SET-listed Millcon Steel, a Thai steel manufacturer, expects to conclude a new deal with partners in the fourth quarter to jointly develop recycling businesses to add value to scrap.
Millcon is in talks with 4-5 foreign companies, mostly from Japan, for the joint venture, said Pravit Horungruang, chief executive of Millcon.
"The recycling business is growing, driven by the global trend of reducing carbon dioxide released from manufacturing," he said.
Millcon's move comes amid growing concern over more expensive steel prices because of the Russia-Ukraine war, which is blamed for increasing energy and raw materials prices.
The company also wants to pursue circular economy-based production, which promotes an upcycling process to add value to unwanted materials, making them usable again.
Millcon wants its prospective business partners to join an end-of-life vehicle (ELV) management project. Many ELV items, including steel, copper and plastic, can be recycled, it said.
"We are also asking the Industry Ministry to support recycling businesses, especially those involving unused cars, through new incentive programmes that seek to attract people who want to recycle their old cars," said Mr Pravit.
The company also wants the government to adjust laws that impose complicated legal procedures on parties taking cars damaged in accidents for recycling.
Millcon currently imports ELVs from many countries, including Australia, Japan, South Korea and the Latin American region, for recycling at its plant, operated by its subsidiary Suntech Recycle & Decarbon Co. The plant is in the eastern province of Rayong.
"Suntech, which has a recycling capacity of 30,000 vehicles a month, plans to increase its capacity to 70,000 vehicles a month," he said.
Millcon expects EVLs to help the company reduce steel imports by using recycled steel, which is less expensive.
Steel from the recycling process can be an alternative for the steel industry, especially at a time when global steel prices soared by 20-30% because of the conflict between Russia and Ukraine.
"Steel makes up 70% of a car. The 30,000 unused vehicles can provide us 15,000 tonnes of steel, or around 700-800 kilogrammes a car," said Mr Pravit.
Some unwanted parts of ELVs that are categorised as toxic waste can be treated and used as refuse-derived fuel for power generation.
Millcon is also interested in other business opportunities under the bio-, circular and green (BCG) economic model, which is being promoted by the government.
BCG encourages manufacturers to adopt techniques that can add value to products and have no or minimal impact on the environment.
Millcon aims to be a leader in the steel industry by developing environmentally friendly manufacturing and launching more green products, he said.
"We are also seeking business partners to jointly run a project in the renewable energy segment," said Mr Pravit.
In 2022, Millcon set a revenue target of 20 billion baht, expected to be driven by higher demand for steel, mainly from state infrastructure development projects.