While some in the paper recycling sector continue to struggle with shifting markets caused by China’s scrap import restrictions, others have seen spectacular business growth. Among them is the Swiss Vipa Group. ‘In 2019 our exports of recovered paper from Europe increased by 38%,’ says company ceo Marc Ehrlich.
‘I get the feeling we are criminals,’ lamented Marc Ehrlich back in September 2018 while speaking at a conference in Berlin. The ceo of Swiss recovered paper recycling and trading company Vipa Group was referring to media headlines at that time saying: ‘A ban on secondary materials from Europe’ and ‘China doesn’t want our scrap anymore’.
More than a year later, Recycling International meets up with Ehrlich in Paris, under the roof of the Museum of Air and Space in Paris, venue of the annual gathering of EuRIC, the umbrella organisation for the recycling industries in Europe.
‘What I was trying to bring across in Berlin was that if the public starts to consider secondary materials as trash because of what’s happening in China, it could mean the end of recycling and thus the end of our business,’ he says. ‘My message then was, and still is: “Recovered paper recyclers and exporters should do their utmost to keep their dignity and continue working on their good reputation”.’
Surely that is easier said that done?
‘Indeed, the world has completely changed. China’s imports of recovered paper shrunk from almost 30 million tonnes in 2017 to just 7 million this year. The nation’s import restrictions have forced paper recyclers and exporters to drastically restructure their businesses. Clearly, far less goes to China, while more and more recovered paper is shipped to other destinations in southeast Asia.’
How has this affected your own business?
‘Vipa Group has never been solely dependent on China, unlike some other big players, as we’ve always spread the risk. We source from all over Europe; mainly UK, Spain, Italy and Portugal. Our top three destinations are currently Indonesia, India and Thailand/Vietnam. Vipa’s recovered paper exports from Europe have increased by 38% from 1.8 million tonnes in 2018 to 2.5 million tonnes in 2019. Europe exports 10 million tonnes per year. We do a quarter of that which makes us the current market leader.’
So what is your big secret?
‘As a trader/exporter, we do business only with the source and the end user: no third parties. Third parties kill your margins. Another thing, and most important, is that quality has been and remains our top priority. In order to survive, our industry needs to be extremely strict on controls and quality throughout the full chain. Let’s face it: after China, we have seen countries like Malaysia and Indonesia changing their import policy just as China has. So quality is key, no matter who you do business with. You have to make sure you have good technical training for all staff and specially trained inspectors on the ground who are independent from both the source and the end user.’
The full interview with Marc Ehrlich can be read in the latest issue of Recycling International.
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