ISRI 2014 Convention: Economics at issue

A panel of electronics recyclers discussed various issues facing the industry in the Spotlight on Electronics session Tuesday, April 8, at the Institute of Scrap Recycling Industries Inc. (ISRI) 2014 Convention & Exposition.

The panel, moderated by Jim Levine of Regency Technologies, with operations in Ohio, Atlanta and Chicago, featured Joe Clayton, vice president of sales and marketing for MRP Co., headquartered in Hunt Valley, Md.; Dag Adamson, president and founder of Lifespan Technology Recycling, Newton, Mass.; and Craig Boswell, president and co-founder of Hobi International, Batavia, Ill.

Levine began by raising the issue of glass from CRT (cathode ray tube) devices, saying, “Everyone thinks it’s going to go away some day, but it keeps coming and coming.”

Clayton said the only thing lacking when it comes to processing CRT glass is the willingness to pay for the service, adding that the capacity exists to handle the material that is being generated.

Boswell also said he saw the problem as an economic one, adding that recyclers have gotten into trouble because they did not adequately price for handling this material. He said the charge is now built into the pricing model in the business-to-business environment. 

Regarding OEM (original equipment manufacturers) contracts, however, Clayton said this was not always the case. “I walked away from an OEM contract because it didn’t pay me enough to do good,” he said.

His response led to a follow-up question on the effect that EPR (extended producer responsibility) legislation has had on the industry.

Adamson said such legislation has resulted in OEMs searching for processing partners based on cost rather than value. He added that Lifespan has walked away from municipal contracts in multiple states because the economics were “just not there.”

Levine added that OEMs were “forced” into this approach and are not happy about paying to recycle material that is 15 to 20 years old. “They do their weight limit and not much more,” he said.

As a result of EPR legislation, Levine added, recyclers have become the “bad guy” when they have to charge to process material. “How did recycling get a bad reputation?” he asked. “I don’t know how we ended up being the bad guy.”

Boswell said the purpose of the legislation was to get OEMs interested in their products at the end of their useful lives, forging relationships between OEMS and recyclers.

Adamson added that design for recycling is a key component of EPR regulations, saying results have been seen in this area.

Boswell added that many of the issues related to EPR for electronics have arisen from the implementation of these laws and not from the concept of EPR itself.

“The biggest problem with EPR is the huge leakages that no one is looking at,” Clayton said. “Freight costs are eating up a lot of money because OEMs only want to talk to the largest [recyclers.]”

Levin added that recyclers did not have a seat at the table when many of these laws were drafted. “We need to get a seat at the table.”

Despite these difficulties, Boswell said he still finds electronics recycling a great industry “because you can still bootstrap it.”

Clayton added that the industry is not “one size fits all,” adding, “everything is specialized and yet still wide open.”

Adamson described electronics recyclers and his business in particular as “green capitalists.” He said, “We are making money every day by doing the right thing.”

The ISRI 2014 Convention & Exposition was April 6-10 in Las Vegas at the Mandalay Bay Resort & Casino.