Cycle: Picking the right waste stream (Abridged)

This is the abridged version of case IMD-2-0095. It is about Cycle, a Belgian metal recycling group, who mainly focus on the recycling of zinc recovered from manufacturing and processing operations (process scrap) in Western Europe. An environmental incident and stagnating financial performance lead to a change in top management. The case describes how the new CEO Vernier initiates a major restructuring program to cut cost and improve environmental management. Associated with other metals, the zinc industry faces increasing scrutiny from regulators (e.g. EU zinc risk assessment). Moreover, several EU directives on end-of-life legislation are drawn up to prevent waste at source. Vernier achieves the financial turnaround in a tightening European zinc recycling market. In the annual meeting, he has to defend its decision to expand geographically (i.e. extend Cycle’s activities to the recycling of process scrap in the US) instead of broadening the current business model to the recycling of post-consumer scrap (i.e. picking an additional waste stream) in a favorable European business environment.

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