Texas Recycling is a well-known presence in the recovered paper industry. For nearly three decades, the Dallas-based processor has focused on buying and selling scrap paper, primarily high grades such as sorted office paper, deinking grades and bulk grades. The company also buys and sells bulk grades such as old newspapers and old corrugated containers (OCC).

Stan Litman had worked for many years as a traveling sales manager for a large industrial chemical company. But at age 52, he made a career change and started working for a Dallas-based paper and rag business called Daltex Waste Material Co.

Stan eventually purchased that business. Both of his sons, Joel and Craig, joined him at Daltex in 1984 and 1989, respectively.

In 1992, Stan and his sons wanted to start something new. Stan sold Daltex, then with Craig and Joel as co-owners, launched a new paper scrap business known as Texas Recycling/Surplus in a 30,000-square-foot warehouse that they leased in Dallas.

“We did not have one pound of paper when we started Sept. 1, 1992,” Joel recalls. “We were like, ‘Now what?’ But we just started moving. We were confident we could get this going.”

Founded on paper

Pound by pound, Joel says, the company developed its scrap paper business, eventually outgrowing that 30,000-square-foot building in 2001. Texas Recycling expanded the facility to 50,000 square feet that year by moving into an adjoining building. About six years ago, the company reached a point where it needed to move entirely to a new and larger facility.

“We were operating in nearly 140,000 square feet of space spread out over four to five buildings,” Craig says. “It was so inefficient going from one building to the other and to the other.”

Part of the reason for moving was to accommodate the diversification of the business. The company became involved in document destruction by starting Action Shred of Texas in 2003. Since its inception, Action Shred has expanded its services to include hard-drive destruction and, most recently, product destruction.

Craig adds that the company also needed space to accommodate higher incoming volumes of OCC.

“We have always been more of a high-grade operation. It’s kind of our niche market,” he says. “But that was one of the reasons we moved—we were missing opportunities with OCC, a prominent grade in the paper industry, and we really couldn’t handle it the way we were set up in our old facility. We weren’t able to take large loads of loose OCC. [Moving] allowed us to do everything so much more efficiently.”

Stan died in 2003, having retained his stake in the business up to that point. For the company’s next chapter, Joel and Craig say they wanted to see Texas Recycling grow its metals processing business. Getting a bigger space helped when adding equipment for this segment of the business.

“The paper business is a mature industry. We asked ourselves, ‘How else can we grow?’” Joel says. “A lot of folks were getting into MRFs, and we thought that really wasn’t what we wanted to do. We then went to metals. We had dabbled in it and knew people in it. We saw opportunities in metal that we really thought would spur growth.”

Moving into metals

For nearly 25 years, Texas Recycling focused a good deal of time and effort on growing its paper recycling services. Although the company handled used beverage cans at its buyback center, becoming more focused on scrap metals processing required Texas Recycling to invest in new equipment and to gain knowledge.

Because neither Joel nor Craig had much experience with ferrous and nonferrous processing, Craig says it was important to hire the right people to expand in that area.

“You sometimes get into a comfort zone, where you’re handling the same thing over a number of years,” Craig says. “But then you push your limits a little, move into a new area, find experts and let them do what they do best. We hire people that have the expertise because obviously Joel and I can’t do everything. … You want to rely on people to do what they do best.”

After relocating to its new site, Texas Recycling hired Bill Prager, whom Joel and Craig knew and had worked in the scrap industry for nearly 40 years, to lead its metals processing division. He has helped to grow that business from the ground up.

“When I got [to Texas Recycling], the only metals business they had was in connection with paper or cardboard accounts—like litho plate aluminum from the printing process—but no straight metal accounts,” Prager says. “I started with virtually zero accounts,” he adds.

In the metals segment, Prager says he has focused only on industrial accounts. To date, the company has about 100 industrial accounts, which Prager says is “not bad for five years.”

Starting from scratch also meant working with new equipment. “All of our trailers and roll-off trucks are brand new,” Prager says. “That gives us an upper hand.”

Since starting the division, it has focused on processing busheling on the ferrous side and stainless steel and some aluminum scrap on the nonferrous side, explains Prager, who says he has enjoyed building Texas Recycling’s metals business.

Combining under one roof

In late 2015, Texas Recycling leased and moved into a new facility on the east side of Dallas that was a former auto assembly plant. It is bout 14 miles away from the company’s original location in northwest Dallas and is big enough to house all its divisions under one roof. The plant has 260,000 square feet of interior space and more than 3 acres outside for rolling stock.

