Northern Exposure

Canada’s recycling industries saw some major developments in 2007, both in provincial recycling programs and in the private sector.

In the recycled metals segment, three major mergers dominated the news in late 2007 and early 2008, while Canadian provinces debated the pros and cons of blue-box programs and deposit systems when it comes to beverage container recycling.

In the area of scrap industry mergers, the sale of Quebec-based Nova Pb, Canada’s leading lead recycler, to Calgary-based Newalta became official Nov. 1, 2007.

Newalta is a leader in waste management and environmental services in Canada. In 1993, Newalta had six facilities in Western Canada and reported

Nova Pb is Canada’s largest integrated lead recycler and the only lead recycling operation in North America equipped with a long-body rotary kiln and a closed-loop air and water circuit.

Nova Pb receives more than 3.7 million spent acid batteries and other lead-bearing materials per year. The company has the capacity to recycle up to 200,00 tons of batteries and to produce up to 100,000 tons of recycled lead per year. Nova also recovers and processes a wide variety of industrial wastes that are by-products of the lead smelting process.

March 5, 2008, Mike Giampaolo, chairman and CEO of Triple M Metal, Brampton, Ontario, and Nigel Morgan, chairman and CEO of Poscor Mill Services Corp., Hamilton, Ontario, announced the merger of their companies to form Canada’s leading metals recycling, processing and services company, Triple M Metal LP.

Triple M Metal was founded almost 40 years ago by brothers Mike and Antonio Giampaolo. The company was ranked as one of Canada’s 50 Best Managed Companies in 2006 and 2007. Triple M Metal is one of Canada’s leading metals recycling and processing companies, with locations in Canada, the U.S., Mexico and England. It also conducts a significant volume of business in Asia, especially China.

Poscor was founded in 1998 by Nigel Morgan. It experienced significant growth thanks to its innovative approach in the sourcing and sale of ferrous scrap and its strategic alliance with its main customer.

Completely integrated, Poscor operates a high-capacity shredder, a large-volume stationary baler and portable balers and has significant screening and iron breaking operations.

"This merger is consistent with the consolidation that has taken place in the global steel industry over the last few years," Mike Giampaolo says in a press release. Giampaolo will continue as Chairman of Triple M Metal LP.

"Our strategy is to continue building a strong and viable business through selective partnerships to keep pace with this steel industry consolidation," he says.

Poscor’s Morgan, will act as co-CEO of the newly formed company. Joe Caruso, a long-time member of Triple M Metal’s senior executive team, has been appointed president, while Antonio (Tito) Giampaolo has been named vice chairman and a member of the board, a role he previously fulfilled with Triple M Metal.

The new company will operate from 12 locations, employ more than 600 people and handle and ship more than 3.5 million tons of ferrous scrap and almost 200,000 tons of nonferrous scrap this year.

Also being finalized is the acquisition of Eastern Canadian metal recycler SNF by American Iron and Metal (AIM) owners Herbert and Ron Black, who have recycling operations in Canada, the U.S., Mexico, China and Hong Kong.

SNF, which has been owned by the Hamelin family of Quebec for 35 years, operates as a metal recycler in Quebec and the Maritimes. The company has two shredding facilities in Quebec.

Combined, the two companies will handle approximately 1.6 million tons of ferrous scrap.

Len Shaw, executive director of CARI (Canadian Association of Recycling Industries) says the Canadian scrap metal industry continues to prosper overall. Prices are still reasonably high, he says.

However, because of a slowdown in manufacturing, less scrap is available.

David Yocholwitz, general manager for Vancouver-based ABC Recycling, reports significant growth in container traffic for ferrous scrap in 2007. "Pressure from the Asian market continues to support record prices," he adds.

A construction boom in Vancouver related to the coming 2010 Olympic Games is also helping matters, Yocholwitz adds.

The most recent data, provided by Rob Sinclair of National Resources Canada Recycling Minerals and Metals Section, International and Domestic Market Policies Group, show that export shipments of ferrous and nonferrous metals were considerably higher last year at 5.4 million metric tons worth CAD $3.7 billion. In 2006, 4.6 million metric tons were exported at a value of CAD $3.3 billion, while 3.6 million metric tons worth CAD $2.5 billion were exported in 2005.

Imports were up slightly in 2007. Canadian companies imported 1.8 million metric tons worth CAD $3 billion as compared to 1.8 million metric tons of scrap metal at a cost of $2.3 billion in 2006.

In the paper and corrugated material recycling industry in Canada, John Mullinder, executive director of the Paper and Pulpboard Environmental Council (PPEC), reports that a high Canadian dollar, increased energy costs and cheap competition from countries that don’t have to meet Canadian labor and environmental standards have collectively led to mill closures, machine shutdowns and global rationalization by owners and shareholders—and more is coming, he adds.

