Peak performance

As its name indicates, Pinnacle Recycling’s founders have high standards for the com- pany, which offers paper and plastics re- cycling services to printers, corrugated and folding carton manufacturers, retail and distribution companies and paper and plastic converters in addition to many other businesses. It was Pinnacle Recycling’s founders’ desire to establish an ethical business that prioritizes the needs of its customers that lead to the company’s formation.
 

A solid foundation

Pinnacle Recycling was formed in Akron, Ohio, in 2010 by four men with more than 80 years of combined experience in the recycling industry: Dan O’Connor; his sons, Tim O’Connor and Chad O’Connor; and Gary Dalessandro.

Chad jokes that his father has been in the business “since the Stone Age,” focusing primarily on sales. But it’s the combined experience of the company’s founders that has made Pinnacle what it is today.

Brothers Tim and Chad, who serve as Pinnacle Recycling’s vice presidents, have experience in paper and plastics recycling, while Gary has an accounting background.

“We figured we had longtime experience and varying backgrounds in the industry,” Chad says, “and we felt that we could start something that could be successful and create jobs, and we could run the business the way we felt it should be run.”

Dan, who serves as president of the company, says all four of Pinnacle Recycling’s founders were working for the same recycling company at the time they decided to establish their own business, “and we knew that we could get along and be successful operating our own venture.”
 

Inside the operation

Pinnacle Recycling operates out of a 155,000-square-foot facility in Akron that houses its main office and warehouse. The company opened a sales office in late 2013 in Parkersburg, West Virginia, which primarily deals in plastics, Chad says.

Pinnacle Recycling serves customers throughout Ohio, western Pennsylvania, southern Michigan and northern West Virginia, providing recycling services to generators of plastic and paper scrap, including printing plants, packaging manufacturers, paper processors, warehouse and distribution facilities, injection molders, blow molders, brand owners and automotive manufacturers.

Tim says Pinnacle Recycling considers itself a generalist, handling a variety of postindustrial paper and plastics grades.

“We purchase all forms of plastic,” Chad says, “including films, rolls, parts, sprues and runners, sheets, trim scrap, regrind, virgin off-spec and obsolete virgin pellets.”

Pinnacle processes a variety of commodity- and engineering-grade plastics, including polypropylene (PP), high-density polyethylene (HDPE), polyethylene terephthalate (PET), thermoplastic polyolefin (TPO), styrenes and acrylonitrile butadiene styrene (ABS).

The company’s plant includes shredders and grinders that it uses to process plastic scrap, producing flakes that it sells to compounders, reprocessors and injection molders.

Of the 8,500 tons of material Pinnacle Recycling handles monthly, approximately 75 percent is paper, Dan says, while plastics comprise 25 percent.

Gary, who serves as treasurer of the company, says Pinnacle bales high grades of paper to mill-specific specifications in addition to handling a large amount of corrugated material.

The postindustrial paper and corrugated products the company processes account for 65 percent of its revenue, Chad says, while plastics account for 35 percent.

“Margins are better on the plastics side,” Dan says.

Pinnacle Recycling supplies 20 to 30 paper mills in any given month, while 20 to 25 companies purchase its plastics during the same time frame.

The company claims, “Our experience and philosophy have given us many years of success in this industry. As a result, we are able to offer customers the most value and return for their recyclable material. We’ve also developed key relationships with end users around the world, aiding in our ability to provide favorable pricing and consistent material movement in all market conditions.”

While most buyers of Pinnacle’s materials are based in the U.S., roughly 25 percent to 30 percent of the company’s sales are to overseas consumers, Chad says.

“Global trade certainly has an impact on our business, and export demand has a ripple effect on domestic markets,” he says. “We have a good blend of domestic and export sales to smooth over changes in either of these two markets.”

Domestic market demand doesn’t compare with that of the export market for some secondary materials. For instance, Chad says, virtually all of the plastic rolls and film Pinnacle Recycling handles are exported, with primary destinations being China and India.

Of course, he mentions how China no longer welcomes some materials after establishing Operation Green Fence in late 2013. This has made some material streams unattractive to Pinnacle because buyers are scarce. “We don’t buy certain materials anymore because we can’t sell them,” Chad says, adding that the company no longer purchases plastics commingled with metals, which it was previously able to sell to buyers in China.

Tim adds that e-scrap also can be difficult to sell if it is not of a particular level of cleanliness.

“Plastics with any contaminant—metal, paper—have been difficult to move for the last three or four years,” he adds.
 

Growing into plastics

Regarding scrap generation, Chad says, “Paper markets are shrinking and will continue to shrink.”