Although many companies process scrap metal outside, Joel and Craig are doing so indoors. “We were moving to the core of the city,” Joel says. “We had to have everything indoors to get this space. City zoning regulations didn’t allow us to have scrap outside.”

He adds that storing and processing material indoors also would be preferential from a quality standpoint, and it provides community relations benefits.

“[T]hat’s been part of being a good neighbor,” Joel says. “We’re located in a residential, light-industrial area. The neighbors didn’t want to wake up and look across the street and see cranes and piles of metal. We wanted to be good community citizens.”

Hillary Litman Freed, Joel’s daughter and the communications manager at Texas Recycling, adds that the four-to five-week move from the old site was challenging, ensuring all the equipment was delivered to the new site safely, all the while keeping the day-to-day operations running. She also describes the experience as bittersweet, watching the family company outgrow where it started.

“That had been our location for nearly 25 years. But, in order for the company to grow, the move needed to happen,” she says. “It’s been nice now that we’re all under one roof.”

Brian Morley, operations manager at Texas Recycling, says having all the company’s operations inside has helped in times of inclement weather. He adds that operating inside also helps to keep workers a little cooler in the summer months. “Where I’ve worked in the past, the majority of operations were outdoors, and there are often slowdowns due to weather. Here, it doesn’t happen that way.”

”We saw opportunities in metal that we really thought would spur our growth.” – Joel Litman, president, Texas Recycling

Another perk to the new location is that it features indoor rail. Morley says having rail inside the facility is “very convenient.”

With all the business units under one roof, Kathy DeLano, vice president of sales at Texas Recycling, says it has given the family-owned company even more of a family feel and made it easier for the different business divisions to communicate.

“All of our divisions work well together, and our customers like that we’re a one-stop shop for whatever they need,” she says. “Everybody says we’re like a family.”

Prager adds that Texas Recycling works to treat its customers like family as well, focusing on providing a high level of service. “Service is paramount in our business; it makes us different than the average bear. We provide customers great next-day service, and we’re transparent. We don’t have any surprises.”

Working through an odd year

In the past year, Texas Recycling faced many unknowns associated with the pandemic, much like other companies. Joel and Craig say the pandemic’s impact on commodity markets was among those unknowns in 2020.

Joel says recovered paper markets were poor heading into the pandemic. “On the paper side, 2019 was the worst market we’d ever experienced,” he says. “Then in January and February 2020, activity perked up for paper. But, then the pandemic hit, and things went south again,” Joel continues.

Adding to the pandemic-related uncertainty, DeLano says securing ocean freight and trucking have been challenging since the latter part of 2020. “But trucking has been an issue for years, and you work through it the best you can since it’s one of those things that is out of your control.”

However, she says, logistics, particularly in Texas, faced additional challenges after a brutal winter storm in mid-February led to power and water outages across that state and snowy roads, which made driving very difficult for one week. Texas Recycling had to stop operations for more than a week because of the inclement weather, which was the company’s longest period of downtime in its history.

Fortunately, Joel adds, the pandemic never shut the business down. Being deemed an essential business, Texas Recycling was open, though with some limitations. Some services were scaled back in the past year—Joel and Craig decided to shut down the buyback facility for one month as a safety precaution. Since reopening, it has only accepted paper and cardboard from the general public.

Throughout the pandemic, Joel and Craig say they have continually stressed safety with employees.

“We want them to be safe and healthy, not only because they’re part of our business family, but also for when they go home to their families,” Craig says.

He adds that the company paid employees if they had to take time off work for COVID tests, regardless of whether the tests came back positive or negative, and if they had to quarantine at home. Overall, only about 10 percent of the company’s employees were infected with the coronavirus associated with COVID-19 since the start of the pandemic.

Joel and Craig say they are now working to make sure Texas Recycling’s employees can get vaccinated.

More recently, Joel explains that markets have improved for paper and metals grades—particularly as businesses have opened up from pandemic-related restrictions and since the winter storm-related issues are behind them. “Manufacturing has picked up and the economy is improving,” he says. “The lights on the path are looking brighter.”

The author is managing editor of Recycling Today and can be reached at msmalley@gie.net.

Aluminum scrap markets in North America were characterized by oversupply leading up to the pandemic. But aluminum scrap’s fortunes started to change in the fall of 2020. By the end of the year, aluminum scrap dealers were saying they could all but name their price and that prompt delivery appointments were readily available.

Aluminum’s recent strength could be further supported by a global green energy transition.

