Apple, Microsoft, Motorola wring new revenue out of e-waste
What do Apple, Microsoft and Motorola have in common?
All of these high-profile technology companies are harvesting new revenue out of discarded and end-of-life gadgets, rather than looking at them just as liabilities that require responsible recycling. What’s more, all three are among the roughly 100 organizations using Hong Kong’s Li Tong Group (aka LTG) to get the job done.
LTG, a specialist in reverse logistics, operates a network of 21 facilities in North America, Europe, Asia and Latin America. You can think of it as a contract “un-manufacturer” — an organization authorized to take apart smartphones, computer networking equipment and other electronics devices. LTG handles items that are traded in, returned or unsold.
“There is inevitably going to be excess or obsolete inventory. The dilemma is how to recover this while adding to the bottom and top line,” said Linda Li, chief strategy officer. “Smelting is not enough.”
The challenge is doing this in a way that passes muster with compliance regulators concerned with enforcing data privacy laws, as well as environmental health and safety standards, Li said. “[Original equipment manufacturers] are realizing that this is something they don’t have to do on their own.”
We’ve all heard the horror stores about the devastating environmental impact of electronic waste (better known as e-waste). The latest estimate from the United Nations suggests that the world generated 46.1 million tons last year, although that count also includes big appliances such as dishwashers and washing machines.
Most tech giants have committed to reducing their contribution to that pile, and to recycling products as they reach end-of-life. But the valuable components and metals used in these products have created a vast black market for unauthorized processors that often pay little attention to worker safety or the impact of their activities on water and soil.
E-waste and related issues of material reuse are enjoying a new moment in the spotlight thanks to increased interest in circular economy or closed loop business models, based on the concept of decoupling production capacity and environmental impacts.
Creative approaches to reverse logistics — also known as reverse supply chain management — represent one potential channel for companies to cycle would-be wasted materials back into either their own supply chains or the supply chains of others in need of similar materials.
Reinventing reverse logistics
LTG’s value proposition is its ability to take technology apart without damaging components that could be resold for other purposes. The liquid-crystal display from a tablet computer, for example, might find a second life as a control panel for a smart refrigerator.
Most OEMs already accept trade-ins when a consumer buys a new device. Whereas in the past those items might have been diverted directly to a recycler, now they might be diverted to LTG for recovery.
“We have a solution for everything. If a device can be refurbished, it will be. If it cannot be used, it will be used for raw material recovery,” Li said.
On its website, LTG notes that it is the only company in the Asia Pacific region to achieve both Responsible Recycling (R2) and Recycling Industry Operating Standard (RIOS) certifications. That said, its ability to handle these processes “in country” in other parts of the world is a big selling point, given strict rules governing the export of hazardous waste, including e-waste.
LTG generally is very close-mouthed about its customers, Li said, citing confidentiality agreements. In late July, however, it disclosed a relationship with Motorola under which it will handle reverse supply chain management for the mobile phone company’s trade-in programs in France, Germany and the United Kingdom.
If you poke around on Apple’s web site, you’ll see Li Tong listed as the liaison for the company’s reuse and recycling programs in Asia. The same goes with respect to its Microsoft relationship, which it further details on this information page about its trade-in program.
LTG maintains different financial relationships with customers of its reverse logistics services, according to a spokesperson, who shared this information via email in response to an additional question after GreenBiz interviewed Li.
Sometimes LTG shares revenue with clients that are selling high-value components. Others pay LTG a fee for harvesting and returning specific items, and processing the rest according to certain environmental standards.
Either way, confidential data on the systems is “sanitized” and proprietary equipment is destroyed. These measures are taken to protect privacy and intellectual property.
Interest in more intelligent approaches to reverse logistics is growing rapidly. Another disruptor to watch closely is Optoro, which sells software that helps retailers remarket returned or damaged merchandise more efficiently.