SK ecoplant acquired Singapore-based E-Waste recycling company TES on February 21. TES is an E-Waste management solution provider with differentiated strengths when compared with other E-waste companies. The acquisition of the recycling firm has turned SK ecoplant into a game changer of the global E-Waste market beyond Asian borders. The following is the background and significance of SK ecoplant’s move to take over TES and the company’s vision way forward.
What is the E-Waste market?
The scope of the E-Waste (Electronic-Waste) industry was limited to disposal/recycling of waste from electronic appliances in the past. As home appliances such as TV sets, refrigerators, and air conditioners were produced in large quantities and waste from those products posed challenges, the E-Waste industry was born in developed countries in the 1990s to protect environment.
However, as new breeds of mobile devices such as the smartphone emerged in 2007, the industry’s coverage and paradigm changed completely. The notion of E-Waste was expanded to cover numerous other IT devices including smartphones, tablets, PCs, and servers, including even batteries these days. In addition, IT device manufacturers are managing their E-Wastes with internal/external resources to fulfill corporate responsibilities that transcend national borders.
Unlike home appliances that are to be used for up to 10 years in the longest, IT devices are usually replaced in one year in the shortest and just two to three years in the longest by users whether at or against their will. But, even if I throw away a two-year-old smartphone, have the parts inside also seen the end of their life? This is why E-waste caught the attention of SK ecoplant.
Why did SK ecoplant notice E-Waste?
On February 15, the United Nations sent a shock with a report stating that environmental pollution attributable to toxic substances from E-Waste claim more lives than annual victims of COVID-19. E-Waste yearly discharged around the world weighed 53.6 million tons (as of 2019, UN / 2020). Yet, out of this hailstorm of E-Waste, only 17.4% is verifiably recycled whereas the rest is unaccounted for except for the fact that such waste is discharged. Where is the remaining 82.6% thrown away and why does it cost so many human lives?
Most unaccounted E-Waste can be found in developing countries like Africa. E-waste is effectively exported by advanced economies to developing countries as they are recycled and donated, and people in the developing countries salvage valuable materials such as copper and gold out of E-Waste. In Agbogbloshie, Ghana alone, more than 80,000 people make their living that way. But the problem is that the E-Waste shipped there is dismantled and incinerated without taking into account safety considerations. E-Waste is melted over a fiery brazier or in burning oil roadside to glean marketable components.
E-Waste incinerated inappropriately discharges toxic chemical substances such as polychlorinated biphenyls (PCBs) and polybrominated biphenyls (PBBs). If left unattended or reclaimed, E-Waste pollutes soil and water by discharging mercury, lead, and other hazardous materials. To make matters worse, E-Waste is disposed of by 18 million children in developing countries around the world who have small-hands and therefore better equipped to disassemble electronic appliances, without using safety gear and are exposed to all sorts of hazardous substances. (WHO / 2021) Against this backdrop, SK ecoplant, committed to protecting the natural environment by recycling wastes into newfound energy sources, took note of E-Waste and saw viable future business opportunities.
Tremendous untapped potential in the E-Waste market
The E-Waste industry is growing at an exponential scale. The E-Waste market, valued at approximately 50 billion dollars (59 trillion won) in 2020, is expected to reach 144 billion dollars (170 trillion won) by 2028, posting the highest annual average growth rate of 14.3% among all sorts of waste markets. (Allied Market Research / 2021)
Such a remarkable and rapid growth expected of the E-Waste market is fueled by a variety of trends. Demands for and production of IT devices ranging from smartphones to tablets, PCs and smart wearables are on the rise year by year, and the increasing penetration of EVs (electric vehicles) accelerated by the global Net-Zero trend is also one of the primary drivers of the E-Waste industry growth. 11 million EVs have been shipped by 2020 in cumulative terms, but as many as 230 million EVs are expected to hit the road worldwide by 2030.(IEA/ 2021)
If EVs gradually evolve into autonomous driving mode and begin to change our life, electric/electronic waste including used batteries will increase in proportion to a soaring EV production. Like smartphones did, EVs will usher in another paradigm shift for E-Waste.
What are the appeal points of TES that has been recently affiliated with SK ecoplant?
