Three's Company

Recyclers from three segments of the industry converged on Orlando early this summer to take part in the Recycling Today Media Group’s annual trade show and conference events. This year, the Paper Recycling Conference & Trade Show and second annual Recycling Today’s Plastics Recycling Conference & Trade Show were joined by the inaugural Electronics Recycling Conference & Trade Show.

The co-located events drew more than 500 attendees, who had the opportunity to hear from some of the industry’s leaders at three tracks of educational sessions and workshops. In addition to the educational programming, attendees were able to take advantage of a number of networking activities as well as to walk the exhibit hall, where 59 companies showed off their latest equipment and services.

OLD NEWS. While the outlook for the newspaper and newsprint industries in North America may be on the bleak side, on a global scale, demand and capacity remain strong, according to Sylvain-Yves Longval of Abitibi-Consolidated Corp., Montreal, who spoke at the meeting of the Paper Stock Industries (PSI) Chapter of ISRI at the Paper Recycling Conference & Trade Show.

Newspapers’ share in worldwide advertising has trended downward in recent years, however, it remains the second most important medium for advertisers after television, Longval said. Furthermore, bolstered by growth in Asia, paid circulation has continued to grow, reaching a new high of 451 million copies daily in 2005. Longval said China, India and Japan account for 62 of the 100 best-selling daily newspapers.

He said that global demand for newsprint increased in 2006, mostly because of higher demand in India and China. Longval said world demand for 2007 is expected to be up slightly and then in for a rebound in 2008.

China, India and Eastern Europe will lead growth in newsprint demand in 2007, which will be partially offset by weak demand in North America, he said, adding that North American demand in March had declined 12 percent year-to-date.

Capacity is also expected to increase in 2007 and 2008, because of new paper mill startups in China, according to Longval.

With new domestic capacity, China’s imports have significantly decreased. Japan is the main supplier of newsprint to China, with more than 80 percent share of total imported volume year-to-date in 2007, according to figures provided by Longval.

In the United States, however, newspaper circulation has declined. A recent ABC audit report shows circulation down 3.1 percent on Sundays and a 2.1 percent decrease on weekdays between October 2006 and March 2007. Longval sites competition from free dailies and the Internet as primary contributors to the decline in daily newspaper subscriptions.

Newsprint consumption is also down more than 12 percent year-to-date in the U.S., he added.

Availability, cost and quality are among the main challenges to recycling newsprint, Longval said. He added that recovery rates alone are not the ultimate goal or main driver of recycling. "Technology is the main driver," he said, "and the ability to deliver high quality material."

Even in the face of many challenges, there is "a lot of room to grow with news," Longval said.

EXPORTING WITH CONFIDENCE. When it comes to accessing the recovered fiber industry’s lucrative export markets, most problems occur from miscommunication or lack of communication, according to Bill Schlenger of Worldwide Fibers LLC, Syosset, N.Y., who spoke on the topic of exporting.

Distance makes clear communication a vital part of exporting successfully, Schlenger said. In domestic sales, "if you have a problem, you resolve it or you can move [material] to a packer nearby," he said. However, if a recycler is exporting, the far-away destination means "there’s not a lot of friends around to buy your distressed tons."

Schlenger advised exporters to first and foremost work with someone they knew and trusted. He said to also communicate anything unique about the material being sold, for instance, if it had been stored outside. "Make sure they buyer knows what he’s getting," Schlenger said. He also recommended taking photos of all shipments, a requirement for shipping to China.

Schlenger added that China is the area to watch when it comes to export, as the booming country is investing some $54 billion in port development and infrastructure in the next decade. "The growth is like nothing we’ve seen in our lifetimes," he said.

In addition to China, Schlenger added that India is also on the rise. New paper machines are starting up and demand is growing, he said, adding that 2007 import volumes are projected to be between 1.2 million and 1.5 million tons.

Mike Belus of Harmon Associates, Atlanta, echoed Schlenger’s comments on China’s growing supremacy in the recovered fiber market. "The reality is China has a significant impact on the domestic market," he said. In 2006, 10 million of the 17 million tons shipped worldwide went to China, he said. "It’s incredibly dominant."

China’s dominance is an opportunity and also a challenge, he said, as Chinese mills are starting to set up buying arms in the United States.

Belus also identified Korea and South America as vibrant, growing markets for recovered fiber.

While China has long been a hot topic in the paper industry, the growing economic power is also developing a hunger for plastic scrap—as are a number of other countries.

THE WIDE WORLD OF PLASTICS. The use of plastic scrap as industrial feedstock has grown throughout the world, creating a global market that has seen supply lines stretch from one side of the world to the other.

In a session at Recycling Today’s Plastics Recycling Conference entitled "On the Waterfront," a succession of speakers described the active plastics recycling markets in China, India and Latin America.

Scott Farling of MBA Polymers Inc., Richmond, Calif., noted that China imported more than 5.8 million tons of plastic scrap in 2006, marking an 18 percent increase compared to the 5 million tons imported in 2005.

