Thinking through the opportunities

Ekman Group is a relatively new name in the recycling industry—the company has had a presence in recovered paper trading for the past 17 years as Ekman Recycling—but it has been operating and trading in various products for centuries.

The Ekman family started the Europe-based company as an iron and timber business in 1663. After some diversification, the business was incorporated in 1802 as Ekman & Co. AB and focused on sawmill and rolling mill operations. Ekman increased its involvement in the pulp and paper industry in the late 1800s and expanded its presence in that sector in the mid-1900s, when it became a subsidiary of the Säfveån Group. Its pulp division remains Ekman’s largest operating division.

Ekman Recycling is the company’s recovered materials division that focuses on trading recovered commodities. Ekman developed Ekman Recycling when it acquired New Jersey-based K-C International in 2004. The division has grown substantially since it started 17 years ago.

Currently, Ekman Recycling trades about 1.4 million tons of recovered paper per year.

“From a volume point of view, we’re four or five times as big today as we were when we started the division with the acquisition of K-C International,” says Neil Cooper, vice president of marketing and finance at Ekman Recycling. “The business started here in the U.S., and we’ve grown the business outside of the U.S., expanding into Europe and the U.K.”

Markus Ocklind, director of the European Recovered Materials division at Ekman, says the company’s work culture promotes entrepreneurship, which also has helped foster the company’s growth and diversification.

“We have a lot of freedom within our divisions,” Ocklind says. “We have to follow the rules and compliance of Ekman, of course, but it is pretty free with how we want the business to be done locally.”

Frank Crowley, senior vice president of recovered materials at Ekman Recycling, says the company has lasted for centuries by being “conservative” yet strategic with its investments.

“One of the mantras we say is if you would do it with your own money, then Ekman will probably do it,” Crowley says. “So, that’s the way to think about an opportunity. There are plenty of thought processes and opportunities out there that are kind of outlandish and one-sided. Ekman has lasted this long by being very conservative overall. That doesn’t mean you don’t take chances. It means that you think through the chances you’re taking. So, I think Ekman does a very good job in looking at the opportunities very, very closely rather than just jumping in with both feet.”

Acquiring its presence

Because Ekman had expertise in selling finished paper goods, the company decided to expand into recycled materials in the early 2000s.

Cooper says Ekman recognized that it could provide more services to paper mills if it got into recovered materials. He says, “Our philosophy was we can go into a mill, and we can sell you wood pulp, we can sell you recycled paper and, depending on your needs, we can take finished paper and sell that as well.”

Ekman entered the recycled materials space as soon as it acquired K-C International in 2004. K-C International was a paper scrap trading business that was started by Ken Choi in 1976 in Beaverton, Oregon. Crowley, who served as Choi’s partner at K-C International for many years before Ekman acquired the company, says the trading firm initially focused on selling scrap paper to South Korea.

“Ken was one of those success stories where he came [to the U.S.] with less than $100 in his pocket and had worked for Willamette Falls Paper on the West Coast,” Crowley adds. “Ken asked permission to leave the company and do his own thing, and that’s how K-C International started.”

Crowley says Ekman approached K-C International’s team about a possible acquisition. “We saw a great opportunity with a company that understood trading—they lived and breathed it,” he says. “We fit right in.”

Cooper says K-C International offered the perfect fit for Ekman to get into recycled materials.

“Ekman has lasted this long by being very conservative overall. That doesn’t mean you don’t take chances. It means that you think through the chances you’re taking.” – Frank Crowley, senior vice president of recovered materials, Ekman Group

“It really rounded out our product portfolio at the time,” he says. “It was the right size. It was the right people. That’s really the key to any acquisition—bringing in people that can fit within your organizational culture.”

Cooper adds, “Without that, you’re going to fail. K-C was an exceptional fit, and they proved to be a very good acquisition.”

He says the fact that Crowley has stayed with the business since the acquisition, and that Phil Epstein, Crowley’s other business partner in K-C International, stayed with Ekman through to his retirement a few years ago, serve as testaments to the acquisition’s success.

Photo courtesy of Ekman Recycling

Setting itself apart

One of Ekman’s mantras is “bringing the world to your business.” The company buys and sells materials across all parts of the world.

Ekman certainly has been doing that since it started Ekman Recycling. The company trades just about any kind of recovered paper, including mixed paper, old corrugated containers (OCC), news grades and various high grades, from its offices in the U.S. and Europe.

The company buys scrap mostly from the U.S., Canada, Italy and the U.K. but occasionally from Spain, France and countries in Central and South America.

Cooper says Ekman Recycling also trades postindustrial and postconsumer plastic scrap as well as some postconsumer aluminum and tin. In Europe, along with traditional bales of recovered paper, the Recovered Materials division sells off-specification rolls.

