Recycling business keeps on going

By Joko Sarwono

BOGOR (JP): Crisis? What crisis?

While most people are lamenting about slow business or losing their jobs, three small-time entrepreneurs, Muslim, 48, Herman, 39, and Caca, 28, are boasting higher turnover and more work for friends or neighbors.

Their businesses have one thing in common: they are based on the concept of recycling. And they chose the depressed auto spare parts and components of all the industries opened to them.

Prices for auto supply parts and components, which are mostly imported, have soared along with the plunge in the rupiah in the last two years.

Recycling secondhand products or industrial waste, on the other hand, is immune from the volatile currency market. Their success, as the ensuing story of these three entrepreneurs shows, relies on the entrepreneurship of the owners.

Muslim supplies refurbished clutch discs and clutch covers, two auto components, which, because they have a short life cycle, are in constant demand.

With the soaring prices of new products, many car owners, particularly public bus and transit van owners, have turned to alternatives, and this is where Muslim fits in.

"My monthly turnover reaches Rp 100 million (US$14,510) from Rp 60 to Rp 70 million before the crisis," Muslim recounted.

"I have recruited 14 more workers and now employ 46 people," said the man whose highest formal education was third grade of junior high school.

Although he did not need really need the extra workers, he hired them anyway because they were his neighbors. "I'm really just sharing the pie with them."

He has been able to give his workers pay increases, a luxury that few other companies in the country can afford today.

Muslim started this line of business in Jakarta in 1982 and moved to Bogor in 1987.

Regular customers

What he essentially does is refurbish used auto components as best as he can so that they can be reused.

Qualitywise, they would be about 20 to 30 percent inferior to new ones, but pricewise they are competitive, he claimed.

"A new Suzuki Carry minibus's clutch disc could cost you up to Rp 145,000. I can sell one for Rp 60,000," he said.

Among Muslim's regular customers are owners of angkot, the public transit vans in Bogor, and some local shops selling car parts and components. "I also get visitors from Setya Bhakti, Bianglala and Alinda," he said, referring to three major intercity bus companies.

"The automotive parts business is very promising," he said.

Muslim decided, however, to concentrate in refurbishing the two components, which, he said, have the shortest life cycle.

Herman, who sells secondhand auto parts from a kiosk in Merdeka Market, also attested to the growing demand for such products.

Some buyers are not too fussy about quality and they would buy anything as long as it fits, said Herman, who acquires most of what he sells in his shop by salvaging parts from car wreckages.

"Now I get 10 to 25 customers each day coming to the shop. Before the crisis, I would be lucky to get five," Herman said.

In those days, the gap between the secondhand and new product market, with most people preferring to buy new, was not so much. Now, with new auto parts 300 percent more expensive, many transit van owners are looking for cheaper alternatives, he said.

The brisk business means that Herman has to make weekly trips instead of monthly ones to car dump sites. His favorite hunting ground is Depok.

Herman resisted the temptation of charging higher profit margins. "My customers are angkot owners or drivers. I know how hard their business is today," he said, adding that he was making reasonable profit through a higher turnover.

"I used to make a profit of Rp 1 million a month, and now I'm making Rp 2.4 million," he said.

Customers speak

What do his customers say?

M. Isak, secretary of the Bogor Public Land Transportation Agency, said people rely on luck when they buy secondhand auto parts.

"You could be lucky and get a good one for cheap. But you could be unlucky and get a real dud. Then, you have to go back to the shop and try another one," Isak said.

Caca's 12-year-old business is recycling rubber waste from auto tire companies into car accessories, like window seals and mats. Some would also be usable for shoe soles.

What she and her husband, Hasannudin, 35, do is collect waste from major tire companies like Good Year, Intirub, Gadjah Tunggal, Bridgestone and Continental.

They then employ their neighbors to remove tire chords and wires from the waste and they are paid Rp 1,000 for every kilogram of rubber they collect. The rubber waste is then reprocessed into various products.

"I can sell my products at half the price of the real thing," Caca boasted.

She has also added seven new regular buyers for her products to bring the total to 10. "Now, whatever I produce is sold immediately," said the mother of three.

"My monthly turnover is now Rp 300 million, twice the precrisis level," she said.