Nasser Aboura, President, Bureau of Middle East Recycling (BMR) and Managing Partner, Aboura Metals sat down with Swaliha Shanavas to discuss the developments in the recycling industry, the challenges, and BMR’s role in bringing about positive change in this evolving sector.
Please tell us briefly about your background and experience in the recycling industry. What triggered your interest in this sector?
My family has been involved in the scrap metals business since 1950. Having entered the recycling sector at a time when Jordan was still in the pre-development stage, the material collected was then transported to Lebanon which was a more advanced destination for scrap. I was a high school student when my father established Aboura Trading Company. He made me and my brothers partners at the time and we were equal shareholders. Growing up I visited the facility often with my father and those experiences allowed me to acquire basic knowledge and interest in the scrap metals business. Upon completion of my civil engineering education in the US, I returned to Jordan and joined the family business alongside my brothers who developed the business further.
We expanded our operations by entering Kuwait, Jeddah and Riyadh markets. In 2007, we opened our office in Dubai Airport Free Zone and recently relocated to Jebel Ali Free Zone. In the near future we plan to expand the premises further, building a scrapyard and a warehouse.
In your capacity as managing partner at Aboura Metals, how has your journey been so far, and how you are strategising for success in the present market scenario?
I have worked for 40 years in the recycling industry. I can easily say it has been an incredible journey building and growing our family business across the region with my brothers. As a team, we work very closely together and have passed down our knowledge and expertise to the third generation. They are heavily involved where they handle more of the operational aspects. Although I am still involved in the business, it is in an advisory capacity as I prefer to give the lead to the younger generation. They are impressive and bring a fresh perspective to the business.
Aboura Metals has a presence in various countries with different lines of business such as lead and aluminium. Over the past two years we have placed focus on plastics recycling as well. Plastic is a vast concern, nationally and on a global scale. We believe that it is crucial that we play our part in this, with both business and environmental considerations in mind.
What is the current state of recycling in the Middle East and what are your views on the development of the metal recycling industry in the region?
The metals recycling sector is developing at a fast pace and has advanced in the recycling scene over the past forty years. As I recall, there was no progression on this front in most countries within the region. There was no major scrap generating centre as such. For instance, KSA is currently one of the major scrap centres with numerous scrap yards, most of them are now operating with highly advanced machines and equipment. As such, the UAE and Jordan have major recycling facilities. Overall, the sector is growing rapidly in the Middle East, especially the GCC region.
How important is recycling for the development of economies worldwide, and what are the major challenges facing the growth of this sector at present?
Recycling is crucial for sustainability and economic growth; however, there are key challenges. The perception among most people is that scrap is ‘waste’ or an inferior business and this outlook needs to change. The recyclables are valuable as they are required for the economy. Scrap is a major resource and recycling is essential for sustainability in the long term. This should be a common understanding. I believe that the UAE is covering this subject and focusing on waste recovery, zero landfill, etc. Thus, now, we are progressing along with other GCC countries as the environment and resource recovery is being considered.
What are your views on the China developments and their impact on the recycling industry? Does this open up new opportunities as well?
The development in China last year has impacted the industry on a global scale. China has been the world’s largest importer of various types of scrap material. However, when the nation restricted imports of scrap metals July last year it caused a major global issue. Recyclers suddenly needed to adjust to this challenge and faced difficulties as there were limited options to revert to. My experience and belief have always been that we overcome such shocks within a short period of time. As a recycler, if China closes its doors, we need to readjust and find a new home. I believe most people are in the process of doing so if they have not achieved that already.
At our conference early March, an industry expert revealed shocking statistics that took us by surprise. As per the study, the volume of scrap exports from the US has in fact increased after the China ban. This has led recyclers to establish alternative channels, resulting in emergence of new homes and shift towards recycling locally. Various other countries including Thailand, Malaysia, India, etc., have also announced a ban. Ultimately, it is expected that all countries mentioned would follow China’s footsteps.
