Desert destinations

Two desert oases some 8,000 miles apart served as gathering spots for major annual recycling-related events in the spring of 2015. The Bureau of International Recycling (BIR), based in Brussels, hosted its 2015 World Recycling Convention & Exhibition in Dubai, United Arab Emirates (UAE), in mid-May, and the U.S. waste and recycling industry met up at WasteExpo in Las Vegas in early June.

In Dubai, some 850 collectors, processors and traders of secondary commodities attended the BIR convention at the InterContinental Festival City May 17-20.

Attendees had access to 12 sessions focusing on metal and nonmetal commodities, an exhibit area featuring equipment and technology suppliers and networking events that included a welcome reception at the Al Badia Golf Club.

June 1-4, the Las Vegas Convention Center served as the site for WasteExpo, as it has several times in the past.

More than 550 exhibitors hosted as many as 12,000 attendees in the WasteExpo exhibit area, which featured demonstration models of collection trucks, balers, shredders and other types of recycling and waste industry equipment.

WasteExpo sessions catered to haulers and processors of a wide range of recyclables, including paper, plastic, construction and demolition (C&D) materials, and to attendees involved in the waste-to-energy industry.
 

A desert revival?

When scrap recyclers gathered in Dubai for the 2009 World Recycling Convention in May of that year, the scrap market was in a several-months-long trough but rebounded soon afterward. David Chiao, newly elected president of the BIR Non-Ferrous Division, expressed his hope that reconvening the BIR Convention in Dubai would produce a similar result.

Chiao of Uni-All Group Ltd., Atlanta, had been serving as interim president of the BIR’s Non-Ferrous Division but had the “interim” tag removed in Dubai after being elected to a three-year term as division president.

Global market reports presented by Sidney Lazarus of South Africa-based Non-Ferrous Metal Works pointed to healthy overall demand for aluminum scrap and export markets in Europe that have been bolstered by a decline in the value of the euro.

China’s overall demand for imported nonferrous scrap continues to decline, however, with its overall demand for finished copper stagnant as its construction sector scales back from the previous boom years.

Nasser Aboura, chairman of UAE-based Aboura Metals, said the nonferrous scrap sector in the Middle East and North Africa (MENA) region has grown along with the oil and construction industries in the past several decades.

The region has exported considerable amounts of scrap to China, but Aboura said India is “the largest trading partner with the Middle East” and that it has “one of the fastest-growing economies in the world today.”

Mohan Agarwal of secondary aluminum producer Century Metal Recycling, Palwal, India, said he foresees Indian demand for aluminum scrap continuing, in part thanks to the seven facilities operated by his company.

Century’s seven smelting facilities produce up to 225,000 metric tons per year of secondary aluminum alloys. Two of the plants are joint ventures with Japanese firms (one with Nikkei, the other with Toyotsu).

Demand for aluminum alloys will grow along with India’s automotive sector, Agarwal said. India is currently the second largest two-wheel motorized vehicle producer in the world and the seventh-largest automaker. India “is expected to become the world’s third-largest auto producer by 2020, with 7 million units annually.”

Since 2014 India has been exporting more small cars than Japan, Agarwal said, and it also will continue producing such vehicles for its growing middle class. “More and more car manufacturers are looking at India,” he said, adding that they are locating assembly plants and research and development facilities in the nation.

Non-Ferrous Division President Chiao was one of two prominent new leaders elected to BIR posts in Dubai. Ranjit Baxi of J&H Sales International, London, assumed the volunteer leadership post of president.

Born in Tanzania to Indian parents and having lived in the United Kingdom for more than 30 years, Baxi can be considered a citizen of the world, befitting his leadership post of a global organization. He will serve a two-year term as BIR president with the possibility of another two-year term to follow.

In 2011, Baxi was appointed BIR’s treasurer, and from 2007 to 2013 he was president of its Paper Division. He remains an honorary president of the Paper Division.

In his acceptance speech, Baxi thanked his predecessor, Björn Grufman, for his efforts during the past four years and expressed appreciation for being named president. “BIR has profiled itself as the sole truly international recycling federation. I am honored to be serving its 800-plus member companies and national recycling federations in the coming years,” he stated.

