Giant Steps

Features - Paper

The paper industry in North America and the rest of the world has embraced recovered fiber as a foremost feedstock

July 17, 2013
Brian Taylor

The occupation of “rag picker,” though it has roots tracing back to Colonial American times, was seldom one regarded with esteem or as a desirable way to make a living.

As America’s cities grew larger in the late 19th and early 20th centuries, however, many of the entrepreneurs who collected textiles, towels and scrap paper as mill furnish began to establish businesses that would eventually be significantly capitalized.

Many of these businesses, or their successor companies, still exist today and have evolved into diversified recycling companies with national and global trading operations.

Long before the first Earth Day and before resource conservation was a widespread passionate cause, the rag pickers and peddlers who called upon shops, factories and homeowners to collect their discards laid the foundation for the 21st century’s paper recycling industry.

A Surplus to Share

As America’s paper recycling infrastructure has grown, so too has its ability to supply paper mills around the world with recovered fiber.

Bill Moore of recycling and paper industry consultancy Moore & Associates, Atlanta, began concentrating on the recycled fiber aspects of the paper industry in the mid-1980s. “When I started, it seemed like you only exported if you were within 50 miles of a port,” recalls Moore.

As the number of residential collection programs grew in the late 1980s and 1990s, the U.S. became a heavier fiber exporter and recovered fiber pricing in the U.S. was more regional. Recyclers with close access to Pacific ports in particular often enjoyed higher pricing as mills in South Korea, Taiwan, Indonesia and other nations sought U.S. scrap paper.

Soon, the increased collection in the U.S. also coincided with a surge in demand from rapidly industrializing China. As China became the world’s factory, its containerboard mill capacity and its hunger for old corrugated containers (OCC) and other scrap paper grades skyrocketed.

“The last decade has been theirs,” Moore says of China’s recycled-content containerboard growth. “It’s a fiber-poor country, so it has absorbed as much OCC as the rest of the world can offer.”

While formerly recyclers in California had served Asian export markets, in the past 10 to 12 years China’s demand has reached all ports and all sections of the U.S. interior. “Now, recyclers export from anywhere,” says Moore.

The Urban Forest
Papermaking historically has involved using a pulping process so that tree and plant fibers could be used as the key ingredients in making printing paper and, later, packaging board.

By the mid-19th century, the use of discarded rags as a supplemental source of fibers was an established practice, and in England—where forest resources were growing scarce—papermakers began buying unwanted books as a source of recovered fiber.

The mechanical process to remove inks to make used books and paper recyclable was developed in 1774 in Germany by Justus Claproth, who worked with a nearby papermaker to improve his de-inking process.

While de-inking capacity would not undergo a major boost in the United States until nearly two centuries later, containerboard and box makers proved more willing and capable of recycling cardboard and to take advantage of the growing urban forest of discarded boxes.

In the Northeastern United States, Italian immigrants gravitated to the paper recycling industry, providing many of the literal “rags to riches” stories of rag pickers who created companies still doing business today.

Bronx-based recycling company Louis Monteleone Fibres Ltd. notes that the company’s history began “when Ferdinando Monteleone traveled from Sarno, Italy, in 1887 and settled in the Bronx, where he started a company, Monteleone and Son. Ferdinando collected waste paper, rags and assorted metals using a push cart and also received these products via door trade from local residents and business owners. His son, Virgilio, joined the business in the early 1900s, thus starting a tradition that would be repeated by Monteleones for over a century.”

Another long-time recycler in the Northeast, D. Benedetto Inc., based in New York, traces its roots back to 1897 when a family member began collecting paper and rags in lower Manhattan. Four generations later, members of the Benedetto family continue to operate D. Benedetto Inc.’s plants in New York City, Buffalo and in Ontario, Canada.

The founders of the Monteleone and Benedetto companies were far from alone in finding their livelihoods through recycling. The collection infrastructure established by peddlers in cities across America helped supply containerboard mills with a reliable source of fiber that they soon came to rely upon as an important feedstock.

Getting Organized
During the first half of the 20th century, paper recyclers quietly grew the size and scope of their industry and also took steps to organize and formalize it.

The National Association of Waste Material Dealers (NAWMD) was formed in 1913 at a meeting in Boston, according to a 1993 Scrap magazine article written by Kent Kiser.

The group originally focused on the scrap metals trade, but in the 10 years that followed, it formed regional and commodity-specific chapters, including the Waste Paper Institute.

