A Permanent Presence

A healthy percentage of waste companies have branched out into recycling as the communities they served requested joint recycling collection service.

What can be compared and contrasted is how carefully some of these companies have entered the recycling business—and how well thought-out some of their recycling efforts have been.

The Rumpke Co., Cincinnati, has done what many of their fellow waste haulers have not: entered the recycling segment with a planned series of commitments to the collection, processing and brokerage of recyclables.

Forging a Regional Presence

The solid waste industry was consolidated as much as any service industry in North America in the 1980s and 1990s. An ongoing and at times furiously-paced series of acquisitions and mergers ultimately produced a handful of national companies along with several dozen regional firms large enough to bid against and compete with the nationals in their home markets.

In Ohio and surrounding states, The Rumpke Co. provides a case study of how a regional firm has been able to not only survive, but also grow and thrive through that era of consolidation.

As 2001 begins, The Rumpke Co. is the seventh largest waste disposal and recycling company in the United States, and the second largest privately owned firm in its industry. The company has achieved these business volumes almost entirely within a three state market covering parts of Ohio, Indiana and Kentucky.

Waste collection and disposal (the company owns or operates nine landfills—three in each state) comprise the largest portion of The Rumpke Co.’s revenues. But when states and jurisdictions in which the company operates began passing laws regarding landfill diversion or started requesting recycling services, The Rumpke Co.’s approach was to set up recycling operations that would serve as an additional revenue source and profit center for the company.

In the company’s central Ohio market, this was accomplished in part in 1989 by purchasing the PICCA Recycling Station of Circleville, Ohio. The facility, operated by Steve Sargent, now Rumpke’s general manager of Corporate Recycling Operations, was Ohio’s largest not-for-profit recycling operation, and was considered to be one of the best managed.

While the facility was a key part of the purchase, acquiring Sargent may have been an even more important aspect. “He’s our guru of recycling now,” co-owner and CEO Bill Rumpke says of Sargent.

Rumpke notes the company’s recycling roots lead back to its earliest years. “Pop (company co-founder William Rumpke) started the company in 1932 to feed hogs—he was a hog farmer,” Bill remarks. In its search for hog feed, the company accepted waste loads into a concrete building with conveyors. “People then pulled objects off of a conveyor belt and picked off metal, rags, glass, paper, and fed most of the rest to the hogs,” says Rumpke.

The company began building its own balers to process recyclables—many of which are still in service today at one of The Rumpke Co.’s 10 Material Recovery Facilities (MRFs).

But Bill Rumpke and other company officials agree the passage of Ohio House Bill 592 in 1987, which mandated a 25% landfill diversion rate for communities, spurred the company to its purchase of PICCA and incorporation of Rumpke Recycling in 1989.

“In the response to all the demands this bill made, we had to be in the recycling business,” says Bill. “We have tried to be the best at it, and in Steve we got the man we felt would help us to do that while keeping 300,000 tons out of landfills each year.”

From the Curb to the Consumer

Rumpke Recycling, though a separate division of the company, starts out intertwined with the parent company. Municipal and corporate contracts often include waste and recycling collection components that are proposed and bid as a combined service. Thus, while Rumpke Recycling accounts for just 12% of The Rumpke Co.’s revenues, that number does not include the role the recycling service plays in procuring the contracts that have made the company a leading solid waste services provider in three states.

Recyclables collected on residential routes and at commercial accounts are then routed to the 10 Rumpke Recycling MRFs, located in major cities Rumpke operates in (such as Cincinnati, Columbus and Indianapolis) or in smaller cities that can serve a wider, semi-rural region.

Many of the MRFs are located in older buildings (often located in Tax Enterprise Zones) that can be purchased or leased at a minimal cost. “We bought the old Carr-Adams building in Cincinnati, a former Wayne Overhead Doors plant in Columbus, and a huge factory that used to build railcars in Dayton,” notes Bill Rumpke.

The MRFs themselves also conduct toll processing of recyclables collected by or belonging to other companies, such as used beverage cans (UBCs) collected by Alcoa in the Indianapolis region.

Recyclable commodities processed include old newspapers (ONP), old corrugated containers (OCC), old magazines, mixed office paper, UBCs, steel cans, glass containers, and number one (PET) and number two (HDPE) plastic containers. Some other types of scrap metal, paper and plastic are also collected from commercial and industrial accounts, while in Kentucky and Indiana the company has recently entered into the tire recycling segment.

Stray materials that enter into the MRFs are not necessarily sent to the landfill. During a tour of the Rumpke Recycling Columbus MRF, Sargent notes that materials such as aseptic packaging, aluminum foil and some plastic resins beyond one and two are separated and eventually processed and sold to a consumer.

The Columbus MRF has been an especially high performance facility for Rumpke Recycling, according to Sargent and Rumpke Recycling District Manager Mark Gray. “Only 3% to 5% of what comes into this MRF ends up as residual material that is destined for the landfill,” says Gray.

