Tuesday, February 17, 2009

Recycling: Still Green or Back to the Landfills? It's all About Supply and Demand

Last summer I visited a recycling center in NAPA during an HP Green Symposium. The tour was fascinating but the winery tour was better.

At that time, the recycling center had pallets of plastic, paper, etc. stacked nearly three stories tall, ready for shipment to China.

Each pallet represented $1,200.00 of revenue.

This was a great example of how our(the U.S.) green initiatives were working - reducing landfill materials, allowing emerging economies to take advantage of already processed materials and making money.

This also made we "Global Citizens" feel better.

Since that trip to NAPA, I have discussed with many clients how the Green Initiative "...finally took off, only after we figured out how to make or save money by implementing certain programs...it is all about the Color of Money..."

Of course, I am routinely accused of being "cynical" - most want to believe that they are doing their part to "save the planet" without monetary motivation. And they are, just not the way they think they are.

"If I can prevent just one tree from being cut down, then I can sleep better at night..."

A mantra repeated all over the globe...right...

Consider this sales model -

I charge my clients a monthly amount - for this charge, I will visit them each week, and remove their unwanted materials - waste. I will also charge an additional flat amount to provide a special container which my client will fill with other materials; materials that can be "recycled".

This requires clients to pre-sort "bad waste" from "good waste" - a task they are willing to allow their employees to do, on the company dime.

As a sales person, once a week I visit 240 customers.

I remove both waste materials - the recycling goes to my multi-million dollar plant where everything is sorted and made ready for shipment all over the world; especially China.

My big huge machine separates and processes all this junk and I sell it all overseas.

Because there is a demand.

That was the summer of 2008 before the Chinese Olympics - right after the Olympics, China decided not to import anymore US trash - boom.

And today, many large recyclers say they are accumulating tons of material, either because they have contracts with big cities to continue to take the scrap or because they are banking on a price rebound in the next six months to a year.

“We’re warehousing it and warehousing it and warehousing it,” said Johnny Gold, senior vice president at the Newark Group. His company has 13 recycling plants across the country. He said the industry had seen downturns before but not like this. “We never saw this coming.”

You think the stock market has dropped - you ain't seen nothing like this.

On the West Coast, for example, mixed paper is selling for $20 to $25 a ton, down from $105 in October, according to Official Board Markets.

And recyclers say tin is worth about $5 a ton, down from $327 earlier this year. There is greater domestic demand for glass, so its price has not fallen as much.



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2 comments:

  1. I know that you guys are all probably anti-Xerox and all, but this article reads just like a solid ink commercial.

    ReplyDelete
  2. Hey - I don't hate Xerox.

    And I think you are right - the Phaser does reduce the amount of materials to the landfill...

    ReplyDelete