In its first move after entering the E-Waste market, SK ecoplant took over TES, Singapore-based E-Waste management solution provider. The former signed an agreement to acquire 100% of the latter’s equity on February 21, 2022.
TES is an E-Waste management leader with strengths that differentiate it from other E-Waste companies. Founded in 2005, TES began its business footprint early on by recycling waste home appliances like ordinary E-Waste companies. However, the company grasped the trends preemptively and expanded their business scope fast to cover IT devices such as smartphones from 2010.
TES head office in Singapore
① Seamless E-Waste management process! One-Stop Solution
The E-Waste business can be broken down to recycling from the hardware perspective and data processing from the software perspective. In other words, the E-Waste industry spectrum ranges from the resale and refurbishing of parts and metals salvaged from E-Waste to the so-called ITAD (IT asset disposition) service that completely destroys corporate and personal data stored in IT devices.
Collecting E-Waste and covering the two aforementioned domains, TES provides a full-fledged E-Waste disposal value chain that involves even delivery of a certificate describing applicable waste disposal process and reuse/recycling status of each component to a customer. In particular, such a certificate is utilized as affirmative evidence by businesses that need to prove their environmental protection efforts to assessment authorities as a part of ESG management practices, and customers are highly satisfied with it.
TES has many formal certificates that can facilitate E-Waste business across national borders.
② Global corporation covering the entire world
TES has 43 business sites in 21 countries across North America, Europe and Asia in a global operational scale rarely found in E-Waste companies. This is because it is challenging to obtain national permits required for shipping wastes from one country to another under the international regulatory framework governing waste. It may take even three to four years in some cases to have such permits issued. Yet, while expanding its business presence, TES has already obtained a considerable number of permits, creating profits by selling resources harvested from E-Waste to customers located in various countries unlike other competitors that may transport waste only in their host countries.
E-Waste disposal process at TES
③ Long-standing partner trusted by global IT giants
Currently, the customer portfolio of TES primarily consists of multinational IT giants. It is customary for global IT businesses to replace IT assets every three or four years in favor of security and stability. This means that serving such companies as customers, TES can access quality E-Waste that has been in use just briefly. Furthermore, as not only traditional automakers but also global IT companies knock on the door to the autonomous-driving EV market, their growth will translate into new business opportunities and growth drivers for SK ecoplant that has just acquired TES.
④ ITAD service satisfying both stability and technical excellence requirements
IT assets including smartphones, tablets, laptops, and PCs are bound to contain user data. Throwing away IT devices without completely erasing data in them is as good as disclosing intangible assets such as personal information and data that can be potentially abused. This is why ITAD (IT asset disposition) service is critical to the E-Waste industry.
What matters most in ITAD is surely information security. It is absolutely critical not to compromise but to securely dispose of data contained in IT assets. For instance, in 2019, US investment bank Morgan Stanley transferred an old server containing customer data to an E-Waste management contractor, which resulted in a leak of enormous customer data. In the aftermath, Morgan Stanley had to face a number of lawsuits including a collective suit filed by customers this January and settled paying an enormous sum to the plaintiffs. Considering such developments, TES is highly rated for unrivalled ITAD solutions perfected by multi-year-long business knowhow and coupled with full-on data security services.
Data being fully erased from IT waste at TES
The E-Waste world promised by SK ecoplant
Starting by taking over Environment Management Corporation in 2020, SK ecoplant has grown into an industry-leading environmental solution provider, ranked first in domestic water treatment, and general waste incineration, second in medical waste incineration, and third in waste reclamation. On top of that, the recent takeover of TES signifying entry into resource recycling business, notably, the E-Waste domain associated with significant future market valuation and added values of resources to be recovered, carries tremendous significance in that it adds the completing touch to SK ecoplant’s value-chain and paves the way for full-scale global market presence.
SK ecoplant’s E-Waste recycling platform vision
As countries worldwide try to reach the goal of Net-Zero by recycling E-Waste over the resource crisis and environmental pollution, the E-Waste market heralds unlimited possibilities. Including TES in its business portfolio, SK ecoplant is expected to grow into a leader of the high-value-added E-Waste recycling industry, and take another meaningful step as an environmental champion underscoring environmental protection in its ESG governance.
This content has been created on the basis of the contents in SK ecoplant NEWSROOM.
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