Erik Deadwyler, senior vice president and general manager of RockTenn Recycling, Norcross, Ga., the subject of this month’s cover story beginning on page 44, stresses the company’s focus on being a low-cost producer of quality secondary commodities. For RockTenn’s recycling division, this means investing in new technology at strategic plant locations, he says, and exiting facilities that don’t further the company’s strategy.
Deadwyler also stresses the company’s focus on innovation, pointing to RockTenn’s new 100-person trading floor in Atlanta, which opened in March. He says that centralizing RockTenn’s trading staff allows for quick and efficient interactions among the staff and enables the company to respond more quickly to changing market conditions and to make better decisions.
As Michael Zacka, Tetra Pak president and CEO for the United States and Canada, writes in his feature “Redefining Reality,” beginning on page 102 of this issue, innovation often is what sets the fastest growing companies apart from their competitors. And RockTenn has certainly been growing, physically and financially, with a new Atlanta material recovery facility (MRF) and the establishment of its trading floor. RockTenn also reported 136 percent growth in its third fiscal quarter earnings.
The company saw net sales of $2,448 million in the third quarter, an increase of $145 million compared with the third quarter of fiscal 2012. This was despite a decrease of $64 million in recycling segment net sales compared with the third quarter of 2013 in light of lower volume and pricing, RockTenn reports. Despite the decline, recycling segment income was flat relative to the third quarter of fiscal 2012.
Much of the company’s growth came from its corrugated packaging segment sales of $1,720 million, an increase of $174 million compared with the same time frame in 2012. Income for this segment grew $123 million to $196 million. RockTenn attributes this growth to higher selling prices and volumes and to “increased synergies that were partially offset by higher commodity and other costs.”
Many people think that innovation needs to be flashy to have an effect. However, as many companies prove time and time again, and as Zacka details in his article, small, incremental changes often can have a big impact on a company’s bottom line. Companies just need to identify the opportunities and focus on those areas.
Where are the opportunities in your business and what innovative approach will help your company reach new heights?
RockTenn, the Norcross, Ga.-based recycler and producer of corrugated and consumer packaging, has earned the respect of its peers in its nearly 40 years of operation under that name. (The company was formed when Tennessee Paper Mills Inc. and Rock City Packaging Inc., owned by Arthur Morris, merged, and its lineage dates back to 1936.) Erik Deadwyler, senior vice president and general manager of RockTenn Recycling, the company’s recycling business segment, says RockTenn has attained this position by adhering to its philosophy of producing quality products as efficiently and cost effectively as possible. He adds that the company’s focus on innovation also helps to create a competitive advantage that has fueled RockTenn’s growth throughout the years.
RockTenn Recycling serves as the supply arm for RockTenn’s mills. “Every ton of paper that goes into a RockTenn recycled paper mill is managed through the recycling business,” Deadwyler says. “In addition, not only are we charged with managing the logistics, the supply and the pricing, we also manage the quality for those mills as well as the inventory for those mills. It is a highly integrated model, as we really work hard at it and are very much focused on it.”
The recycling division handles some 8 million tons of recyclable commodities per year, 250,000 of which are nonfiber items, Deadwyler says. Four million of those tons are comprised of OCC (old corrugated containers), ONP (old newspapers), DLK (double lined kraft), mixed paper and boxboard cuts consumed by RockTenn’s mills. RockTenn Recycling’s 29 recycling plants process 1.7 million tons of the total recyclables handled by the company. The balance of the material is bought and sold by RockTenn Recycling’s brokerage operations, Deadwyler says.
Eight of RockTenn’s recycling plants are single-stream material recovery facilities (MRFs) that handle residential as well as commercial and industrial material, while the remaining 21 plants are paper stock processing plants equipped with balers and minimal sorting capabilities. “These are generally smaller plants that are focused on serving local niche markets,” Deadwyler adds.
Of the remaining 4 million tons of recyclables that RockTenn does not consume internally, he says, the company exports roughly 1 million tons, largely to China. Domestic consumers purchase the balance of the material.
RockTenn Recycling generates in excess of $1 billion in revenue per year, he says, with $100 million coming from the Waste Spend Management Group, which is part of the company’s national accounts team. This group, with clients that include J.C. Penney and Starbucks, helps customers manage their spending on recycling and trash disposal services, Deadwyler says.
Of the issues currently facing the recycling industry, Deadwyler says two are foremost in his mind: the changing scope and efficiency of single-stream MRFs as well as quality concerns related to digging deeper into the waste stream to extract more recyclables. The second issue has been compounded recently by China’s Operation Green Fence.
