Editor’s Note: The following article includes edited excerpts from the Mill Buyers session at the 2013 Paper Recycling Conference & Trade Show, which was organized by the Recycling Today Media Group, publisher of Recycling Today, in partnership with the Paper Stock Industries (PSI) chapter of the Institute of Scrap Recycling industries Inc. (ISRI). The event was Oct. 16-18 in Chicago.
As one might expect in a year when China launched Operation Green Fence and single-stream recycling programs continue to expand throughout the U.S., accepting a greater range of material from the communities they serve, quality concerns remain foremost on recovered fiber buyers’ minds. Some of these buyers joined Bill Moore, paper recycling industry consultant and president of Atlanta-based Moore & Associates, to field questions from attendees of the 2013 Paper Recycling Conference & Trade Show in Chicago this fall. The panelists (pictured seated above from left) were:
- Johnny Newsome, director of trade sales and mill supply, Sonoco Recycling, Hartsville, S.C.;
- John Lucini, director of operations, West, SP Fiber Technologies Northwest, Newberg, Ore.;
- Ryan Anderson, Midwest regional buyer, SCA Tissue, Menasha, Wis.; and
- Peg Wander, fiber procurement manager, Liberty Paper, Becker, Minn.
Newsome has been with Sonoco’s recycling division for 23 years and handles mill supply, trade sales and national accounts. Sonoco operates 11 mills in North America producing 1.1 million tons of paperboard and some containerboard annually. It also operates 95 converting plants.
Lucini, who has been in the paper recycling industry since 1974, described SP Fiber Technologies as a diversified supplier of newsprint and packaging products that was created in 2012 when it purchased the assets of SP Newsprint. The company operates two mills—in Dublin, Ga., and Newberg, Ore.—and 13 recycling facilities in six states.
One of SP Technology’s Dublin paper machines has been converted to produce packaging grades. It has an annual output of 280,000 tons of lightweight liner, bag paper and medium, Lucini said. The company produces a total of 220,000 tons of newsprint per year, with production divided among the Dublin mill, which uses 100 percent recycled furnish, and the Newberg mill, which uses 50 percent recycled ONP (old newspapers) and OMG (old magazines) and 50 percent wood chips. He added that the Dublin mill consumes 1,000 tons per year of OCC (old corrugated containers) and ONP, while the Newberg mill uses 650 to 700 tons per year of ONP and 600 tons of OMG.
SCA’s Anderson has 17 years of recycling industry experience. He purchases fiber for the company’s Menasha mill as well as for three of SCA’s Mexico mills.
SCA is a global hygiene products company with $15 billion in sales globally. Its Midwest mills consume 335,000 tons of recycled paper per year, including printers’ mix, SOP (sorted office paper), heavy print, poly window, light groundwood and fly leaf shavings as well as OCC, mixed paper and some DLK (double-lined kraft).
Wander has been with Liberty for eight years, though she has worked in the wider recycling industry for 22 years.
The company’s 100-percent-recycled linerboard mill consumes approximately 250,000 tons of recovered fiber annually, 90 percent of which is OCC.
Wander said Liberty was looking beyond traditional sources of recovered fiber, working in the C&D area to recover OCC as well as with dirty MRFs (material recovery facilities).
Among the questions panelists and Moore fielded from the audience included:
Q: What is an acceptable percentage of contaminants in a bale and which should we work the hardest to keep out?
Peg Wander (PW): … We really need the long fiber material. For us, a contaminant can be short fiber boxboard material or newsprint. We will tolerate up to 5 percent.
For us, prohibitives are absolutely containers, cans, glass—nothing that is obviously not going to go into the box linerboard manufacturing process. It is a complete reject for us.
When we go in and do bale audits … we find that we have customers who are pretty much on that 5 percent line; some have moved into the 7 percent range. When we start getting to 10, we have to start having a conversation, if you will.
Ryan Anderson (RA): From the white side, what we are looking at is a little bit different. As far as a list of what is most detrimental to us, it is brown fibers, glues and then probably red ink.
John Lucini (JL): Our dilemma is that we see a lot of brown fiber in our incoming material. We are trying to make a newsprint sheet that needs to be brighter and brighter all the time to meet the demands of our customers, especially in our recycle mill, which has to compete with sheets that are 100-percent-virgin fiber. And that brown fiber does not go away. It pulps up, it gets into our sheet, it hurts the brightness. We throw chemicals at it. It creates a cost issue, but it also creates a marketing issue for our group to be able to be competitive in the marketplace.
