The upcoming implementation of the Anti-Waste Law for a Circular Economy (AGEC) in France, is expected to drive the industrialisation of car recycling companies. However, due to the high investment cost, only half of the sites may be able to participate, which could lead to the sales of companies and consolidation within the sector, potentially favouring European organisations.
Indra Automobile Recycling, a leading network of end-of-life vehicle (ELV) recyclers, organised its tenth Forum on Monday, March 27, at its pilot site in Romorantin. The event brought together 300 automotive dismantling professionals, including members and non-members, to discuss the latest developments in the industry. The program included meetings with twenty referenced suppliers of the network and four conferences, including one on the AGEC law that will change the economic model of recyclers.
However, not all recyclers will be able to adapt to the new law. According to Loic Bey-Rozet, CEO of Indra, the AGEC law is expected to eliminate 800 recyclers from the industry or half of the workforce. The law aims to professionalise recycling to increase the reintegration of recycled materials into automobile production and boost the output of reused parts. The turnover is expected to double to reach one billion euros by 2030, compared to 300 million in 2017. The resale share for the export of damaged vehicles will also need to be reduced.
More thorough sorting upstream of the crusher will be necessary to meet these requirements. With its highly industrialised dismantling approach, the Indra pilot site is at the forefront of this field. It can extract 40% of a vehicle’s mass, or around 480 kg per car, in just three hours. The centre treats 20 ELVs per day and can generate up to 450 euros in selling parts and materials, including polypropylene, which is more expensive to recycle than the original.
However, profitability remains fragile, and recyclers must adapt quickly to survive. “We are tight,” said Olivier Gaudeau, director of engineering at INDRA. The AGEC law will undoubtedly lead to the industrialisation of car recycling players, opening the door to sales of companies and concentrations of the sector towards European organisations.
The era of dismantling practices based on traditional and manual methods has long passed. According to Loic Bey-Rozet, the average number of parts dismantled per vehicle is currently 14, intending to reach 25 in the future. The economic model of ELV centres is focused on reusable parts, which will likely result in price increases for these parts.
Reducing the number of operators in the industry will lead to a concentration of ELV volumes being processed per centre. This will require significant investments in methods and tools with a more industrial and rational approach to production to maintain profitability. This investment demand is leading to the concentration of actors within networks, with a European dimension emerging. LKQ with Rhenoy and Altracco, Genuine Parts Company with its Back2Car brand, and Autocirc, which belongs to the Altaroc fund, are emerging as the three major players in Europe, according to Loic Bey-Rozet. The experienced Swedish group has recently acquired two Carecos in France, and Europe is now the focus of Indra’s strategy.
Renault and Suez’s branch, which operates 360 sites in France, also aims to expand to other European countries such as Portugal, Italy, Spain, and Belgium, with the UK also on their target list.