“One of the big challenges I see is that the industry is in this dilemma right now where we are trying to go out and source new volume from the waste stream, and we are trying to do that while meeting the quality specifications of both our domestic and international customers,” he says. “We have fairly high recovery rates in the U.S., so it’s really things like single-stream recycling that are giving us the opportunity to capture incremental tons. The recyclables coming into the plants are dirtier, and what the Green Fence has taught us is that the challenge is making sure that the volume we are recovering becomes a marketable commodity that meets the quality requirements both in the U.S. and abroad.”
He says he thinks that single stream is an effective way to collect and process recyclables, adding, “Yet, we have to be able to recover the commodities out of that stream and be able to market them to an end user. The Green Fence has really presented some challenges.”
Deadwyler says that while single-stream processing technology has made many advancements since its introduction more than a decade ago, additional advancements are needed to help processors bridge the quality gap that appears when digging deeper into the waste stream.
Concerning the scope and efficiency of single-stream MRFs, he says, “With single stream a lot of it on the efficiency side is that you can increase your throughput with automation and reduce the actual labor costs associated with processing. We have seen dramatic improvements in what the sorting screens and optical sorters can do.
Grab a Front-Row Seat
Greg King, who replaced Erik Deadwyler as senior vice president and general manager of Norcross, Ga.-based RockTenn Recycling, in late August, will be among the speakers addressing attendees at the Paper Recycling Conference & Trade Show, Oct. 16-18 , 2013, in Chicago at the Marriott Magnificent Mile.
The conference’s opening keynote session, “The Future of the Industry,” is scheduled to begin at 4 p.m. Wednesday, Oct. 16. King will be among the panelists, who will share their thoughts on the changes affecting the paper and recycling industry segments and the trends that are shaping their businesses and the paper recycling industry overall. He will be joined by Waste Management Recycle America President Bill Caesar and Pioneer International President and CEO Shawn Lavin.
Recycling Today Events, headquartered in Richfield, Ohio, in partnership with the Paper Stock Industries (PSI) chapter of the Institute of Scrap Recycling Industries Inc. (ISRI), Washington, D.C., organizes the Paper Recycling Conference & Trade Show.
More information is available at americas.paperrecycling
“I think the scope over the past decade has changed,” he continues. “Ten years ago, the focus would have been on sorting paper. In light of some of the declining volumes of fiber in the stream, the scope of these systems now is much more about handling multiple commodities efficiently and trying to get the highest recovery that you can get.”
Deadwyler says RockTenn Recycling is focused on innovation, particularly concerning the organization of the business.
“As one of the largest buyers and sellers of recovered fiber in the U.S.,” he says, “we have taken steps to create a very efficient, customer-focused transaction platform.”
RockTenn has established a 100-person trading floor in Atlanta that supports all of its brokerage transactions. All of RockTenn’s traders are on the same operating system, and managers, including Deadwyler, also have offices on the trading floor.
“Following the Smurfit-Stone acquisition (which was finalized in mid-2011), we had multiple systems and a lot of people in the field supporting our brokerage transactions,” Deadwyler says. “So this is a great opportunity to create efficiencies by centralizing that activity. Our business is a fairly real-time business with a lot of information that needs to be exchanged. Having this very open work environment allows people to interact quickly and efficiently, and that has allowed us to respond better to market conditions and make better decisions.” He adds, “This really allows us to operate efficiently and manage all of the 8 million tons a year that we handle.”
RockTenn Recycling also prefers to take a long-term view of the industry, Deadwyler says, focusing on being a low-cost producer of quality secondary commodities. “As part of that strategy, we are going to continue to invest in new technology at strategic plant locations,” he says, noting the company’s recent investment at its Atlanta MRF, a single-stream facility that includes a drum feeder, triple-deck OCC screen, fiber polishing screens, magnets, eddy currents and optical sorters. “In addition, we’re going to exit our nonstrategic facilities.”
In 2012 RockTenn closed six collection facilities, according to the company’s “2012 Annual Report,” as part of a reorganization of its recycling operations. Deadwyler led this reorganization, which took place in September and October of 2012 and removed about $8 million per year in fixed overhead costs by reducing and redeploying staffing. The company also closed underperforming and nonstrategic recycling plants. Many of RockTenn’s remaining recycling facilities are strategically located near the company’s recycled paperboard and containerboard mills, which helps to ensure supply availability at reduced shipping costs, according to RockTenn.
Deadwyler says RockTenn tries not to be distracted by short-term fluctuations in the industry. “You are always going to have short-term noise in the market,” he says, “with prices going up or down and different conditions; but, we are really just focusing on the core strategic principles of being low cost and efficient in how we run the business.”
