Recycling firms to benefit from growth in several industries

Aerial view of part of Jag Bhd's plant in Shah Alam, (Filepic)

PETALING JAYA: Recycling companies are the hidden beneficiaries from the growth that is being experienced in several industries in Malaysia.

The usage of products from the technology or even the automobile industry for example will yield a necessary by-product: waste that can then be processed by recyclers.

The products that are processed from these recyclers will then be reused again and reintroduced into the product lifecycle or be processed into a commodity that can be sold to traders.

Recycling helps converts waste from overloaded landfills to reusable components and is growing to be an important aspect of an efficient waste management system in an era where environmental concerns are heightened and landfills are growing scarce.

The two listed companies in Malaysia that deals in recycling waste include JAG Bhd and Tex Cycle Technology (M) Bhd.

While both of these companies are recyclers in their own right, they however deal with in distinctly different industries and both companies cannot be directly compared with each other for a like-to-like comparison.

Jag is an industrial and electronic waste recycler and is one of a handful of companies that has the full recovery waste recycling license from the Department of Environment (DOE) for the scheduled waste recycling facility.

The company’s products waste products are input from the semiconductor and electronic industries that is processed into primary commodities such as copper, gold and silver.

Jag processes and recycles computers, monitors, televisions, stereos, copiers, and fax machines among many other items.

“Many of these products can be reused, refurbished, or recycled. And electronic discards is one of the fast growing segments of our country’s waste stream,” the company said in its website.

In its most recent second quarter ended June 30, the company saw its net profit grow almost ten times to RM2.51mil from RM272,000 a year ago with revenue growing 66.5% year-on-year to RM36.69mil.

Earnings per share also grew to 0.21 sen from 0.02 sen in the same quarter a year ago.

In its financial results, Jag attributed its better performance to the higher sales volumes and higher average selling prices for copper, tin, iron and aluminium.

According to Hong Leong Investment Bank Research in its trading idea report dated Sept 8, the company is one of the beneficiaries of the recovery in commodity prices.

In the six months year-to-date period, the company had also seen a turnaround in its performance from a net loss of RM1.64mil to become profitable once again with a RM4.94mil net profit.

While Jag mainly services the electronic and semiconductor industry, Tex Cycle is a recycler for other several industries and is licensed to treat 31 out of 77 types of waste which is regulated in the country, such as rags, wiper cloths and gloves.

The company provides waste recovery and recycling services and also provides rental of recycled products within some manufacturing industries.

Tex Cycle said on its website that it collects contaminated materials directly from companies in the electronic, engineering, automobile, oil & gas, printing and other manufacturing industries.

“These materials are usually soiled with grease, inks, solvents and whatever substance imaginable. Such wastes are now highly regulated and have to be disposed off, at sites permitted by the DOE and handled only by liceorted by our licensed fleet of trucks to our sites,” it said.

The company processes these wastes to remove contaminants from the soiled materials so that they can be reused while damaged materials can also be converted into safe recyclable products, that can also be reused.

In its most recent second quarter ended June 30, Tex Cycle reported a slight rise in net profit to RM2.63mil from RM2.11mil on the back of revenues rising to RM9.27mil from RM7.7mil.

The company said that improved performance is mainly due to higher sales volume from new customers.