The Upside

William Caesar has been on a fast track with Waste Management since joining the company. Caesar, who joined the company in 2010 as its chief strategy officer, was named president of Waste Management Recycle America (WMRA) in January of this year, replacing Pat DeRueda.

Caesar says his time as Waste Management’s chief strategy officer gave him the opportunity to gain a solid understanding of the needs of the company’s different customer segments. That position helped groom Caesar for the top position with Waste Management’s fast-growing recycling division, WMRA. “I was in a position to work with our teams operating in different geographic areas and across our different lines of business to develop growth strategies and to prioritize investments,” he says.

Although his time with Waste Management is relatively short, he has a long history in the energy and materials business. Prior to joining the conglomerate, Caesar worked for the consulting firm McKinsey & Co., where he was a principal in the company’s Atlanta office and a leader in McKinsey’s North American Energy & Materials practice.

Caesar says his time with the consulting firm allowed him to learn what it takes to grow and manage a business, how to interact with people, how to be a demanding partner and how to identify opportunities.

During his 13 years with McKinsey, while he provided guidance and support to numerous clients, Caesar says he also learned from the senior client leaders with whom he interacted.

As the new head of WMRA, Caesar is charged with leading a diverse collection of operations. WMRA currently operates nearly 100 recycling plants, which have increasingly been shifting to single-stream processing, and provides marketing services for more than 140 locations in the United States and Canada. In addition, WMRA operates seven electronics recycling facilities and one plastics recycling plant.

The company continues to expand organically and through acquisitions. In total, WMRA handles approximatly 8 million tons of recyclables per year.

In a recent interview with Recycling Today magazine, Caesar discussed the future direction of WMRA and the state of secondary commodity markets.

Recycling Today (RT): Where do you see markets for recyclables headed this year?

William Caesar (WC): After what felt like a bit of a market correction in Q4 2011, we have begun to see a rebound in many material grades, much as we anticipated. We expect the recyclables market in 2012 to be relatively stable, with prices generally above five-year averages with some seasonal fluctuations.

RT: Where do you see some of the biggest upsides in the recycling industry in 2012?

WC: The EPA’s latest report on the solid waste industry showed that the recycling rate in the United States, while higher than at any other time, is only about 34 percent—there is a tremendous opportunity in this industry to work with our customers to increase recycling rates. WM’s recent investment in RecycleBank demonstrates our recognition that we need to explore new ways to move the needle on recycling rates. I also think that the industry will begin to see new technologies emerge at commercial scales that will enable us to either process different materials or convert materials we already collect into higher-value products.

RT: What are the biggest concerns/challenges you see in regard to the recycling industry?

WC: Improving inbound material quality is a continual challenge—success here helps drive operational efficiencies and improves outbound material quality.

Our customers also are looking well beyond traditional materials to recycle, and we need to find ways to expand our offerings.

Perhaps the largest challenges we face in the industry—beyond generating additional volumes—are managing through commodity price fluctuations and the restructuring of the North American pulp and paper industry.

RT: China continues to play a significant role as an end market for many recyclables (paper, plastics and many types of metal). At the same time, there are mixed signals coming from that country (economic, quality control issues, etc.). Can you comment on the role China will play through the rest of this year? Does your company expect to see some significant changes in activity from China?

WC: Waste Management sees China as a very stable market for recovered materials in the future. Chinese companies are expanding their processing capacity—adding more machines—and demand will continue to increase for recycled paper grades in the near future. China will play a key role in North American paper consumption, and we feel very confident the demand will stay steady over the next five years.

RT: You note that the present recycling rate is about 34 percent. Where do you think we can get to by 2015?

WC: Like other companies in the industry, Waste Management believes we will continue to see significant variations in recycling rates across the country. But we have a strong expectation that recycling rates, in general, could easily cross over the 40 percent level by 2015, as long as the value of the underlying commodities—paper, metals, plastics—remains relatively high.

