RECYCLING FACTORY OF AUTO PARTS  

FROM DAMAGED CARS


 

 

BUSINESS BACKGROUND                                                            back

In most countries a great number of auto cars damaged by accident are wasted to junk yards for final scrap, and partly recycled there. And most of parts are junked, remaining valuable parts not recycled. It is resources-waste and waste money.

The life-ending auto cars can be disposed to junk yards, but damaged cars by accidents might contain many fresh parts which can be re-used in auto parts markets with a reasonable price. It would be quite advantageous not only customer-side but also nation-side.

Of course, the decision for disposal to junk yard completely depends on a insurance company or car owners who evaluate either take a way to repair client's damaged car or compensate it within insurance contract. If the latter way is more profitable to them, they will take the way to waste a damaged car, which is junked as life-ending cars.

However, these cars to be scraped in the junk yards can be converted to valuable resources by properly dismantling the cars. Expected recycling parts and/or materials are as follows:

a) Green materials for environmental protection. 

    Gasoline, battery, anti-freezing liquid, wiper cleaner, lube oil, spare tire, windows, side mirrors.

b) Valued auto parts for sale. 

    Generator, doors, bumpers, combination lamps, engine, transmission, audio set, wipers, steering wheel,

    radiator, air-conditioner, pumps, fans, tool set,

c) Body

    Bonnet, trunk, frame,

The actual value of recycled auto parts might vary according to a grade of damaged car and age of cars. It totally is evaluated by the accumulated experience of specialists..  There are many recycling factories being operated in the world, particularly top 5 major car producing countries. Most government encourage recycling auto parts from waste cars for environmental protection and resource recovery. It is believed that recycling industry is one of attractive business in recent days.


EXISTING PLANT USA

A plant has being operated since 1996 in USA and it is the first commercial plant in the world. Due to economy and reliability of auto parts to be recycled, all damaged cars by accidents can be limitedly recycled up to less 7 years-used-cars after factory manufacture.

The recommended capital structure stems an insurance company, a municipality, existing junkyard members and private sectors.

The plant is capable of dismantling 100 damaged cars a day, and 30 thousand cars a year in the factory and stock yard is approximately 20 acres which can store 1,500 damaged cars for two weeks operation in the factory.

However, required stock yard area depends on collecting methods and easiness of transportation.. They are mostly collected and transported by trains from dispersed several States.

Factory outline is as follows:

- Factory area :About 20,000sq.meters

- Dismantling line :One line consisting of dis-assembling all parts from damaged cars loading to final junk machine, 120 meters long. It was manufactured in Holland but customized in the factory

- Operation :Heavy parts section to be moved by overhead hoist and small parts section driven by screw conveyor.

- Aux. area :Green area where recycle all parts/materials possibly causing to environmental pollution.

- Inventory area :About 70 % of entire factory area occupied for storage of all recycled parts ready for sale

- Delivery area :Minor touch-up for delivery and packing, and delivery twice a day

- Test area :All defects should be tested properly .

- Stock yard area :Approx. 20 acres for 1400 damaged cars storage

- Power supply :Captive power generation by recycled gasoline or diesel oil.

- Oil storage tanks :Gasoline and lube oils.


OPERATION AND MARKETABILITY

A key activity is made at the damaged car receiving yard where specialists carefully examine all damaged cars before dismantling and evaluate and sort all valuable parts to be recycled in the factory by using a wire-less hand-computer for data input to main computer system.

As soon as a specialist input all data with regard to a damaged cars, those valued information necessary for dismantling work keep stored into the main computer.  And at the same time job orders are immediately directed to workers and printed out at each work section, where and what parts to be dismantled and finally where to store them.

Ultimately, a total value for each damaged car is registered automatically. Completely computerized system can make it possible to operate the factory with minimum operators, presently less 50 operators working which finally results in profitability of project. It is obviously clear that a key point for project success is operational know-how as real-time inventory control and job order system.

As soon as an order for certain parts is, for instance, requested from each client, all ordered parts can be immediately checked if available or not to all specifications, such as colors, models, manufacturing year, car brand, etc.

Recycled auto parts from the factory are sold to the auto parts shops in whole country as a whole sale basis and considerable amounts of parts are exported to third countries who import a number of brand new American cars and second-hand as well. In general, a number of drivers tend to prefer that five years-lapsed car is good with same aged-parts in repair.

In USA the second and third similar factory are being planned with double dismantling capacity in California and Canada as well. In Japan there are many recycling companies are now actively working since 1960's. However, Japanese facilities are not modernized comparing with America's.

According to our country's data about 10% of total cars are junked a year and it means that approx. 1.2 mill. of cars are wasted and junked a year. I guess that there are about 5 mill. of cars in your country.


 FINANCIAL PROSPECTIVE

Major portion of investment cost stem building, dismantling line, inventory rack and inventory control system. For reference a existing plant cost at less 10mil.US$ including land cost for lease, equipment and machinery, inventory system and utilities, and in return they can earn UD$ 3,000-4,000 from recycling a damaged car and presently 100 cars dismantled a day. Of course, it might be subject to the market price of recycled parts in Japan.

On the hand, estimated expenditure in operation mainly depends on worker's salary, no other raw materials required as like other industries, except a land cost for lease. It is quite sure that high return on investment can be achieved and the project is viable in Taiwan. There is no car manufacturer in Taiwan and therefore all auto parts for repair and maintenance might be imported from originated countries. Recycled auto parts market would be prospective afterwards and its demand will be increased.


 ACTION PLAN

If you are interested in this business, you should investigate at least following items first and please reply to us:

1. Check if recycled auto parts are legally salable in your country.

2. Investigate if there are any advantages in using recycled auto parts in repair from the insurance companies.

3. Is there any existing large factory and stockyard for car storage? New building construction requires high cost in investment and therefore leasing of existing building for factory is better.

5 Check if potential investors are interested in this business, tentatively an insurance company, a land owner, a municipality, and other private sectors.

6. What is your position and role for this project

7. Collect information about total of registered cars, annual junked cars, annual increase of new cars, amount of auto parts import, retail/whole sale price of auto parts.

8. Estimated plant capacity i.e. dismantling cars yearly or daily. In USA the capacity is approximately 100 cars a day as mentioned above.


HYUBWOO'S ROLE

HYUBWOO E&D is now working with American company, who operate a car recycling plant as introduced above, for the project of scrap tire pyrolysis plant, capable of 2 mill. of scrap tire a year. Pyrolysis of scrap tire make it possible to completely dispose waste tires and also recycle high valued carbon black and hydro carbon as by-products like limonne. In this project we supply only pyrolysis plant but American company has two upgrading facility to reclaim carbon black from char and limonne from pyrolyzed oils, which are reclaimed from the pyrolysis plant. But, if there is no two upgrading facilities, reclaimed by-products by pyrolysis will remain as another polluted wastes to be properly treated further. By such reasons we closely work together with American company:

HYUBWOO's role is expected as follows:

-Promotion of project implementation

-Supply for all plant production equipment

-Consulting services linking two parties, American company and Investors

-Feasibility study for the project, if requested

-Engineering, design and installation

-Site supervision and start-up operation during site construction

-Any other service when both party request