Being in the waste management business, chief investment officer of Enviro-Hub Adrian Toh compares his work to that of the local ragand-bone men who frequent the housing estates in Singapore collecting recyclable materials.
“We are like the karung guni man because they take over the waste, open it up and extract the recyclable components inside,” says Toh in an interview with The Edge Singapore.
However, the company is more than just the regular karung guni collector. Its business has survived through the pandemic and thrived amid the increasing production of waste from society at large as economies reopen.
For Toh, the company’s business, which is primarily to collect e-waste, extract the raw materials inside and sell the commodities in a treated and purer form, is resilient. “In this world, there will always be a consistent demand for waste clearance and management, as waste production is a constant in our society,” shares Toh. “We take anything from large equipment like old fridges to small gadgets such as cell phones, and in the recycling process, [distil] the parts of material value and determine what is ‘treasure’ to us [that can be sold].”
Enviro-Hub’s work to turn trash into treasure is reaping returns. For its latest 1HFY2022 ended June results, the company’s revenue was up 29% y-o-y to $22.8 million, while earnings were up 43.2% y-o-y to $739,000.
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Photo: Enviro-Hub
Part of the higher numbers came from the company’s relatively new healthcare segment, which includes its glove-making venture Pastel Glove that contributed 14% of the overall revenue.
Toh says Enviro-Hub will continue to grow this business segment, given the longer-term growth prospects and better margins. Apart from latex glove manufacturing, the company’s manufacturing and trading of healthcare products include its pharmacy retail stores across Malaysia. This segment, Toh says, will undergo aggressive expansion in the later years.
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On the other hand, the group still has its legacy businesses in its portfolio in securing piling contracts and investment properties, such as Lam Soon Building in Hillview. Toh says: “We are looking to divest these businesses soon and focus more on our e-waste recycling and healthcare segments.”
For now, the trading, recycling and refining of e-waste and metals, which generated 72% of its revenue for 1HFY2022, will continue to be Enviro-Hub’s main business, given how it is both resilient and has potential for growth. “Many customers have been with us for 20 years, with some even reaching the 30-year mark,” shares Toh. “We do have the assurance that our customers will not leave [us]. [At this stage], it’s just about whether we want to [take on other clients].”
He adds that the company’s e-waste recycling plants are now running at full capacity. At this point, he does not see competition within the market as there is more waste than the current players can handle.
Toh adds that Enviro-Hub leverages on advanced technologies and equipment to recycle the collected e-waste. “The ways of recycling have undergone several cycles of evolution over the years,” he explains. “This means recycling technology is getting more and more sophisticated, [and we need to keep up with it.]”
These fancy machines are used to extract the precious metals and other valuable commodities found within electronic devices, while the remaining components that the company cannot recycle will be sent to landfills or other waste management companies with the relevant expertise.
Next, the company extracts metals, such as gold and copper, to be sold. This means Enviro-Hub’s margins are tied to the commodity market. “E-waste recycling historically is known to be a low-margin business, because of how it is difficult to sell these precious materials to collectors at high prices in this market,” Toh says, “but in recent times, due to [a spike in] gold and silver prices, we’ve been able to make a decent profit.”
The company does not hedge and hold on to its stock while waiting for better pricing. Rather, it aims to clear its inventory as quickly as possible and avoid hedging costs.
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While technology has transformed over the years, making recycling more efficient, cost-effective and environmentally-friendly, there is still much room for improvement.
“E-waste [recycling] continues to be at an infantile stage in Southeast Asia,” says Toh. “We hope to be able to continue surpassing existing standards and work towards being technologically up-to-date [in our systems].”
As Enviro-Hub moves to keep itself up to date with technology, Toh also emphasises that society at large needs to be educated on recycling and the importance of it. “Today, people are still not completely aware of how to recycle [properly],” says Toh, adding that the group is trying to do more in this space by using social media platforms to better educate public audiences.
Cover photo of Toh (left) and Ng: Enviro-Hub
