While voters in the United Kingdom have recently decided they wish to exit the European Union after 43 years, many of the nations in Central and Eastern Europe that were relative latecomers to the EU have continued to rack up positive economic indicators since joining the federation.

The 2004 “enlargement” of the EU, when 10 countries joined at virtually the same time, helped open up new levels of investment by multinational and even medium-sized firms in new plants, warehouses and distribution centres in nations such as Hungary, Poland and Slovakia.

Where industrial activity blossoms, so too does the generation and processing of scrap materials, including metals, paper and plastics. Western European-based recycling firms have been among those pursuing ways to tap into this active region.

Farther east, in former Soviet regions such as Belarus or Ukraine, the picture often is less clear. Ukraine in particular, though home to considerable steelmaking capacity, has been mired in conflict in the eastern portion of its territory.

NUMBERS TO NOTICE

The Brussels-based Eurostat agency gathers and compiles economic data of many varieties, including a measurement of industrial activity that leads to an industrial production index figure for each European nation.

Throughout 2016, Eurostat has used 2010 as the base year to provide a figure of 100 by which nations can compare and chart the health of their industrial production.

Comparing these index figures for the 13 months from April 2015 through April 2016 reveals a pattern that demonstrates growth in industrial activity in most of the Central and Eastern European nations and minimal growth, or even contraction, in many Western, Northern and Southern European countries.

In April 2016, Slovakia recorded an index figure of 143.3, portraying a particularly impressive amount of monthly industrial output growth since its 2010 baseline figure of 100 was established.

The automotive industry has been among the sectors that have blossomed in Slovakia, with Volkswagen, Kia and Peugeot among the automakers that have established operations.

Slovakia is far from alone in terms of industrial production index growth. In April 2016 Romania’s Eurostat index figure was 136.2, Hungary’s 125.8 and Poland checked in at 124.3.

Those figures compared with April 2016 monthly numbers of 101.9 in France, 99.8 in the U.K. and 96.2 in Spain. While these nations may be starting from a higher 2010 base, workers in these older EU member nations are critical that employers are moving operations to the lower-wage eastern regions.

Whether manufacturers are following low wages or simply responding to newly opened markets, recyclers that wish to obtain sufficient scrap volumes are following in their wake.

United Kingdom-based nonferrous metals recycler Tom Martin Ltd., based in Preston, England, has done so by establishing an operation in Katowice, Poland.

Tom Martin Poland Sp. z o.o was established in 2012, and the company’s Alan Slater says it was “essential” that the firm immediately find local managers.

The reward has been access to a growing market, Slater says. “I would suggest an increase of 20% scrap generation in the area that we operate in near Katowice,” he adds.

Although operating in Europe east of Germany can be rewarding, it also has its difficulties. Slater says language barriers for English speakers are far more common in the eastern part of the continent, though “it is worth noting that Polish speakers can [often] converse with other countries with similar languages, such as Slovakia.”

Even more intimidating than a language barrier can be corruption, organized crime or, in the case of Ukraine, outright war and conflict.

STORMY FRONT

Germany-based scrap recycler Scholz AG in 2015 expressed its dissatisfaction with lax regulatory or criminal tolerance conditions in Serbia.

At a spring 2015 waste and recycling industry event in Serbia, Beate Kummer of Scholz gave a presentation on what he called illegal recycling and landfill sites that exist in that nation.

He said Scholz Holding had invested €20 million ($21.4 million) since 2001 to improve environmental standards at its sites in Serbia, but “right now there is no legal certainty for recyclers and no fair competition.”

Kummer estimates that Serbia has 10 times more illegal operators than legal recyclers. He says the illegal companies are working in “gray zones” in the Serbian economy. “Approximately 3,000 small illegal scrap yards are operating in the metal scrap recycling industry; beside that there are more than 2,000 illegal dumping sites for waste,” Kummer comments. “It is a fact that inspectors do not control that gray market—only legal operators are visited by authorities.”

He continues, “The biggest problem in Serbia is there are laws and other standards already harmonized with EU legislation, but they are not applied. Before 2012, importers of [end-of-life] vehicles paid fees to the fund for Environmental Protection, which was later distributed for the recovery of ELVs (end-of-life vehicles).”

In Ukraine the political conflict involving military actions has been ongoing since 2014. Although it has eased off as of mid-2016 compared with the preceding two years, the situation has greatly affected Ukraine’s steel and ferrous scrap sectors.

All things considered, Olga Yakymchuk of Ukraine-based information service Metal Expert says, “Ukraine is a reliable [trading] partner and one of the five largest ferrous scrap suppliers to Turkey.”

As the Ukraine currency (the hryvnia) devalued as a result of troubles in Ukraine’s conflict zone, ferrous scrap exports from the country increased significantly in 2014 and 2015.

Statistics gathered by the Brussels-based Bureau of International Recycling (BIR) for its most recent “World Steel Recycling in Figures” booklet indicate that after exporting less than 300,000 tonnes in 2013, Ukraine shipped out more than 920,000 tonnes in 2014 and more than 1.2 million tonnes in 2015. In 2015, more than 900,000 of those 1.2 million tonnes went to Turkey. The second largest destination was Moldova, which took in 250,000 tonnes.

According to Yakymchuk, the dynamics may be changing as Ukrainian mills have demanded that ferrous scrap exports be restricted to ensure affordable feedstock. (Ukraine’s president vetoed an initial attempt in April, but another may be forthcoming.)

Overall, however, should the political situation in Ukraine stabilize, and tension between Russia and the NATO nations ease up, it would only add to potential opportunities for recyclers in Eastern Europe.

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