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Government Backed Electronics Recycling in China New Trend

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Published on : Jun 25, 2015

Based on government policy established in 2011, recycling of electronic waste has been intensifying in China, though there are many challenges for increasing this sector, according to China Business Report, from Shanghai.

106 electronic waste recycling units had received subsidies from the government fund during the end of 2014. These units have a total capacity of 133 million electronic items annually but have only recycled 70 million, according to the newspaper report.

Due to the air, soil, and water pollution that resulted from the use of heat or acid to extract precious metal used by the waste collectors there is an urgent requirement for an industrial remedy for waste recycling according to the newspaper. 

After 2012 Gem Co. a Shenzen based recycler witnessed a boom in business and accounted for gross profits of US$50 million in 2014 derived from electronics waste. But regardless of the expansion and government funds and subsidies the business average gross margin is approximately 10% only as quoted by industry insiders.

According the Gem Company’s chairman Xu Kaihua, the profit margins were not promising and it is difficult to maintain a competitive edge. Additionally the value added tax is 17% for buying the scrap. 

In the meantime the electronic waste recycling sector is witnessing many acquisitions and mergers and larger companies such as Dongjiang Environment and Sound Environment are in the process of expansion and acquiring smaller companies. 

Gem and Dongjiang have collaborated with online recycling sites Taoly365 and Aihuishou to attain bigger volumes of electronic waste. Gem has plans of taking over a metal company to manufacture metal products got from the waste metal that it recycles according to the newspaper report.