The prohibitive materials: We can’t make paper out of plastic, tin, wood, garden hoses, Christmas tree lights—you name it, it’s in there.
We have become more aggressive in measuring [the material that] arrives at our mills. I know the stuff has been poor quality, but some of the results that we have seen have been very surprising.
We have looked at Newberg, where we have an option for fiber, and we’re maximizing our wood supply as an alternative to secondary fiber. It has allowed us to become a little more selective over the suppliers we work with.
Johnny Newsome (JN): At Sonoco, about 70 percent of what we consume is OCC and the remaining is mixed paper.
Prohibitives are definitely the nonfiber [material], wax-coated board or heavy wet strength. … There are more prohibitives now than ever. Pricing is higher. So, basically, you’re buying material that you are going to screen out of your machine and then throw away. It has increased cost, our shrinkage is higher than it was years ago. Prohibitives load up your cleaning system. They comprise your machine speed.
The glass is an abrasive in the cleaning system, and it wears out your screens. We had screens that used to last a year that will last just a few months now, and they are several thousands of dollars—$30,000, $50,000, a $100,000—to replace.
Bill Moore (BM): Does the future hold sorting at the mill to get the needed ONP quality?
JL: … Frankly, given the competitive nature of our business, that is an expensive step. I guess if I take the mill view, they want to buy something they can make paper out of and not have to deal with sorting in a mill environment with some of the labor costs … that are involved.
Q: Do you think we will be able to enforce bale specifications more strongly going forward and clean up that supply?
RA: I think we are at a point where that has started to happen. The Green Fence has obviously made it easier to go back to suppliers and try to hold their feet to the fire. In a lot of cases, I think there are, in my opinion, design flaws in the systems themselves that are making it more difficult. I do see that a lot of these companies are trying to clean it up, but it is still a situation where the quality coming in is not up to standards. I think there is still quite a bit of room to go.
JN: We’ve added sorters on our lines. We’ve slowed our lines down. The quality is better coming out of MRFs now as a result of Green Fence, in my opinion. And I think our U.S.-based paper makers will benefit from it.
Q: Johnny says he considers wet strength material a prohibitive in OCC. Is it an outthrow in mixed paper?
JN: It depends on the system. We have a continuous pulping system. Our system cannot beat up the wet strength, and it just goes out the side of the machine just like plastic. Other batch pulping systems some mills use can run wet strength without much of an issue. And it has good fiber in a lot of cases. Your buyers just have to know what they are buying. There are certain markets for it.
PW: I would agree. … If it is important to you that it gets 100 percent recycled, you maybe want to be able to find the mill that is going to be able to batch it and handle it that way.
BM: There is at least one and there are probably a few dedicated wet strength repulping systems. They primarily do industrial scrap from converting of beverage container packaging and other high wet strength. … You can process it. It’s a time, heat and chemicals issue. Some folks are really set up for that, and some folks are totally not set up for that, as Johnny said.
Q: As printers and packaging companies use more inks and coatings, what are the mills seeing as challenges in handling those coatings and inks that weren’t around five or 10 years ago?
RA: From the tissue side, we have made a lot of investments. … Where we were five years ago, we could not handle what is coming through the door today. At least up in Menasha, we have invested over $50 million in the last five years to be able to handle the direction the [recovered] paper was headed.
That being said, the amount of ink that we get in on some of the material, even with that investment, is more than we can handle. We are seeing a lot less yield. There is a lot more ash, a lot more fillers in the paper, so our yield numbers are down.
Overall, it is costly. The base sheet is of lower quality. You are getting the brightness out of the fillers, out of the coatings, and so you have extra sludge and less paper.
… It used to be that you could use trim as a brightener. But now the inks go right to the edge, and you are getting shorter trims out of the paper coming in. The majority of the paper that does hit the doors these days, where we used to have a lot of white, unprinted areas, now has got ink all the way to the edge. It definitely has become much more difficult and costly to remove it.
Q: I’m wondering with the shrinking supply of ONP are mills substituting wood chips for ONP?
JL: Definitely from what I’ve seen in mills that have that capability. In our case we have some swing capacity on pulping in Newberg so that we can swing between recovered fiber to wood chips depending on the cost of the head box.
