Safe & Sound

Electronics recycling can be approached as a disposal option, an environmental solution or a recycling opportunity, depending on a company’s point of view. An additional viewpoint regards electronics recycling as a security issue—and that is an approach that may merit wider consideration in the future, according to the leaders of Reclamere, Tyrone, Pa.

The central Pennsylvania recycling company put together a business plan two years ago with its eye on electronics asset recovery services and re-marketing components and refurbished computer units and accessories. These activities do indeed make up a healthy portion of the company’s business, according to Reclamere vice president of sales and marketing Joseph P. Harford.

But the company is also beginning to grow its business by appealing to the security requirements of banks, hospitals and other institutions with private information that is stored on hard drives, servers and other equipment that is eventually scrapped. Reclamere has struck an alliance with a Pittsburgh document destruction company to offer a security service that addresses both paper files and the matching electronic files.

Reclamere was formed in 2000, when president Robert Dornich, vice president of technology and logistics Angie Keating and Harford began planning the company that started up its operations in November of 2001.

The company accepts what Harford calls "the entire gamut" of electronic office equipment, including computers, CRT (cathode ray tube) monitors, printers, copiers and fax machines. "Essentially, what we say is as long as its not carpeting, furniture or lighting, we can manage it for them," says Harford.

According to Harford, "as long as there is a consignment or brokering or recycling market" for the equipment, Reclamere will accept it.

Even though the company is just 16 months old, Harford says it has made some changes in its operating methods. "We still do some refurbishing and demanufacturing, but I would say that makes up just 25 percent of our business. The glass from our monitors goes to a glass-to-glass recycler, while the majority of our business is now brokering out what we procure and offering security services."

Rather than expanding its own demanufacturing and component sales departments, Reclamere has shipped much of its material to companies with established operations. "We can find companies that have their core competence in demanufacturing and in marketing components," says Harford. "If someone down the street is doing it well, why reinvent the wheel?"

Reclamere has paid close attention to the controversy that emerged last year when electronic equipment exported from the U.S. was documented as being disassembled unsafely and environmentally unsoundly in Chinese villages.

"We work with the U.S. Commercial Service, part of the Department of Commerce, to qualify the foreign port to make sure they are who they say they are when we ship overseas, say to Chile or even to Canada. In the U.S., we may visit the facility where we’re shipping materials," says Harford.

"We perform due diligence," Harford continues. "We make sure equipment will not wind up in China being dumped in back yards."

While offering asset recovery and recycling services to companies and institutions is a key part of what Reclamere does, the company’s effort to move into the security niche may help separate it from some of its competitors.

As a way of boosting its security offerings, the company has struck a marketing alliance with AllSafe Document Destruction, a Pittsburgh company that offers document destruction services to banks, hospitals and other clients with confidential records that need to be destroyed before they get into the hands of identity thieves.

"The reason that partnership was struck is that Angie was contacting other female business owners to talk about business start-up issues, and we came across AllSafe, which has been in business in Pittsburgh for 14 years," says Harford.

While the importance of document destruction has been communicated to companies over the past several years, the issue of data destruction is still catching up. "In electronics, the level of awareness and information really has not been communicated well," Harford notes.

The marketing alliance between Reclamere and AllSafe may be a way of increasing that awareness. "There seemed to be a direct connection between what they do at large banks and hospitals and their documents destruction and making sure they are following certified standards. The connection happened realizing that all of that paper was generated somewhere—it came from somebody’s mainframe, network server or hard drive," says Harford. "It made sense to say, ‘Not only do we need to deal with the paper, but also with where that information resides.’"

The data destruction/privacy issue will also gain attention if companies or institutions that fail to destroy information are sued by identity theft victims. Harford notes that in Pennsylvania, some privacy advocates procured computers through a government surplus-to-low income residents give-away program, and were able to restore confidential information.

And in Georgia, says Harford, "The state enacted legislation that is fierce in terms of the employer’s fiduciary responsibility [in such situations]. It could become a template for a number of other states dealing with the issue."

Harford believes the marketing alliance is a way for companies seeking traditional document destruction to also be reminded of the need for proper electronics destruction security measures.

"Apparently, no one’s ever put the two services together—but the paper’s all coming from an electronic source where it’s stored," he comments. "A lot of companies and institutions have Social Security numbers and other data that they don’t want out on the street. Data security is a big issue when it comes to obsolete equipment and its recycling."

Owners of a start-up business can never be certain what to expect in the first year or two of operations, but right now Harford says Reclamere’s progress is encouraging.

"New companies are always happy to make it through their first year," he remarks. "We’ve done that while chalking up some nice success stories."

Among those success stories are the AllSafe partnership and the doors that it opened, as well as an agreement to become the electronics recycling company for Mellon Bank in Pittsburgh.

"We are working on a program for the 501 school districts in Pennsylvania," he notes. "We have offered an attractively priced disposal service and a good disposal schedule and transportation service."

According to Harford, Reclamere is also working with original equipment manufacturers (OEMs) to become the recycler of choice for off-lease equipment—a potentially huge market to tap into. "The OEMs are looking for a way to deal with legislation that may force them to deal with take-back programs," he notes. "We’re working to position ourselves to be a provider of services in those situations."

While the company’s initial successes are satisfying, Harford believes the electronics recycling industry is one that will consolidate in the future, and that Reclamere will need to take steps to grow as a company to be able to compete.

"I don’t know if consolidation is going to occur right away, but I do think OEMs will seek partnerships with major players—they want to respond to recycling concerns before a solution they don’t care for is dictated to them by legislation," says Harford.

A movement toward such alliances as well as the potential cost of meeting recycling permitting conditions will push consolidation and "force some out of the game," Harford predicts. "Small and medium-sized players will be challenged by pending legislation and having enough volume to make the permitting process worthwhile."

Harford has no doubt that the demand for electronics recycling is real and necessary. "Even conservatively, you’re looking at between 300 million and 350 million units becoming obsolete in U.S. in next year-and-a-half," he remarks. "As broadband gets more exposure and as people want to become more wireless and more mobile, those needs are going to make the turnover of equipment increase again. Our concern is not running out of equipment, but making sure we’re doing everything we possibly can to satisfy both our buying and selling customers, because the competition it going to get fierce."

The company is "adamant about customer service," says Harford, and has a primary operating philosophy to maintain a level of professionalism that will allow it to stand out in its field.

One way Reclamere would consider growing is by franchising its name and operating methods, says Harford. "I think it’s an idea that’s a valid one. It still comes down to the fact we have a little black box—a business model—that we’re trying to perfect ourselves."