LONDON A new
wave of investment, focused on the Middle East and Asia, is
being seen in the global scrap sector, one scrap player in the
Middle East said.
Until the economic
crisis took hold in 2007-08, investments in the global scrap
industry had been rife, Salman Shaban, commercial manager of
Dubai-based metals recycler Lucky Group, told AMM
sister publication Metal Bulletin.
ventured into (scrap) as a side business as it was easy money,"
However, since then a
lot of investors have moved away from the scrap industry. This,
he said, was largely the result of difficulties in obtaining
credit or loans since the crisis.
companies, processing yards and secondary aluminum plants have
been shut down since 2009, but things are starting to improve,
"It seems that things
are changing now, and a new crowd of investors and start-ups
are taking shape in the scrap metal industry again," he
"This time, we are
seeing more genuine long-term investments, such as
primary/secondary production plants, state-of-the-art
processing facilities and waste treatment centers," according
These investments are
mainly taking place in Southeast Asia, East Asia and the Middle
"This region thrives
from the oil and gas economy, a construction boom and large
populations," Shaban said.
The Arab Spring of
2011 is another factor that drove investment in the scrap
industries in countries not affected by these protests, he
Collections of scrap
in Tunisia, Libya, Egypt and Syria were seriously hindered by
the protests, Shaban said, adding that this drove investment
away from the affected countries and toward other countries in
"Some of the negative
factors have been short term, and this has given a boost to
certain Middle Eastern countries," Shaban said.
beneficiaries from the Arab Spring were countries like Saudi
Arabia, and the (United Arab Emirates), which apparently
received big boosts in investment from the wealthy who chose to
relocate their wealth away from disputed countries," he said.
"It seems that some of the wealth ended up in joint ventures,
investments and start-ups in the scrap metal industry."
A version of this
article was first published in AMM sister publication Metal