Across all of RockTenn Recycling’s MRFs, the company focuses on producing quality products, Deadwyler says. “If that happens, you earn respect and a reputation in the marketplace of being a high-quality shipper and you can ship to all customers in all markets.”
This approach helps to make regulations such as China’s Operation Green Fence a moot point, he adds.
However, mixed grades of paper and plastic continue to draw the attention of Chinese customs officials, regardless of how well-prepared the material is. “The lower-end quality product that comes through some of our operations is where the challenge has been,” he says. Deadwyler adds that when it comes to this material, RockTenn has been able to find alternative markets as well as to clean up the material further. “We’ve been looking at both alternatives depending on the capabilities of the plant as well as the other options. But I think the core issue is that we have to produce a high-quality product.”
Deadwyler, who started in the industry as a recycling coordinator for Independence, Mo., and later held a position with Enron’s pulp and paper trading group, has been with RockTenn since 2002. He took over the recycling business segment in 2006. “At the time we were much smaller than we are today, but we were a very profitable, good size recycling business,” Deadwyler says. “With the acquisition of Smurfit-Stone’s larger recycling business in 2011,” he continues, “we now have a great opportunity because we have the size and scope that came over with the acquisition to build what I believe will be an industry leading recycling business.”
The author is managing editor of Recycling Today and can be contacted via email at email@example.com.
Boring may sound bad, but boring can be good. Think about good old boring Charlie Brown from the comics. He may be bland, but everyone likes Charlie Brown, almost as much as his glowing dog Snoopy.
The world of zinc, lead and tin would fit right in with Charlie Brown. Good old zinc, lead and tin. Except for when something akin to Lucy snatching the football away, which happened earlier this summer in the lead market, base metals are generally characterized by their consistency. (See sidebar, “Battery Producer Takes a Hit,” below )
The markets for zinc, lead and tin tend to be boring and steady, according to most traders. The materials avoid many of the extreme peaks and valleys that are seen in commodities like aluminum or nickel-based materials. Right now, for example, stainless in many parts of the country is in a valley well below where it normally sits. That kind of price displacement rarely happens in these base metals, sources say.
“Nobody is not answering the phone when I call about zinc, lead or tin,” says Jeff Bentley, manager of nonferrous materials at SA Recycling’s corporate headquarters in Orange, Calif.
Bentley attributes the steadiness to the simple fact not enough zinc, lead or tin is moving through the market to accumulate a glut of material.
“If zinc is selling at 80 percent of its intrinsic value today, it was probably selling for 80 percent of its value last week and will be selling for 80 percent of its intrinsic value next week,” he says.
Quantities are not like what recyclers see with MLC (mixed low copper) or bright copper wire scrap. “But we do make sales every month,” Bentley says.
“Lead recycling is one of the oldest industries in the world and has one of the highest product recovery rates (in excess of 95 percent),” says Ed Green, vice president of battery operations for Toxco Inc.’s Baltimore and Lancaster, Ohio, locations. Green is responsible for day-to-day logistics and processing operations.
Toxco’s Trail, British Columbia, location recycles lithium batteries, while its Lancaster plant processes large format lead-acid batteries, nickel-metal hydride batteries used in hybrid and electric vehicles and nickel-cadmium batteries. The company’s Baltimore location is a universal waste handling facility. Kinsbursky Bros., Toxco’s parent company, owns and operates a battery recycling operation in Anaheim, Calif.
“While we don’t have the comparative data of recovering lead from primary sources versus secondary sources (i.e., batteries), we presume that the cost benefit in all areas (electricity, transportation, carbon expenditures and more) is worthwhile and beneficial, especially when considering the limited primary lead activity in the U.S.,” Green says.
Recycled lead accounts for the vast majority—more than 99 percent—of new battery production, according to Janet Karch, director of recycling for Dallas-based Interstate Batteries. Interstate has a closed-loop process and actually recycles more batteries than the company sells, she says.
Karch says she sees the demand outlook for recycled lead remaining strong. “We anticipate the trends that have been seen over the past few years will continue,” she says. “Globally, there will be an increased demand for recycled lead.”
All of Interstate Batteries’ recycled spent SLI (starting-lighting-ignition), or lead-acid, batteries—about 25 million last year—are processed by permitted North American smelters, Karch says.
Battery Producer Takes a Hit
In a business that is notable for its even-tempered markets, the announcement in mid-June by Exide Technologies, Milton, Ga., that it was seeking bankruptcy protection put a cloud over the lead business. Exide is a major producer of lead-acid batteries.