Making Every Bottle Count

There are several reasons why Rumpke Recycling is able to achieve good returns on its processing investments. Among the reasons are attention to plant productivity and operating techniques, the establishment of active brokerage services, and a fortunate geographic position in a part of the country near many hungry industrial consumers of recyclables.

At the Columbus MRF, Rumpke Recycling has installed a mixed plastic sorting system made and designed by MSS Inc., Nashville, Tenn. The system was funded in part by a grant from the Ohio Department of Natural Resources.

The system features two optical scanning units that help the MRF process up to two tons of mixed plastics per hour, ultimately producing streams of mixed-color PET containers, clear HDPE bottles, and mixed-color HDPE containers. The sorting system was installed in August of 2000, with a goal of being able to process up to 12,000 tons of mixed plastic this year.

Such processing pioneering is frequently attempted at Rumpke Recycling. The company earlier experimented with a mixed waste processing facility (called a “dirty MRF” by some), ultimately deciding the process was not worth pursuing further.

Currently, Rumpke Recycling is setting up its first single-stream collection and processing system in the Dayton, Ohio, area, installing sorting equipment made and designed by Machinex Industries, Plessisville, Quebec, Canada. “It’s getting harder and harder to ask residents to do that sorting,” notes Jeff Raffenberg, Recycling Group Marketing Manager, of the mixed collection trend that has a solid foothold in the western U.S. and is working its way east.

From tire recycling to single-stream systems, Rumpke Recycling officers note the company is willing to innovate, and gets the green light to do so from company co-owners Bill and Tom Rumpke (Tom is Bill’s cousin). “Never being afraid to try something is a corporate attitude,” notes Raffenberg.

“Bill and Tom Rumpke are entrepreneurs,” adds Sargent. “They’ve given us a great deal of flexibility to try things.”

Whatever is collected and processed has to be sold, which involves Raffenberg and his marketing division. Coping with price volatility while seeking end markets for materials collected provides challenges for most recycling companies, including The Rumpke Co.

“It’s been a bumpy road, with the volatility of the market throughout the years,” says Bill Rumpke, recalling times when there were “one thousand tons of baled corrugated that no one would take.”

Rumpke Recycling has been active in setting up guaranteed contracts with some consumers to ensure a home for OCC, ONP and other large tonnage commodities. Beyond that, relationships must be cultivated and maintained with consumers of paper, metal, plastic, glass and any other materials being processed at the company’s 10 MRFs.

Raffenberg notes materials processed and baled at the Columbus MRF (the MRF that also has the exceptionally low residual rate) tend to move through the facility on a very quick turnaround schedule. “Columbus just sits in a good place,” he says of the city.

The same could probably also be said of the tri-state region in which Rumpke Recycling operates, with several major consumers of scrap plastic being located in the three states.

Much of the mixed-color plastic is sold to Signode Strapping of Florence, Ky., a manufacturer of plastic cargo securement strapping material. Other loads of mixed plastic go to a manufacturer of drainage tile. “Even mixed glass cullet has a market,” Raffenberg says of the materials produced at the Rumpke Recycling MRFs.

The company brokers whatever materials it does not have sold under a contract, including some 3% to 5% that heads for export markets. “We’re exporting some secondary fiber and some plastics, and I expect that export rate to grow—especially if we get the rail siding re-opened at our Columbus MRF,” says Raffenberg. “There are good freight rates available from Columbus.”

Through its combination of residential collection and corporate service contracts, and using its 10 MRFs, Rumpke Recycling processes more than 26,000 tons of recyclables each month.

A Clear Focus

Despite its knack for experimenting and its willingness to use different techniques at different locations, Rumpke Recycling answers to a clear mission: “Recycling must be self-supporting. It is one of the key components to providing comprehensive solid waste services for our customers,” Sargent states.

Rather than treating recycling as a necessary but unwelcome side business—as some solid waste companies have done—The Rumpke Co. has viewed its recycling business as a valuable asset. “We use this arm not only for the municipal contracts, but to get into the large corporations who want to reduce their waste flow,” notes Bill Rumpke.

He adds that beyond using recycling as a foot in the door, proper attention has been paid to make sure the recycling division is managed appropriately both to produce profits and make the right impression on corporate accounts.

“I think, dealing with companies, we look very professional and people are impressed with our expertise,” says Bill Rumpke. Regarding profitability, he adds, “it became profitable for us because it was done and done right. Now we could not exist without recycling—it is part of what people demand.”

In terms of future growth, Rumpke Recycling will have the opportunity to expand along with The Rumpke Co. as it continues to move into adjacent markets within Ohio, Indiana and Kentucky, as well as adjacent states.

“Right now, we use the oil slick philosophy—to slowly move into adjoining markets,” says Bill, adding that regions in the same three states as well as Tennessee, Illinois and West Virginia are also being considered. “It’s not a hit and miss thing—we analyze it completely,” he remarks.

“Recycling is here to stay without a doubt,” Bill remarks. “It’s grown and become healthy, and even during the worst of times can be break-even. We must continue to manage it well enough so it is profitable to The Rumpke Co.”

The author is editor of Recycling Today. He can be reached at btaylor@RecyclingToday.com.