Despite a myriad of mergers, changing markets and fierce competition, today's MRF managers are optimistic about the future.
While Americans continue to recycle, recycling facilities face a host of challenges in the new century. In addition to fierce competition, many facilities are struggling to ensure high-quality feedstock, keep up with new technologies and hold on to good employees.
How do they do it?
To find out, Waste Age recently asked several recycling facility managers about these issues and more. Our panel of MRF managers represents several regions and materials:
- John Armando of Raisch Products, a C&D recycler in San Jose, Calif.;
- James Langemeier of Capitol Fiber, a newsprint recycler in Annandale, Va., near Washington, D.C.;
- George Ochoa of Strategic Materials, a glass recycling facility in San Leandro, Calif.; and
- Jean Bina of Phoenix Technologies, a polyethylene terephthalate (PET) processor in Bowling Green, Ohio.
In an industry that grows ever more complex, there was little consensus among our panelists about the current business landscape. But some themes did emerge. To be successful in today's marketplace, facility managers need to keep employees trained and motivated, and be ready to adapt to constantly shifting decision-makers and regulations.
Perhaps most importantly, several panelists urged their fellow recycling managers to maintain high operating standards and high-quality products, which benefits recyclers industry-wide. In today's recycling industry, the old adage "a rising tide lifts all ships" still seems to hold true.
Waste Age: Within your region, what key issues are you facing today, and why are they important?
Armando: Issues that determine the ownership of waste - such as flow control or what is defined as waste and not recycled feedstock - affect our business. Not allowing waste generators to determine what is waste and what is recycled feedstock, and not allowing them to determine what is the most environmentally conscious and cost-efficient manner to dispose/ recycle their material, can potentially affect our business. If we're not allowed to receive material, we have no material to recycle.
We are seeing more "illegal" recyclers hanging out their shingle for business. By illegal, I am referring to companies that do not have the proper permits or licenses to do business. These companies have an unfair advantage because they do not have the same expenses (i.e. permit cost, site upkeep, etc.) as a company that is working legally. It always seems that these companies are the ones that operate "dirty" and give the industry a bad name. Unfortunately, the cities and counties rarely punish these companies - in fact, they go out of their way to help them, and it may take years to close them down because the laws are not enforced.
Ochoa: There is an ever-increasing demand for quality glass for the end- users - primarily the fiberglass and container glass industries. They require higher-quality cullet. We need to increase communication in the recycling community about the importance of high-quality recycled glass.
Langemeier: Northern Virginia and Washington, D.C., are collectively a mature market, so starting new programs to increase supply is the key issue. Since I started at CFI in March of 2000, we have been relying on word-of-mouth and referrals to gain new business, both of which are long-run, so results have been limited.
Bina: Phoenix Technologies pelletizes and crystallizes recycled post-consumer PET flake for direct sale and reuse back into consumer packaging applications.
With a multitude of emerging barrier technologies adding complexity to the recycle stream, our engineers and chemists are exploring new ways to advance our processing capabilities, enhance our quality and develop new market applications to maintain our position as a leader in the RPET in-dustry.
Another significant challenge for us and for all processors in North America is to continue to inspire increased collection of recyclable plastics as the number of PET packages on store shelves expand and more beverages are consumed away from home as "single-serve."
Waste Age: What steps or actions have you taken to ensure you can be competitive in today's changing marketplace? Is there any new technology, for instance, to increase efficiency?
Armando: Having sufficient feedstock, and the number of tons that can be recycled per hour, are what allow us to remain competitive in today's market. So it is very important for us to maintain equipment and the conditions of stockpiles. Not keeping up with the new technology or understanding the current laws that separate a recycling facility from a transfer station can directly affect the bottom-line. It also can affect how the industry views our operation.
Ochoa: We've consolidated our plants. We're recycling more material through existing assets, closing obsolete plants. We are using a philosophy of continuous improvement in our operations. This includes retaining good employees. We have a process in which employees can work their way up to plant manager positions.
Langemeier: Keeping a tight hold on expenses. To do this, I have a lean staff where all employees are required to wear multiple hats - top to bottom.
Bina: Phoenix Technologies is committed to exceeding customer expectations and to making our customers successful. The foundation of this achievement is based upon developing long-term relationships and strategic alliances with both customers and suppliers.
Waste Age: Most recycling programs have reached their maturity. How is this affecting your operations?
Armando: The asphalt and concrete recycling industry has been around for more than 20 years and has reached its maturity. Although this has increased competition, it also has allowed time for the end-product to be tested and prove itself in application. It has allowed time for specifications to be written and accepted, and for the contractor to become familiar with the product.
Ochoa: I don't necessarily see our industry reaching maturity. It is continuously evolving due to challenges in collections and end-uses. And consolidations, legislation and increased competition keep the industry fresh and challenging.
Langemeier: Municipalities and local cities are moving toward expanded mixed paper programs. We now only can bale mix paper, whereas before it paid to "up sort" to different grades, that is, news, old corrugated cardboard (OCC), and so on.
