Viewpoint - "Why can’’t reman growth match recycling?" - David Fitzsimons, managing director, Oakdene Hollins
- November 20, 2016
- ReMaTec News
How could annual sales growth in remanufactured products begin to match that seen in recycled materials over the past 20 years? And if this is to be done, which public policy instruments will make that growth possible? Thanks to the recent leadership of the Ellen MacArthur Foundation in combination with the long-term commitment from individual leaders such as Rolf Steinhilper, Walter Stahl, Binshi Xu, Nabil Nasr, Bob Lund, Henrique Rozenfeld, Mitsutaka Matsumoto and Bin Song, it looks now as if policy thinkers at the United Nations, Organisation for Economic Co-operation and Development, European Union and within some governments are going to answer these two questions.
If a consensus emerges around the best combination of policies, this work could create a period of new business opportunities for OEMs and specialist third parties. Above all, if investors start to have confidence in the policy prescriptions and come to believe that remanufacturing could follow a similar growth path to that witnessed in materials recycling – then expect to see many more mergers and acquisitions in the sector. Right now such prospects seem remote. Commodity prices continue to fall and over-production in the Chinese linear economy churns out products at prices that sometimes undermine core collection systems.
The tensions between possible longer-term benefits from the circular economy and the short-term need to sell today’s output, will not go away anytime soon. These tensions are just as evident in China’s 13th five-year plan as they are in management meetings at many product based businesses. But the potential prizes in terms of jobs, growth and improved resource efficiency warrant our renewed support for those who are working on the policy proposals: the specialist staff and associated academics at the UN, OECD, EU and in governments. They will need to understand value chains in the sectors where remanufacturing already exists i.e. automotive, rail, aviation, HDOR, marine, IT, medical devices, defence, as well as in those where it could yet be developed.
The Brussels based Remanufacturing Council (Conseil Européen de Remanufacture) – created as part of the European Remanufacturing Network project - will be supporting these global efforts to design an improved economic framework favourable to remanufacturers. Business leaders with operations in any part of Europe who want to shape these reforms are invited to get in touch.