Building a bridge

When the global scrap metal community gathers for a convention or conference, Salam Al Sharif, president and CEO of Sharif Metals International, is most likely among the crowd of traders or on the roster of speakers, building bridges from the Middle East region to the rest of the world. Salam was born in 1963, the same year that marked the official start of Sharif Metals, founded by his father Mahmoud in Kuwait as a scrap collecting and trading business.

Starting as a grade school student performing odd jobs at the original Kuwait location, Salam at first witnessed and then played an increasingly important role in helping the business expand to become the largest scrap metal recycling firm in the Middle East.
 

Taking root and growing

The Sharif family’s roots in the metal business go back to 1938 in Palestine, says Salam, when his grandfather and Mahmoud’s father A. Salam Al Sharif worked as a coppersmith and fabricator of copper products.

Salam Al Sharif’s son Mahmoud followed his father’s footsteps into metalworking, entering into the foundry business initially in Palestine and then in Kuwait in 1956.

“My father worked as a foundry supervisor in a lead and cast iron foundry in the Kuwaiti Ministry of Works until 1963,” says Salam. Even as he worked for the Ministry, however, Mahmoud began laying the groundwork for the company that would become Sharif Metals.

“In the afternoon, when he’d leave work, he went out and looked for copper and brass scrap that he could trade,” says Salam, adding, “He realised he couldn’t go far until he had a yard of his own.”

In 1963, Mahmoud stepped down from his role in the Ministry, purchased some land and began collecting both peddler and production scrap. Some of Salam’s earliest memories involve him and his brothers spending time at the original Kuwait location. “We would go to the scrap yard by third or fourth grade and we would get the flavor of what the scrap yard was, and also earn our pocket money,” Salam recalls.

Salam and his brothers Monir, Mohd., and Ahmed learned more about the business as they worked weekends and holidays throughout their school and university years. As the four brothers began their full-time careers they helped spur Sharif Metals to adopt a wider geographic footprint and to increase its volume of business.

“After high school and university we took the business to a new level or dimension,” says Salam. “As a civil engineer and metallurgical engineer, I spent one year in the construction business, but then my dad said in 1986 that they needed my services for the family business.”

Salam established the Sharif Metals location in Sharjah, an emirate adjacent to Dubai within the United Arab Emirates (UAE). “After a few months I was taking care of marketing the Kuwait materials to the international market as well,” he notes.

The Sharjah location increased in volume and prominence and eventually became the head office for Sharif Metals International.
 

Additional growth has followed, with locations and branches established in the Kingdom of Saudi Arabia (KSA) and in Amman, Jordan. “We now have 11 facilities,” says Salam, adding, “The business has been on a steady pace of growth as my younger brothers and I took care of different locations and worked hand-in-hand at boosting the business into the international level of recognition, a wider geographical footprint and a bigger share of the market here in the Gulf and Middle East.”
 

Strategic thinking

The Sharif Metals path to regional growth and global recognition has involved taking some risks but also a commitment to keeping its growth manageable and sustainable.

On the risk-taking side, Salam was initially uncertain whether it was worthwhile to attend meetings of the Bureau of International Recycling (BIR) or to get involved in its Non-ferrous Division board.

“I started attending BIR meetings in 1987,” recalls Salam, “and three years later I was asked to join the Non-ferrous Division as a board member, representing the Middle East, which was unprecedented at that time.”

Salam continues, “I wasn’t sure if I should join the board. I’m not a rigid kind of guy who stays in one seat quietly; I’m somewhat outspoken. But that kind of enabled me to get along with a lot of the new friends and old friends from the trading side as I became friends and colleagues with fellow board members.”

Salam’s stint on the BIR Non-ferrous Division board subsequently led to a bigger role within the organisation when he was appointed chairman of the Ambassadors Committee in 2008 as well as providing the impetus to create a new regional association.

“After the 2008 crisis and chaos in the market it became apparent that more communication and dialog in this region was critical,” says Salam. He coordinated with other companies in the Gulf region to form the Bureau of Middle East Recycling in 2009, and has been serving as its inaugural president.

