Electronic Waste and Metal Recycling Company

Electronic Waste and Metal Recycling Company

Project Cost: RM500,000

Amount Invested : RM100,000

Amount Required : RM400,000

Knowledge / Experience Required:
strategy
finance
sale & marketing

Proposed Investor’s Role:
part-time
as mentor
as consultant

Industry:
energy / natural resources
engineering
manufacturing
trade
electronics
others (Recycling)

Project Stage: start-up

EXECUTIVE SUMMARY:

Company History:

Terra Sepadu Sdn. Bhd. is founded in 17 April 2012 at Sungai Petani, Kedah. The company is licensed with the Royal Malaysian Police and Department of Environment for metal, plastic and electronic wastes disposal service. We provide disposal for items such as:

1. Computers, servers and its peripherals
2. Photocopiers and projectors
3. Lab/Medical equipment
4. Vehicles and its components
5. Industrial machinery and its components
6. Telecommunication equipment
7. Televisions, radios and entertainment systems
8. Refrigerators, washing machines and other electronic household items

These items are either refurbished to be sold to public as reconditioned items or dismantled and sold as metal, plastic and/or electronic scraps to full recovery facilities. The main market for our waste disposal service are government agencies (such as schools, universities, hospitals, clinics and offices) and factories (such as metal fabrication and electronic manufacturing plants). We also plan for scrap collection service from housing communities in collaboration with the Local Authority.

The current shareholders are Mohd. Saifullah bin Majid and Hafierul Hafiz bin Md. Razi with equal shares. The former is in charge of the daily plant operations and financial activity while the latter is in charge of marketing and administration activities. To this day, we have invested RM100,000 for our wastes disposal service. We have plans to expand our waste disposal service into full recovery for electronic wastes and smelting aluminium, steel and copper scraps within the next 10 years.

Product / Service Description:

Terra Sepadu Sdn. Bhd. is a private limited company with 100% Bumiputera equity which provides all kinds of waste recycling activities. Generally Terra Sepadu procures metal scraps and electronic wastes for recycling and/or refurbishing purposes from both public and private sectors tenders as well as public collections and purchases from other scrap dealers.

Business Opportunity:

Since the Government policy prioritizes Bumiputera entities, we exploit the opportunity of collecting unused/damaged government assets and inventories. Due to the recent circular which is issued by Jabatan Alam Sekitar (JAS) which states that ALL electronic wastes disposal MUST be through JAS-licensed companies, it provides great opportunity for us to collect from the thousands of government agencies in the Northern Region since we are already a licensed scrap dealer with the Police and JAS.

We also cater to private sector wastes disposal needs such as from the automotive, metal forming and electronics industries. By diversifying into private sector, we expand our scrap supply source. In the near future, we plan to collect various scraps (metals/plastics/woods/electronics/ papers) from housing areas.

Revenue Model:

After collecting these wastes, we dismantle them into their respective categories and grades which will be sold to major traders and/or processed in-house for their raw materials. We have already marketed our services throughout the Northern Region and has already established ourselves in Sungai Petani. As long as technology and consumer tastes develops and changes, we are confident that the supply of unused/damaged equipment will always be available, hence, generating a superior and sustainable returns.

Management Team:

MOHD. SAIFULLAH BIN MAJID is an Automotive Major of Mechanical Engineering graduate from Universiti Teknologi PETRONAS. He has experience working with Boustead Heavy Industries Corp. Sdn. Bhd. (BHIC) as Strategic Management executive, Public Works Ministry at the Policy Division and as operations engineer at Ministry of Health. He has extensive experience in strategic planning and implementation, especially in manufacturing, construction and green technology, as well as machinery and IT-related matters.

HAFIERUL HAFIZ BIN MD RAZI is a graduate in Automotive and Mechanical Engineering and a post graduate MBA at UiTM. He has experience as Production and Process Engineer as well as as Procurement & Purchasing Engineer at Autoparts Manufacture Co. Sdn. Bhd. (APM) and NAZA Automotive Manufacturing Sdn. Bhd. respectively. He has extensive experience in improvement and management projects as well as organizing cost control and vendor quality controls. He also has exposures in scrap-related business since the founding of his father’s scrap company in 2002.

Currently, the organization has a workforce of five men. The two current shareholders are responsible for the finance, account, marketing and sales. The remaining three are general workers who collect, dismantle and segregate the various wastes as well as operating the 5-tonne lorry.

Current Status:

We have started our operation for one and half years (since early 2012) as well as invested RM100,000 throughout our operation. Currently, the sales revenue ranges from RM25,000 to RM35,000 per month which in turn generates RM10,000 to RM20,000 net profit per month.

Funding Milestone:

With the additional fund, we can expand our operations further by participating in scraps disposal tenders ranging into hundreds of thousands of ringgit. We also propose to expand our operations further to recover gold and silver in electronic wastes, although currently we are manually recovering silver in small quantity. Besides that, we also propose to smelt scrap aluminium from various factory wastes into aluminium ingots of high quality which can be sold back to the local and export markets.

Business Valuation:

We are willing to allocate 30% of our total shares to interested Investors for the additional funding. We arrive at this figure after considering the semi-active role of the Investor within the company as well as the start-up funding and full-time effort of the current shareholders to ensure the business is operational in top condition.

Expected Return On Investment:

The Investor has the potential to earn a yield of 50-60% from the total initial investment over a period of 2 years. This is based on the calculation that we can double and/or triple the monthly sales revenue since we have managed to enter into large and sustainable scrap disposal contracts with large industrial corporations while maintaining the scrap collection service with various government agencies.

Investment Risk and Mitigation:

There are various risks in this business endeavour:

1. Commodity price drop – In order to mitigate this risk, we employ a high inventory turnover policy. The scrap is collected, dismantled and sold within one week.
2. Increase operational expenses – If we expand the business further, we have expected that operational cost will also expand. However, the cost will be throttled down by increasing the productivity of our skilled workers.
3. Customer’s late payment – We always prefer customers who pay instantly with cash. However, in certain cases, there are customers who prefer invoices. Therefore, as a safety rule, we always keep 3-month working capital available to avoid any unnecessary risk of having to deal with our customer’s financial difficulties. We also choose to deal with customers who have strong financial background, if they opt to pay via invoices.

Exit Strategies:

The Investor may opt for exit after 2 years. The current shareholder will buy back the 30% share from Investor at a rate which will be determined upon point of exit based on the company’s accumulated profit

CONTACT INFORMATION

Mohd Saifullah bin Majid ( terrasepadu@gmail.com)
Company Name: Terra Sepadu Sdn. Bhd.
Postal Address : 2429, Lorong Joget 4/2, Taman Ria Jaya, Sungai Petani
State : Kedah
Post Code : 08000
Country : Malaysia
Telephone : 044304678
Mobile: 0193899903

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