Recycling Rounds Out Weyerhaeuser's Paper Circle

The Weyerhaeuser Co. has found an excellent supplement to its high fiber diet. With 34 recycling facilities operating in North America, the Tacoma, Wash.-based company is responding to the increasing demand for products made from recycled fiber.

In 1974, the integrated forest products company went beyond its principal segments - timberlands and wood products; pulp, paper and packaging; and real estate and financial services - and introduced Weyerhaeuser Recycling, the business responsible for recovering fiber.

Today, new fiber from 23 million acres of leased or owned land fuel Weyerhaeuser's metaphorical "paper circle" of recycling. Its business is to collect the fiber that may have started out in a Weyerhaeuser nursery and transport it to the company's mills, where the recycled paper is used to make printing papers, newsprint and corrugated containers.

From The Beginning The company's roots can be traced back to Frederick Weyerhaeuser, the son of a German farmer, who started the company in 1900. In the 1930s, it launched 4Square Lumber, a lumber supply for builders. In the 1940s, Weyerhaeuser reportedly began the nation's first tree farm, which portrayed forestry as a perpetual supply of new fiber. And in the 1950s, the company sought global markets for its new pulp, paper and packaging products. Today, the company hopes to evolve internationally, as it continues to emphasize perpetual forestry. It currently operates pa-per mills in nine states and prov-inces in the United States and Ca- nada and has sales offices in Beijing, Brussels, Geneva, Hong Kong, Tokyo, Seoul and Singapore.

The challenges of the 90s differ greatly than those of any other decade. Weyerhaeuser Recycling, for example, depends, in part on waste haulers to provide them with a steady stream of fiber. Weyerhaeuser, in turn, reverts to its various processing methods to provide clean paper to its papermaking operations and to other long-term customers.

By educating its suppliers, the company can collect clean, recovered paper, which in the recycling industry is the most valuable product available.

Through the years, the company's modernized mills and high-tech papermaking processes have affected the percentage of recycled fiber that's used in paper products. For example, a pulp, paper and containerboard mill in Plymouth, N.C., recently underwent a four-year modernization period. Improvements to the linerboard machines have allow-ed the mill to use 100 percent recycled content to make liner. The mill also will double its old corrugated containers (OCC) consumption to more than 1,000 tons per day, ac-cording to Weyerhaeuser.

On the West Coast, the company's North Bend, Ore., mill was converted to produce containerboard from 100 percent recycled materials. This conversion will significantly increase the amount of post-consumer fiber used by Weyerhaeuser.

For 22 years, the company's $4 billion pulp, paper and packaging sector has used recycled fiber. As demand grows, so does the amount of recycled fiber that Weyerhaeuser uses (see chart on page 26).

Investing Long Term Across the country, Weyerhaeuser manufacturing operations are converting rolls of paper (which in some cases are as large as a city bus) into boxes, writing papers and newsprint. But the papermaking process is finicky. Large and long-term investments are necessary to succeed with recovering fiber. Further, papermaking systems require the right mix of new and/or recovered fiber, depending upon the paper grade and the individual machine.

Since its single-plant entry into the recycling industry, Weyerhae-user reportedly has more than doubled its recovery of recyclable products every five years. For example, in 1994, the company recovered more than 2 million tons of wastepaper in facilities in 18 states and provinces.

As the nation's recycling system matures, the company has found certain advantages to signing agreements with haulers, municipalities and others in the circle. Foremost, these agreements guarantee Weyerhaeuser volumes of fiber for its papermaking operations.

However, the company would like to recover more fiber from businesses and homes. One means of doing this is to invest in ways that will draw fiber through the system.

For example, long-term contracts which guarantee "takeaway" of the materials add stability to an often volatile marketplace, according to a company representative. By signing a 20-year contract, businesses can improve service and recover more fiber. In addition, a local hauling company is more likely to initiate a curbside recyclables collection program if it already has a guaranteed market for the materials.

Non-Traditional Recovery To maximize recovered fiber, Weyerhaeuser Recycling teams with haulers, other paper companies and large corporations.

For example, since 1992, Weyerhaeuser has provided takeaway service for Kmart Corp.'s old corrugated containers. The retail chain recovers more than 13,000 tons per month from more than 2,200 stores nationwide. Weyerhaeuser then uses the recovered containers in its five liner and medium mills.

To maximize fiber recovery, Weyerhaeuser also has started to collect a variety of materials from its customers. The company acquired several of Alcoa Recycling Company's processing plants and began processing paper at the facilities. Alcoa still purchases aluminum cans from its vendors, but the aluminum is sorted and baled by Weyerhaeuser. Weyerhaeuser then uses the aluminum collection system to add paper collection services.

In addition, Weyerhaeuser Recycling recently signed an operating agreement with another paper recycling company, Sonoco's Paper Stock Dealers (PSD). By sharing processing facilities, each company will lower its operating costs, allowing both to increase collection. Both companies also will share assets, therefore reducing the overall costs of collection.