Bina: Despite the absolute decline in PET recycling volumes [as reported by the Charlotte, N.C.-based National Association for PET Container Resources (NAPCOR), Washington, D.C.-based Association of Post Consumer Recyclers (APC), and other industry experts], the nominal poundage of recyclate has increased slowly each year. We actively participate in industry organizations that promote the expansion of recycling programs and have broadened our own supply scope, specifically in the area of our food grade product, to include the use of curbside [recyclables] for direct food contact as approved by the Food and Drug Administration (FDA).
Waste Age: What are the most interesting changes or challenges in your field?
Armando: I believe that the industry is beginning to recognize that other materials can be included in the process of recycled asphalt and concrete. As these materials - brick, porcelain, ceramics or glass - are accepted, more recycled-content products can be used. This will save more of our country's natural resources.
Asphalt and concrete recycling was not always accepted as it is today. It took years to develop and prove itself. But it had to start somewhere; someone had to try it and someone had to allow it on their job. As more and more municipalities, contractors, and soils and design engineers attempt to solve today's problems and try to make a difference, more diversions from landfills will be accomplished.
Ochoa: The most challenging thing is dealing with single-stream glass collection - and dealing with improved collection systems at the expense of the recycling process.
Bina: Finding new applications for products such as beer, juices, baby food, sauces, etc., through the use of barrier technologies are both an opportunity and a challenge.
Langemeier: Optical sorting.
Waste Age: What effect are mergers and post-merger changes in the industry having on your operations?
Armando: As of yet, the various mergers primarily are within the municipal solid waste industry and have not affected Raisch. Raisch Products was named as the largest construction and demolition (C&D) recycler by the Silicon Valley Business Journal, and we recycle more than 650,000 tons of demolition asphalt and concrete, brick, block porcelain, ceramics and other inert materials each year.
We have worked with companies such as Waste Management Inc. in Houston to establish recycling facilities on their sites, but mergers have had no effect on this other than each time a company merges, we have to deal with a new group of decision-makers.
Ochoa: The only impact mergers have had is in collection systems. Waste haulers are moving toward single-stream collection and more automated systems. As a result, glass breaks easier and it is tougher to clean and sort.
Langemeier: Mergers have given CFI a stronger position with end-users. CFI bales true to the written paper grade specs. For example, most plants do not bale a true #8 news any more. They bale a 7/8 news. As a result CFI is one of the only plants on the East Coast that has a true #8 news, so we have better end-user relationships compared to the rest of the market.
Waste Age: What challenges will you face in the coming year?
Armando: Material approval. Although recycled asphalt and concrete is accepted by Caltrans (California Department of Transportation) and has been for years, and although this material is and has been used for city streets, county roads and state highways for years, there still are designers and soil engineers who are not familiar with the recycled product and afraid to use it.
There are also cities that follow the Caltrans specification so closely that it is impossible to produce the material to meet spec. Caltrans designed the specification tight to avoid abuse, but it is impossible to follow the spec to the letter.
Ochoa: Our challenges remain employee retention, continued emphasis on quality end-uses and continued degradation of the glass recycling stream due to efficient collection instead of focusing on the highest quality uses. There's a disconnect between collection and the end-market. Our challenge is, "how do recycling facilities deal with a stream that is becoming more contaminated?"
Bina: Some barrier technologies will reach "critical mass," meaning that they will be a large enough segment of the stream in certain areas to truly effect the proverbial "witches brew" of recyclables. This will continue to be a challenge for the foreseeable future. Additionally, the increasing demand for recycled PET, and the balance of supply and demand, and value vs. virgin and widespec, will continue to be dynamic.
Langemeier: Obtaining more supply!
Waste Age: What advice would you give other MRF managers?
Armando: Often, recyclers will accept loads that are not really in the best interest for recycling but do so to increase the bottom-line tipping fees. But this often results in disposal charges greater than their tipping fees. When it comes to removing the unrecyclable material from the facility to the landfill, this may contaminate the finished product and make it unmarketable, or fail when used in the field. This gives other recyclers a bad name because it's considered operating a dirty facility. This directly affects us all and often forces government to step in and create another regulation trying to prevent this situation. I think we all can agree that we already are over-regulated.
Ochoa: The outlook for the industry is good. It's challenging but it can offer a good career.
Bina: The market for recycled plastics, especially #1s and #2s has realized superbly successful growth in North America. Applications for very "high value" uses in economically viable scenarios, and companies with serious capital investments, have established a long-term commitment to the use of post-consumer recycled (PCR). There is significant unutilized capacity to process PCR in North America, and there is huge demand for more material. Anything that can enhance and expand MRF programs should be considered. We, the processors, want more recycled plastic. Organizations such as NAPCOR and APR are excellent resources as MRF managers try to increase the profitability and throughput of their operations.
Langemeier: Build alliances and pick your niche.