Tissue grades have been a focal point of the recovered paper industry since the onset of the coronavirus pandemic forced much of the workforce to leave office buildings in a fundamental shift to remote work. While grades like old corrugated containers saw a sharp increase in volume as e-commerce took off, sorted office paper (SOP) generation, in particular, has felt the opposite effect.
With fewer people consistently working in offices and long periods of remote schooling, tissue-grade recyclers have struggled to gather supply, resulting in high demand, even higher premiums and begged the question of what will happen to mills if generation continues to slow?
Looking back
During the 2022 Paper & Plastics Recycling Conference in Chicago Oct. 19-20, a panel of tissue-grade experts gathered to discuss the implications of the pandemic and how their operations have had to adjust as the market has fluctuated. The discussion, moderated by Kari Talvola, president and CEO of Fibre Trade Inc. in Burlingame, California, included Kathy DeLano, vice president of sales at Texas Recycling in Dallas; Ysabelle Dupuis, supply and logistic director at Kruger Recycling in Quebec; and Ron Gable, senior vice president of performance and operations at Proshred Security and Redishred Capital Corp. in Ontario.
“It was definitely something that we had never seen before,” Dupuis said of the supply issues at Kruger mills. “I have to say that our biggest issue was that our mills kept on running because people kept on buying toilet paper—a lot of toilet paper—so we needed to provide materials. That was the hardest thing.”
DeLano said the paper packing side didn’t see a huge drop in generation in the early stages of the pandemic, but as printers started to lose workers, jobs were not being done, and scrap paper was becoming less and less available.
“At first, [printers] were getting their paper OK [because] mills will running off their inventory,” she said. “It’s like the last year or so, a lot of our printers have been on allocations from mills—they’re not getting paper as fast as they need it. They live by the sword. They wait for jobs to come in and then they start ordering paper. Now, it can take them two to five months.
“That’s what I’ve experienced from our customers [is] just having a hard time getting paper in so they can print jobs so we can collect the scrap [and] send it out to the mills. It’s a big, big cycle," DeLano added.
The issue isn’t so much that generation has slowed but rather the pace with which supply has dried up. Gable suggested volume had been coming down since before the pandemic—a challenge those in the industry had started to confront. He said his on-site, mobile paper shredding business saw a 40 percent drop in volume per stop from 2009 to 2019.
The combination of office buildings closing and paper generation coming from home offices seemingly diverted much of the high-grade supply to the municipal stream.
“It was easier to adapt to COVID than it has been to adapt to post-COVID because of everybody was sort of on one boat together,” Gable said. “The one adoption that we did was we continued to emphasize the security side to companies: ‘Get your paper from those home offices back and let’s get it into the secure waste stream.”
Changing with the times
The market fluctuations over the past two years forced many changes to operations, but the panelists agreed it provided opportunities for improvement, too, particularly when it comes to safety.
DeLano said Texas Recycling used to buy cardboard, cans, newspaper and metal, to name a few, off the street through a buyback program and decided that because of the public exposure, that practice would shut down during the pandemic. As lockdown restrictions eased, the company limited what it would buy back to cardboard, newspaper and cans.
“In some ways that made us more efficient, we can use that labor in other parts of our plant and work on cross-training,” she said. “Then during COVID, we practiced all the safety protocols—we had masks, social distancing…we were considered an essential business, so we went to work every day, but we got through it. I think we did a pretty good job.”
PPRC 2022: What to consider when upgrading a MRF
Gable said he also was proud of how his company handled the situation, not just from the standpoint of securing enough paper supply, but of how it took care of its employees. It was a difficult task for the mobile shredding business, which often goes to hospitals or elder care facilities.
“We had workers who would come to work, jump in their cab, drive to many different types of businesses and take the bin away, then the next day put on hazmat suits to go into the hospitals and some of the other care homes that our workers would go into,” he said. “We had to adjust for that.”
Gable added that, other than truck drivers who are not able to work remotely, the company encouraged its sales and administrative staff to work from home, which he said made the business more efficient.
Remote work certainly wasn’t a positive dynamic as it pertained to supply security, as many in the recovered paper industry who deal with high grades tend to agree, but Dupuis said fostering a community among the Kruger workforce did in fact save a lot of supply to its mills, which was critical as the pandemic progressed.
