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July 18, 2024

How To Start Scrap Metal Collection in Nigeria or Africa: Complete Guide

How To Start A Lucrative Scrap Metal Collection Business In Nigeria Or Africa: The Complete Guide | Image: Pixabay

Metal is an essential material used from day to day both in the industrial and everyday setting. But what happens when a metal loses form, becomes old, worn out and supposedly useless? Recycling is the answer! Recycling and repurposing scrap metal is a highly lucrative business with great potential for any business investor at any scale whatsoever in any part of the world. However, for those who cannot completely delve into the full scrap metal recycling business, collecting scrap metals is a viable and profitable option, and the great news is that it requires less capital than recycling.

As of 2019, the global metal recycling business at large was worth $52.1 billion, and it has been projected to grow as high as $76.1 billion at a massive CAGR of 7.8% within the forecast period of 2020 and 2025. The USA stands tall in the metal recycling market. The country exported over 17,000 metric tonnes of scrap metal in 2019. The US is trailed by Japan (7,657 MT), Canada (4,369 MT), Russia (4,059 MT) and Australia (2,325 MT) in the same market year. On the flip side, Turkey remains the biggest importers of scrap metal, with particular attention on steel metal. The Eurasian country imported a whopping 19 million MT of scrap steel alone in 2019. This further underlines the heavy demand for scrap metal all over the world.

Like other industrial nations of the world with growing economies, Nigeria consumes almost 7 million metric tonnes of metal annually. However, at the moment, the nation contributes a relatively insignificant percentage to the metal recycling industry if compared to how much metal we consume. Although there is a paucity of data on what precisely the scrap metal recycling market in Nigeria is worth, there are estimates that the country churns out about a thousand metric tonnes each year. For a smart investor, this is a huge business potential.

There is no doubt as to whether the world will continue to demand metal. What this means is that, as a metal collector, there is the possibility of making millions just by collecting and selling waste metal. At the rate of N800 to N1,000 per Kg, a collector could make as much as N7 million from a truckload of aluminium and about N25 million from copper. The interesting thing about metal collection is that it is an accommodating enterprise. There are no restrictions on the number of staff, and there are no qualifications required. Literally any able-bodied individual who is willing to learn the basics of scrap metal collection hands-on can earn a living from it. It is a common business in major cities and towns in Nigeria such as Onitsha, Port-Harcourt, Lagos, Enugu, etc.

Scrap metal collection holds a high profit and ROI for willing investors with the right network and access to buyers at best rates. If you’re looking to start a lucrative scrap metal collection business, you will find this step-by-step guide a trusted companion.

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What Is A Scrap Metal?

Scrap metal refers to all metallic and related materials, excess metal, as well as metallic waste from vehicle parts and building materials, among others. Scrap metal is processed and refined into usable material used for the production of new metallic items.


What Is Scrap Metal Collection?

A major step in repurposing scrap metal is the actual collection of the scrap metals. Collecting items from bins, gutters, waste heaps, etc., doesn’t sound like a coveted job, but it is worth billions of dollars, and it keeps lots of people employed all over the world.

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Business Opportunities In Scrap Metal Collection In Nigeria And Around The World

1). Scrap Metal Collection:

One of the most basic job opportunities that the scrap metal collection industry offers is the actual collection of scrap metal materials. Most young and energetic people in Nigeria, especially men, with little or no academic qualifications resort to scrap collection. They scout the major cities and towns for unused old metallic materials and sometimes purchase the materials from the owners who feel they do not need such metals anymore. In Nigeria, scrap metal collection is a steady daily source of income for collectors. They deliver their daily picks to scrapyards where the materials are compressed and beaten into shape for proper packaging, and they get paid.

2). Scrap Metal Recycling:

Scrap metal collection is only a component in the system of scrap metal recycling. The collection of scrap materials creates opportunities for recycling. This involves exporting scrap materials since there are not many recycling factories in the country. For most collectors who do not have direct access to international buyers, they sell to large companies who deal in recycling and/or exporting the scrap items.