Powerful transition

As Julian Kettle, senior vice president and vice chair of metals and mining at U.K.-based Wood Mackenzie, states on that research and consultancy group’s website, “Metals will play a starring role in the energy transition.” He cites aluminum, cobalt, copper, nickel and lithium as being the most vital metals because of their roles in key components used in electric vehicles (EVs), battery energy storage, wind and solar technology and electricity transmission.

Kettle adds that aluminum demand will increase by about a third by 2040 as a result of the green energy transition.

According to the World Bank, this transition will require more aluminum than any other metal, with green energy technologies requiring almost 6 million tons of the metal each year by 2050. The primary application for aluminum is in frames for solar modules.

The metals and mining industry will need to invest heavily to meet the needs of the energy transition, Kettle writes, though he also notes that existing production methods would contribute 12 billion metric tons of carbon to the environment by 2040.

“Without economic, timely, reliable and sustainable metal supply, the pace of the energy transition will be inhibited,” Kettle writes. “But scrap could provide a solution—provided the right incentives are in place.”

Kettle says increasing the use of scrap in aluminum production is “the first logical step on the road to decarbonization,” adding that scrap smelting facilities are less capital-intensive than primary facilities.

“In the world where all available scrap is used, secondary scrap processing capacity for aluminum would need a near threefold increase on what we have today at a cost of around $15 billion,” according to Kettle, who adds that such an investment “won’t happen without significant stimulus” in the form of policy incentives.

Aluminum’s use in vehicles also is increasing as the industry attempts to meet emissions and fuel consumption goals. A study by DuckerFrontier, headquartered in Washington, notes that North America’s light vehicles’ aluminum content is growing, particularly as demand favors light trucks and EVs.

According to the study, flat-rolled sheet for auto body applications will be the primary area of growth, followed by platform aluminum high-pressure die castings. By 2026, net aluminum demand is expected to increase to 514 pounds per vehicle as aluminum use increases for all vehicles using aluminum in closures, body-in-white and chassis applications to meet long-range CO2 goals as well as the ramp-up of electrified powertrain and battery-electric vehicle platforms that use more aluminum sheet, extrusions and castings for mass savings to achieve range targets.

While aluminum, and likely aluminum scrap, appears poised for increased demand in the future, China’s recent changes to its import regulations for nonferrous scrap metals should have a more immediate effect on scrap demand.

Reopening the door

North America was oversupplied in aluminum scrap prior to the pandemic in part because of changes to China’s scrap import policies in the second half of 2019 that restricted the import of scrap under HS code 7602000090. In 2018, China imported more than 2 million tons of aluminum scrap under the HS code 7602. In 2020, that volume declined to roughly 909,407 tons as noted by Andy Home in a Feb. 9 article for Reuters.

As of November 2020, “furnace-ready” aluminum scrap is no longer subject to import restrictions in China. However, given lingering uncertainty surrounding customs agents’ interpretation of these new regulations, some U.S. scrap dealers have expressed hesitance about shipping material to the country. Also, rising ocean freight rates and limited container availability have hindered exports, as have the strong Midwest premium, which makes it difficult for overseas buyers to compete on price.

Matt Kripke, president of Kripke Enterprises Inc., a brokerage firm based in Toledo, Ohio, says export demand “had kind of a moment five or six months ago when the Midwest premium dipped.” However, as that premium has strengthened, it has been hard for export buyers to pull aluminum scrap out of the U.S. because they cannot be competitive on price.

As of March 16, the U.S. Midwest aluminum premium reached a more than two-year high, Fastmarkets AMM reports. That publication assessed the aluminum P1020A premium, delivered duty paid Midwest U.S. at 19 to 20 cents per pound March 16, an 8.33 percent increase from Friday, March 12, when it stood at 17.5 to 18.5 cents per pound. Fastmarkets AMM reports that the premium has risen 18.18 percent since the start of March.

The Midwest premium is rising as scrap appears to be in short supply within the U.S.

Strangled supply

As of early March, a contact with a scrap processor that has operations in the Midwest and South says, “It doesn’t seem like there is enough scrap. All the rolling mills are busy and in need of scrap. Secondary smelters are the same.”

“Spreads are very tight and there seems to be a shortness of scrap,” Kripke says, noting that demand for coil, billets, slab and cans has exceeded the pace of scrap generation.

“It’s hard to tell if demand is that strong or if the supply is that weak,” he adds. “You can sell anything you can get your hands on. You can name the price if you have material.”

Kripke says he doesn’t believe the semiconductor chip shortage, which has affected some automakers’ production schedules, is a factor in that reduced supply or is likely to reduce aluminum demand significantly this year. “If you asked me that 30 days ago, I would have said yes. Today, I’m not sure we are going to see it.”

