“Automotive scrapping has been made useless”
CEO of Ehyasazan Sanat Khodro:

“Automotive scrapping has been made useless”

“Policies adopted by the officials over the recent years have kept car owners away from scrapping centers; there is practically no scrapping in the first place for us to decide about selling scrap to steelmaking plants,” said Seyed Jalil Esfandiari Zaki, CEO of Ehyasazan Sanat Khodro, a vehicle recycling and scrapping center.

In an interview with FelezatOnline, Seyed Jalil Esfandiari Zaki said: “Ehyasazan Sanat Khodro officially got into business in 1386 (2007) when the government program to decommission old vehicles was started. The center used to have a good performance in the early years, supplying considerable volumes of scrap as raw materials to furnaces, but it is now barely surviving thanks to policies and decisions by the officials. About 25 people used to work here, but now there are only three people working as guards.”

We used to scrap 80 cars per day.

“1393 was the height of our activities; car imports were free and the government offered replacement plans and loans to the owners of scrapped cars. Thus, owners were willing to have their cars scrapped.”

He pointed out that the company has not scrapped any cars for about a year: “Continuing to work under these circumstances is just a waste of capital and human resources. Other companies in the business might scrap only a handful of cars per month, which is nothing compared to the 80 cars scrapped daily in the past. It can’t be profitable at all for industry participants.”

Scrapping stopped as the domestic automotive industry was supported.

He cited one of the reasons for the decline of car scrapping: “As soon as Shariatmadari entered the cabinet, he proposed an end to car imports with the justification of supporting the domestic automotive industry; the proposal was approved by the parliament and implemented. When imports stopped and loans for scrapped car owners were cut, owners preferred to keep their cars. As a result, an environmental program with an economic perspective and over 200 certified centers were just left to their devices. The centers, which had invested several billion tomans and at least a hectare of land for the business, were barely surviving or inching closer to bankruptcy.

“Currently, the price differential of old vehicles to brand-new ones is lower than it used to be; old cars are traded on the market at higher prices than scrap yards can offer. Owners are not at all interested in having their cars scrapped. When Pride in its worst condition is worth six million tomans, how can you expect owners to have their cars scrapped for only three million tomans?”

Scrapped cars are ideal feedstock for steel furnaces.

“With an approximate weight of 960 kg to one tonne, Paykan contains 70-80% scrap metal, mostly ferrous, which can be used as raw materials for steel furnaces.

“After receiving the scrapping permit, the parts of the car are separated either manually or by machines. The passenger compartment is fed to the pressing machine where it is pressed into a cube, which is then sent to steelmaking furnaces along with other parts.

“Some non-certified scrapping centers remove some apparently functioning parts from the car and resell them; but that does not happen in certified centers.”

Buyers of scrapped vehicles

Esfandiari cited Khouzestan Steel and Foulad Yazd as major buyers of scrapped vehicles: “The representative of one of the melting plants would buy scrap from us right here and would send it to their melting plant. But there were no commitments or contracts to continue their cooperation and we would choose buyers according to their offer prices. Steel companies will definitely buy scrap from us if the scrapping program is revived.”

In the end, he expressed hopes that if the officials consider the resumption of the operations of scrapping centers and offering loans to owners of old vehicles, there will be more jobs, the environment will be saved, and unsafe vehicles will be removed from roads.

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