What started off as a chance encounter dropping off some electronic waste has turned into a rapidly expanding business with big plans for managing director Patrick Moynahan.
Founded about 13 years ago, Computer Recycling, headquartered in Penrose Auckland, takes electronics that would otherwise end up in the rubbish and recycles them by remaking the product or shredding it and separating the different materials.
It has grown from a husband-and-wife owned business in a niche sector to a sizeable company and major industry player with around 35 staff, most working full time.
Computer Recycling has formed a partnership with the waste disposal organisation Envirowaste to help divert more e-waste from ending up in landfill around the country.
It’s estimated the average New Zealander generates around 20 kilogrammes of e-waste annually with only around 2% recycled, and toxic materials such as plastics and metals regularly end up in landfills.
The partnership collected more than 55,000kg of unwanted tech in its first 90 days from four drop-off points in Auckland, Hamilton and Mount Maunganui.
Through another partnership, with Global Metal Solutions, the company’s reach extends as far down as New Plymouth.
While electronic collection is only available in the upper North Island, expansion is in the works with Computer Recycling planning to set up collection sites in Wellington and Christchurch within the next year.
Business model and services
As one would expect, there are multiple components to the Computer Recycling business model.
The company offers electronic business services such as data erasure and asset auditing, electronic recycling available to both businesses and the public, and technology resales domestically and internationally.
Computer Recycling has a few hundred business customers including household names such as Vodafone, Eroad, Health Alliance, and Delonghi.
Roughly 20% of the company’s revenue comes from services, 40% from recycling, and another 40% from technology resale.
The company offers both drop-off and pick-up services for a wide range of electronics and whiteware ranging from fridges to phone cables.
Most products can be dropped off for free, while others that are more complex incur a fee up to around $30.
Each year the company also run around 30-35 electronic waste collection days throughout greater Auckland, but Moynahan says the vast majority of its volume comes from local businesses, large corporations and industry partners.
Once the electronics arrive at the Penrose facilities, it goes into a sorting area where it gets weighed and receives a customer file so it can be tracked.
Computer Recycling uses an enterprise resource planning software system that allows it to track customer and locational activity.
It then gets passed along to a team of hand sorters who grade the different materials and divide the waste into three separate groups.
Moynahan says because the material is so mixed and contains batteries and other contaminants, the company can’t just feed it all into a shredder.
If the device is deemed worthy of revival, a technician team can refurbish, re-engineer and reload software for the product to be resold or remarketed.
There are hand dismantlers who dismantle the equipment and categorise it into different grades of metals such as copper, aluminium or stainless steel.
Finally, there is the mechanical separation and processing division where the dismantled items are fed into a shredder called the ‘Bluebox’ and the output is loaded into an optical sorter that mechanically sorts and grades it into different material types.
Those types are then exported and passed onto third party vendors overseas in countries such as Belgium, Japan, and South Korea through permits to be further recycled and processed.
Computer Recycling was incorporated in 2009 by Peter and Emma Torckler before being purchased by Moynahan in 2018 after about a year of discussions. It is now owned under ultimate holding company E-Waste Solutions.
Moynahan owns around 85% of this company with his father Michael Moynahan owning the remaining 15% and serving as general manager to look after day-to-day operations.
Moynahan, who has a background in advertising and marketing before moving into the construction sector, is passionate about waste and saw potential in the company with its unique processing system.
The company is profitable, and over the four to five years of ownership Moynahan has grown revenue about 560%.
He is targeting $12 million in revenue by the end of 2023.
“I didn’t have any money at the start, so I borrowed $100,000 off my mother and father and with my savings, that’s what I utilised to purchase the business,” he says.
After the purchase, the company and its seven or eight staff were relocated to a new premise in Onehunga before outgrowing it and relocating again last year to the current 3619sqm site in Penrose.
When asked if the current location was big enough, Moynahan says it was for the time being.
Moynahan has since acquired two other companies – PCB International, a collector and consolidator of electronic waste, and E-Waste, a company that runs collection day events through New Zealand.
He has plans for another acquisition within the next six months.
The company has been internally funded over the years but has also taken advantage of some grants and lending initiatives over the years.
Through BNZ, it has been able to utilise green lending and other types of trade facilities in order to grow to its current level.
In 2020, Computer Recycling also received a $1.5m funding grant from the Ministry of Environment, that was put toward the new Bluebox and optical sorter machinery that were brought in from overseas.
Bluebox is one of just eight internationally, and there is only one other company in the world that has paired it with an optical sorter.
“That was a really big catalyst of injection to help us grow a quite a small niche business into something that’s much more sizeable,” Moynahan says.
An unregulated sector
There is currently no regulation for the electronics recycling sector, leaving the door open to subpar operators and a lack of manufacturer accountability for the product end of life. Moynahan says this is one of the biggest challenges for the company.
“Because there’s no legislation or need for people to dispose of this sort of material in an environmentally and sustainable manner you’re competing against every man and their dog, so we have to work very hard to create a robust point of difference,” Moynahan says.
He says the company has to make sure it’s charging adequately and that the downstreams (where the material goes for further refining) is profitable.
New Zealand has the Litter Act from 1979 and Waste Minimisation Act from 2008 but neither cover e-waste.
Last year the public was able to have their say on a new scheme that is expected to eventually replace the existing legislation and work with industries to develop end-of-life plans for electronics alongside other products such as tyres and plastics.
The consultation period closed in December 2021 and a revised final version was expected in mid-2022, but there hasn’t been an update.
According to the expected timeline, if the proposal is passed it could come into force as early as next year.
The impact of legislation
Moynahan says New Zealand is the only country in the OECD that does not have this legislation and overseas manufacturers would pay into a fund, which would partly go to recyclers in order to cover costs and meet compliance. Computer Recycling currently does this voluntarily.
Moynahan expects the legislation change to occur in the next two to three years but says it is quite slow moving.
“We are a small, isolated nation so it is a tricky balance,” he says.
“We don’t have a huge amount of sway with the manufacturers when it comes to dictating terms.”
There would be strengths and weaknesses to the new legislation for Computer Recycling.
Positives for the company would include greater awareness around the overall issue, more reporting across the sector, and the opportunity to fund new investment activities for machinery and processing.
On the negative side Moynahan says from a personal and business owner standpoint the almost-level playing field would make entering the local sector more appealing to international businesses.
“We have grown organically in through the help of the New Zealand government, the BNZ and my personal finances, but when you introduce global players into a freshly regulated market, they can bring substantial capital.”
Changing technology and consumerism
Moynahan says the shredder and the optical sorter were a huge win for him and the machinery is designed to tackle the latest kind of materials, but acknowledges that things are getting smaller and componentry getting more complex with blended materials making it harder for people to fix.
“So what we have now will give us a good five or six year runway, but definitely we need to continue to educate our own staff.”
He says the staff see what material is coming through, allowing the company to keep on top of trends and make sure it maximises recovery value from the materials.
When asked if he thinks people need to buy less and stop replacing electronics every few years, Moynahan thinks people will inherently buy more and items are not designed to last long or be fixed.
However he believes people should buy consciously and not necessarily buy cheap and disposable, particularly when it comes to electronics.
Looking back, Moynahan says the biggest lesson has been the reliance that business owners have on employees.
“It should never be taken lightly on who to choose for certain roles, because if you choose wrong, then you feel like you’ve wasted time.”