Chiao was born in Taiwan and came to the United States as a student in 1977. He started trading in scrap metals a few years later in 1983 and became a member of BIR in 1988. Throughout much of his career Chiao has specialized in connecting nonferrous scrap recyclers in the U.S. with consumers in China, including working as a joint venture partner with a Chinese firm.
 

Providing an oasis

Tighter margins for recycled commodities didn’t stop thousands of people from converging at the Las Vegas Convention Center June 1-4 for WasteExpo. While many MRF (material recovery facility) operators and haulers are feeling the squeeze created by lower secondary commodity prices, energy was still high. With an estimated 12,000 participants, it was one of the best attended conferences in the show’s history, according to the show’s organizers.

Panelists expressed recycling market woes during the Heavy Hitters Panel, a keynote session featuring representatives from some of the leading waste management companies in North America. Moderated by Michael Hoffman, managing director of St. Louis-based Stifel Financial, the session took a close look at the factors affecting recyclers’ profitability, including pricing structure.

David Steiner, president and CEO of Waste Management (WM), Houston, told attendees his company hasn’t invested in recycling in the last two years and is only bidding on contracts that yield a certain return on its investment. He said WM has to be able to cover its processing costs, adding, “This is a crisis.”

Ron Mittlestaedt, CEO of Waste Connections, The Woodlands, Texas, explained that the cost of recycling is two to three times that of landfill. He estimated it costs $80 per ton to recycle material versus $30 per ton to landfill it. While that may be the case, the added cost of recycling is often not passed on to the customer, he said.

Richard Burke, CEO of Advanced Disposal, Dearborn, Michigan, suggested MRFs be viewed as manufacturing plants, where recyclables that come into the facility are the raw materials. As the business is structured currently, he said, the MRFs are “bearing too much of the risks.”

Waste and recycling volumes remain down about 30 percent from the economic downturn, Steiner said, despite the fact that industries that were affected negatively by the Great Recession have seen growth well exceed where they were prior to it.

Panelists agreed that if housing starts would reach the 1.2 million level, then waste volumes would start to return to 2007/2008 levels.

Burke said industrial volumes started to pick up in the Southeast last year and C&D volumes have increased this year.

Joeseph Quarin, president and CEO of Progressive Waste Solutions, headquartered in Vaughan, Ontario, which provides recycling and disposal services to 13 states, the District of Columbia and six Canadian provinces, said volumes also are picking up in the regions his company serves; but, he added, “The pace of recovery has been slower.”

Despite slower growth and price structure issues, Suzy Teherian, former chief financial officer of eCullet Inc., a technology-based glass processing company headquartered in Palo Alto, California, said she doesn’t see interest in recycling going away.

She served as the sole speaker in the “Financial Drivers Changing the Waste and Recycling Industry” session on the opening day of WasteExpo 2015.

Teherian said, without a doubt, college graduates and other young professionals with fresh ideas are entering the “green” industry looking for jobs.

She showed the audience photos of the most recent annual FIRST (For Inspiration and Recognition of Science and Technology) Robotics Competition Championship, which had a recycling-themed focus for 2015. More than 18,000 students from around the globe met in St. Louis to test their engineering skills throughout the four-day event. The competition ended April 24, when four out of 900 participating teams were recognized.

“A whole different group of people are getting into this industry and bringing innovative ideas,” Teherian said.

In the 1960s, high oil prices and an oil shortage led to the initial interest and use of renewable energy, she said. Using waste as a source of energy affected the waste industry, and recycling took off, she explained.

“Young folks going to college got excited about alternative fuel sources,” Teherian said.

Teherian recognized that 2014 saw record global investment in renewable energy, adding that while she said she does “know oil prices are going to go up, I just don’t know when and by how much.”

As the industry has grown, client expectations also have increased. “A change and struggle for our folks [has been] the increase in financial metrics,” she said. Teherian described how recyclers today must record the number of tons processed daily and disposal costs, among many other metrics.

The old days of doing business are over, she emphasized, adding, “In the past, a handshake was good; now you need legal proof. It’s more data driven. Now you have to do a capital analysis.”

In the short term, Teherian said, “There are not many financial drivers behind recycling, but as we continue to push for recycling, we’ll continue to see more demand for recycling infrastructure. We have to produce more information, and it has to be accurate.”

The authors are on the editorial staff of Recycling Today and can be contacted at ksmith@gie.net, btaylor@gie.net and mworkman@gie.net.