BM: … If you look around the world at newsprint machine closures, there has definitely been a bias … to close recycle facilities. Over the cycle and clearly at the high end of the recovered fiber ONP cost cycle, ONP is noncompetitive with TMP (thermomechanical pulping) with virgin fiber, and that is why we have seen those shutdowns. And I think it is going to continue to be that way, which coincides with the declining supply of ONP, so it gives you a little bit of balance.
Q: ONP No. 8, whatever the quality is from the MRFs, when do you think the standard and the quality can match each other so we don’t have disputes all over the world?
BM: It is really an issue of the PSI guidelines versus what is being produced in the market. And, John, I know you are on the front line of that in many ways.
JL: I think that the low-grade ISRI/PSI specifications need to be looked at. I think you have to remember that those specs are a guideline. … Each mill is going to make its own decision on what they can handle, what they can buy, what they need to buy, and I don’t think you can default to a published document to do that.
That being said, we are definitely not receiving material from our suppliers that meets that ISRI spec—not even close. We are working very aggressively, sampling what is coming in, understanding what is there, trying to educate our suppliers as to what we can tolerate and what we can’t tolerate and trying to develop a meaningful spec for our operation. And I’m sure everybody up here and all the other mill groups have that same dilemma. So we will do that, and then we will enforce that and buy against that specification.
BM: If you look at the ISRI guidelines, first of all, they are not specifications, they are guidelines, and many mills have their own. That is the first thing to understand. And PSI has made revisions to the low-grades, in particular to the ONP guidelines, at least once or several times over the last five to 10 years. … those guidelines are supposed to reflect what is being traded in the marketplace. It is a bit of a Catch 22, because if you raise the prohibitive and raise the outthrows, is it a spiraling effect that if you keep raising it people exceed it and you revise the spec again.
JL: From the mill perspective, there is this concern that the spec is X and we are getting Y. If we make the spec X+5 we are going to get Y+10. What is being traded isn’t necessarily what mills can use or want or can deal with. I do think that is something that those of you who aren’t members of PSI, here’s the pitch, you can be at the table. We have a specifications committee. We went through this two or three years ago. It was quite a long debate, and there are quite a few different viewpoints, and we did change those guidelines. But that is an ongoing process, and we need everybody’s involvement in that.
BM: Joel (Litman of Texas Recycling/Surplus, Dallas) is president of the chapter, and I see he has the microphone:
Joel Litman (JL): I think you guys did a great job explaining it. But it is a process; it is always evolving. What we talked about three, four, five, six years ago is different from today. … Like Bill said, it is a guideline. It is kind of like making a recipe. Everyone has a recipe for chicken soup, but one household may make it a little differently than another, even though the recipes are the same. It really depends on what the mill is buying, what their needs are. The PSI specs are guidelines, but it really depends on what the mill’s recipe is for their end product.
BM: It is also a process that takes time. There is a lag time because it is a consensus-building approach. And it can take a year to two years to change a guideline from when someone says, I think the guideline should be changed, to when it gets implemented.
JL: Like John was saying, you have to be at the table. … You have to come to PSI, join our organization and have a seat at the table. We do take comments from the public. Once the specifications get to a point they are published in the trade journals for comment. But if you really want to have a hand in it, join us at the table, because PSI members and ISRI members are the ones that vote on it.
Q: I’ve heard a lot of talk about reduced fiber and prohibitives in the process. We’ve recently acquired the rights to a patent-protected coating process. It is a water-soluble coating that replaces PE and PLA and has allowed us to make a 100 percent recyclable paper cup. The early feedback from the foodservice guys is that this is something the whole industry might be interested to adopt. My question is, assuming we can get that level of adoption, will that help with some of these problems that you’re facing in terms of having a new supply of something you can recycle compared with something that you can’t?
RA: That is largely going to come down to the process. I’m not sure what kind of wet strengths you are putting in there, what you are using as that water barrier. It would be determined on whether we could remove the fibers from that source and how it had to be conditioned to know if it is worthwhile to put it in that process to be able to recycle it. Without knowing more about the actual product itself, it is hard to say whether or not that would be a viable source. But it would definitely be something that we are interested in looking at. If this is new technology and there is fiber available there, that is something that definitely would be of interest.
BM: The devil is in the details.
PW: When I think of adding a cup to the collection process, there is still a variety of other cups out there. It’s that education again of how do we know that we’ve got the right cup and that it is going to come through the system appropriately.
JL: I’d guess I’d add that my views are that you have to be careful. Like Bill said, the devil is in the details. You start telling the public that a “cup” is recyclable, it is going to end up in that bin with everything else, and that is how we have kind of got ourselves in the mess that we are in today.
