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An active construction sector is among the drivers of a healthy scrap recycling market in the Middle East region.

Brian Taylor January 18, 2013

Construction slowdowns, austerity measures and “fiscal cliffs” can happen anywhere in the world, with the Middle East and North Africa (MENA) region certainly not immune to boom-and-bust cycles.

Throughout much of the past decade, however, a commodities boom that has kept oil prices buoyant has helped fuel a construction boom in the Gulf Cooperation Council (GCC) region in particular. (GCC nations include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates [UAE], with Jordan and Morocco invited to join and Yemen negotiating to do so.)

Conflict during that same time also has been a part of the story in the MENA region. Conflicts including the war in Iraq, uprisings in Tunisia, Libya, Egypt and Syria,and ongoing exchanges of rockets and shells in Israel and the Palestinian territories have caused harmful disruptions to the economy, followed by rebuilding projects.

Construction has thus fueled a demand for metals in the region and also has produced a steady supply of scrap metal, meaning scrap flows in the Middle East have remained relatively steady after the economic crisis of 2008 compared with Europe or North America.

Adding to the Middle East’s relatively healthy recycling profile is a growing interest by governments and nongovernmental organisations (NGOs) in the region to put a post-consumer recycling infrastructure in place to collect and process paper, plastics and obsolete electronics.


Productive Decade

At the 2012 CMRA (China Nonferrous Metals Industry Association Recycling Metal Branch) Recycling Metal International Forum, freelance journalist Adam Minter was asked to update delegates on recycling industry conditions in South America and the Middle East.

One Week, a lot to Learn

In the first full week of March 2013 two consecutive recycling industry events will cast a spotlight on the Middle East.

The second edition of the Paper & Plastics Recycling Middle East Conference will be 3-5 March in Dubai, United Arab Emirates, at the Hyatt Regency Dubai.

The 2012 version of the event drew more than 200 delegates to Dubai to hear updates on the region’s recycling industry and to interact with exhibitors and fellow attendees. More information on the event can be found at http://middleeast.
paperrecyclingconference.com
.

Also at the Hyatt Regency Dubai 5-7 March, shortly following the conclusion of the Paper & Plastics Recycling Conference, the Middle East Metals Recycling Conference will debut.

This new event will offer presentations on the copper, aluminium and ferrous scrap industries, with particular attention being paid to scrap generation and scrap consumers in the Middle East and North Africa (MENA) region.

Those seeking more information or wishing to register for the Middle East Metals Recycling Conference can go to www.metalsrecyclingme.com.

For the forum, held at the China World Hotel in Beijing in early November, the CMRA identified the regions as beginning to export additional nonferrous scrap. Minter remarked that the construction sectors are active in both regions, resulting in the intense use of ferrous and nonferrous metals, some of which leaves the regions as exported scrap. Both regions have benefited from the global commodities boom cycle attached to the rapid growth of Asian economies.

In the case of the GCC nations, the demand for and high price of oil has helped prime the economic growth engines in several of these countries.

Gross domestic product (GDP) figures collected by the United Nations show the GCC nations had a combined GDP of $375.5 billion in 2000, at the start of the commodities boom. This figure came in at 36.26% per capita GDP for GCC residents compared with the United States. Ten years later, the GCC states had a combined GDP of nearly $1.1 trillion, coming in at a 56.6% per capita figure compared with the United States.

Governments and businesses have poured much of this increased money supply into the construction of apartment and condominium towers, office towers, retail centers, hotels, tourist attractions and an upgraded industrial and warehouse sector.

Since 2004, BNC Industry Networks, based in the UAE, has been cataloguing major construction projects in the MENA region, with a focus on the GCC states.

On its website, www.bncnetwork.net, the group says as of mid-December 2012 it is “currently tracking 57,140 construction projects worth $2.74 trillion. We [have] updated information on 754 projects and added 66 new projects in the Middle East to our project intelligence database in the previous seven days.”

This frenzied activity consumes steel from Turkish steel mills and aluminium and copper produced within and outside of the GCC states. The same construction activity yields scrap that, likewise, may stay within the GCC trading area but is just as likely to head to Turkey (in the case of steel scrap) or to India or China in the case of nonferrous scrap.

The factors influencing the MENA region’s scrap metals sector will be primary topics of discussion at the inaugural Middle East Metals Recycling Conference (www.metalsrecyclingme.com), to be held 5-7 March, 2013, in Dubai. (See the sidebar “One Week, A Lot to Learn,” at right.)