This relationship begins in Charlotte, N.C., where Weyerhaeuser will close its facility and move its employees and equipment to an expanded PSD plant. This alignment increases the company's presence in the Mid-Atlantic and Southeastern regions of the United States.

In an effort to place both market and supply under one roof, Weyerhaeuser joined the Liberty Financial Group and Willamette Resources Inc. in an operating agreement earlier this year.

This led to a new $3.5 million commercial processing and re-cycling facility in central Oregon; Weyerhaeuser will serve as the operating partner and will lease half of the 48,000 square foot facility. Liberty Financial Group, who is the owner of the area's largest waste hauler, Sanipac Inc., can now process its volume, which reportedly has increased 15 times during the past six years.

Securing New Sources In the early years, Weyerhaeuser Recycling focused on securing additional sources of OCC and office wastepaper. Fortunately, OCC has become the most mature segment of the industry, and one for which recovery rates are currently the highest (65 percent of manufactured OCC reportedly is recovered for recycling).

To nurture office wastepaper collection, Weyerhaeuser launched their We-cycle Office Wastepaper program. During its 21 years, the program has grown to include more than 3 million participants.

In 1991, a joint venture between Weyerhaeuser and the Nippon Paper Co. created a newsprint mill in Long-view, Wash., a $375 million newsprint de-inking facility, now in the company's portfolio. Today, the mill produces more than 20 grades of newsprint containing up to 40 percent recycled fiber. On average, the mill consumes more than two million newspapers per day, which is equivalent to every newspaper produced in Washington, Oregon and Idaho.

The high-tech de-inking process is the result of Weyerhaeuser's partnership with Jujo Paper Co., the pioneer of the Japanese de-inking technology. Today, the de-inking plant produces up to 500 tons of pulp per day for the newsprint machines.

"We're driven by what the mills want and what our suppliers need," said Steve Frank, director of manufacturing for Weyerhaeuser Recycling. For example, if Weyerhaeuser Recycling does not recycle a non-paper commodity, it will send the material to a recycler who does.

"A loud cry we're hearing now is that customers want one-stop shopping," added Frank. "And that means managing all of their non-hazardous wastes."

In 1993, Weyerhaeuser Recycling introduced its Waste Integration Service Center (WISC). Service representatives from across the country, with help from a service center in Tampa, Fla., audit customers' waste streams. They identify materials which can be recycled and design plans to collect and transport the company's waste. The sourcing reps also select new equipment, suggest ways to maximize the existing equipment and design material recovery strategies. They also educate and train the customer's staff on how to handle waste and they distribute related posters, brochures and videos.

"When a recycling container is full, the company calls our dispatch center in Florida and we take care of getting it hauled," said Frank. Overall waste management costs a customer less if it merges the company's waste management and recycling into a larger negotiating group.

The WISC system also can track solid waste and recycling activity tracking audits, invoicing, receipts and analysis on demand or in a monthly summary for each customer.

"In some cases, recycling can turn a significant waste bill into income," said Frank. "It adds up to a net profit for a customer, adding revenue to their business."

Kraft General Foods, reportedly the nation's largest manufacturer of processed food, uses WISC to close its loop. WISC worked with Kraft to devise a plan to collect Kraft's paper packaging and other recyclables. The paper is baled and trucked by service providers negotiated by WISC and then it's delivered to Weyer-haeuser Recycling, which pays Kraft for its raw material. Meanwhile, Weyerhaeuser paper mills use the recovered packaging to make the next generation of Kraft boxes.

"We try to answer needs at every level," said Frank. "Kraft wants boxes with recycled content because their consumers want it. At the same time, they've got to watch the bottom line on waste management."

The Continuing Circle There will always be an infusion of fiber into the paper circle, both new and used. In some respects, however, the amount of fiber being reused today will determine the future demand for new fiber.

To meet the needs of a consuming public and to comply with regulations, the pulp and paper industry has invested heavily in recovered fiber manufacturing processes. For example, during this decade, the papermaking industry will have invested $10 billion in using recovered paper.

But the most easily serviced sources of supply already have been captured. Given our current system, re-covery rates for many grades are be- ginning to reach their practical limits. Indeed, consumer demand and legislation will help industry find supplies to feed the system.

According to Franklin Associates Ltd., residential collection routes will bring in the greatest influx of materials. In 1992, residential recovery of the five major mixes of papers was 27 percent; by the year 2000, the rate will climb to 41 percent. To encourage recycling, many states have passed legislation to police recovery rates.

Consequently, Weyerhaeuser will continue to seek more non-traditional sources of fiber. In some cases, the company will strengthen its partnerships with municipalities and waste haulers to build long-term markets.

A clean supply of fiber is the name of the game in the investment-heavy, ever-changing business of papermaking. By providing long-term markets, Weyerhaeuser hopes to team with providers interested in working on a usable source of fiber.

"We started recycling because it made economic sense to make use of material we were otherwise sending to the landfill at a high cost," recalls Frank.

The company has come a long way in 21 years and, according to Frank, it will double its capacity by the year 2000.