Only the company’s U.S. operations come under the bankruptcy filing. Exide cited higher spent-battery costs and lead-related price increases as putting pressure on the company’s margins.
The real kick came in 2010 when Wal-Mart Stores Inc. moved its battery contract from Exide to rival Johnson Controls, headquartered in Milwaukee, Wis. The move cost Exide about $160 million in annual revenue.
Exide says it is not going out of business. Its Chapter 11 filing does not change the work schedules of its plants or offices, the company says, adding that it intends to continue to fulfill commitments to clients and will continue looking to write new business contracts or renew current contracts as well.
Several operations are permitted to recycle lead-acid batteries, which contain lead and sulfuric acid. (Perhaps the most common lead-acid battery is the one that is used to start your car.) Toxco operates a permitted lead-acid battery operation in Lancaster that processes batteries in one of two ways: Batteries are manually demanufactured into their base components—lead battery plates, plastic and steel. The battery electrolyte is treated on site in a wastewater treatment unit. These components are then sent off site to a Toxco-approved secondary processor, where they are recycled. The second method involves an automated system through which whole batteries are mechanically processed and the materials separated into their base components. In this system, the lead is segregated further into basic components of lead grid (metallic portion) and lead paste (oxides). The plastic and separator materials also are recovered. The battery electrolyte is recovered and treated on site.
Since Toxco is not a lead smelter, all lead materials are ultimately sent to an Toxco-approved secondary lead smelter for recovery.
While California may have the strictest regulations about lead, several other states have mandates to recycle lead-acid batteries, including Ohio. An Ohio law became effective April 25, 2008, prohibiting the disposal of lead-acid batteries in solid or hazardous waste landfills. The Ohio law and those in other states typically require wholesalers and retailers of lead-acid batteries to take back old batteries for recycling when a consumer purchases a new one. Batteries that are covered by the law include those used in vehicles, motorcycles, wheelchairs and boats.
For the most part, such laws target the automotive, or SLI, batteries and were established to capture used batteries at the point of purchase from retail locations.
SA Recycling’s Bentley says his company gets two types of lead: scrap and lead-acid batteries. “In California there is an extra layer of regulatory oversight that makes it difficult to do business,” he says. As a result, SA deals only with companies that the state’s Department of Toxic Substances Control has approved.
For that reason, too, SA typically avoids the export market.
“While we can and do manage these smaller automotive type batteries, our specialty lies with the larger industrial-type lead-acid batteries,” Green says of Toxco.
Fortunately for recyclers, most battery sales, even those involving large industrial batteries, have a component to ensure the battery being replaced is properly managed at the end of life, he says.
Green points to the company’s diverse customer base. “We have business relationships that span the gap from very small producers or generators all the way to large telecom companies as well as OEMs,” he says of Toxco.
“Often our companies are used specifically because the regulations require the proper handling of batteries, and, as all of our facilities are licensed, our customers have the confidence that their material will be properly managed,” Green says.
With 60 years of recycling spent batteries under its belt, Interstate finds laws mandating the process actually supports the company in many ways. “We take responsibility to our stakeholders seriously and have implemented a Green Standard program to ensure that we not only meet the regulations but exceed them where possible,” Karch says.
Interstate Batteries’ Green Standard program focuses on the quality of the company’s collection and recycling procedures, ensuring safe and secure handling of battery cores to minimize environmental and safety risks, the company says.
“We’re seeing no more than normal,” says Randy Katz of City Scrap and Salvage, Akron, Ohio, of the volume of lead the company receives for recycling. Most of the lead City Scrap processes is from lead-acid batteries, though the company also gets lead from weight or barbell sets and some soft lead.
Lead prices seem steady at the moment, sources say. Typically, lead sells for something in the area of 15 cents per pound.
“There’s nothing in the way of change that I have noticed,” Katz says.
While she looks to those who make a living forecasting the future to provide price outlooks, Karch says Interstate Batteries does expect lead prices to remain steady or even increase over the next year.
Green says it is difficult to pinpoint the long-term (12 to 18 months) outlook for lead. “We hope that the market will stay stable,” he says, “but we just don't know, as our crystal ball is broken.”
He adds that while competitive conditions are always present in the industry, the market for secondary lead appears to be in equilibrium, with supply and demand keeping pace.
“KBI/Toxco is a battery-centric business,” Green says. “We are continuously in the market to acquire batteries for our operations.”
Because the available supply of end-of-life batteries can be seasonably affected by extreme winters and summers that have a deleterious effect on batteries, more scrap could be available after a particularly harsh winter or summer, Green explains.
While lead tends to flow through recycling operations at a slow but steady pace, the market for tin and zinc in most areas is barely a trickle.
