Municipal Recycling

ALLIED WASTE TO BUY BFI

Allied Waste Industries Inc., Scottsdale, Ariz., is making a bid to buy Browning-Ferris Industries Inc. (BFI), Houston. If it goes through, the deal will become the second largest ever made in the solid waste handling industry.

The combined company, to be called Allied Waste Industries Inc., would have annual revenues of $6.6 billion. The company will be headquartered in Scottsdale and will be led by Allied Waste’s current senior management team.

BFI is one of the nation’s largest operators of recycling collections programs and material recycling facilities (MRFs). BFI operates 90 MRFs—dubbed “Recycleries” by the company—with recycling accounting for 10% of BFI’s revenues. By the company’s own estimate, BFI collects recyclables at some five million North American households.

As with the other blockbuster solid waste deal announced within the past year, the company being acquired has the greater recycling presence. In 1998, USA Waste acquired Waste Management, with Waste Management having a greater number of recycling locations and recycling collection contracts in place.

Of this deal’s partners, Allied Waste has historically shown less interest in recycling than BFI. Just 4% of Allied Waste’s revenues came from recycling in the fourth quarter of 1998, compared to BFI’s 10%. Allied Waste operates 22 MRFs to serve its 2.6 million customers, compared to the 90 BFI Recycleries that serve its 7.1 million accounts.

“The combination of Allied Waste and Browning-Ferris will create an efficient and highly competitive leader in the solid waste services industry,” Allied Waste CEO Thomas H. Van Weelden says in regard to the merger.

Allied Waste says it expects to achieve $290 million in “synergies and cost savings” in the initial 12 months after the transaction closes. Part of those savings will result from the sale of “certain non-strategic businesses” and other “required divestitures,” according to Allied Waste executives in a company news release.

Over the last several quarters, BFI quarterly reports have noted that the recycling operations have been a drain on profitability as the low commodity prices of collected recyclables have failed to yield adequate revenues.

It is unclear to what extent the newly merged company will be anxious to continue BFI’s significant presence in the recycling processing segment.

WILL BUYERS BEGIN NOTICING THE RECYCLING SYMBOL?

Will more consumers in the year 2010 be conscious of choosing products made from recycled materials? At least one forecast into the near future is venturing to say yes.

Dr. Stephen M. Millett of Batelle,  a Columbus, Ohio, research organization, used the company’s Interactive Future Simulations (IFS) software to try and determine consumer preference trends in the year 2010.

Among the list of “top ten consumer drivers” as determined by Millett and the IFS software was one with recycling implications. Number eight, according to Millett, will be environmental quality.

“Consumer behavior so far has been inconsistent: people say that they want environmentally friendly products, but they are reluctant to pay more for them,” notes Millett’s summary. “Home water and air treatment and waste recycling will be much more important by 2010 than they are today,” he continues. “Generation Xers and idealistic, but affluent, Baby Boomers will drive the demand for ‘green’ products and services.”

It should be noted, though, that among the “consumer drivers” that are further up the list and may at times compete with this environmental mentality are “aesthetics,” “ease of use,” and “superior performance and utility.”

NOT EVERYONE IN A FROTH OVER PLASTIC BEER BOTTLE

While advocacy groups such as the Grassroots Recycling Network, Athens, Ga., are  skeptical of the recyclability of PET beer bottles being test marketed by Miller Brewing, the maker of the bottle is working with recyclers to determine the contain-er’s recyclability.

Continental PET Technologies, the maker of Miller’s amber and clear PET beer bottles, presented its findings regarding the recyclability of the containers to the Association of Postconsumer Plastic Recyclers, Washington. At an APR board meeting, officials from CPT expressed their willingness to participate in APR’s “Champions For Change” program, a testing program designed to determine a package’s compatibility with the recycling infrastructure.

CPT,  a unit of Owens-Illinois Inc., Toledo, Ohio, believes most non-PET barrier material included in the bottle can be “removed in typical PET recycling processes.” Other concerns  include its amber color, metallized label, and the aluminum closures used.

“APR commends CPT and their reclaimer study partners for their work and their forthright approach, as well as for their ongoing commitment to more extensive study and validation with other recyclers,” states an APR news release.

AGENCY SPELLS OUT PRICE PLUMMETS

Municipal recycling programs across the country are not generating as much revenue from the sale of what they collect compared to what they were generating two or more years ago. Spelling out this commodity pricing nature of the recycling business can be tough to communicate to constituents.

In North Syracuse, N.Y., the Onon-daga County Resource Recovery Agency (OCRRA) has attempted to do that with a detailed chart in one of its Operation Separation Rap newsletters.

In OCRRA’s case, the agency pays two different companies to process the recyclables it collects, which include several grades of paper, two types of plastic, glass, and tin-plate containers. The agency then sells the processed materials.

Recent numbers  portray the negative trends that have made profiting from recycling a difficult task. “A comparison of the weighted per ton revenue received for the sale of the recyclables collected in November 1997 with November 1998 reveals the value of the material being collected has decreased from an average value per ton of $46.56 to $32.64,” the OCRRA reports.

LEXINGTON EXPANDS COLLECTION EFFORTS

The city of Lexington, Ky., is expanding its recycling collection efforts, broadening its plastics collection in particular. The city’s Division of Public Information has notified residents that it will now accept all rigid plastic containers except motor oil containers and those made from polystyrene.

The Solid Waste Division is also expanding recycling efforts at multi-unit housing complexes. More than 70 apartment complexes  have containers next to their dumpsters to accept newspapers. Four complexes are testing partitioned containers to collect plastics, cans and clear glass containers in addition to newspapers. If successful, they will be introduced at additional complexes.

Lexington city officials are also trying to make sure that citizens know that old telephone directories will be accepted for recycling  in the mixed paper bin this spring, when new telephone directories are scheduled to arrive at homes and businesses across the region.

MARYLAND  NOTES INCREASED RECYCLING RATE

The state of Maryland reported an increase in that state’s recycling rate in 1998. The Recycling Division of the Maryland Department of the Environment reports a 32% recycling rate for 1998, compared to 29% for 1997. Total  waste disposed last year was down 68,000 tons from the prior year, despite the state’s population increasing  more than 70,000 people. The Maryland Recyclers Coalition (MRC), Annapolis, Md., calls the results encouraging in light of a national trend that has seen stagnant or declining rates in many states since the value of recyclables began declining in 1996.

“With the recent surge of mega-landfills lowering waste costs and the havoc of weak markets, recycling has lost a bit of momentum,” says one MRC board member. “But having already taken about a third of the nation’s discards, it’s definitely not going to fade away. It’s obvious that minerals, oil and especially landfill space are finite, and will become more costly. In the meantime, those who have embraced recycling keep getting better at it.”

Maryland formed a Solid Waste Task Force that held public meetings last year. MRC reported several comments called for improved recycling efforts, which is in the lower tier among states in terms of recycling funding.