Due to the recurrence of electronic component recycling in Europe and strengthening environmental regulations, more and more major OEMs (original equipment manufacturers) will be passed on to another partner of their supply chain responsibility EMS (electronic manufacturing services), which is recycling.
At the end of last year, the European Commission approved the "WEEE" directive. The act 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 console and accessories, equipment cables are considered to be too high cadmium content.
As a result of this European law, many EMS providers, including cotec, Flextronics and Asahi, are working hard to develop after-sales support business and start promoting their goods as part of the warranty service. Worldwide, maintenance and quality assurance services are a $3.5 billion market, analysts say.
"Europe and Japan are at the forefront of the campaign, warning people not to discard waste materials." Bill Mitchell, vice president and President of global services, said, "we have started to launch waste and electronic products in Europe and develop environmentally friendly practices to send products back to work."
James Lovegrove, executive chairman of the Belgium Club of the American Electronics Association (AEA), pointed out that Belgium, Denmark, the Netherlands and Spain have implemented stricter regulations on product recycling, which are expected to start in August 2004. As a global high-tech industry association, AEA has headquarters in Silicon Valley and Washington.
"Large OEMs like HP and IBM have recycling systems." Lovegrove said, "manufacturers of consumer goods and some smaller companies, have no recycling system, because the recycling market profit is very small, if there is no law enforcement, they are hesitant in recycling in the article."
Outsourcing to EMS company
The cost of EMS supplier to implement the recycling plan is lower than that of other companies. In the supply chain, due to the training of workers, the product components can be disassembled and repaired. "It's a value chain, a reverse supply chain system." "For us, it's a simple business, but government departments and other OEM partners, and for future development, it's an important cornerstone," said Asahi's Mitchell
Because of concerns about strict environmental regulations, penalties have been imposed in Europe, and the realization that the United States may adopt similar bans, more and more OEM manufacturers are beginning to care about their own disposal of the product, said ilka pouttu, chief executive officer of Ketai,. The media contractor's products in Estonia and Finland are used for wireless infrastructure maintenance, and the mobile phone business is in Hungary. "OEMs need to provide more environmentally friendly services, such as what we use to ensure that mobile phone batteries are sent to government designated places to avoid environmental pollution," he said
Recycling outsourcing, OEM no longer engaged in electronic components, these components or reuse recycled or sold to third-party suppliers of plastic and metal waste. The service also supports the opportunity for EMS suppliers to deepen their relationships with customers.
Xerox asked in October to accept part of the recycled Flextronics International's multi-year outsourcing agreement. Singapore based contract manufacturers have agreed to pay $220 million for Xerox's four plants in Toronto, Lucent, Penang, Malaysia and Aguascalientes, Mexico, including those engaged in material recycling services.
The deal frees the office equipment manufacturer from relatively low-end copier and printer recycling businesses, allowing it to calculate the life of the entire project and save the company $100 million. A Xerox spokesman said the company will continue to recycle high-end production equipment.
As Flextronics was dragged down, zealey said the EMS supplier would "do everything possible to avoid any Xerox products being dumped in the dump as part of the agreement."
Asahi represents the number of customers in resource recovery projects, including Amsterdam, IBM, and products ranging from mobile phones to mainframe computers. "We recycle and provide services in different locations." "We are the product of a reverse logistics network that goes back from the site to our recycling center," Mitchell said
In December, Asahi agreed to strengthen its domestic business by buying $33.5 million in the maintenance and logistics business of Tencent, a power supply manufacturer. The deal enables Asahi to provide maintenance, refurbishment and final assembly, as well as logistics services in Lincoln, Kentucky, Louisville and Nashville, Tennessee.
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 process this product." "We don't want to deal with these products ourselves, there are some good companies that can do for us, and we intend to continue to do our core business and provide practical services," said Denis Ayo, vice president of business development for circuit, a global services subsidiary of Jabil.
