Indonesian e-scrap recycler targets thousands of communication towers

Indonesia generates more than two million tonnes of electronic scrap per year of which only an estimated 7% is properly processed by companies like Mukti, an e-scrap recycler with three facilities near Jakarta.

It’s business as usual at Mukti Mandiri Lestari in Bekasi, a district east of Indonesia’s capital Jakarta, as truckloads of scrap come and go, and the morning shift in the dismantling and cable stripping halls is working overtime. ‘Bekasi is our main facility,’ says company director Layla Dutha Faradiba. ‘In Purwakarta, some 75km further east, we have two more plants, also for e-scrap.’

Apart from handling typical consumer electronics such as laptops and smart phones, Mukti processes production scrap from major industries and electronics brands. Their niche activities include the dismantling of communication towers sourced from across the entire Indonesian archipelago.

A FAMILY BUSINESS

Faradiba leads the Mukti business with her father, Wawan Budiawan, and her mother Suhaedah. ‘In the late 90s my dad, who at that time was an exporter of machinery, saw the problem and potential of e-scrap. E-scrap was mostly being dumped so he started to collect materials like copper scrap from industrial production. In fact, he made electronics recycling in Indonesia happen long before any kind of regulation was in place.’

100 000 TONNES

Twenty-five years on, Mukti is a mature, profitable, fast-growing business. With a workforce of 500, it processes some 100 000 tonnes of e-scrap per year. Purwakarta and Bekasi are situated in the greater Jakarta area which has a population of 35 million and a huge concentration of industrial production with many big consumer brands represented. ‘Obviously, with all these industrial zones surrounding us we are strategically close to our suppliers, to the scrap,’ says Faradiba. ‘What’s more, we benefit from the Free Zone situation which means we do not pay much tax.’

CAPACITY EXPANSION

Even so, it seems the best is yet to come for Mukti. Indonesia has a fast-growing middle class which is an extra driver for electronics consumption. With a population of 280 million, it is the fourth most populous country in the world and one of the largest electronics consumers.

Clearly, where there is fast-growing consumption of electronics there needs to be fast-growing electronics recycling. A recent study indicates that by 2040 the average person in Indonesia will create 10 kg of e-waste – the current average is 2.8 kg. Electronics recycling, currently a EUR 2 billion business in Indonesia, is expected to hit EUR 14 billion by 2040.

Faradiba and her family are ready to claim their share. In 2024 Mukti will expand its operations with two facilities currently under construction near Bogor, south of Jakarta, which is another emerging industrial heartland. ‘There is so much consumption and production growth, supply of our new operations is guaranteed,’ says Faradiba.

WORKING WITH THE BIG BRANDS

Electronic giants like Fuji Film, Kenwood, Epson and Lenovo, as well as automotive majors Honda and Toyota, are among Mukti’s suppliers. Another is DHL. ‘They have huge warehouses packed with electronics, stuff that never arrived at customers or has been rejected. We take care of it.’     

In addition, a lot of electronic scrap is coming from Indonesia’s telecom sector and companies such as Telkom Indonesia and Telkomsel. ‘We take in the underground cables but also sim cards and other things.’ An interesting niche is telecom towers. ‘Every year some 10 000 of these towers are being replaced by new, wireless towers, so we dismantle parts containing valuable metals such as the signal boxes.’

REMOTE OUTPOSTS

Mukti receives materials from all over Indonesia, even the most remote places. Like Ambon, an island of the Moluccas archipelago in the eastern part of Indonesia. Java, Sumatra and Sulawesi are familiar names but ever heard of Bintuni or Timika on Papua? In these and 36 other places across Indonesia, Mukti has established collection hubs – or ‘drop off points’ as they call them.

‘Obviously, logistics is challenging in a country that consists of thousands of islands but it’s worth the effort,’ says Faradiba. ‘We already source scrap from as far away as Papua, which is 3 500 km from Jakarta. Even in faraway places there is valuable scrap to be found.’   

The Mukti management is talking to a mining company on Papua. ‘They have machines, computers which at some point in time reach end of life and then they need a party to help them get rid of it.’

DIGGING FOR GOLD

Another niche offering business opportunity, recently launched, is Mukti’s jewellery division. Faradiba explains: ‘We get a lot of precious metals from our recycling, like palladium, silver and gold. So we thought: we’ve already got the gold, why not make our own jewellery and sell these to other jewellery outlets. It’s a very exciting idea.’