The scrap processor says he believes Ford and General Motors have been hit hardest by the semiconductor shortage, adding that his company doesn’t do much business with those automakers. “Toyota hasn’t been much affected.”

According to press reports, Hyundai also has a stockpile of chips, allowing it to maintain its vehicle production.

As of March 11, Kripke says the North American market is 30 to 60 days away from reaching equilibrium between supply and demand. At that point, he says, he expects spreads to begin to widen.

Some of that future scrap supply is likely to come from the winter storms that hit much of the country in February. Kripke says he expects damaged gutters and downspouts will need to be replaced in Texas, particularly, where ice and snow are rare, saying, “A lot of scrap will hit the market.”

That also will increase demand for 3105 aluminum, he says, which he describes as “already strong.”

Kripke speculates that aluminum could be in short supply because scrap yards might be more focused on processing their ferrous scrap, given the rising demand and pricing for that material, and neglecting their aluminum. “Some yards may have unprocessed material on the ground,” he says.

The volatility in copper pricing also could be playing a role, Kripke says. “Processors don’t want to take a chance sitting on inventory if the price swings downward,” he adds.

Prompt deliveries are readily available with aluminum consumers, as many avoided locking themselves into contracts because spreads had widened so much in recent years, sources say.

However, the scrap processor with operations in the Midwest and South says his company has engaged in more contracts this year. “In 2020 we did virtually none because the spreads were so wide,” he says, adding that “spreads seemed historically reasonable, so we went back to our historic mix.”

Kripke says the change in spreads since the start of the pandemic has been “very, very dramatic.” He adds that when it comes to secondary grades, including aluminum radiators and old cast, “If you own it, you can name your price.”

He continues, “2018 was a year when to call it a buyers’ market would have been an understatement. That started to shift in the second half of 2020.”

The processor says he would like to see better balance between supply and demand. “I’m not sure how long that is going to be.”

The author is editor of Recycling Today and can be contacted at dtoto@gie.net.

Mike Rogers, the owner of Toledo, Ohio-based scrap recycling firm R&M Recycling Inc., encountered one of the worst situations any recycler has to face when a fire caused extensive damage to the company’s Toledo processing and warehouse facility.

The fire destroyed the firm’s two-ram baler and disrupted operations at the Toledo site, which is the largest of the three Ohio and Michigan facilities operated by R&M, which Rogers founded in 2000.

Rogers says what caused the fire was unclear, but what needed to be done was both obvious and challenging: to acquire a new baler and install it as quickly as possible to get the Toledo plant back up to full operational speed.

Rogers turned to his longtime equipment provider Ken Ely Jr. and Ely Enterprises, based in Lorain, Ohio. Ely, a Harris dealer, came to assess the damage two days after the fire and helped R&M navigate the insurance options as it prepared to re-equip.

Three weeks later, R&M ordered a Harris Badger, which was delivered and installed in the following 60 days. “We have bought several balers from Ely Enterprises over the years,” says Rogers, who credits the dealership for delivering “great results.”

The Harris Badger is a narrow-box, two-ram baler that has proven its worth to the global recycling industry as a cost-effective and reliable baler that also offers the flexibility required by processors of multiple materials such as R&M.

“Based on our material and the volume we bale, it was the right accommodation,” Rogers says of the Badger.

At its two feeder facilities in southern Michigan and at its flagship site in Toledo, R&M purchases materials ranging from obsolete and prompt ferrous scrap to bare bright copper to insulated wire and aluminum used beverage cans (UBCs).

For heavier materials, the Badger’s solid uni-body construction gives it the added strength and rigidity to compress such scrap grades and stand up to the challenge. On the operations side, the Badger features Harris’ multifunction touch-screen display, which shows pertinent up-to-the-second diagnostic and production information.

Rogers says his employees found the new baler “easy to adapt to,” and the rapid response by Harris and its dealer Ely Enterprises has prompted him to say he would “strongly recommend” the companies. One year after installation, R&M’s Harris Badger is on the job 40-to-50 hours per week, he says.

More information on the Badger and other world-renowned two-ram balers offered by Harris can be found at https://harrisequip.com/products/two-ram-balers.

We are recyclers; operations is in our DNA. CP Group has evolved with the recycling industry and has consistently been at the forefront of innovation. This is due in part to our roots in owning and operating a material recovery facility (MRF) for over 25 years. We don’t just manufacture machines, we engineer solutions based on our firsthand experience. We understand commodity issues, we understand downtime and we understand ever-changing material streams. We relate to our customers because we live it every day in our MRF. That is the CP Group difference.

