How to open a scrap metal business in the UAE
One of the top ten global suppliers of ferrous scrap is in the United Arab Emirates. Scrap metal is obtained from a variety of sources, including industry, consumer goods, transportation, and international markets. Items from South Asia, Africa, and the Far East are frequently exported to the UAE before being sold as scrap all over the world.
Nearly 6 million ton metals are recycled annually, as governments and people become more environmentally conscious, metals make up one of the most important components of landfill debris. As a result, scrap metal will continue to be scarce.
Three important factors must be taken into account before beginning a scrap metal recycling business. These consist of the quantity of scrap metal, the storage space, and the security features in that storage space. Additionally, you must determine your target market in order to comprehend your customers' personas.
How much does it cost to open a scrap metal business?
An entrepreneur with the thought of opening a scrap metal business has many possibilities. You can run a warehouse that sells recycled metals to scrap metal firms while specializing in the sale of scrap metal. Alternately, concentrate on a particular kind of scrap metal recycling. Metals are commodities, and supply and demand determine how much they cost. This is typically concentrated on estimates of the supply and demand for various types of metals a year or more in advance. Overall, this capital-intensive company is great. As a result, the initial investment can be anywhere from a few thousand to many thousands of dollars. High technical skill is required for this firm, yet it has the potential to be very lucrative. You can decide whether to recycle copper, gold, lead, nickel, silver, or tin. And everything comes down to how well you know this business.
How may a scrap metal business be started in UAE?
Here's how to launch a scrap metal business in UAE and establish yourself in the industry:
1. Thorough market research
The first step in starting your own scrap metal business is determining your role in the industry. Can you gather junk locally to sell abroad? Do you want to import the scrap and sell it later? Do you have a plan in place to internally process the scrap? We advise you to contact us.
For the purpose of simplicity, let's focus on a very simple sort of scrap metal trading that is common in the UAE. Let's imagine your business purchases copper, aluminum, and other metal scraps from recently foreclosed homes as well as waste metal produced during construction. The junk is then cleaned and sorted before being sent to one of the neighboring nations, where due to the UAE's expanding economy, the majority of its scrap metal ends up. All of this information must be gathered through a thorough and in-depth market analysis.
2. Choosing the right yard space
A number of variables have an impact on the cost of building your company's facilities. You should consider the yearly rent if you're renting a warehouse or a yard. It may also be necessary to use a forklift, metal sorting bins, shipping containers, specialized sorting equipment, solid waste management, or other goods.
3. Get your license
You would only be able to work with a select few businesses who manage this garbage if you applied for a free zone license. Do not forget to abide by all applicable environmental, preventative, and capital restrictions. Having a free zone license has several benefits, but the biggest one is that your company is fully owned by you. The Department of Economic Development can help you obtain a local license, but you'll need a local sponsor who will own a 51% stake in the business.
You will have more possibilities, though, if you conduct business in the domestic scrap market. Royal General Trading can become your partner so you can have complete operational control over your business.
The most crucial thing to keep in mind is that, based on the sort of scrap metal you manage, you may be subject to different rules and permits, depending on the licensing option you choose. These laws are different and are always being reviewed.
4. Perform your business operations.
Once you have the appropriate license and have made all of your selections regarding your business location and organizational structure, you are ready to begin your business operations. With the right preparation and an experienced advisor by your side, you can swiftly establish your metal scrap business to benefit from local and international advancements. The UAE's scrap is primarily exported to South Asia, which has a booming economy and many export opportunities. By recycling metals, you will not only gain but also contribute to improving the earth for future generations.
Advantages of starting a scrap metal company in UAE
1. Energy efficiency
The overall energy saved when comparing recycled metals to new ore could be as high as:
- For aluminum,92%
- 56% for steel
- 90% for copper
2. Financial advantages
The National Recycling Coalition asserts that transferring metal waste to recycling generates 36 times as many employment as sending it to an incinerator and six times as many jobs as sending it to a landfill. The authority also reports that the recycling sector employs more than a million people. Therefore, it comes as no surprise that the scrap metal sector is prosperous and brimming with potential.
3. Advantages for the environment
By reducing greenhouse gas emissions and using less energy than mining metal from virgin ore, recycling metal contributes to the preservation of natural resources. Producing things from recycled materials reduces greenhouse gas emissions far more than the production of new metal. You and other city dwellers may have respiratory health problems as a result of these emissions, which have the potential to contribute to climate change and dangerous air pollution levels in cities. Metal recycling could reduce greenhouse gas emissions by 300 million to 500 million tonnes, according to the Institute of Scrap Recycling Industries (ISRI). The recycling of waste metal is an innovative strategy that also addresses a higher purpose.