SME’s to be included in scrap metal distribution

The Public Procurement and Disposal Agency (PPDA) decided to include Small and Medium Enterprises (SME) in the organizations allowed to access scrap metal. This is in addition to 28 steel and metal industries. The Agency has been dispersing scrap metal since 2014. Previously it distributed the metal to industries every month.
The Agency called the Enterprises on October 3 to submit their demand specification authenticated by the Metals Industry Development Institute. Eight SMEs applied for the opportunity through October 19, the deadline is October 25.
Scrap metal is the small piece left over after the greater part has been used. Also when items which are made up of metal reach the stage they are meant to be given to the industries which will use them as raw material after recycling.
The Association of Basic Metal and Engineering Industries (ABMEI) supported the decision by the Agency but said they are concerned that proper segregation be conducted.
“The SMEs can only reuse the metals but they can’t melt the non-usable,” said Solomon Mulugeta, chairman of the Association. “If the Agency can’t segregate the items properly they will just resell the scrap back to the large scale companies. If this happens it will mean additional cost without adding any value and will create inflation.”
They are also concerned about the Agency’s capacity to segregate metal and the need for additional technology and resources.
“We will order the government organizations, which we will dispose the scrap metal for, to segregate the materials based on the specified need of their SMEs,” said Assefa.
About 60% of global metal is manufactured using the scrap metal. The Agency disposed 10.9 million kilograms per year on average for the past four years which makes the total 43.6 million birr.
In Ethiopia the demand supply ratio of steel was among the major challenges for the economy in general. For a nation which has ongoing mega construction projects with a flourishing construction industry steel is a big concern for the government. Last year the government took steps to stabilize the rebar market which was affected by the devaluation of the Birr.