In 1958, the Waste Paper Institute, in the spirit of distinguishing that scrap paper with a market value is not waste, changed its name to the Paper Stock Institute of America (PSI). The PSI name and organization has since remained in place as the PSI (Paper Stock Industries) Chapter of the Institute of Scrap Recycling Industries Inc. (ISRI).

Separately, regional pricing services and surveys had been developed, with Official Board Markets (OBM), also known as the Yellow Sheet, emerging as one of the industry’s leaders.

By 1963, when Recycling Today magazine was founded as Secondary Raw Materials, the paper recycling industry had a voice in the form of trade groups like PSI. The industry also had specifications and terminology for grades that also were championed by PSI, and could turn to published pricing to form a basis for trades within or outside of a given region.

Although this foundation was in place by 1963, events in the next 50 years would lead to tremendous growth, considerable technological advancement and the globalization of an industry sector that had started with rag pickers collecting from the part of the world that was within walking distance of their homes.

Waking Up to the Possibilities
The 1960s are regarded as a turbulent time in American history for many reasons, with several social, protest and civil and individual rights movements gaining momentum at the same time.

Among the causes that had people questioning the way society was structured was the environmental movement, which, among other things, called attention to the effects of pollution and resource conservation.

The year 1970 brought with it the first national Earth Day and the establishment of the U.S. Environmental Protection Agency (EPA) by the Nixon Administration. The EPA’s Office of Solid Waste would increasingly become involved in recycling data collection, advocacy and funding, providing the federal government with a bureau that could follow up on the Solid Waste Disposal Act of 1965 and subsequent legislation.

On the scrap paper collection side, the 1970s witnessed the emergence of more municipally funded recycling drop-off centers and initial curbside programs. These municipal efforts were sometimes seen as government-funded competition by traditional paperstock dealers, but the additional collected tonnage ultimately gave paper mill operators the confidence of knowing that they could supply recycled-content mills.

In the 1980s and 1990s, as more scrap paper became available, mills conducted experiments and tests and then often made investments in recycled-content capacity, says recycling and paper industry consultant Bill Moore of Moore & Associates, based in Atlanta.

“They found the material was certainly competitive on price (compared to wood chips) and it also had some good properties, such as good opacity properties when making newsprint,” says Moore. For some paper manufacturers, he adds, “there was almost a complete reversal relative to their former reluctance to use recovered fiber.”

Other paper or paperboard manufacturers, particularly of brown grades, had long used recovered fiber but were about to benefit from the gains in collection infrastructure.

The company that would eventually become one of America’s largest paperboard makers, RockTenn Co., traces its roots in part back to a recycled-content paperboard mill that started up in Chattanooga, Tenn., in 1917.

RockTenn was one of several paperboard makers that grew and thrived in the 20th century during a time when America’s food and other retail networks increasingly packaged and shipped products in corrugated boxes.

While government mandates and purchasing preferences may have pushed some newsprint and printing and writing makers into using recovered fiber, in sectors such as containerboard, boxboard, kraft paper and molded pulp, the recycling boom of the last quarter of the 20th century simply helped to solidify their business models.

Safe and Sound

Recycling as a good business and environmental practice has provided much of the impetus for the growth of paper recycling in the past 50 years. One sector of the industry, however, is more closely tied to the protection of business and government secrets, the protection of confidential or personal information and crime prevention.

Government agencies, banks, hospitals and companies have long marked documents as “classified” and, ideally, taken measures to ensure that these documents are destroyed before falling into the wrong hands.

Paper recyclers have been among the entrepreneurs who have served this market in a way that also ensures these documents are not incinerated or landfilled, but instead make it to recycled-content paper mills.

The 1990s in particular witnessed the growth of companies specializing in offering shredding services to government and industry clients, in part as a response to instances of “Dumpster diving.” The raids into waste bins behind office buildings were conducted by criminals who knew how to profit from obtaining bank account numbers, Social Security numbers and other personal information.

In 1997, several of the service companies that offered on-site or off-site shredding of confidential documents founded the National Information for Information Destruction (NAID).

Seven years later, in 2004, the Recycling Today Media Group established Secure Destruction Business magazine (SDB), later changed to Storage & Destruction Business.

NAID members and SDB readers included paper recyclers who had established document destruction divisions to be part of this growing sector. Document destruction service providers helped collect large amounts of office paper that, after being shredded and baled, became an important recycled paper grade.

