Role of the Salvage Industry

The salvage, scrap and idle asset management industry helps businesses extract maximum value from damaged or otherwise unwanted goods. Salvage and scrap items and idle or unwanted assets are often viewed as goods that need to be sold as quickly as possible – for whatever amount a buyer is willing to offer. The goods are often marketed to a small number of potential buyers, limiting the demand that can be generated for these items and reducing the potential price that could be earned.

Professional management of these assets enables items to be treated in an optimum manner – and a way that ensures maximum value realization when sold. Professional salvage and idle asset management begins with a swift response to every situation, as lost time could result in a further deterioration of goods. There are 5 key steps involved in salvage management:

1. Identification: Determining which goods are salvageable or fit for a purpose, and which are not.
2. Quantitative and Qualitative Inventory Taking and Segregation: The degree and extent of damage may vary among various items within the complete goods. It may be that out of 1,000 bags of cement affected by water, 100 bags have suffered minor damage, 300 bags may be partially set, 200 bags fully set and the remaining 400 bags are not affected at all. This segregation enables the items to be sold separately – and greater value to be realized.
3. Protection: Protecting the goods is of critical importance in achieving maximum value for the goods – and preventing waste. In the case of wet fabric this would involve getting the fabric dried, or in the case of water affected cement, removing the unaffected cement to a dry area.
4. Valuation: Valuing the salvage or assets is important in order to gauge possible demand. There may be multiple factors impacting the valuation, such as the demand for the commodity in market, the nature and extent of the damage suffered by the material and the local market for the merchandise, among others.
5. Value Optimization: This is a key part of the process and involves market-making for the assets – the creation of competition in a fair and transparent manner, among interested parties, as well as broadening demand to related industries.

Professional management of salvage, scrap and assets, ensures that asset owners minimize loss, maximize recovery and optimize value – and that the buying process is fair, transparent and efficient.