12 September 2008 REAL PEOPLE DOING UNREAL THINGS Recycling IT By Jacqui Pile

Companies write off mountains of computers and IT equipment after three years, because the taxman requires that they depreciate them over that period. That means most computers end up gathering dust in a storeroom or, more harmfully, on landfill sites, where toxic materials can seep out and contaminate the soil and groundwater. So when Wale Arewa moved from the UK to SA in 1999, he started Xperien, a company that trades old computers, laptops, servers, network devices and other IT equipment. "In Europe the asset recovery market had been well established for years, yet in Africa there was nothing," he says. Arewa hired a technician to help refurbish old computers and set about buying and selling second-hand IT equipment. Now Xperien, of which he is CE, has grown from two people to 25 and turns over R15m/year. The company is trading about 12 000 computers a month. "We can't keep up with demand," he says. World wide trade in second-hand IT equipment is estimated to be about R1,7 trillion; in SA it's worth about R1bn. He attributes the growth to companies seeking to recover at least some of their IT investment - and smaller companies needing to buy IT at affordable prices. "You have a situation where after three years, a company's IT investments are worth zero," he says. "Compare that with the return on a car, where the residual value would be about 60% after the same period." Xperien buys computers for about 20% of their original value, refurbishes them and sells them for about 40% of their original value. "Companies can get at least a fifth of their investment back." But convincing companies to get an asset recovery plan in place has been a challenge. Arewa says, for example, that SA's four retail banks have more than 20 000 computers worth R120m in active deployment, but only one has an end-of-life plan for its IT equipment. "Planning tends to fall between the cracks because the accountants have written off the asset, while the IT department is focused on bringing in updated systems," he says. In 2008, about 2m computers will come onto the SA market. At the same time about 600 000 others will reach the end of their three-year lifecycle. The biggest challenge, however, is for second-hand dealers to get hold of enough computers to meet demand. Companies such as HP and IBM ship about 400 000 computers back to Europe to encourage users to lease upgraded models locally. Only Dell allows its computers to be redistributed. "We end up having to re-import discarded computers from Europe to meet demand locally," says Arewa. He says only about 10% of second-hand IT is not re-useable. That then gets sold to recyclers who mine the equipment for heavy metals, such as gold and cobalt. "It's far better than ending up on a dump somewhere."