Ekman Recycling sells recycled materials to buyers all over the world, including in the U.S., Europe, Southeast Asia, South America and Central America. Ocklind says Ekman always has prioritized selling to “many markets.”

He says, “Diversification is a big thing for our division—we are not so focused on one market.”

Ekman also looks for ways to provide solutions to its customers’ problems, and one way it can do that is by getting to know its customers well. Crowley says the company likes to go the extra mile to try to understand its customers. That includes visiting recycling facilities as well as paper mills.

“We put ourselves into the facilities, large or small, and try to understand the complexities of what they need, and then we tailor solutions to their needs,” Crowley says. “You give them solutions as if you’re their partner, not as if they are a tool to be used.”

The company was able to partner with one paper mill group in Europe by providing an additional service recently. That paper mill group was not sure how to handle its off-specification paper rolls, so Ekman proposed a solution. Ekman offered to warehouse all nonprice paper rolls and to sell them only to markets that had been approved by the paper mill.

In addition, Ekman installed equipment as well as placed some of its personnel at that paper mill to manage all its scrap. Ocklind says this service ensures that the off-specification paper rolls are properly handled and that the mill does not need to worry about the difficulties of processing and managing its paper scrap. He adds that providing these solutions has helped boost the paper mill’s trust in Ekman. The company also has the capability at that mill to bale scrap paper from external sources.

“That is quite unique, and normally that is not the usual business we do,” Ocklind says of Ekman’s work with that paper mill group. “It’s taking things one step further—not just buying the paper for them, but we’re also providing the service.”

Preparing for change

Ekman’s focus on hiring experts also has helped it to successfully grow throughout its history. The company acquired K-C International largely because of the people involved in that trading business. Ocklind stepped into Ekman Recycling in 2015 to run the Recovered Materials division in Europe because Ekman was impressed by his two decades of experience managing IL Recycling AB in Sweden.

“Markus ran the biggest recycling company in Sweden for many years, and I knew he had the tools and the ability to do something,” Crowley says. “Our people are our biggest asset. That’s the reason why we’ve grown in Europe to the size that we have. Markus has recognized that through his previous experiences and grown a great team.”

However, hiring has been a little more challenging in recent months, Crowley admits. “There’s a shortage of workers around the world, and it’s very difficult when the government is giving so many subsidies not to work. … Finding people who have expertise in our business is a big challenge. To find a salesperson may not be so hard, but to find a salesperson who understands scrap paper” is more difficult.

In recent months, Ekman Recycling has kept busy buying and selling recovered paper. Crowley says there is “unbelievable demand for fiber” this year. He says Ekman suspects demand has increased because of the Amazon effect, with more people ordering packages online since the onset of the COVID-19 pandemic in the spring of 2020.

“Consumer demand increased tremendously during COVID,” Cooper says. “You couldn’t spend money on travel and hospitality. So, what did people do? They bought stuff. So, that spurred a tremendous increase in e-commerce. With e-commerce, you need packaging, and that is a big user of recycled paper and bulk grades.” Yet that surge in demand for packaging has had a ripple effect in the transportation sector, increasing demand for ocean shipping containers this year.

Cooper adds, “The increase in consumer spending—not just in the U.S. but also Europe—has created demand for export containers from China and Southeast Asia. It has made vessels very full, and it’s created tremendous congestion at the ports. That creates backlogs and delays and constraints on vessel space and container availability, so it’s a tremendous impact of COVID.”

With ongoing shipping constraints a concern for many traders this year, Ekman Recycling is working to ensure it can find domestic buyers for its materials.

“I think we’re facing the same problems as most other exporters,” Cooper says. “It’s difficult to find vessel space. Being able to deliver containers per the shipping line return date has been very difficult.

“The way we navigate that is we stay in contact with the shipping lines as much as we can, and we try to stay current to manage the ever-changing delivery dates,” he continues. “You also need to have a domestic business to move tons when you can’t get export containers or vessel space.”

Ekman expects that more paper scrap will remain in local markets and that its domestic business in the U.S. and Europe will grow.

Ocklind adds that having a diversified business has helped Ekman Group to fair well during challenging seasons, with customers in many different markets. He says, “We try to sell to many markets and to have this service for our suppliers.”

The company wants to continue to grow in the same way—by taking calculated risks and maintaining a high level of service to its customers.

Cooper says, “Our philosophy is that we’re a global presence, but we support the local businesses in the markets in which we operate. It’s important that we deliver value in the supply chain for all the partners that we do business with.”

The author is managing editor of Recycling Today and can be contacted at msmalley@gie.net.