Assad Company Faces Turbulent Times Amid Battery Recycling Scandal
The Assad company, specialized in lead battery recycling, has been navigating a tumultuous period since the outbreak of the scandal involving the importation of household waste from Italy in late 2020. The company organized a financial communication on July 30 to explain its situation.
In 2020, the scandal surrounding the importation of household waste from Italy led the Customs and Environment Ministry to strengthen restrictions on the importation and exportation of products classified as waste, including old batteries (VB), considered hazardous waste.
In March 2021, Customs blocked the clearance of approximately 900 tons of VB, requiring special authorization for their release. An interim note issued in October 2021 prohibited the importation of VB under all customs regimes, negatively impacting the supply of recycled lead for Assad, which had to turn to purchasing finished lead at higher costs. This situation reduced the company's profit margins, affecting its profitability.
In July 2024, a first-instance judgment condemned Assad to a penalty of 234 million Tunisian dinars for offenses related to VB management, including purchasing on the local market and prohibited importation of VB.
The company immediately appealed the judgment, contesting the accusations and imposed amounts. The penalty details include 80 million dinars for purchasing VB on the local market, 69 million dinars for prohibited importation, and 85 million dinars for placing imported VB on the local market.
In addition to legal complications, Assad faced operational challenges. The company's recycling unit was temporarily closed in 2023 due to delays in renewing the recycling authorization, disrupting production and affecting first-half results. The increase in the number of approved recyclers also increased competition in the market, although the revocation of several operators' authorizations in September 2022 allowed Assad to strengthen its position.
The company is actively working with authorities to update the regulatory framework for VB, hoping for a rapid resolution of blocked files and a relaxation of import restrictions. A key meeting with the head of government is expected to validate the proposed regularization measures.
In parallel, Assad is seeking to diversify its lead supply sources to reduce its dependence on imports and market fluctuations.
The company's financial and operational recovery will largely depend on the evolution of the regulatory situation and its ability to navigate this complex environment.