3). Repair And Maintenance Services:

Operating scrapyards is the most preferred option in the scrap metal recycling industry in Nigeria. Whereas most scrapyards go the manual way of using axes, hammers, crowbar etc. in their craft, the sophisticated scrapyards deploy the services of heavy equipment such as metal shears, high-speed balers, light iron auto-balers, cranes and pulleys, among others. The hitch is that such equipment requires repair and technical maintenance from time to time. This leaves room for technicians, engineers and electricians in the scrap metal recycling industry too.

4). Transport And Delivery Services:

Collected scrap metals are packaged for delivery to companies where they are further refined or exported to countries where they are in high demand. Delivering the scrap metals to the companies requires the services of trusted expert truck drivers.


Facts And Benefits Of Scrap Metal

  • Recycling metal takes less energy and resources than falling back on ore mills for metals.
  • Metal can be recycled multiple times without losing its quality.
  • Recycling scrap metal keeps the environment clean and habitable.
  • It also reduces land pollution.
  • Recycling metal also reduces greenhouse gas emissions.
  • Recycling scrap metal also means 40% less water is used.
  • Scrap metal recycling or collection is a highly lucrative business.
  • Scrap metal collection is a common practice in urban areas.
  • The USA, Japan, Canada, Austria and Australia have some of the biggest scrap recycling markets in the world.
  • In Nigeria, scrapyards are found in major industrial towns such as Onitsha, Port-Harcourt, Lagos, etc.
  • When you recycle a single beverage can, you create enough energy to power a 60W bulb for as long as four hours.
  • Scrap metal recycling keeps millions of people employed all over the world.

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How To Start A Scrap Metal Collection Business In Nigeria: A Step-By-Step Guide

1). Understand the Basics:

The first thing to do is to equip yourself with the basic knowledge about metals and their types as well as their values. This will get you acquainted with the atmosphere of the business and streamline your attention to valuable metals.

2). Create A Business Plan:

The next stage would be to draft an effective business proposal to guide you through the business.

3). Locate A Business Site:

You will need to locate your scrapyard right on your company site for better monitoring. Ensure that your business site is situated at the heart of town for easy access.

4). Employ Labour And Procure The Needed Equipment:

Employing labour for a scrap metal collection company is not exactly demanding because there will always be people coming around to work with the company as collectors. However, you need to be careful to employ only trusted hands so as to avoid metal thefts and related issues. Invest in the necessary tools and equipment, depending on your budget. They include a scale, hammers, crowbars, as well as mechanised devices such as high-speed balers, axes, pickup trucks, metals shears, etc.

5). Network With Buyers:

This is the point where your power of influence and networking comes to play. Identify with both local and foreign-oriented scrap metal dealers.

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Challenges Of Scrap Metal Collection In Nigeria

  • Difficulty in reaching the international market
  • High startup cost
  • Difficulty in procuring quality tools for scrap recycling
  • Scrap metal collection is time-consuming
  • Exposure to health hazards such as toxins from lead
  • Accidents and cuts during collection or packaging of sharp metal
  • Poor road network for transporting collected scrap metal
  • Distrust between collectors of scrap metal and scrapyard owners
  • Metal thefts
  • Difficulty in securing loans

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To Sum It Up

As inconvenient as it might seem, scrap metal collection is a very lucrative business opportunity for entrepreneurs and investors. The fact that it is associated with metal recycling, an eco-friendly business, means it can never run out of market favour. The scrap metal collection business in Nigeria can be a lucrative and profitable venture to start-up, due to its vast market demand and on your ability to build a wide network. If you’re looking for a lucrative business to venture into, the scrap metal collection business in Nigeria is a great option to explore.


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What are your thoughts on how to start a scrap metal collection in Nigeria? Let me know by leaving a comment below.

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