If our ecological systems are going to survive over the long term, then we must find ways to eliminate the negative impact of disposable products on the environment. The ability to break down waste to its original elements and use it to produce new materials and products will not only allow for cost savings, but also the conservation of resources and energy, better use of landfills and a reduction in greenhouse-gas emissions. The path to environmental stewardship requires the widespread adoption of and investment in recycling solutions to reduce and eliminate waste. Barron Partners invests in recycling industry companies that have built profitable businesses without the need for any premium pricing of their products in the marketplace, since such premiums may not be sustainable. We recognize the need to utilize recycling solutions that protect the environment, thereby slowing climate change.

According to the U. S. Environmental Protection Agency, the recycling industry generates $236 billion in annual revenue in the U.S. alone. It has grown to become a large and important part of the world’s economy today and holds many recycling investment opportunities. For example, many industries, including plastics, metals and paper, depend on recycled materials to meet growing global demand for a wide range of products, thus giving birth to the appearance of niche companies within the recycling industry capable of supplying these much-needed recycled materials.

An example of a significant recycling investment opportunity is in the steel industry. China has developed the largest steel industry in the world and is the largest consumer of recycled scrap steel, importing vast tonnages to feed its hungry mills and meet the nation's demand. Steel made from scrap, as opposed to iron ore, requires 75% less energy input and is also required by the new generation of highly efficient steel mini-mills (electric arc mills), which require mostly scrap steel as feedstock to operate. As large amounts of scrap steel become available in China for the first time over the next several years, Barron Partners sees a unique recycling investment opportunity to enter China’s steel recycling industry now. Those who have the vision to establish Chinese recycling facilities, set up collection networks and establish strategic relationships with the steel mills stand to potentially make enormous profits.

According to Deutsche Bank research: “Ferrous scrap steelmaking can help to reduce energy consumed and reduce pollution. According to CAMU, manufacturing steel with ferrous scrap can save up to 60% of energy consumed (0.4 ton hard coke or one ton raw coal) compared with metals directly produced from iron ore. The Bureau of International Recycling (BIR) added that compared with traditional iron-ore steel making, ferrous scrap steelmaking reduces waste gas emissions by 86%, waste-water discharges by 76% and solid-residue production by 72%. China’s iron ore reserve is relatively barren, and steel makers rely heavily on the overseas market for iron ore supply. According to General Administration of Customs, China imported 628 million tons of iron ore in 2009, increasing by a 27% CAGR from 2001. The price of iron ore also surged to more than US$200/ton in September from US$27/ton in 2001. As such, given China’s limited iron ore resource and the significant increase in iron ore price, ferrous-waste recycling is much more appealing today.”