Mitsui will enter China's auto parts recycling industry

"Nihon Keizai Shimbun" reported on November 17th that Japan's Mitsui & Co., Ltd. plans to enter China's auto parts recycling business, and will join hands with China's large-scale integrated recycling company, Shenzhen Gelimin, to build a factory in Wuhan, Hubei Province. Mitsui will dismantle the engine starter motor from the scrap car, and then sell it through cleaning and repair. The factory is scheduled to be put into operation around September 2015. In China, which has become a major automobile country, the proportion of recycled products in replacement parts is expected to increase. Mitsui & Co., Ltd. hopes to nurture the auto parts recycling industry as a new source of revenue in China by effectively utilizing Japanese technology.

In the United States, where cars travel long distances, 80% of replacement parts are considered to be recycled products. The market size is about 6 billion U.S. dollars. In China, cars that have sold more than five years and have traveled more than 100,000 kilometers are also increasing. The Chinese government attaches importance to fostering the recycling of parts and components industry. Some people think that the market will develop to the same size as the United States.

Mitsui & Co., Ltd. will join hands with Shenzhen Greentech High-Tech Co., Ltd., which is engaged in home appliance recycling, and HONEST, a large-scale professional company in Japan, and form a joint venture company in the spring of 2015. From the perspective of capital contribution, Green America accounted for 45%, HONEST accounted for 30%, Mitsui & Co., Ltd. accounted for 25%, and Mitsui Chemicals had approximately 200 million yen. Some analysts believe that this is the first time that a large Japanese company has been engaged in the automotive parts recycling business in China.

Mitsui & Co., Ltd. will build a new parts recycling plant in Gemmi's auto dismantling plant. First, it recovers two products, the engine starter motor and the generator, with an annual recycling capacity of 360,000. After being on the track, it will expand to 14 products.

The production base of Mitsui & Co., Ltd. is planned to increase to 6 before 2014, which are located in Shanghai, Tianjin and Guangzhou respectively. From the point of view of both the engine starter motor and the generator, the sales of Wuhan Plant alone is expected to reach 4 billion yen (approximately RMB 214 million). By 2020, it will strive to achieve sales of 70 billion yen.