Beyond Metal

The well-established use of scrap metal in furnaces and smelters has helped ensure that scrap recycling activity is lucrative and that recycling rates are high in the MENA region.

In the paper recycling sector, a lack of forest resources serves as a stimulus to recovered fibre collection, along with increased regional paper and board production tied to the GCC region’s economic growth.

At the 2012 Paper & Plastics Recycling Conference Middle East, Atul Kaul of Saudi Arabia-based Waraq Arab Paper Manufacturing Co., noted that the Middle East region is growing as a consumer of recovered fibre, with mill companies in his company’s home nation of Saudi Arabia now adding capacity that will cause it to consume 1.1 to 1.2 million tonnes of recovered fibre each year.

Meddle East Memos

Recyclers and traders who are seeking a steady stream of information from the Middle East and North Africa (MENA) region have one source available in the form of Waste & Recycling Middle East magazine.

The bi-monthly English-language magazine, published by Dubai-based Media Fusion FZE, says its mission is to “cover all issues related to waste management, collection, hauling and disposal, recycling, composting, processing, incinerating and waste-to-energy” in the region.

The publication and its staff served as co-sponsors and co-organisers, along with the Recycling Today Media Group, of the 2012 Paper & Plastics Recycling Conference Middle East.

In 2013, the two organisations will work together to produce a 2013 version of that same event as well as the new Middle East Metals Recycling Conference.

Those seeking more information about Waste & Recycling Middle East can visit www.waste-recyclingme.ae.

Another representative from a GCC region paper manufacturer, Mubrak Al Khater of Saudi Paper Group, brought that company’s message of commitment to recovered fibre to the conference.

As stated on its website, “Saudi Paper Manufacturing Co. is committed to continuously increasing its reliance on waste paper as a major factor of production in its manufacturing operations. It has clearly demonstrated this through its investments in paper deinking technology and waste paper collection centers that are dispersed throughout the Arab world.”

In addition to these regional end markets, paper manufacturers in China, Europe and other parts of the world have opened up trading offices or set up contacts in Dubai and elsewhere in the Middle East to bid for collected fibre for export from the region.

A plastics focused session at the conference offered insights from three major players in the Middle East plastics recycling industry and provided an overview of this growing sector.

Ranjish Sinha of Bansal Petrochem International LLC referred to recycling as “the industry of tomorrow” and predicted that the collection rate for plastic scrap items such as PET bottles “will continue to grow.” At the same session, Tarek Al Mousa of Kuwait-based Metal & Recycling Co. (MRC) said his company has tripled the volume of plastic scrap handled in 2011 versus 2009.

Bolstering the recycling industry in the United Arab Emirates and some other MENA nations is the adoption of resource recovery and sustainability goals by government agencies or non-governmental organisations (NGOs) with considerable influence.

In Dubai, the Emirates Environmental Group (EEG) describes itself as “a professional working group devoted to protecting the environment through the means of education, action programs and community involvement.”

Shiraz Hamirani, chairman of Dubai-based paper recycler Paper Chase International, credits the EEG with having been a helpful ally as his family business has grown in the UAE. (See “The Chase is On,” p. 22.)

In Sharjah, another one of the seven UAE emirates, investors have put significant resources into the recycling infrastructure of Bee´ah. On its website, www.beeah.ae, Bee´ah describes itself as working “in partnership with the Sharjah City municipality to establish ongoing programmes and procedures that will ensure Sharjah remains a shining example of an emirate that not only truly cares about its environment, but acts upon its concern, both locally and regionally.”

Fleets of trucks that used to haul materials to a sizable landfill in Sharjah now more commonly bring clean or mixed loads to several processing facilities set up nearby.

A material recovery facility (MRF) sorts and bales recovered fibre, plastic bottles and metal cans. Several hundred feet away, a concrete crushing plant crushes construction and demolition rubble into usable secondary aggregate grades, and down the road from that another facility shreds and processes scrap tires.

“We believe that the key to economic recovery is optimizing the usage of our country’s resources, and Bee´ah has already started with the concern of waste by investing over 300 million dirhams (€62.4 million) to date in tools and infrastructure to overcome the UAE’s challenges.”

Bee´ah also says it is preparing for a 100% landfill diversion target set for the wmirate of Sharjah by the end of the first quarter of 2015.

The combination of a world hungry for secondary commodities and governments willing to invest in landfill diversion may help the Middle East remain a recycling hot spot for several years to come.


The author is editorial director of Recycling Today Global Edition and can be reached at btaylor@gie.net.

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