Dan adds, “News is certainly a different animal than it was a few years ago.”

This reality prompted Pinnacle to widen its scope from the start to include plastics. “We continue to diversify into other opportunities, such as plastics, to offset some of the declines in paper volumes,” Dan says.

However, as oil prices have declined, so have plastics prices.

“Plastics pricing is declining a little bit,” Tim says. “HDPE and PP tend to be more stable. PET and other grades have just tumbled.”

He adds, “In the past, we simply made a call, and it was gone. Now, it is much more difficult.”

The slow growth of the U.S. economy in general also has affected generation. “We’d see much more material out there if the economy would take off,” Tim says.

“Market conditions in our region, as well as in the rest of the country, can be described as ‘flat’ for the past couple of years,” Dan says, describing demand and pricing. “Pricing has been stable, and, for the most part, material has been moving fairly well.”

Gary adds that domestic recovered fiber markets can be characterized as “amazingly stable,” having been so for the last three-plus years.

The size of Pinnacle’s plant gives the company the flexibility to ride out market slowdowns, Dan says. “Since our plant and warehouse are a pretty good size, we have been able to purchase and store some slower moving inventory from our accounts until markets were able to improve.”

Changing market conditions are common within the recycling industry. Because Pinnacle Recycling’s owners each have an extensive history in the industry, this tendency toward change was something they were keenly aware of on the day they opened their business.

“You have to be able to meet changing market conditions, and to do so we continue to invest in equipment to become as effective and efficient as possible,” Gary says.

“We also provide continuous training to our employees to assure that they, too, operate with a high level of safety and efficiency,” he adds.
 

Agreeable attitude

Brokerage services account for roughly 15 percent of Pinnacle Recycling’s business, Gary says. “Anyone can broker as long as they have relationships with buyers and sellers,” he continues. “We do a little bit of that, but that is not what we specialize in.”

Pinnacle’s founders say they understand how important it is to evaluate their customers’ needs and offer solutions that are effective and economically beneficial.

This understanding, Gary says, has led Pinnacle to focus on customer service.

The company states on its website, www.pinnaclerecycles.com, “Our goal is to provide the highest level of service, competitive pricing and timely payment to our customers and [to] do so with an equal level of integrity and dependability.”

Dan elaborates, “We believe that by providing our customers with the highest level of service we can set ourselves apart from the competition. We achieve this by always operating with a ‘can do’ attitude in responding to our customers’ requests.”

He continues, “We try to service them and take whatever they have, even if we can’t recycle it ourselves.”

Chad says sometimes Pinnacle must turn to industry colleagues to meet some unusual client requests. “We all have been in the industry so long, we do have a lot of relationships. We may have to reach out to people who we know to find a market for unusual material our clients are generating and want us to handle,” he adds.

Some of Pinnacle’s employees, known as “flex guys,” are cross-trained to better respond to customer needs, Dan says. For instance, some of the company’s CDL (commercial driver’s license) drivers also can run a tow-motor, giving Pinnacle the flexibility to respond to emergency pickups.

“We stress service in our business,” Chad adds.

Pinnacle Recycling also stresses consistency and fairness, according to its owners.

Dan says, “All business revolves around the interaction of people, whether it’s your customers, your employees, your vendors. We believe that we must be consistent and fair when dealing with anyone involved in our business. It’s really pretty simple if you agree to the terms of engagement with someone and you do what you say you are going to do.”
 

Positive outlook

Pinnacle Recycling’s responsiveness and focus on adding value for its clients have been key factors in its success during its first five years in business and likely will continue to contribute to the company’s success going forward.

“The future of Pinnacle Recycling looks very bright,” Dan says. “We are positioned to grow our business and have the people and knowledge necessary to do so.”

He adds, “We are always on the lookout for positive ways to expand our business.”

While Pinnacle dabbles in metals, it’s not an area the company seeks to grow. “We do some metals now as a convenience for our customers, but it’s not going to be something that we focus on,” Chad says.

The company’s owners say they believe the plastics segment of their business will drive future growth. Tim says, “Because plastics is a smaller portion of what we do now, we can really grow it. I think we would like it to be 50 percent of our volume, but it will take some time to get there.”

Chad adds that in four or five years, Pinnacle should be able to achieve that goal. “Plastics is where our growth potential is, and we focus a lot of our attention there.”

Pinnacle’s owners say they will invest in processing equipment, particularly extruders, as needed to realize this growth.

Chad adds, “We would like to get to the point where we’re producing pellets in the four to five year range.”

 

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