Beginning as a buyer and seller of scrap metals, Charles M. Davis founded the company in 1954. In 1977, he invented the world’s first aluminum can flattener. Since then, the company has engineered, installed and serviced more than 450 MRFs on six continents.

In today’s world of rapidly evolving material streams and increasingly stringent commodity specifications, CP Group provides confidence and security to customers. Owning and operating a MRF for more than 25 years, CP Group continues to advance MRF design, ensuring the highest possible recovery rates at the lowest possible cost.

A Future-Proof Approach

Our experience operating a MRF and developing them for customers navigates our future-proof system design. A core tenet to accomplishing that lies in our design principles to fractionate, liberate and separate.

By effectively accomplishing each of these phases, we can deliver higher recovery and stronger throughput with lower operating costs. Our machines have the latest technology, allowing for effective and profitable plant operation.

The CP Auger Screen is a game-changing tool for MRFs to fractionate material. Used as a primary separator, it cost-effectively reduces the presort load by at least 60 percent. This reduces the labor needed for presort and allows sorters to focus on the “big uglies”—large trash, rigid plastics, wrapping hazards and metals. It also enhances worker safety by reducing exposure to sharps and other hazards in the smaller fraction. The secondary Auger Screen is built with low-wear technology, and it maintains reliable sizing at high volumes. These machines are there to protect the people, not the other way around.

Through effectively segregating inbound streams into like fractions, our systems accelerate material liberation, allowing for more pure commodities. Our high-amplitude rubber and steel disc screens agitate materials at higher throughputs to remove the fluffy, high-volume 2D material from the rigid 3D material in the commingled middle stream. These machines are the lowest maintenance screens in the industry, with unmatched disc longevity. It’s not uncommon for our rubber CPScreen and AWScreen discs to run 2,000 or even 3,000 hours. Our steel GlassBreaker and OCCScreen discs run tens of thousands of hours.

From there, materials are presented downstream for separation that maximizes production levels and delivers higher recovery rates and superior purity. Our MSS optical sorters have the fastest belt speeds with the most square-feet scanned per second in the industry. These wider belts have high production with 96 percent typical purity rates. The MSS CIRRUS FiberMax™ optical sorter represents a true solution to increase recovered fiber quality. As our customers faced a changing market for recovered paper, we combined our top-of-the-line sensing capabilities with increased conveyor speeds to deliver high production and greater quality.

This systematic perspective ensures that greenfield plants and the most complex retrofit projects are managed, designed and installed in a way that boosts our customers’ return on investment. We manufacture machines that are extremely durable with low maintenance requirements.

In-House Reliability

As the industry has changed, CP Group has improved along the way to stay ahead of the curve. All our equipment is engineered and manufactured in-house. We have complete oversight from machinery design to production all under one roof. Our goal is to provide customers with high-quality, durable and low-maintenance equipment.

Additionally, our research and development team keeps CP Group at the forefront of technology as material streams evolve and the need for new equipment emerges. Our continuous advancements are rapidly integrated into our systems because of efficient testing on-site and in our MRF.

Delivering successful plants and retrofits that exceed customer expectations is core to our success. CP Group’s headquarters in San Diego, California, has 115,000 square feet of manufacturing space, and our MSS optical sorting division in Nashville, Tennessee, has 46,000 square feet. We have the capacity and flexibility to adjust our manufacturing to the speed of any project.

By using automation and state-of-the-art manufacturing, we consistently and cost-effectively deliver superior quality machines. We work to eliminate customer pain points and focus on lowest cost-per-ton solutions.

The investment in our shop is an investment in our customers and our future. We take pride in our work, and we stand by our solutions.

Innovation for the Future

From the earliest days of designing can flatteners and densifiers, CP Group learned that innovation must deliver operational efficiency to add value for plant owners. This disciplined approach has guided our research and development work. CP Group holds more than 50 patents, each one curated to deliver operational value.

The future of mechanical screening maximizes sorting efficiency while minimizing cost. Our latest development is the patented CP Elliptical Auger Screen that adds aggressive agitation to the sorting process, fractionates the stream and then liberates the material. This can be used for primary and secondary sorting. That dual action earlier in the process enhances downstream separation.

We make sure to stay on the pulse of ingenuity for our industry by enhancing and fine-tuning our solutions. Our real-world experience combined with our tribal knowledge guide the CP Group team in delivering advanced sorting systems that work hard for our customers.

Learn more about our design principles and technology. Contact Ashley Davis, director of sales & marketing at the CP Group, at ashley@cpgrp.com.