The market for tin, too, is slow. Block tin scrap is a popular item, as is appliance tin. Much appliance tin comes from spent air conditioning units. While some southern operations will see tin roofs from barns and sheds, this material often is regional.
“The only tin roofs that I’ve seen are at Friendly’s Ice Cream,” quips Katz. However, if he does receive tin of this type, Katz says he would simply run the material through his shredder as sheet iron.
Into summer, the market for tin was weak. “It is slow all over the country,” says Benny Aslam, nonferrous buyer with American Recycling, Fort Worth, Texas.
Although the company shreds a fair amount of tin, its local market has been “OK to slow,” Aslam says. Most of the tin American Recycling sees comes from the public, which brings about 8 cents per pound.
Most new tin scrap—turnings and other material generated in the manufacturing process—never leaves the manufacturer; it is simply reclaimed and reused in the manufacturing process, sources say.
On the West Coast, recycling yards rarely see new tin scrap. However, the electronics industry does generate a fair amount of tin, and the Los Angeles area is home to a tin smelter.
Those who purchase appliance tin usually offer something in the area of $150 to $155 per ton for it at the gate, sources say. Clean tin might fetch another $20 per ton. On a per-pound basis, that figures to 7 cents or 8 cents per pound—hardly worth anyone’s time to collect unless in quantity.
On the appliance side, tin has to be free of Freon (or have the Freon removed on site) before it can be processed.
“The price is so minimal on zinc and tin that you don’t even see it come in,” Katz says of the Ohio market.
Zinc die-cast will go through his shredder, he says. However, so little of it comes into the yard that City Scrap does not even keep track of the volume.
The story is a bit different on the West Coast, where Bentley enjoys a good export market, especially to China. He says it is easier and less expensive to ship the material to China rather than to ship the material to consumers on the East Coast.
“The West Coast has been taking advantage of preferential freight rates [to China] for at least 10 years now,” he adds.
Anywhere there is die-cast production with alloys, there will be zinc scrap. Some comes from the aerospace molding market, but most of the full spectrum of zinc material that comes into the typical operation will be postconsumer.
While boring and slow, at least these base metals are largely predicable.
The author is a freelance writer based in the Cleveland area. He can be contacted at firstname.lastname@example.org.
Incoming Institute of Scrap Recycling Industries Inc. (ISRI) incoming Chairman Doug Kramer says he is aware that the industry he grew up in and has worked in for most of his adult life has issues of extreme importance facing it.
When Kramer becomes chairman of Washington, D.C.-based ISRI at the group’s 2014 convention in April, he says he will build upon the work his predecessors, fellow officers and ISRI staff members have done to make the scrap industry safer and more unified.
Asked to take part in a Recycling Today Industry Leaders Q&A session, Kramer, who is president of Los Angeles-based Kramer Metals, replied that he was honored to have the opportunity to let readers know what his priorities will be and why he believes the industry should feel strongly compelled to address the key issues of safety and materials theft.
Recycling Today (RT): For how long have you been involved with ISRI and why has being involved been a priority for you?
Doug Kramer (DK): My ISRI involvement goes back, really, to ISRI’s inception. I got involved at the end of 1986 and beginning of 1987, right during the transition from ISIS (Institute of Scrap Iron and Steel) to ISRI, and I started with chapter involvement (then called the Southwestern chapter) and then on to national involvement in 1988. I remember that the first committee I served on was the State Subcommittee, co-chaired by Cricket Williams and Shelly Padnos. That subcommittee was elevated in status to a full committee, called the State Committee, and I served on that; if I’m not mistaken, I think Scott Horne was the chairman.
I am truly fortunate to know and to have known many of our association’s past leaders and industry icons because of my father’s involvement in both ISIS and ISRI. Those individuals, and especially my father, strongly believed in giving back to the industry. My dad really instilled in me a strong belief in the importance of participating in the governance of the association and of volunteer leadership. My dad always taught me to fight for what I believed in and for what is right, and that’s why ISRI is a priority to me. To be chosen by your peers and, in some cases, by your father’s peers, to lead that fight on their behalf is both humbling and daunting. Howard Cosell summed it up best, “What’s right isn’t always popular, and what’s popular isn’t always right.” That’s how I live my life and it is how I intend on leading ISRI.
RT: How has being involved with ISRI changed the way you and your colleagues operate Kramer Metals Inc.?
DK: When you’re involved with companies that operate at the highest levels of efficiency, technology, compliance, ethics and so forth, there’s a tendency to emulate those companies—to try and “behave” like them in the best sense of that word at all levels. Because ISRI delivers programs and training like the Safety Blueprint, Operations Forum, metals ID and environmental compliance, and all of the government relations and management tools that are available, I’m constantly being pushed to be better, safer, more efficient and an exemplar for our industry.
