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Mauritius: Slow recovery for scrap metal exporters
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L'Express (Port Louis)
17 October 2007
Posted to the web 18 October 2007
Pauline Etienne
Port Louis
Although they were the first to ask for legislation, firms that export scrap metal have had difficulty to adapt to the severe regulations. While some are starting to pull through, others have had to lay off workers.
Scrap Supplies may have to make more employees redundant by the end of this month if the situation does not get any better.
"The business is slowly picking up." Some more time will be necessary for exporters to break even but some have noted an improvement compared to the month of August. Three months after the introduction of new regulations on scrap metal business, the situation has, however, not got back to normal.
After the price of scrap metal skyrocketed on the world market, many operators suddenly appeared on the market - especially foreigners. This lucrative business encouraged thefts for all those who had a means of transport, as the sector was not regulated. So much so that the government had to react in a strong way and implement strict regulations to restore law and order.
In fact, even the oldest companies involved in that business for more than 40 years and who had always done their best to avoid encouraging thefts suffered from these regulations in the beginning. Exporters, dealers, collectors and transporters all need a licence now to operate in this business.
Steel Scrap Ltd is one of them. "We stopped working for three weeks in August before obtaining all necessary permits and made sure we were operating legally. Although it is still not as flourishing as it used to be before the regulations, we can say that the business has been picking up since last month," revealed Ahmad Taujoo, the financial director of the company.
Gilbert Pigeot from Scrap Supplies Ltd cannot say the same. He obtained his export licence only three weeks ago. "Since August, we have not been able to work at all. We thought the situation would get better after we obtained our licence but we have not been able to resume our activities as they were before."
Still sceptical
Last Friday, he had to lay off four of his employees because "there was not enough work to do". And he warns he may have to follow that trend by the end of the month if there is no improvement.
The general manager of Scrap Supplies is sceptical about the results of the regulations. Even though the number of thefts has decreased, he asserts there are still illegal operators in the sector. "I called the ministry to denounce some of them but they told me that the police are now responsible for making sure people abide by the regulations," he relates.
If all exporters agree that there was an urgent need for these regulations, they nevertheless have to abide by more constraints today. Many collectors or transporters did not only do this with scrap metal. Therefore, they do not find it necessary to pay the Rs 10,000 requested to obtain the licence to continue collecting or transporting scrap metal. They prefer to shift to another business. Even though the situation tends to get back to normal, the general manager of Steel Scrap Ltd, Marc Técher, concedes, "We have fewer scrap."
To try and accelerate the process, Steel Scrap Ltd have, however, made a few requests to the committee responsible for implementing the regulations and chaired by the deputy prime mi-nister and minister of Tourism, Xavier-Luc Duval. Their request to exempt carriers from the need of a specific licence for scrap metal has, however, been refused.
"These trucks should normally already have a licence for carrying waste. In theory scrap metal is a waste. But the authorities refused this request," explains Ahmad Taujoo.
However, they hope they will be luckier with the two other ones: the reduction of the licence fees and the extension of working hours (beyond the 7 am to 5 pm contained in the regulations). The authorities said they would work on these proposals and could well amend the regulations in a near future.
In fact, scrap metal exporters were the first ones to ask for regulations and they acknowledge they are the first ones to benefit from this. "Before the adoption of these measures, the situation was chaotic. There was an urgent need to put some order in this mess and the number of thefts has definitely decreased," says Ahmad Taujoo.
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However, some - like Scrap Sup-plies - could be forced to close down if the situation does not get any better
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