“Keeping a team strong, healthy, and making sure that you still build that group sense where they want to keep working every day, there was emphasis put on that, but maybe not enough,” she said. “We saw a lot of companies having staff of staff leaving for other jobs, so my key takeaway was [not taking] for granted your staff coming to work 8 [a.m.] to 5 [p.m.] and thinking ‘It’s work. They’re going to have to do it.’ It has to be a community. It has to feel that it’s being held together.
“I just brings that team together where then it was easier to make sure that we could supply our mills because everybody worked together to get it done. … I think I will keep on maintaining that in the years to come," Dupuis added.
The impact on quality
While high grades supply remains a concern, so does the quality of the material coming in, and both Dupuis and DeLano reported instances of lower-quality paper in the stream.
“If you look at the sorted office paper, it’s more colorful,” Dupuis said. “There’s more mixed into it. You’ll find more coated paper sometimes in your SOP. I think it’s a real reality now.”
“A lot of our customers have a hard time finding paperboard, glossy stock, so they’re kind of getting paper from whatever crevice they can find it,” DeLano added. “We saw a lot more thermal mechanical pulp paper. … It’s less expensive paper for the printers to buy, but it’s also a little less valuable. As a recycler, we saw a huge increase in that.”
DeLano said some mills still are accepting the lower-quality material from recyclers, especially as they try to replenish their stock after having to dip into their own supply.
“We just have to know which mills to send it to,” she said. “It still can go into a tissue grade, it’s just not their favorite thing to use because a lot of that stuff just goes down the drain and in the pulper, but it is usable. As mills try to catch up and replenish their stock, they’re taking material that maybe they wouldn’t have taken before.”
PPRC 2022: Mill buyers discuss supply challenges in current market
The lower quality also isn’t favorable for mills because of the high cost of materials like the chemicals and starch it takes to make that paper work in the formula. Dupuis said she anticipates many mills going back to their traditional formulas, but that mill groups, including Kruger, are looking into substitute grades to avoid complications if a similar supply crunch happens again.
“At a certain point, if you needed X amount of tons, you didn’t have a choice but to be a bit more lenient than where you were before,” Dupuis said. “We’ve all been in this industry for too long to know that there’s always something that’s going to come back where there’s not going to be enough material or there’s going to be too much. With high grades, it’s never going to be too much, it’s always going to be not enough—that’s pretty much where we will have to maintain our view.”
“We’ve made a lot of very aggressive changes,” Gable said, “but I think that’s what it’s going to take for the next year or so across the industry is trial and error and creativity.”
What’s next?
Remote work isn’t going away, and with many people spending less on travel and entertainment because of the state of the U.S. economy, the panelists said the high grades market will only continue to suffer as already seen in the diminished away-from-home sector.
“It’s not when generation will be down—it’s now. It’s happening now,” Dupuis said. “It’s a known fact the high grades should be called the dying grades. It’s something that slowly is becoming less available. … Are we ready to have brown paper towel at home? We’re not there yet, but it’s something that has to come.
“When is it going to stop? I don’t think it ever will stop slowing down. I think it’s really a dying grade," she added.
Gable wasn’t quite as cynical, noting that in 1992 when he got into the shredding business, there was talk of a paperless office even then. But, 30 years later, he suggests there are more printers in offices than ever before. That doesn’t mean generation of high grades isn’t slowing down, rather, there might not be a need to prepare for the death of the grade just yet.
“We’re still generating paper,” he said. “But I think the slowing down—it’s already slowing down. I think we’ve gone through a rapid slowdown, and adjusting to post-COVID, we still have yet to see. My expectation is that we’re planning for us to be at the high [price cycle], but we don’t plan for the low to be anywhere near where it was.”
Latest from Recycling Today
- ReElement, Posco partner to develop rare earth, magnet supply chain
- Comau to take part in EU’s Reinforce project
- Sustainable packaging: How do we get there?
- ReMA accepts Lifetime Achievement nominations
- ExxonMobil will add to chemical recycling capacity
- ESAB unveils new cutting torch models
- Celsa UK assets sold to Czech investment fund
- EPA releases ‘National Strategy to Prevent Plastic Pollution’