As ISRI has become more demanding of my time, I have really had to lean not only on my dad but also on our entire organization for support. We’re fortunate to have a good team in place. I don’t have to worry that my dad is without help and that the business is somewhat adrift while I’m not there. The skills and programs that I bring back to the office from ISRI have really helped me get my employees prepared for the next two years.
RT: What are some ISRI initiatives and programs that you would like to see remain or be elevated as priorities in the years ahead?
DK: There’s no question that I am committed to changing our industry’s safety standing. There’s just no reason that we should be the fourth deadliest industry in the United States—that’s just unacceptable. I know we can do better. I also know that it is crucial that safety, as well as environmental compliance, is driven from the top down. We must do a better job of engaging the owners and/or presidents/CEOs of our member companies to truly make safety the top priority. If safety is first, then that has to be woven into the fabric of the company. Otherwise, we should be honest and say that safety is second or maybe third, behind profit and production, and that we accept injury and possibly death as a cost of doing business. Sounds pretty terrible when you put it like that, doesn’t it? So safety, for me, is definitely a priority.
The other major issue for me is the poor impression our industry seems to have with almost everybody but ourselves—we think we’re pretty great but it’s clear that not many other people agree. Just take two issues: metal theft and the EPA (U.S. Environmental Protection Agency) making a run at changing the definition of solid waste. We have to do better. We have to change how we are perceived, and it’s a big job because that change includes a lot of institutions, individuals, the media and, of course, government. I think a big part of that change will occur through our efforts with initiatives like JASON Learning (www.jason.org), which will educate children not only about what we do and its value but also the value of working in this industry. This industry will be part of their lives. Unfortunately, this is a generational change, so it will happen long after I’m gone from ISRI. We just have to change the perception of our industry—we have to.
RT: To what extent have metals recyclers been able to have their side of the story heard and become part of the discussion on the issue of metals theft in the past few years?
DK: Oh I think we’re definitely part of the discussion … the wrong part of the discussion! I mean, we’re fighting this fight simultaneously in Congress, at the state level, at the county level and at the municipal level! We’ve told our story and, in many cases, it’s been heard and well-received. But in many more cases—and this gets back to my answer to your previous question and changing the perception of our industry—our message gets lost. Actually, our message gets completely derailed because I think metal theft is such a local issue—that it is so esoteric a discussion based upon exactly where you operate that a lot of the discussion is just noise to local police and municipalities. We’re trying to send a unified message, but that message only works in particular circumstances.
In addition, and we have to be honest here, there are a significant number of industry participants who do not conduct their businesses ethically and who do not follow the law, and these are the guys that we are constantly compared to in the press and at hearings from Washington, D.C., to Anytown, USA. It’s just so difficult to talk about what a great job we are doing and how our industry is part of the solution and how great ScrapTheftAlert.com is and then get slammed with examples and pictures and anecdotal evidence that suggests the exact opposite is true.
And, as long as I’m venting here, it’s easy for legislators and some police departments to point at us and say, “These scrap guys are the problem.” I mean we’re easy to find—the legitimate scrap recyclers are easy to find, what we buy is easy to track because we’re following the law and most of us have deeper pockets than the thieves, so we’re slapped with punitive action and blame. We’re convenient to go after.
I believe people in positions of power think that if they just keep passing punitive laws on top of existing laws that lay burden on top of burden on the scrap industry, metal theft will go away. We all know that isn’t true, but if the police arrest a metal thief and prosecutors won’t prosecute the crime, guess what … we’re the bad guys by default because we’re an easy target.
RT: Are there still many recyclers who are not ISRI members and what is your message to them as to why it’s worthwhile to join?
DK: There are still a lot of recyclers who are not ISRI members, and I’d like to take this opportunity to reach out to them and encourage them to join.
The benefits of membership, aside from the member services and all of the education and training programs, really boil down to opportunity. The Superfund Recycling Equity Act (SREA) reports, for instance, are one of the most valuable and least expensive benefits ISRI offers and they afford the opportunity to avoid liability under Superfund. Those reports can literally make the difference between keeping and losing your business. You can’t get those without being an ISRI member. ISRI membership affords you the opportunity to identify new markets; the opportunity to meet scrap buyers not only from your region but from all over the world; the opportunity for your business to grow and to become more competitive; the opportunity to learn and share experiences with other business owners and managers; and the opportunity to build valuable relationships that begin as business opportunities and become lifelong friendships.
