As the recycling problem of electronic components in Europe reappears and strengthens the environmental protection laws and regulations, more and more major OEMs (original equipment manufacturers) will be transferred to another partner of their supply chain responsibility EMS (Electronic Manufacturing Service), which is recycling.

At the end of last year, the European Commission approved the "WEEE" law, guiding contents. The bill requires OEMs to be responsible for recycling facilities to prevent tons of electronic products from becoming waste. This action coincides with the Dutch government's decision to ban imports, because the "Sony Game Station" game machines and accessories, equipment cables are considered to have too high cadmium content.

Because of this European law, many EMS providers, including Ketai, Flextronics and Xudian, have made great efforts to carry out after-sales support business, and started to promote their goods as part of warranty service, and their goods have been recovered. Analysts say that the maintenance and quality assurance service worldwide is a market worth 3.5 billion dollars.

"Europe and Japan took the lead in this campaign, warning people not to throw away waste materials.". "Bill Mitchell, vice president and president of Xudian Global Service Department, said," We have started to carry out waste and electronic products in Europe and develop environmentally friendly practices in order to send products back to work. "

James Lovegrove, Executive Chairman of the Belgium Club of American Electronics Association (AEA), pointed out that Belgium, Denmark, the Netherlands and Spain have implemented stricter regulations on the management of product recycling, which is expected to start in August 2004. As a global high-tech industry association, AEA has its headquarters in Silicon Valley and Washington.

"Large OEMs such as HP and IBM have recycling systems." Lovegrove said, "Manufacturers of consumer goods and some smaller companies have no recycling system, because the profit in the recycling market is very small. If there is no law enforcement, they are hesitant to recycle in the article."

Outsourcing to EMS company

The cost of EMS suppliers to implement the recycling plan is lower than that of other companies in the supply chain. Because workers are trained, they can disassemble the repaired product components. "This is a value chain, reverse supply chain system." Mitchell of Xudian said, "For us, this is a simple business, but government departments and other OEM partners, and for future development, this is an important cornerstone."

Due to the fear of strict environmental regulations, penalties have been imposed in Europe, and it is realized that the United States may adopt a similar ban, and more and more OEMs are beginning to care about their own ways to dispose of this product, said Ilka Pouttu, CEO of Ketai. The media contractor's products in Estonia and Finland are used for the maintenance of wireless infrastructure, and the mobile phone business is in Hungary. He said: "OEM manufacturers need to provide more environmentally friendly services, such as ensuring that mobile phone batteries are sent to places designated by the government to avoid environmental pollution."

Recycling outsourcing, OEM is no longer engaged in electronic components, which may reuse plastic and metal wastes recycled or sold to third-party suppliers. This service also supports EMS suppliers with the opportunity to deepen their relationship with customers.

Xerox requested in October last year to accept part of the recycled Flextronics International outsourcing agreement for many years. Singapore-based contract manufacturers have agreed to pay US$ 220 million to acquire Xerox's four factories in Toronto, Sender, basil, Penang, Malaysia and Aguascalientes, Mexico, including those engaged in material recovery services.

This transaction frees the office equipment manufacturer from the relatively low-end recycling business of copiers and printers, and can calculate the life of the whole project and save the company $100 million. A spokesman for Xerox said that the company will continue to recycle high-end production equipment.

As Flextronics was pulled down, Zealey said that this EMS supplier will "make every effort to avoid any Xerox products being thrown into the garbage dump, which is part of the agreement."

Xudian represents a number of customers in resource recovery projects, including Amsterdam, IBM, and various products from mobile phones to large computers. "We recycle services provided in different locations." Mitchell said, "We are the product of the reverse logistics network returning from the scene to our recycling center."

In December last year, Xudian agreed to acquire the maintenance and logistics business of Tencent Technology, a power supply manufacturer, for US$ 33.5 million, thus strengthening its domestic business. This transaction enables Xudian to repair, renovate and assemble in Lincoln, California, Louisville and Nashville, Kentucky, Tennessee, and provide logistics services.

However, not everyone thinks that OEM EMS should be responsible for environmental waste. "If we can't fix it, the OEM will indicate which organization we should be used to deal with this product." Vice President of Business Development of Circuit Dennis AYO, a global service subsidiary of Jabil, said, "We don't want to deal with these products by ourselves, and there are some good companies that can do for us. We intend to continue to engage in our core business and provide practical services.