Buyin' scrap iron – Industry challenges, opportunities

THOUGH it employs thousands of people, the scrap iron industry has had a bad rap because of stolen public and private property, like flood grills and copper wires, passing through the hands of some dealers.

But the industry is a crucial component of the formal and informal economy, ridding the streets of clutter, while providing employment and generating considerable foreign exchange.

The Central Statistical Office (CSO) valued the industry at a staggering $1.1 billion within a year of the Scrap Metal Act 2022 being partially proclaimed in February 2023, and dealers resumed local and export business.

The industry’s main lobby group, the TT Scrap Iron Dealers’Association (TTSIDA) isn't sure how the CSO calculated the figure.

Business Day spoke with TTSIDA president Allan Ferguson about the state of the industry.

“A lot of people are saying they don’t know where that figure come from. I don’t know neither. I do doubt the figures."

Ferguson sought to dispel negative connotations, like theft and criminality, attached to scrap iron dealers and to promote the industry as one of many opportunities.

He said the industry has far more potential, but all hands are needed on deck.

Ferguson suggested the $1.1 billion valuation must be understood in the context of the yearlong shutdown starting in August 2022.

The government froze the industry after an increase in the theft of copper wires, manhole covers and other public and private property, sometimes leaving citizens without utilities.

“I don’t have nothing to discredit the figures, though."

But, Ferguson said, “Because the industry was shut down for more than a year, when it opened back, a lot of people immediately moved out a lot of material.”

That local trade and export rush died down shortly after.

Ferguson addressed the public perception of the industry, saying he understands it, and has no tolerance for criminality in the business.

He is even sceptical of the vans that blare: “Buyin’ scrap iron; ole battery buyin.’"

“Since I became president (in 2011) I have been lobbying government upon government to (regulate) this industry. This industry allowed people to come off the street and run into it. It will bring in criminal activity. But if a man have to have a licence to pick up scrap, a next man cannot go into a yard and sell no scrap. He can’t thief and sell no scrap because he must be licensed. And this is what we’re pushing.

"Up to now, the van men and them still operating without licences. So the theft still continuing, because this is a lawless country.”

The van collectors, as he described as some of the errant scrap iron traders, are not all association members.

“Remember, I have normal working people, who collect in vans and are honest, who are members of our association. We have plenty van men.

"But if you come off the street and thiefing scrap (from a van), I will look at you as a van collector who thiefing scrap,” he said, suggesting the legitimate collectors and law-breakers are often confused with each other.

“I told them, I think the best thing to keep this industry running is to set up camera systems to monitor what we’re doing. I know a lot of people don’t like it – monitoring the containers as we fill it – (but it) will keep the industry moving all the time.”

If the administrative and policing issues can be ironed out, the industry can grow by leaps and bounds, Ferguson said.

“This is why the association has been pushing to ensure the industry is regularised and everybody is regularised, because this industry is one where the money reaches down to the small man who collects in the dumps and drains and the ravines. This money reaches down to all of them, not just the truck and ship owners. It trickles down to the vast majority of people."

Ferguson met with Minister of Trade and Industry Paula Gopee-Scoon, the permanent secretary and other ministry representatives on June 21 to discuss progress in implementing the act.

In May 2023, the remaining sections (except Section 3(1)(2) of the act and the Scrap Metal Regulations 2023), introducing a new licensing regime, were proclaimed and came into effect.

Business Day understands the old licences will stop being used from August.

“We don’t know if they’ll have to renew (the old licences) because there are a lot of issues with that. Up to now, Town and Country (Planning Division) don’t have an idea what’s going on, because when we go to Town and Country to register for approval for the yards, that’s proving a serious challenge."

He said dealers face considerable obstacles with inspections and approvals from the Environmental Management Authority, the Occupational Safety and Health Agency and the fire service – all needed to obtain licences.

“When you talk about all these things, it’s a serious challenge as we speak today.”

In a media release in June, Ferguson was said to have expressed his “appreciation for the efficiency and commitment of the Ministry of Trade and Industry to the advancement of the scrap iron industry."

Ferguson agreed the meeting went well but stressed that inspectors are still sorely needed.

“I don’t want (the ministry) to feel like I’m knocking them. What I can say is that the ministry’s staff are working hard. They have a lot of patience dealing with many people. But I think they need more staff, more inspectors.”

The industry has slowed because of a lack of inspectors, who are mandated to visit scrapyards before licences are approved and processed.

“We would’ve told them this wouldn’t be able to work, because you can’t have eight inspectors or sometimes seven or less for almost 30 scrapyards."

He said an inspector can take up to a week to assess a yard.

“Whilst it’s frustrating, we’re working with it. But just because you get a result doesn’t mean it’s working. The industry needs more manpower to keep it afloat for the people who buy material, for those who want to borrow money. You can’t have a business and have to wait a month to sell (again).

“If I have a grocery, and I have to close down for a month and then reopen a next month, sell for a week, then shut down for a next month – I want to know how those business people will feel.

“This is the system. And it’s not that we’re blaming anyone, but we need to do better for the industry to deliver maximum results."

In June, the Ministry of Trade and Industry said it processed and granted 545 licences when the industry reopened, allowing exports of all scrap metals.

There are only about 26 scrapyards in the country. Some applied for numerous licences, as they are only granted for specific purposes, like purchasing and exporting.

“Every time we do a shipment, you have to get a new licence,” Ferguson explained. “For example, I might get ten, and someone (else) might get 100 because they have (multiple shipments).”

Only local manufacturers who use copper can obtain licences from the ministry to export their excess copper, as long as they meet the minimum weight.

Metals exported from the association’s member dealers include heavy melting steel (HMS) 1 and 2.

HMS is a designation for recycling steel and wrought iron and is split into categories.

HMS 1 includes aluminium, brass, and stainless steel. HMS 2 contains galvanised and blackened steel.

TTSIDA’s members also export batteries, motors, radiator copper and radiator aluminium.

“Everything in the industry goes up and down,” Ferguson said about market fluctuations. “We buy steel from $800, $900, up to $1,200 (per tonne) for HMS 1."

Copper, aluminium and brass are shipped to China. Scrap steel and other metals go to Taiwan, Japan, India, Pakistan, Bangladesh and Turkiye.

Most of the local scrapyards are in Central Trinidad, as well as Arima, Penal, Point Fortin and Claxton Bay.

Ferguson is a former national boxing champion and served in several administrative positions in the sport in TT and regionally. He
owns two scrapyards.

He said he uses his administrative positions for forces of good and says he has all the experience and drive needed to revolutionise recycling in TT.

“All I’m doing here is part of my struggle, my fight for good leadership. We have to do this in a way to employ more underprivileged people. Because people don’t (know about) the industry, people disrespect us.

“Places like India, the US, all over the world, in Taiwan, China, they take this industry serious, the government, and everyone helps to push it."

He said he would ensure the TT Solid Waste Management Company (SWMCOL) is profitable if given a chance to lead the organisation.

“All they (SWMCOL) taking and burying in the earth, we could recycle it: paper, plastic; we could recycle everything instead of dumping it. Trinidad signed off on ‘three Es’ (Energy-Environment-Economy) not to do all these things because of climate change."

He said he submitted a proposal to clear abandoned and derelict ships languishing off the coast for free.

“I will make that a thing of the past, if they give me my way. The dumps are packed with one set of rubbish – I will make that a thing of the past because we could recycle.

“We could take all these things – even your old phone, we could recycle it and make things.

Knowledge is right on the government's doorstep, he said, and it just needs to ask, as foreign governments have done.

Over 25,000 people are directly affected when the industry closes or licences cannot be processed.