Asia's profitable PC scrap yard

ALTHOUGH R. Frazier Sdn Bhd has been operational in Seberang Jaya, Prai, for only three months, its warehouse is stacked to the ceiling with obsolete PCs, printers, typewriters, computerised passbook machines, minicomputerss, mainframes and monitors of various sizes.

Using valuable warehouse space as a dump yard may not be a typical businessman's idea of an enterprise, yet Scotland-based R. Frazier Ltd has minted millions out of antiquated products.

Since its inception 1993, the company has grown from a À250,000 company to a À30mil powerhouse in 1997. Between 1996 and 1997, company revenues tripled.

In fact, British Telecom, together with R. Frazier Ltd, has earned at least À1mil annually since the telecomms giant contracted the latter to dispose of its outdated computer and office automation equipment.

Frazier Sdn Bhd's general manager YB Ng claims the 25,000 sq foot facility in Prai is the only one in the Asia Pacific region involved in maintenance, re-engineering, recycling and refurbishing PCs and other computer peripherals.

While the bulk of the Asia Pacific revenue is earned from third party maintenance for PCs and peripherals, Ng is confident that the recycle bit of the business will grow in the coming years.

"Asian are not deep into recycling like the Europeans are, but the market in the Philippines, Indochina, Poland, Yugoslavia and Middle East for recycled goods is high," he says.

Twenty per cent of what R. Frazier has refurbished in Prai since October were for the Malaysian market, although there is a stigma associated with using recycled PCs here.

"Companies here would rather not say they use recycled PCs because of the perception it creates; but we sold nearly 1,000 refurbished 486-based PCs here last year.

"It is common to find a mix of new Pentium PCs alongside refurbished 486-based units in companies and institutions here," he adds.

Ng reckons that the economic downturn might even force companies to invest in refurbished, instead of brand new, PCs.

"Our European office won a contract to supply Dutch schools with 40,000 486-based PCs annually for five years," adds Ng.

High tech, nine lives

"In Europe and the United States, we have a revenue-sharing scheme with AST, Dell, Tulip Computers and Sun Microsystems whereby we split the profit for each refurbished PC we sell," says Ng.

According to Ng, it was law in some European countries for PC manufacturers to take back an obsolete PC for every new one they sell.

Ng says that data from every unit is purged before internal testing and other repair is done. All units undergo a series of stringent tests and are issued certificate of fitness before being shipped out.

"Whatever we cannot repair will be sent to Scotland to be salvaged and disposed off in an environmentally-friendly manner at our newly opened reclamation plant in Dumfries, Scotland," he adds.

In fact, Ng reveals that his parent company is planning to set up a recycling facility for waste management in Asia Pacific. But it won't be in the near future, not until everyone is environmentally conscious, he adds.

Birth of recycling

The local office has a paid up capital of RM520,000. To date, a total of RM4mil has been spent to set up the Prai facility.

The Scotland company is one of the world's largest asset management companies, and has operations in the United States, Germany, South England, the Netherlands and South Africa.

Transcapital is an investment holding company involved in contract manufacturing activities serving the computer and electronics industries.

It also manufactures and sells latex finger cots and related products; is involved in property holding; trading of raw electronic components and industrial products; as well as the design, development, engineering, manufacturing and sale of flexible circuit interconnect solutions.