That said, let’s assume that all of that is not compelling enough to convince someone to join. The reality is that, because of ISRI, all of us in the scrap recycling industry are still able to conduct our business. Without the intervention of ISRI and the volunteer member leaders in ISRI over the past 25 years, our industry, as we know it, would not exist today in its present form.
The recycling business may be tough right now, but it could be a whole lot tougher. Believe me, business is booming in Washington, D.C., and in all 50 states’ legislatures, and there’s no lack of desire to promulgate bad legislation. Protecting our industry comes with a hefty price tag in terms of both human capital and real dollars, and that price tag increases every year.
Growing our membership is critical to this organization. Yet, despite all of this, there are still some industry participants that we just can’t seem to reach—they’re content to ride the coattails of our members and directly benefit from the hard work of ISRI staff and ISRI members.
I can’t imagine being a scrap recycler and not belonging to ISRI. ISRI membership is the best and least expensive insurance you can buy to protect your livelihood.
RT: Sustainability seems to have maintained momentum as a corporate practice. How can ISRI member companies tie into sustainability as a corporate goal for some of their customers?
DK: I think that ISRI’s RIOS™ (Recycling Industry Operating Standard) program provides an excellent way for members to demonstrate to their customers that they are supporting corporate sustainability goals by recycling in an environmentally responsible manner. More and more ISRI members are turning to RIOS to show their customers, competitors and peers that they are committed to the highest standards in the industry. RIOS is the only management standard developed for the recycling industry by the industry. From paper and metals to plastics and electronics, RIOS certification by accredited, third-party auditors provides assurance that a recycler is operating at the highest quality, environmental, health and safety standards. It’s a lot of work and a big commitment but well worth the effort.
RT: When you’re not taking care of Kramer Metals or ISRI business, how do you like to spend your time?
DK: You know, I have three families: I have my Kramer Metals family, I have my ISRI family and then I have my wife Jill and my two sons, Noah and Jonah. My wife and children have definitely been deprived of my time, to some degree, because I’m never really “off the clock” as far as the business is concerned, and ISRI has steadily increased its need for my time as I have moved through the officer chairs. I love to spend time with my wife and sons … I live for them. Everything I do is for them, so I don’t care what we’re doing, as long as we’re doing it together. I take them to as many ISRI meetings as possible just so I don’t have to be away from them. We love to travel, but when we’re home we love to go skiing, we mountain bike, we go camping a few times a year and, since we live in California, we obviously go to the beach as much as possible. In addition, the boys always seem to have a project we can work on—as long as I’m doing something with them, I’m good.
Jill and I have some great friends and some great neighbors, so we like to hang out, barbeque and just enjoy spending time together.
And, believe it or not, I really like spending time with my Dad away from the office. The older I get, the smarter he gets, and the more I appreciate spending time with him, and I especially like watching him with his grandchildren. I would never have had the opportunity to become the next chairman of ISRI, let alone do all the things I’ve done in my life, without my dad’s encouragement, support and approval. And, believe it or not, I really like spending time with my dad away from the office.
RT: Are there any business issues unique to California right now, and are any of these likely to spread to other states?
DK: Oh, man, don’t get me started on California! I’m lucky to live and work in the most business unfriendly, industry killing and litigious state in the Republic. Enough said. While all of that is, in my opinion, true, I think that everything that California does eventually infects the rest of the United States to one degree or another. Most of the time, that’s a bad thing. Sometimes, it’s not as much of a nightmare. Case-in-point: metal theft. I think that we actually have a pretty good metal theft law here. Now, if they’d only enforce it ….
Editor’s Note: The following article is reprinted from Waste and Recycling Middle East, waste-recyclingme.ae, with permission.
Aboura Metals, Dubai, United Arab Emirates, has been involved in the metals recyling business since the early 1950s. The company’s Managing Partner Nasser Aboura talks about the developments in the company and the Middle East recycling industry in the following interview.
Operations and Network
“The company that is now Aboura Metals was founded by our late father, Hussein Mohammad Aboura, in the early 1950s,” Aboura says. “Since then, the company has grown to be a well-recognized expert in the international scrap metals industry with a focus on recycling and trading in ferrous and nonferrous scrap metals. With our headquarters located in Dubai, we own subsidiary yards and offices in Jordan, Saudi Arabia and Egypt, with the total yard area spanning more than 100,000 square meters (in excess of 1 million square feet.)”
In the secondary scrap metals industry, the most essential aspect of the business is delivering high-quality scrap material as per international standards and specifications, he states.
