Is nature itself a form of Investment Recovery?
Yes, it seems to be so when you delve, for example, into the processes of water cycle or photosynthesis. Examples abound: the formation of oil from fossils, the transformation of energy into its various forms and transformation of energy into matter and vice versa also speak volumes about the Investment Recovery function carried out by nature. Albert Einstein’s E = MC2 basically proves that energy and matter are simply two forms of the same thing—convertible from one to another. Energy equals mass to the speed of light squared.
Hence, the operational principle and most basic tenet of IR: Everything can be recycled and nothing is waste in the absolute sense in this world.
The wheel of civilization would have been halted had there been no process for recycling. A machine, pipeline or virtually any asset may lose its existing utility. That does not necessarily mean it does not have an alternative use:
• Copper was used for pottery before aluminum and plastic were invented. Still, copper remains to be one of the precious metals because of its more valuable alternative usage.
• Coal and oil lands were considered wastelands before the invention of motors. That same oil now controls the world economy since human beings invented a new utility for it.
So, in other words, IR’s responsibility is to discover the new economic potential of an item while losing the existing one. IR professionals recognize the non-performing and/or underutilized asset, identify new and/or different usages of those items, conduct a feasibility study of the recovery process and methods from economic and operational perspectives, assign a potential value and recover both economic and environmental utility for this previous so-called waste.
Hundreds of billions of dollars have been generated by petrochemical companies all over the world … born out of so-called “waste materials.” Every day we generate real value in our recycling activities. We may know how much we are recovering economically and environmentally within our departmental function. Yet we likely don’t know the extent of economic and environmental loss that may be incurred due to dumping of the “wastes” within our own organizations.
IR professionals have to keep their eyes wide open to see the possibility of finding utility—even for the vented gases from the various manufacturing plants; maximizing the economic and environmental returns out of it. So, the recovery of carbon dioxide, which otherwise would be emitted to the air, is an IR function of vital importance both from an environmental and economic perspective.
One very satisfying element for creative IR practitioners is the reactivation of assets rendered idle by changing market conditions or new manufacturing and technological processes; foreseeing opportunity and recovering significant value from those previously “idle assets.”
The aging existing plant, upcoming new expansion projects and the various metal and other industrial wastes they will generate will multiply IR’s opportunity in the coming years. In a nutshell, Investment Recovery works as a catalyst in converting so-called “wastes” into sources of income. This maximization of financial return is in addition to ensuring a clean and safe environment.
Commercial Perspective of IR activity
Old and obsolete materials, technology and equipment are definitely a bane and blight for any industry. Commercially, the IR professional manages the redeployment, sale or otherwise economic disposal of anything and everything in surplus.
Apart from other options, IR mostly uses the outlets of redeployment and selling. Each of these options will have its’ own set of critical issues that must be considered, planned and managed carefully. (Redeployment moves an item within your organization, sales is a task of finding and convincing the customers without compromising on ethics and morality.
In some cases, the disposition decision can involve even the demolition of a major equipment and/or facility in the most effective and optimal way both from financial, environmental and operational perspectives.
IR is challenged with the responsibility of managing the surplus to maximize the financial return while properly eliminating the potential risk and liability that may arise out of the sales/disposal of the surplus materials. This necessitates an incredibly diverse range of knowledge, resources and insight.
This is particularly important since IR handles an incredibly diverse range of materials from nuts and bolts to blowers and bearings, furniture to furnace coils and reactors, paper, plastics, scrap and high value metals, and vases to vented gases.
Constant learning. There are complex skills and broad knowledge expected from and required for IR Professionals. The wide-ranging skill set includes multi-industry business knowledge, equipment engineering, financial knowledge, negotiation skill, legal and environmental safety knowledge.
IR professionals should make the process of incessant learning as their hobby and habit. This will make a positive impact of magic touch in its day-to-day business and will nurture excellence. This will help IR professionals to infuse new visions and ideas in their planning and day-to-day activities. The alpha and omega of IR work are the relationships built with internal and external clients.
Gulf Cooperation Council (GCC) countries are a group of six oil rich nations in the Middle East that are not separated by any vast ocean but bordered only by the Red Sea on the Southwest, Arabian Gulf on the east and Arabian Sea on the South. The member countries of GCC are Saudi Arabia, UAE, Oman, Kuwait, Qatar and Bahrain. These oil-producing countries are strategically positioned geo-politically and are of vital importance from a global economic perspective. The history of the Middle East elucidates one fact loud and clear from its strategic geopolitical position: Whatever comes from the Middle East or goes to the Middle East becomes global in its presence.
Investment Recovery in the Middle East is a novel idea with stupendous potentiality. As of now, there are only modest waste handling sections in the major oil, gas and petrochemical companies. The idea of professional surplus asset management can be marketed throughout the GCC if an organization like the Investment Recovery Association extends its activities to the oil and gas-rich Middle Eastern countries in general and to the GCC countries in particular.
An opportunity. Investment Recovery as a profession has ample and immense possibilities in the stupendously oil rich GCC countries. There is a genuine need for an external IR network connecting similar companies in this region. By broadening its vision and extending its services to companies in the GCC, I believe that the Investment Recovery Association could play a greater role in helping these organizations recover the resources of their surplus and idle assets and become genuinely global in its reach.
Abdul Razak Puthiya Purayil,
Equate Petrochemical Co.