For a company that has grown considerably in the past 30 years, however, the Sharif Metals approach can also be considered noteworthy for its lack of high-risk maneuvers.

“As a company, the volume we have been doing has increased about 10-fold in a span of 20 years,” says Salam. “It is steady growth but not a vertically sharp curve. We wanted to maintain the sustainability of the business,” he comments.

Sharif family members have taken one calculated risk by making the decision to invest in vertically expanding the business by entering into secondary metals production.

“We thought processing and trading is not enough—we need to add value to the metals we are trading with, so we invested in a secondary aluminum production plant in the UAE, then one in KSA, then another in Jordan and another in Lebanon,” says Salam. “We now produce about 3,000 tons of aluminum alloys per month.”

The company has taken a similar approach with lead batteries and lead scrap. “As lead battery export restrictions came into play and we foresaw Basel Convention rules looming in the future, we developed a plant in Jedda, KSA, for refining and alloying lead ingots from batteries. We now have three plants with about 3,000 tons per month of lead ingot and battery production,” says Salam.

He says Sharif Metals is not looking to become a global leader in the production of these metals, but instead is taking advantage of a regional opportunity. “We don’t look for the biggest numbers, but when we realise it’s the right time to launch a plan we’ll undertake some capital expenditures when it seems right.”

The approach has seemed to help the company retain and grow its nonferrous scrap business. “In terms of volume of nonferrous scrap, I can humbly say we handle the largest volume in the Middle East,” says Salam.

Another regional opportunity has put Sharif Metals into the end-of-life vehicle and auto shredding sector in the KSA. That nation monitors its ferrous scrap flows carefully in part to ensure a supply of feedstock for its domestic steel industry.

“On the ferrous side we process and containerise scrap HMS (heavy melting steel) for shipment to other parts of Asia from many locations,” says Salam. “In the KSA, however, we have two shredders that produce about 20,000 to 25,000 tons per month of shredded steel scrap that stays in Saudi Arabia.”
 

Careful management

Aspects of the business climate in the Arabian Gulf region are positive, including an ongoing construction boom in the UAE, KSA and some other member nations of the Gulf Cooperation Council (GCC).

However, as Salam surveys the business landscape heading into 2014, he also is confronted by many sources of concern that will challenge the Sharif Metals management team.

“Among the challenges in 2013, and they will continue in 2014, are export restrictions for lead in the KSA and other nonferrous restrictions,” says Salam.

The labor market in the KSA also is presenting challenges. “The KSA government provided an amnesty period for workers to leave the country and about 1.5 million workers had to flea during that period. That has left a lot of scrap yards with no workers,” says Salam. “Now we see a lot of supply shortages in the KSA because of that.”

Currency fluctuations can represent another challenge in the Middle East, as volatility of the U.S. dollar, regional currencies or the Indian rupee can shift trading patterns. Additionally, as the GCC region has prospered and more scrap has been generated, this has caused competition to flourish, notes Salam.

Some of those competitors are very capable, he comments, while others are likely to wash away in a tide of difficult business conditions.

“Every coin has its reverse,” Salam says of the opportunities heading into 2014. “When you have a well-managed professional company with a well-organised team of workers, it can always have an opportunity versus those who operate in an ad hoc manner,” he states.

“We feel our system and professional set-up pays off,” says Salam. “The shabby companies will find it difficult to stay in the market. That leaves a well-financed and well-set up company like ours to retain and expand its market share.”

The values handed down through three Sharif family generations are being passed on to a fourth generation, Salam notes, as both he and Mohd. have sons who are beginning to play a role in the family business.

Salam says it will be his and his brothers’ task in the next two decades to ensure that core management principles remain. “Regarding profit or loss, we want them to learn the principles of making money sustainably rather than making a quick buck with short cuts,” he states.

“We have a legacy to pass on to the fourth generation,” concludes Salam. “From my dad, I learned to be faithful to yourself and to your profession. Respect your commitments and never lose your relationship even if you lose money. Money cannot buy back the relationship.”

The author is the editor of Recycling Today Global Edition and can be contacted at btaylor@gie.net.