Waste Management has a strong commitment to provide single-stream recycling for communities where it is appropriate. WM can cite numerous success stories when communities are able to convert to single-stream recycling, and we expect that there will be a number of additional single-stream facilities built or converted in the next few years, and this processing capacity will push recovery rates up.

One area where I think we need to do more to drive recycling is in the “away-from-home” locations—at work, in the office, in recreation areas.

The challenge will be to build the collection systems to gather this material efficiently, to provide appropriate containers in these locations, as well as to educate the public on the appropriate materials to put in those containers.

RT: It seems that the company has invested a significant amount of time converting/opening single-stream operations throughout the country. Do you expect to continue this strategy?

WC: Yes, the conversion of non-single-stream MRFs (material recovery facilities) and the opening of new single-stream plants is a priority for Waste Management as we pursue our goal to process 20 million tons of recyclable material by 2020.

When we combine all the materials we recycle today (including C&D, organics, e-waste, mercury lamps, etc.), we are more than half the way there. Residential and commercial customers have clearly indicated that single stream is the preferred approach to recycling.

RT: Will WMRA look to establish more vertical partnerships with consumers to strengthen end markets for the material?

WC: We think vertical partnerships represent a particularly interesting opportunity for us and we will explore opportunities as they present themselves. As we look to improve the efficiency of our recycling operations, these types of partnerships provide an opportunity to either increase volumes or create new markets for materials that we previously landfilled. I don’t know that we will see this on a widespread basis, but we expect to find niche opportunities with smaller components of the material stream.

RT: Can you discuss WM’s outlook in the electronics recycling sector? There are a number of certification standards available. Does WM seek to obtain different certifications for its electronics recycling side?

WC: Waste Management has been involved in the electronics recycling business for more than a decade and has a national infrastructure in place that includes processing operations, drop-off locations and mail-back programs. We are one of the few companies in the arena that has obtained both R2 (Responsible Recycling Practices) and eStewards certifications. Waste Management supports the industry’s move to a more rigorous approach toward certification.

RT: The plastics recycling industry seems to be in a bit of a growth mode. What is WM’s outlook for the plastics recycling sector? And what are the key issues that WM is addressing in regard to the plastics recycling sector?

WC: Waste Management sees plastics becoming more important every day. The curbside stream is changing rapidly, with the percentage of newspaper in the stream decreasing at drastic rates. We are more focused on plastics in municipal bids today because they are playing a bigger role in the blended value of curbside materials. Our goal is to extract as much value from the waste stream as possible, and plastics, pulp, fiber and paper are all valuable resources we extract. We are also seeing the potential for greater demand for low-grade plastics that otherwise might wind up in landfills. Waste Management is at the leading edge of innovation with new technologies that allow us to convert these products into higher value materials.

RT: Waste Management recently announced a strategic investment in RecycleBank as one way to boost recycling levels. Are there other programs/strategies that can help your company increase recycling rates?

WC: Waste Management is actively engaged in a variety of educational programs, primarily targeting our efforts at the local level.

We recognize that some of the most significant impacts are those that are focused directly in the communities we serve, so often times we will work with a local town or municipality to develop targeted approaches to not only increase participation but also to improve the quality of the materials that are being set out for collection. We see this as equally important to both the short-term and long-term success of recycling.

RT: Are there any customers/clients that you work with who have really embraced the recycling/sustainability culture? Can you provide some examples of what they have done that has really boosted their green credentials?

WC: Waste Management has held numerous eCycling collection events with LG Electronics. These events are held throughout the country, but of particular note are a couple of events that occurred at the two most recent NCAA (National Collegiate Athletic Association) Final Four tournaments.

Together with LG, Waste Management staged e-waste drop-off locations, allowing the public to simply drive up and drop off electronics without even having to get out of their vehicles. It was simple, painless and good for the environment.

William Caesar is president of Waste Management Recycle America, based in Houston.