Marketing of recycled white goods could be worth £235 billion
Remarketing offers domestic appliance manufacturers a profitable avenue for the disposal of their used goods, says a new report. The impending EU Directive on electrical goods will require producers to recycle three quarters of their appliances. The latest study by an environmental research body shows that remarketing is a viable option, with a potential worldwide market of £235 billion.
The incoming WEEE (Waste Electronic and Electrical Equipment) Directive, due to be implemented in 2004 (see related story), states that all electrical appliances must be 90% by weight reclaimed, and 75% by weight recycled. Producers will thus be responsible for the entire life-cycle of their products and parts and will have to find alternatives to disposal, such as reconditioning and reuse.
WEEE Remarket: An Investigation into the Remarketing of
White Goods Parts explores the potential market for repairing and reusing appliances and their components once the Directive comes into force. DARP Environmental Ltd, who carried out the study, say that fridge mountains should not put people off. “WEEE mountains will not occur if the industry acts now to create an infrastructure to support the new sector,” says the report.
In the UK over 23 million household appliances are discarded every year. The rate of disposal is increasing by 16-28% every five years and is the fastest growing in Europe. In white goods such as fridges and washing machines a large number of parts contain hazardous substances. The inadequacy of current UK legislation means that the majority of toxic substances end up in landfill or vented into the atmosphere, says the report. Landfill leachate may contaminate groundwater supplies and there is an added risk of uncontrolled fires. Incineration brings similar problems of hazardous emissions from plants.
In the USA over 70,000 firms remarket, with the majority of them commanding annual sales of $21 million. But there are barriers to the development of a market in the UK, says DARP. The results of their survey suggest there is mistrust and competition between manufacturers and remarketers, and the public may also be reluctant to buy used goods that are not quality-controlled. “Businesses must encourage the consumer to trust remarketed goods through countrywide recognition of guarantee and certification,” recommends the report.
The survey of appliance manufacturers reveals some skepticism about the potential market for reconditioned goods. One company pointed out that consumers enjoy novelty. This, combined with the decreasing cost of manufacturing, means new products are likely to be cheaper and more attractive to buyers than remarketed ones.
Other obstacles included the lack of specialist tools to dismantle old machines. Without the right tools components might actually be damaged during disassembly. Another problem is that increasing numbers of components are made of plastic, a material that is virtually impossible to recondition or recycle. Metals on the other hand can be remanufactured, and can remain in the remarketing cycle infinitely, says the report, hence there is no reason why metal should ever go to landfill.
One of the manufacturers surveyed pointed out that most appliances undergo design changes, so that by the time an appliance has reached the end of its lifespan its components are no longer compatible with new machines. But a remarketing company suggested that design alterations are simply marketing ploys, and are usually superficial. When DARP preformed its own dismantling of appliances, it found that “the majority of essential components are common to all makes and models of a particular appliance type.” Of the top 20 components for remarketing listed by DARP, seven were to found in washing machines, including the motor, pump, programmer and drums.
One area where remarketing has a definite advantage is in the provision of components for repairing existing appliances. Manufacturers are only obliged to carry spares for a maximum of seven years, but customers tend to replace appliances every 10 years. Hence there is a period when spares may become scarce at a time when repairs are more likely to be needed.
Another advantage is the ease of dismantling. “During our disassembly of used appliances we observed that many remarketing related tasks are uncomplicated and so can be undertaken by all members of society, even those in the lower pay range who find it difficult to gain meaningful employment,” says the report. The unemployed or disabled could be ideal candidates for remarketing work. The average time taken to disassemble machinery was 100 minutes in the study, but this was using volunteers unfamiliar with the appliances. DARP estimates the market cost to disassemble to be £4.20 plus £3.00 overheads, to make a total of £7.20 per hour.
DARP surveyed a number of remarketing organizations in the UK, and found that some were thriving. The successful companies were found to have better organised networks and established reputations for quality in the industry and among the general public. One company had established informal contracts with various landlords so that they came to him to purchase products and often to dispose of their unwanted appliances.
Key problems identified by remarketers were: inadequate regulation of the remarket industry, the lack of recognised training programmes for them and the scarcity of tools for their specific requirements. DARP is calling for more research and support into the development of the remarketing industry.