Wednesday, Jun 3, 2020
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Scrap metal firm sees 500% decline in exports

Construction at the Arawak Cay Port has led to a 500 percent decline in exports of scrap metal at one of the biggest companies in that industry,Guardian Businesshas learned, with end-of-year changes expected to slash profit margins even further.

According to Everette Strachan of Strachan’s Auto and Bahamas Scrap Metal, the clearing of old jalopies around town will not be as enticing to those in the field oncethe cost of transporting them off the island increases.

“The government has granted us permission to use a barge for a few more runs,”he said.”We keep The Bahamas clean, green and pristine… we remove vehicles that are all about the island.

“But by the end of the year, I’m 99 percent sure we won’t be allowed to bring in the barges anymore[and]shipping costs will increase by 200 to 300 percent.”

It’s an increase that will come on top of a 500 percent decline in sales in recent months, said Strachan, as construction at

the port limited the barges coming in. He is now hoping the government secures another spot somewhere on the island to load scrap metal onto the barges, which facilitate a method where material can be dumped straight onto them.

That’s different from methods currently being used by other companies, which either load metal pieces into containers or use regulated racks to get their goods to market in the U.S.

Strachan argues those methods would not suit his business at all as the containers would not accommodate the size of his items and racks would increase his costs by as much as 10 percent. He is not willing to change his methods, given the volatility of the scrap metal industry by nature.

“You’ll see inventory increase at our yard because market prices fluctuate daily,”he explained.”For example, one day the cost of metal you have in stock could be$15 and it could be$3 on another day.”

Strachan suggests the country-not to mention those in the industry-could benefit from having a manufacturer of some kind set up to process the metal that is currently in stock. It would create jobs for the country as well as complement the plans for the new port.

Minister of Environment Earl Deveaux acknowledged in an earlier interview that the construction of the port presents a good opportunity for Bahamians to develop the scrap metal industry. He then argued that a change in the level of interest Bahamians have in developing the scrap metal industry may only come with a change to the legal policies.

“Perhaps the best incentive,”said the minister,”would be to pass an environmental levy act to charge a disposal fee up-front for disposing of the metal once it has served is useful primary life.

“The business would be good for The Bahamas for environmental, social and economic reasons. It would enable a cleaner environment and facilitate[the]full use[of]tradable skills,[for example]welding, fabrication, heavy machinery operations and the like. I can see no downside to engaging the initiative.”

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