Doing karung guni is big business

Posted on 02 February 2011

Driven by the global hunger for scrap metal, the junkyards in Defu Industrial Estate have grown increasingly crowded over the years. And they say one man’s junk is another man’s treasure.

Photo story by Ng Wai Mun, for the writing contest.

  • Although an eyesore to city planners and urban redevelopment advocates, a hefty scrapyard as big as the one owned by Hup Lee Leong Trading Co. loaded with rusty metal scrap is the source of envy for many small-time scrap traders. Metal scrap sold to the company is handled and sorted by
magnets and grabbers mounted on excavators.
  • For a small recycling business however, metal scrap is sorted by type manually. Money can be made from the smallest metal parts in abandoned appliances.
  • Driving a lorry full of metal scrap, hardware trader Ng Ser Siong queues for the scales at the scrapyard. It is a daily routine, and the 50-year-old man says that whenever he waits in line at this
junkman’s haven, he recalls his regret of not investing more capital into expanding his own outfit.
  • Almost ten years ago, Heng Huat Siong Hardware Trader started diversifying to deal in electronic
scrap. Employee Ng Keng Boon had picked up the skills of dismantling the computer’s Central
Processing Unit to identify precious metals in processors and hard disks from scratch. “I think I am
paid the most by the boss, because of my special expertise,” he jokes.
  • Although retirement for this Comfort taxi is due, recyclers still see meaningful value in its scrap and used parts. Aluminium and steel feed booming factories, including vehicle manufacturing plants. Sixty percent of the average car is made up of recycled metal.
  • To curb theft of metal items, spiked by the rise in metal prices, the Secondhand Goods Dealer Act imposes a no-cash rule and requires dealers to keep detailed records of sales and purchases. This greatly inconvenients the dealing process, say most traders.
  • Foreigners frequently seek out metal trading or recycling companies for cheap and working second-hand appliances and send them back home. You can find treasure out of the load of junk, a 34-year-old Nigerian interviewed says.

LINED with bumpy dirt tracks and filled with a hotchpotch of warehouses and workshops dealing in different activities, the Defu Industrial Estate is known by many as a shoddy place.

“Nobody likes to venture here, because they say it is filled with rubbish and the air is full of dirt, ” says Kuak Boon Seng, 56, owner of scrap recycling company Boon Seng Recycling Pte Ltd.

“But, it is definitely the place to be if you want to make good money out of all these metal,” he adds, pointing to piles of scrap occupying his junkyard sitting on the piece of rented land along Defu Lane 7.

The invisible hand of scrap metal economics is indeed hard at work here in Defu Industrial Estate, home and haven to recyclers and traders, commonly known as karung guni men, who wish to tap into this lucrative business.

Every day, trucks queue for the scales at the junkyard and their backs are filled with unrecognisable scrap poking from the top of the load, rattling as the vehicle inches forward to empty the pile.

This routine is familiar to 50-year-old hardware trader Ng Ser Siong, whose lorry rumbles into the junkyard lot a few times every day, as he drives his batches of collected scrap there for sale.

The small outfit that he runs, Heng Huat Siong Hardware Trader, deals with steel, copper and aluminium.

These metals can be found in drink cans, copper wires, and electrical appliances like refrigerators and rice cookers, sold to him by the man on the street.

“I started out almost 25 years ago as a “karung guni” man who picks up whatever I can find on the streets. But, somehow my business just grew bigger and better.” – Ser Siong

“I have no shortage of supply. This place is getting so crowded, because everyone wants a piece of the business,” he says.

The worldwide hunger for scrap, driven by rising metal prices has drawn some people to the streets, scavenging for precious metal. This economy of scrap has trickled into diverse corners of society, and even retiress and foreigners are joining in to earn some extra money.

Often confused with waste, scrap, in fact, has significant monetary value. Ferrous metal is usually sent to a local steel mill for recycling or exported. For non-ferrous metal scrap, it is sorted and exported overseas for recycling.

Just last year alone, 872,000 tonnes of ferrous metal scrap was generated. The amount of non-ferrous metal scrap generated registered at 57,600 tonnes.

For bigger companies such as Hup Lee Leong Pte. Ltd and Fook Seng Fatt, both located in Defu Industrial Estate, most scrap metal collected by their junkyards are exported overseas to countries in the region to feed booming trading houses, factories and mills.

Owners recognise that the scrap metal business has lots of potential. Most, determined to expand their businesses, have invested in excavators, magnets, and automated scales. Aluminium scrap can then be pressed, compressed and compacted by machinery, increasing productivity.

On the other hand, although traders who own smaller outfits are envious of the bigger brothers, they are contented with what they have achieved.

“I started out almost 25 years ago as a “karung guni” man who picks up whatever I can find on the streets. But, somehow my business just grew bigger and better,” quips Ser Siong.

His one-man outfit has since grew into a full-fledged metal trading company. Ten years ago, he diversified into dealing with electronic scrap, and this decision has been proven to be right, as sales from the precious metals found in computers and laptops now form the bulk of his earnings.

“Now, there are some people who call me ‘big boss’ when they see me,” he says, grinning.

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  • andrewong2024

    Nice piece! I enjoyed reading this… something different from msm. Keep up the good work!

  • Pingback: Results of writing contest (round two) « New Nation

  • Jim

    I like this article. We should never be afraid of doing even the smallest and dirtiest things, so long as they bring economic benefits to each and every one of us.

  • http://www.laremy.sg/ Laremy

    Hi Wai Mun,

    This is a great article!

    Do note, however, that the correct spelling of the phrase is actually “karung guni”.

    “Karung” means cloth or sack in the Malay language, while “karang” means coral.

    Cheers,
    Laremy

    • http://zerolionlaker.blogspot.com Tim

      Oh I know better now. Thanks

    • terence

      Hi Laremy,

      thanks for pointing that out. We’ve edited the article. Note that the mistake is mainly the editor’s error. I think Wai Mun spelt it correctly in the original article. We’ll be more vigilant.