Editor's Focus

The recent spectacular rise in prices for many grades of recycled fiber, followed by their equally dramatic fall, shows the kind of cycles a processor – of any recyclable commodity, not just paper – has to be on top of in order to run a successful recycling business. Some new dealers got into the paper business during the upturn, hoping the good conditions would last forever. Of course they did not, and many of these new players have now closed their doors.

But there are ways to ride the ever-fluctuating commodity markets and still prosper, as many long-time players know. We profile one such company, Vista Fibers of Dallas, in this month’s Recycling Today. Although the company has only been around for 10 years, it is made up of individuals and acquired companies that know the paper markets inside and out. One key to Vista’s success has been its strategy of diversification, according to Tom Lyon, president.

The company is involved in many aspects of recycling, from collection to processing to brokering of materials from municipal, commercial and industrial sources. Vista handles curbside commodities – metal, plastic and glass containers – along with paper. This enables the firm to offer full-service recycling, and it makes good business sense.

But in addition, Vista’s parent company, Allied Vista, includes two other businesses along with the recycling segment: record storage and wire product manufacturing. Although these are much smaller businesses than recycling, which is Vista’s main focus, they provide a steady revenue stream. The record storage company in particular is thriving; it has become the largest such business in Louisiana and also has a facility in San Antonio, says Lyon. This provides a stabilizing force for the company when the recycling commodity markets are in the doldrums.

Other processors balance the fluctuations of the recycling commodity markets by selling some primary metals, or through some involvement in manufacturing. For some, a pure brokerage arm is sufficient to provide that balance. Others might increase their reliance on export sales when domestic markets are lagging, if their companies are set up to sell overseas.

Another factor that has helped Vista in particular continue to be profitable even through the current market downturn is its close relationships with its customers and its attitude of consistent, steady growth.

Although the idea of making large amounts of money during good markets is tempting, Vista’s approach of steady growth, along with some involvement in steadier markets than recycling (while keeping the recycling focus) is worth learning from.