BM: Overzealous recycler, I call them.
Q: What do you think is the reason why it is kind of difficult for OCC and mixed paper from the Dominican Republic to get into the U.S. given the fact that we are even closer than other markets?
BM: It is all about freight, first of all, and then there’s China. I’m sure China buys from the Dominican Republic.
JN: Normally if it goes in a container, it is going to go to China in most cases.
BM: The U.S. isn’t an importer of OCC. We are an exporter of OCC, so I suspect that that is one reason. It always has to do with transportation flows.
JL: The freight opportunity is out of the U.S. back to a market, not into the U.S.
BM: That’s right, look at your container freights outbound and find out where the lowest cost destinations are, and that is where the OCC will flow. Because almost every country has recycled board making capacity and, therefore, uses OCC and mixed.
Q: This summer, our trade industry, AF&PA, introduced a public education campaign called “Think Before you Shred.” Now nobody here has mentioned that shredded paper is an issue—at least it’s paper—and we’re talking about other contamination issues. When I called them, he said that’s what their members requested. So it seems to me that there is a disconnect with what our trade organization is hearing as an issue with paper mills and with what everybody is talking about here at this conference. …Are you all no longer members of AF&PA or are you not sharing the quality issues that you have that are bigger than shredded paper?
JL: We use a little bit of office pack from time to time in our mills, and the mill doesn’t like it for a couple of reasons. One … they can’t see what is inside there, and so they have some problems with contaminants. But I think a bigger issue is housekeeping. Bales fall apart, we have a trommel that fluffs the material before it goes into the pulper, and it creates a dust storm in the facility. They physically can’t see the feed belts on the cameras. They don’t like it; they’d just as soon not buy it.
From a MRF perspective, we’ve tried to work with the municipalities in our area to tell them to tell the public to keep that stuff out of the curbside because all it does it goes through the fines screen that we’ve installed to take out the glass and the bottle caps and the chicken bones and the batteries, and it’s a yield loss to us. It’s fiber, but it’s not suitable to be collected in that fashion.
We’ve squawked at the municipalities that they need to educate their residents about what can go in that bin. And they make a token shot at it by sending a flier out with a garbage bill. But it is very ineffective and part of it is confused by marketing efforts by some of the packaging manufacturers. For ONP, the generator is confused, and if the generator is confused, we’re going to just keep getting junk like we are getting now.
BM: We know how to do the public education; it’s a matter of funding. Do your companies spend money on education for the grades you use and who should be responsible for education: the mill? The processor? The generator? The collector?
PW: I feel that we are all stakeholders in the process and we all have a responsibility to try to educate. From the mill’s perspective … whatever we can do to provide [the generator] with a better understanding of the process so they understand why they need to put certain materials in the bin. We have a video of the process, and we are happy to go to communities to share that … and get them engaged in quality from that perspective.
In terms of funding … I think we’d be open to the discussion, if you will. But it is a good point that a lot has changed in the industry in terms of education.
RA: From our end, we have also taken a look at this issue. I know we have done some work with our marketing group, and I don’t know exactly where we are at in that process. It is something that we are looking at and understanding that we may have to be one of the ones to step up and try to do some of the education.
JL: Over the years when we were looking to build the ONP supply, SP was extremely aggressive with schools and provided lesson plans, comic books. ISRI has got a project now to help provide lesson plans for teachers.
I think the biggest issue is that we don’t typically have the resources that the solid waste companies have or the large consumer product companies have to … make a pitch. Most of our public involvement is that our managers are on solid waste advisory committees, they attend public meetings, but they also have full-time jobs on top of that. These other entities have full-time people that are just focused on public relations and that kind of thing. Our industry hasn’t had the resources or hasn’t thought it necessary to [allocate] the resources. We do rely on AF&PA to do that. But even that doesn’t seem to have the horsepower that the consumer products folks have to influence packaging decisions and that kind of thing.
JN: At our MRFs, we do have education centers and we bring students in and spend a lot of time there. I think the next generation will be smarter recyclers than we are. To me, that is where it begins.
At the end of the day it is all going to come out in price to municipalities. The price of curbside has continued to increase, but as it is becoming more contaminated and it costs more to process … At some point, to me, the municipalities have to be clear on what can be collected effectively. A lot of things are recyclable but you can’t just put it all together and expect to sort it all out. The price will ultimately determine who pays.