“We maintain and deliver superior quality products and services through continuously investing in two vital assets: our machinery and equipment and our employees,” Aboura says. “We source the latest machinery and recycling equipment, such as shears, sorting lines for aluminum used beverage cans, specialized balers, [a] copper/aluminum shredder and [a] granulator, to mention a few. We are also committed to maintaining a motivated and diligent workforce that works effectively and efficiently in order to ensure seamless operations,” Aboura adds.
In addition to being an ISO 9001:2008 certified company, Aboura Metals is an active gold member of the Bureau of International Recycling (BIR), the China Nonferrous Metals Industry Association Recycling Metal Branch (CMRA), the Institute of Scrap Recycling Industries Inc. (ISRI) and the Metal Recycling Association of India (MRAI). The company is a founding member of Bureau of Middle East Recycling.
Secondary Metals Outlook
Aboura further explains that despite some challenges in the world economy in the past few years, “In 2012 we started seeing promising improvements in the metals markets. Emerging and developing economies have shown an increase in GDP with plans of increasing manufacturing and improving infrastructure. Recycled metals demand is expected to continue to rise along with the growth of emerging economies.”
Recycling aluminium and copper plays a vital role in keeping the supply of these finite resources alive, reducing energy consumption and waste disposal, contributing to preserving the environment. Not only does recycling save the environment but it also helps in meeting the growing demand for these metals.
Aluminium, the most widely used nonferrous metal, is suitable for applications in the transportation and construction industries, the packaging industry and even the electrical industry.
Copper possesses superior qualities that make it popular for power, lighting and communication transmissions. In addition to this, demand for copper also stems from its application in construction, electronics and industrial machinery and equipments.
“According to BIR statistics, almost 40 percent of copper demand is met by recycling,” Aboura says. “One can understand where the demand for aluminium and copper stems from and, due to their ability to be recycled and reused, demand for these secondary metals is on the rise,” he adds.
“During 2012 markets were good. At times we faced some challenges, but I think from years of experience I can say that it is within the norm to experience steep increases or decreases in demand, consumption and prices,” Aboura says. “In general, the situation in the Middle East is full of uncertainty due to political conflicts that have arisen across Egypt, Lebanon, Syria and Jordan, and this has resulted in adopting a wait-and-see approach by many investors in the region. However, business in other countries across the Middle East was on the rise, especially with the growth witnessed across the Gulf countries.”
With the eurozone slowdown, uncertainty and instability persist in the markets as traders and buyers remain skeptical and cautious, Aboura explains, adding that this trend is likely to continue in the short- term until confidence is restored. “Nonetheless, the realization of economic power of emerging markets is becoming more popular. Growth strategies based in these developing countries by their local governments and many multinational companies looking for investments will have a positive impact on our businesses,” he says. “Thus, regardless of temporary slowdowns in the global markets, I believe there is a promising future for the scrap metals industry.”
As for procurement, he says, “We have built and cultivated deep relationships over the decades with our reputed suppliers across the Middle East and Africa region. Of course, our main source of acquiring supply is our own yards that are located in Jordan and Saudi Arabia.” These yards are run by Ali Aboura, Ghazi Aboura and Hasan Aboura, the company’s managing partners.
“Just as we value trust and honesty when working with our customers, we follow the same values when working with our suppliers,” Aboura continues. “It is essential to maintain successful relationships in order to move forward and develop our cooperation even further for the future.”
Aboura Metals’ factory operations are regional, but its client base is global. The company ships internationally to western and eastern countries, and the demand is highest in India and other Far East countries, Aboura says, as well as in European countries and the Americas.
Challenges and Key Concerns
Aboura says aluminium, just like other basic metals, is a very cyclical product. When an economy is booming, demand for aluminium increases and vice versa.
“Despite steady increase in consumption of aluminium metal, we are still being exposed to risk and imbalances with the low LME (London Metal Exchange) prices,” he says. “This is due to the major slowdowns in China and Europe.
Aboura continues, “The Middle East’s recent growth to become a major aluminium producer provides us with opportunities but also with some challenges. In 2011, the region represented 7.7 percent of global aluminum production and is projected to reach 8 percent by 2015.
“Major challenges are still faced by the industry, such as suppressed aluminium LME prices and increases in the prices of natural gas,” he adds.
Aboura says, “Our focus has been on achieving consolidation. This will allow us to further develop our operations, reduce cost and improve efficiency. We see future growth into new international markets which we have not tapped into yet.”
He continues, “While our external growth strategy remains to expand into new markets, we are growing internally through recruiting and developing our third generation and providing them with opportunities to take on leading managerial roles across company operations, allowing our history, heritage and values to be preserved across everything we do.”
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