our joint venture projects have helped our clients save 15 to 20 per cent on their new steel purchase,’ says Mr Loke.
Besides joint ventures, implementing a 24/7 shift work schedule has also helped the company increase its business efficiency, notes Mr Loke.
‘By implementing shift work, we are now able to operate 24/7. This helps to speed up operations and at the same time, we are also able to save in terms of rent … Had we not implemented shift work, we would have to double the size of our yard in order to maintain the same output.’
For the next few years, World Metal Recovery has plans to expand its product offerings by diversifying into the recycling of electronic waste. Given that many end-of-life electronics contain valuable elements such as gold, silver, and platinum, the company can stand to increase its profitability by recovering such materials, says Mr Loke.
He estimates a five-fold increase in profit from the per unit recovery of such precious metals when compared against the per unit recovery of common metals.
In line with the company’s diversification, overseas expansion into the Europe, US, and Middle East markets is also on the cards, says Mr Loke. The company also has plans to set up a refinery in Singapore to facilitate the recovery of precious metals from electronic waste.
