Scrap metal export picks up
Since the recession in 2010, exporting of Samoa’s scrap metal and earnings from the exports have slowly picked up again.
According to Samoa Roofing & Supplies Owner and Manager, Silafau Ioane Sio, they didn’t halt the exporting of scrap metal during the recession, but they only decreased the number of containers they exported.
“For example, we used to export like five to six tons of container per month with 120 tons of scrap metal, average of 20 tons per container. When we had the recession, we dropped down to like one container a month with an average of 20 tons per container.
“Now the market price is starting to pick up again a little bit, which we managed to start our exports again,” Silafau said.
He explained their markets – Australia, New Zealand, Singapore, and Taiwan – determine the price and the variety of scrap metals they export.
“It’s a very tough business because basically it all depends on your overseas markets, so that’s why I am saying it’s very tough. Overseas markets dictate the price.
“We haven’t been to China and other parts of Asia, but those are the main markets that are closer to us, especially Australia and New Zealand.
“We’ve tested all the markets around. It seems that Australia and New Zealand are the most effective for us in terms of costing, freights and things like that. Even though there are also markets around in Singapore and all those Asian countries, it all depends on the cost.
“What we’ve learned is that we’d rather go to Australia and New Zealand.”
Silafau explained the costs in their overseas markets vary.
“It all depends on the market price. For instance two years ago, the price dramatically dropped, pass even the breakeven point. This happened back in 2008 or 2010 when we had the recession. The recession had a huge impact on the business in terms of exports.
Silafau admitted they have yet to reach the peak of their exports since their inception in 2006 before the recession.
“We still export scrap metal, but instead of exporting 120 tons, we are now exporting only 40 tons or 20 tons when it comes to bad times. But now we are increasing our exports again to gradually 60 tons a month with an average of 20 tons per container. It’s now between 60 and 80 tons per month – four containers.”
He explained: “Scrap metal it has two parts. One is called the ferrous metal and the other one is called non-ferrous metal. Ferrous metal is more like the steel, which is a low value material, whereas the non-ferrous metal, you have materials like copper, which has a bit higher value. So it depends on what you put in the container. Sometimes what we put in the container varies.
“If we put in the container 60 tons of ferrous of materials, it’s not a big return because the ferrous is like 220 a ton that’s gross and you net it off, minus the expenses and stuff, so maybe you end up like $90 tala per ton, net a month. It ranges from $90 tala to $200 tala per month. So it’s up to you, you have to be smart to put in a mixture so you can get something.
“The good thing about Australia and New Zealand is that they accept anything and a mixture of things we export to them in the container, whereas in Asia, if they want only one material like 20 tons of copper, then I tell you what in Samoa it takes you the whole year to get 20 tons of copper or even like aluminum cans, if they want us to ship 20 tons of aluminum cans, it takes you months to fill that 20 tons. It’s because they’re very big markets.
“We export every month to Australia. We requested to Australia to export a variety of scrap metals and they have been very good to us, but basically if you think of it from the other end, it’s a bit of expensive for them, compared to us where it is cheaper here. But that’s how you look for some markets and some people who can help clear our waste.”
Silafau explained the main reason for their existence is not so much to make profit, but to help Samoa, in particular the Tafaigata landfill, clear recyclable scrap materials for exports.
He also noted that they also provide for families in Samoa through employment and trading of scrap materials for money.
“People sell us their materials as well. Whatever they bring in, we pay them. What we pay them depends on the price of each material. For example, for aluminum cans, we pay 90 sene a kilo. If they have 10 kilos we pay them $10 tala. For copper, the price is very high but for steel it’s very low.
“For steel, we only pay 10 sene per kilo, so it ranges from 5 senefor steel to $5 tala per kilo, which is copper.
“We also bring in the cars as well and it’s also part of assisting the environment because normally, it’s very difficult for us to process that. So we use an excavator to dismantle all the cars and get steel.
“Sometimes we go out to get materials from the people. We also sell materials to people. Most of the time we don’t, we may just charge a fee to cover the cost of bringing it in. It’s because what may be useless to one person, maybe useful to another. If someone comes in looking for a door of a car, we give them a door for the car.”
Silafau explained: “It’s very expensive to dismantle the cars because we use the excavator. Expenses wise, dismantling a car, depending on the size, for a small taxi it will cost you $80-$100 tala to dismantle it alone.