However, this will certainly establish various opportunities. China will introduce new regulations for scrap metals by June and the outcome is uncertain. Again, less scrap will be moving towards this nation and it remains ambiguous, especially quantitywise. Surely, major effects on prices will be present. Will there be an oversupply of scrap? What should we do with the materials? These are certain questions we may need to address, but one must cope with such situations and challenges in order succeed in the business.
In your role as BMR President what is your typical workday like and how has your experience been so far?
As president, I assumed office in October 2018. The responsibilities are completely different from my former role as a board member and vice president. Unlike running your own business where you make your own decisions, this is an association where members are involved and I am held accountable for every decision and action. Initially, I dedicated more time on follow ups and ensuring things were in order. I’m glad we successfully concluded our conference with a good turnout and an increased membership of almost 10 percent. I am working closely with other board members and have received tremendous support thus far.
What kind of ambition and plans do you have for BMR?
The primary objective is to serve the members as they join BMR with certain expectations. In addition to the BMR conference, general body meetings and other events are organised throughout the year. This is a great opportunity for board members to network. We need to organise more of these events and in fact have already started this process. For instance, in the last quarter of 2018, we had a VAT workshop. We are also planning similar activities including workshops, social activities and so on, particularly within the UAE for starters. The aim is to provide more information that benefits the members and offer more networking opportunities to strengthen the fraternity and build a strong membership base.
Tell us about BMR’s role in mediation and the organisation’s experience over the past few years in this regard?
A few years ago, BMR instituted an arbitration committee and at one point I had the honour to serve as a member and chair the committee. At that time, we were able to solve several cases. Recently, alongside our Indian counterparts MRAI, ANMA, etc., we agreed on a standard format for contracts. We modelled guidelines outlining the procedures, conditions, requirements and considerations in case of a claim. Most of us are following this contract now, which brings standardisation and quality to all parties.
With regard to facilitating industry best practices, we have been advising our members with respect to KYC ‘Know Your Customer’ guidelines, processes in dealing with trusted suppliers, VAT processes, etc.
What are the key issues the recycling industry is facing with regard to VAT implementation? What initiatives has BMR taken to help recyclers deal with the issue?
We had organised a two-day workshop where we focused on explaining the process of VAT implementation. Change is usually hard to adjust to and transitioning into a new process usually has some challenges and hiccups, and it was imperative for us to support our members through new macro changes and drive this conversation to ensure all our stakeholders are well equipped with the expertise and knowhow. Within our industry the refund process is a priority; we are perhaps one of the few sectors that provide reimbursement.
Having said that, we decided to hire a consultant and have signed an agreement with a consulting agency in the UAE. We hope to produce a study on alternatives that could potentially remove the burden on our members. In February, we held a meeting, gathering around 120 attendees from the UAE. Our consultant, PricewaterhouseCoopers was also present and had the opportunity to discuss and share our plans. Once the study is completed, we will be meeting with the authorities to follow up where we left off and how we can potentially benefit the industry. This is one of the services we hope to advance to make it more practical for recyclers.
What do you love most about your job and what is the most challenging aspect?
I have to love my job to be able to achieve the level of service and quality we commit to. As a team, we need to gather all efforts and work as a collective to covey the most outstanding results. These values and thinking are shared by all board members. Since the establishment of BMR it has created a fraternity among the Middle East recyclers and although we are competitors, we are all working together, which I deem good as we have a common goal.
What differentiates BMR from other associations is that we do not possess permanent staff or a permanent office to manage our work. We are self-sufficient with only the assistance of an executive secretary. We meet and plan together, dedicating a notable amount of time and effort. This has created a strong relationship and bonding between all board members that are working tirelessly towards the goal of improving our industry and servicing our members. We are constantly growing, and thus need to continue to deliver, meet certain standards and aim higher. The challenge is to innovate, brainstorm and deliver new ideas, concepts and ways to elevate our platform and our members.
What do you like to do in your spare time?
I dedicate a considerable amount of time to my family. I exercise and go to the gym whenever I am able to. I also enjoy travelling.