“Sustainability is no more a choice but a need and a requirement, not just in aluminium but in all areas of human activity” ~ Diwakar Gautam, CEO, Sunberg Limited

AL Circle

Sunberg Limited is a UK based metal recycling company, forming an integral link between scrap collectors, recyclers and processors. Sunberg caters to the increasing global demand for recyclable scrap Ferrous and Non Ferrous metals, such as aluminium, brass, copper, zinc, lead, steel and ingots. Diwakar Gautam is the CEO and managing director of Sunberg Limited. He is a post graduate engineer by training. Based in U.K. and has been focusing on metal recycling over the past twenty years. He is sharing his outlook about the aluminium recycling industry while sharing his company’s strategies and projections:

Q: Brief us on the company profile and business operations of Sunberg Limited. 

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A: Sunberg Limited based in London, UK started operations in metal recycling industry 20 years ago. Small to medium sized industries in South East Asia, mainly China and India, were well positioned to segregate various grades of recyclable metals that were largely originating from Europe, Russia and USA. Sunberg became a trusted partner of suppliers and buyers managing the supply chain right from procurement, logistics, finance to delivery. Efficiency, reliability and accuracy of contractual obligations became the hallmark of the company. The success of the company is attributed to a people-centered culture, co-creating value for stake holders and building trust between its suppliers and buyers who have always been treated as stake holders in the business.

Q: How does Sunberg plan to be at the forefront of global recycling efforts in 2019 and ahead?

A: Volatility has become a norm and managing it is the need of the hour. With fast changing economic priorities and policies, Sunberg is well positioned to bring transformational collaborations to forward thinking organizations. Sunberg of recent has developed a modular model where in it is contracted by suppliers and buyers because of the transparent transactions and a fixed service charge payable for all or any of the logistics, documentation, banking and finance activities and support that it provides. Democratization, distribution and access to information means that companies can no longer command a market share without continuously evolving as true value providers and reducing friction in the process. Rather than competing, the operational focus at Sunberg is an engagement which is not a process driven mechanical output but a symbiotic relationship of an evolving organism. Sunberg is therefore bringing value propositions in response to new challenges and opportunities addressing different needs of different markets.

Q: Which countries are the key markets for your business? Are you planning to venture into any new market in 2019?

A: Sunberg continues to be agile in response to rapidly evolving market dynamics. Supply of most recyclable metals continues from US/Europe to Asia. There are no “new” markets anymore only “new” market dynamics, which means that rather than spreading thin across many markets it is better to go deeper into conducive markets. This strategy has meant that as suppliers and buyers have grown so has the share of their business with Sunberg. Selected participation has built mutual trust and despite narrower margins the business continues to operate with a positive outlook.

 

Q: There has been a renewed awareness about recycling and sustainability in the aluminium sector. How do you see the industry moving in 2019 in the field of sustainability?

 

A: Sustainability is no more a choice but a need and a requirement, not just in aluminium but in all areas of human activity. Even amongst young children today there is a greater awareness about sustainability and recycling which becomes an important consideration in our actions on how we produce, consume and discard. There is global traction in recognizing that the “use and throw” culture or irresponsible consumer habits are coming with alarming consequences not just for the future generations but for many of us in our own lifetime. In my own life time I have seen economic modelling go from local to global to “glocal” to now once again local. What this means in sustainability is that countries and policy makers recognize that while global action is required, rather than wait for global action they opt for immediate “local” action. While the world debates how to address Climate change globally steps have been taken by countries like China and even recently by Scotland, where they introduced a deposit scheme for aluminium cans to promote healthy responsible consumer practices.

 

Q: How do you think the trade war between China and the U.S. will change the trade dynamics of aluminium scrap in 2019?

 

A: Commodities tend to respond instantly to any implications arising out of a change in trade policy. The most recent spate of trade war between China and USA has meant that grades of Aluminium scrap that were traditionally preferred imports for China from USA, have almost found overnight markets in other strong recycling hubs in places like India, Malaysia, Vietnam etc. Value in a recycling product is determined by price payable by an end user of that recyclable product as such if the price from an end user in a different market is less, there is an immediate proportionate price drop in the purchase price by a supplier of the scrap material from its local environment. The net effect to all the participants in the supply chain is accommodative according to the value that eventually a consumer can pay. There is disruption in the geographic routing of material and a temporary disruption phase in price parity for viable transactions to take place, but the markets are agile enough to accommodate these.

 

Q: It is said that the U.S. will see an oversupply of domestic aluminium scrap in 2019. What is your view on that?

 

A: Scrap supply is a byproduct of human activity and it is not generated or produced specifically to meet a demand of scrap. There cannot be an oversupply, only an adjustment in the value associated with the scrap. A case in example is price adjustments seen in old scrap cars in UK where when the steel prices were low one had to pay for a scrap car to be taken away and when the steel prices went up recyclers were paying for old cars to be brought to them because there was enough value for them to pay for old cars, process them and still make money by selling the scrap steel.

 

Q: Do you think a more organized approach towards recycling is needed for better resource utilization in aluminium sector?

 

A: Without a shadow of doubt policy makers and governments need to look at choices consumers make when consuming goods while also enforcing responsible production and resource utilization by producers. With deep pockets and massive scale primary producers of metals over the years have reaped significant profits to produce primary material at cheaper prices while recyclers have had to deal with multiple stages of logistic costs before a waste is available for suitable downstream use. There are well recognized benefits of recycling and as such producers should be incentivized when they exercise better resource optimization practices. The recent ban on plastic packaging in Mumbai, India and several other places taxing plastic bag use are clear stimulants on consumer behavior. In UK Waitrose is experimenting in several ways to reduce the negative impact in packaging of goods that they sell.

 

Q: What is your overall outlook for the recycled aluminium market in 2019?

 

A: Recycling is gaining greater global support as a responsible way of life and a responsible way of living. Aluminium recycling as an industry is dependent largely on the overall economic outlook, recycled aluminium markets are not insulated from the overall economy. With a positive economy and more disposable income people tend to discard or replace goods and spend more in either building homes or buying goods or cars etc., resulting in a better demand from manufacturing, both result in more scrap. With rising population, the concentration of consumers is no more restricted to a few economies or few cities but is spread across the geography. This inevitably means that eventually we are heading towards a truly circular economy where in I strongly feel that within a 200-mile radius consumption and responsible recycling will result in a truly circular closed loop engagement and value delivery, reducing the carbon footprint of logistics of material movement across countries or continents. The markets for ALL recyclable materials are very positive and on an endless trajectory, prices are the only thing that will go up or down. Recycling is not the end but the beginning!

 

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