Further contamination of the fiber supply and the political thrust to "divert more" (almost regardless of its impact on the quality of existing materials being recycled) is forcing the paper industry to make some stark choices, he says. "Either we go high-tech with automated equipment to counter the cheap labor of our competitors for the fiber feedstock, or we just let the export markets handle the increasing contamination of the fiber supply," he says. "It’s crunch time."

The industry continues to be hampered by higher costs for freight and other price increases, notes Pascal Aguettaz, corporate manager of the Recycled Fibers Supply Group of Kingsey Falls, Quebec-based Cascades Inc. But the higher value of the Canadian dollar relative to its American counterpart has helped diminish the impact of those higher costs.

Another problem he identifies is the drastic reduction in the supply of recovered uncoated free sheet product in North America. In 2000, he says, 15 million tons of the material was collected in North America. Last year, only 12 million tons was available, as office workers made more use of digital information and use less paper.

He reports that prices are down from USD $15 to $20 per ton. He notes that Cascades is getting $130 to $135 per ton for its recycled material, adding that he expects the price to drop another $5 to $15 per ton in early April.

He foresees the price perhaps bouncing back to current levels ($130-$135 per ton) by summer, but that it will be nowhere near the $150 to $170 per ton the recycled commodity used to attract.

One would have thought that the debate over private vs. publicly operated blue-box collection and a deposit-for-return system for bottles vs. inclusion as part of a blue-box program would have been resolved long ago. Yet, both issues are the subject of renewed debate in Canada.

Early this year, the province of Ontario, Canada’s most populous province, switched to a deposit-and-return system. In most of the provinces, this system is preferred to collecting beverage bottles as part of existing blue-box programs. The government claims that the new system will divert the equivalent of 30,000 metric tons of glass (or 80 million bottles) at a cost of $15 million per year.

Those involved in the bottle-making and packaging industries are not impressed, however. Barbara McConnell, a spokesperson for CSR, Toronto, the agency representing the two industries, points out that glass accounts for less than .25 percent of the material that is put into Ontario’s landfills. She notes that the new system will cost more than double the previous method for collecting bottles through the blue-box system.

She is also critical of the $7.5 million that the government is setting aside to educate the public about the new system and the additional $5 million that the municipalities are slated to receive to cover the cost of the program. She argues that the money would be better spent improving the blue-box program.

Proponents of the deposit-and-return system, however, counter that the return rate for bottles is higher through this system than through the blue-box program.

British Columbia on the West Coast and Nova Scotia on the East Coast are the two newest provinces to introduce electronics recycling programs. Jay Illingworth, vice-president of Electronic Product Stewardship Canada (EPSC), Ottawa, Ontario, reports that B.C. introduced its electronics recycling program Aug. 1, 2007, and Nova Scotia followed suit Feb. 1, 2008.

Alberta was the first jurisdiction in Canada to introduce an electronics recycling program, loosely modeled on the California’s law, in October of 2004. Saskatchewan introduced an electronics recycling program Feb. 1, 2007.

Ontario is in the midst of program plan development, and an industry-led group there was scheduled to submit the plan to the Minister March 31st.

EPSC was created in 2003, Illingworth says. "We are the driving force behind creating e-waste recycling programs across the country. Working closely with the Retail Council of Canada (RCC), we helped design the e-waste recycling programs in operation right now in B.C., Saskatchewan and Nova Scotia."

EPSC is currently in negotiations with the other three Maritime provinces of New Brunswick, Prince Edward Island and Newfoundland about introducing electronics recycling. As for Quebec, a consultative process has been ongoing for the last five years, Illingworth says.

Manitoba is also engaged in a consultative process concerning electronics recycling. The West Central province did organize a one-time collection of electronics last summer that garnered 300,000 kilograms of computers and televisions from 20 communities throughout the province. Jim Ferguson of Environment Manitoba says an industry product stewardship program was agreed to in November and is just waiting government approval. The program would include levies ranging from $5 to $45 on electronic equipment. "We hope to have the program established within the year," he says.

A new industry-run tire stewardship program began April 1 in the West Central province of Manitoba, replacing the oft-criticized government program.

Ashley Leibl, owner of Reliance Tire, a Winnipeg-based recycler, says, "The previous government program forced the processors to suffer the burden from financial shortfalls. We had to carry the program on our backs because the government failed in its fiduciary duty to ensure that the processors were paid appropriately," he says.

"We have eliminated most stock tires," Leibl says. "Off-road tires were a problem, but that was tackled early last year. There’s still a year’s worth hanging around though. That will be our first order of business."

The author is a freelance writer based in Canada. He can be contacted at myron@autobahn.mb.ca.