Curb Service
In the 1960s there was some overlap between the solid waste and recycling industries, with some hauling or cartage companies involved in both sectors. To a greater extent, however, they operated as two separate industries that each served industrial and commercial facilities at their back loading docks.

Households in urban and suburban areas were served most often by city-operated packer trucks collecting waste only.

The 1980s and 1990s brought a dramatic change for recovered paper as cities, whether by public request or to meet state landfill diversion targets, increasingly created curbside recycling programs.

The introduction of these programs pulled solid waste companies into the recycling collection sector at the very least, and often into the sorting and marketing of recycled containers and paper as well.

Waste Management Inc., headquartered in Houston, had spent the 1980s acquiring other companies on its way to becoming a national firm with considerable solid waste market share. Its rise coincided with the spread of curbside recycling, thus causing Waste Management also to become a market-leading collector and processor of recovered fiber.

In 1991, Waste Management collected scrap paper from an estimated 4 million households in North America, and that year it formed the joint venture Paper Recycling International (PRI) along with paper manufacturer Stone Container Corp. The PRI joint venture sold some of the collected and baled paper back to Stone Container while offering the rest to domestic paper mills and the export market.

PRI grew to have 10 offices and some 70 employees before it was dissolved in 2001 after Stone Container merged with Jefferson Smurfit Corp., another paperboard producer that had its own established supply chain.

By that time, the scrap paper being collected in curbside programs by Waste Management and other haulers had little trouble finding markets.

Several months before PRI was dissolved, the Clinton Administration issued an executive order that mandated all federal government agencies and bureaus purchase office paper containing at least 30 percent recycled fiber.

Public goodwill toward recycling seemed just as entrenched during that time. A survey conducted in 2000 by the 100% Recycled Paperboard Alliance found that 92 percent of respondents believed “they are doing something good for the environment when they buy [recycled-content paper or boxes.]”

The same survey indicated that 84 percent of respondents “felt better about companies that use [recycled-content board] as packaging material.”

In its role as a collector of information, the EPA’s Office of Solid Waste provided some helpful data in 2010 to show the interplay between curbside recycling and the related growth of the paper recycling industry.

Its document “Municipal Solid Waste in the United States: 2009 Facts and Figures,” indicated that the overall municipal solid waste (MSW) landfill diversion rate had grown from 5.6 percent in 1960 to 33.8 percent in 2009, with much of this newly diverted material being paper.

In 1970, before curbside recycling programs spread across the country, paper and paperboard was recycled at a 15 percent rate nationally. Less than 40 years later in 2009, the paper recycling rate had jumped to 62 percent.

Traditional paperstock dealers and packers certainly played their parts, but the role of curbside collection in paper recycling’s rise is hard to dispute. Whereas in 1970 with its 15 percent recycling rate curbside recycling was practically nonexistent, by 2009 more than 9,000 curbside programs were in place in the United States, directing scrap paper and other materials to more than 575 material recovery facilities (MRFs) across the country with some 85,000 tons per day of processing capacity.

As well, the lines between industrial and commercial paperstock dealers and curbside collectors and processors have been crossed and have blurred.

Among the larger MRF operators in the Mid-Atlantic states is TFC Recycling, owned in part and operated in part by Michael Benedetto, a descendent of the Benedetto family member who began collecting rags and paper in lower Manhattan in 1897.

Thoroughly Recycled

As documented by the U.S. Environmental Protection Agency (EPA) or the American Forest and Paper Association (AF&PA), the volume and percentage of paper recycled in the U.S. has grown tremendously in the last 50 years.

Recycling of the old corrugated container (OCC) grade in particular has benefitted from a longer history of demand from both mills and paperstock dealers.

The strong infrastructure in place to collect and recycle OCC can be seen in its 2012 recycling rate of 91 percent, as calculated by Washington-based AF&PA. The 29 million tons of OCC collected and processed in the U.S. in 2012 helped the grade maintain its leading position as the packaging material with the highest recycling rate in the U.S., according to AF&PA and three other paper industry trade groups in a news release issued in June 2013. The trade groups have allied to form the Corrugated Packaging Alliance (CPA).

“Recovery for recycling has increased steadily since 1993, when 54.5 percent of old corrugated containers (OCC) was recycled,” says the CPA. Of the 91 percent of corrugated that was recovered in 2012, more than 50 percent was used to make new containerboard, 34 percent was exported and and 12 percent was consumed by mills in the U.S.