In 2006, the United States shipped approximately 350,000 metric tons to China, though that figure may not include a considerable amount of plastic scrap that was first shipped into Hong Kong.

Most of China’s plastic scrap enters through southern ports of entry, including Guangzhou and Shenzhen, which is on the border of the Hong Kong trade zone. Hong Kong is listed as the largest exporter to china, with some 1.6 million metric tons of plastic scrap shipped last year, but much of this material was likely generated elsewhere.

In 2006, PET and PVC were the most commonly shipped types of plastic scrap. Farling noted that much of this scrap is sorted and extruded in a very low-tech (and sometimes unsafe) manner, though MBA is a joint-venture partner in a highly automated plant in Guangzhou.

India is currently importing a more modest 90,000 metric tons per year of plastic scrap, according to Surendra Kumar Borad of Gemini Corp., Antwerp, Belgium. The scrap, 77 percent of which comes from Europe, is handled by 30 licensed importers based in government-approved Special Economic Zones.

By far the most common resin imported in India is LDPE and LLDPE, accounting for some 85 percent of the total, according to Borad. Most of this is plastic film and wrap. "This is what Indian companies ask for," he said.

With the United States currently supplying only 15 percent of India’s plastic scrap imports, there may well be an opportunity for American recyclers in India. "There is always a shortage of material for domestic companies [in India]," said Borad.

What could be helpful to American shippers is a relaxation of strict Indian import laws. If a relaxation in the law occurs, the volume of scrap flowing from North America to India "could grow significantly," Borad said.

Along the United States-Mexico border, AvangardInnovative, Houston, is a significant handler of plastic scrap. The company’s Jon Stephens said the newly named company (its predecessors were Avangard Industries and Innovative de Mexico) is now "the second largest plastics recycler, processor and broker in North America."

The company operates more than a dozen MRFs and recycling plants in the United States and Mexico and just opened a PET bottle-to-bottle manufacturing plant in Mexico. The company also sources material at maquiladoras and other manufacturing plants, Stephens said.

Although plastic scrap is shipped north and south between the United States and Mexico, Stephens said AvangardInnovative also ships a lot of its plastic and paper scrap to China and India. Freight rates can dictate the destination. Whereas it can cost 8 cents per pound to ship scrap from Mexico City to Atlanta, it can cost just 2 cents per pound to send the same material to China.

In another presentation, Jane Hay of U.S. Bank, Minneapolis, Minn., detailed the options for financing export shipments, including several different types of letters of credit with varying degrees of risk and insurance.

Her "tip of the day" to recyclers: "Use a bank that corrects documents in-house whenever possible and teaches you to avoid future discrepancies," said Hay.

Such organization and documentation can also be key to success in the electronics recycling industry.

BACK TO BASICS. Speakers addressed the basics of electronics recycling during a session titled "Collections 101" at the Electronics Recycling Conference & Trade Show.

The Recycling Today Media Group planned the event with the help of the World Reuse, Repair and Recycling Association (WR3A), a Middlebury, Vt.-based nonprofit trade co-op dedicated to "fair trade" standards for international recycling.

The session’s speakers were Robin Ingenthron, president of American Retroworks, Middlebury, Vt., and of WR3A; Bob Nicholson of Uniwaste Services Corp., Portsmouth, N.H.; and Tim Anderson, president of World Computer Exchange. The speakers addressed a variety of topics, including reuse, recycling and donation of personal computers and monitors.

Ingenthron began his presentation by saying there is "an awful lot of wishful thinking" surrounding electronics, adding that it was easy to believe that aging electronics can be reused. However, this is not always the case, according to Ingenthron.

Part of the problem is the decline in the domestic secondary market. The reuse market for devices containing CRTs, such as computer monitors and televisions, is collapsing within the United States, he said, citing the decline in TV repair services. In 1990, the U.S. was home to 100,000 TV repairmen; however, in 2010, that number is projected to decrease to 19,000, Ingenthron said.

According to Ingenthron, three electronics recycling business models exist in the United States. The first is capital intensive and requires the use of shredders and separation equipment. The state of California has embraced this model, Ingenthron said. The second model is labor intensive and focuses on demanufacturing, while the third model is based on "smoke and mirrors," with "recyclers" abusing the system by sending nonworking units along with some that can be reconditioned to refurbishers in overseas markets.

Bob Nicholson and Uniwaste is a recycler who is trying to do things "the right way," however, that approach sometimes leads to higher costs for the company’s customers. "If a customer is driven purely by prices, chances are we aren’t going to do business with them," he told attendees.

Nicholson said attendees looking for recyclers to process their electronics should ask about the company’s mass balance, or how much of the material received is turned into a marketable commodity with documented end markets.

Anderson of World Computer Exchange (WCE), which claims to be the largest North American nonprofit provider of donated used computers, said WCE has shipped 23,072 computers to connect 2,322 schools with 992,500 students in 34 developing countries.

According to Anderson, WCE acts as "a quiet, respectful and transparent broker helping partners to build their ICT in education capacity."

The co-located Recycling Today Events were held June 10-12 at the Peabody Hotel in Orlando.