Brothers Brent and Zack Kirstein of 4G Recycling Inc., Deerfield Beach, Florida, prioritize being honorable and responsive as core values. The firm, which manages waste and recycling programs for clients throughout North America, markets in excess of 450,000 tons of recyclables annually for printers, envelope manufacturers, paper mills, converters, distribution centers and supermarket chains.
While the brothers formed 4G Recycling Feb. 1, 2012, they say the Kirstein name and the family’s commitment to integrity, service and timely payments extends back to 1910.
Rooted in recycling
The brothers say the Kirstein family has been involved in the recycling industry since 1910, when their great-grandfather Phillip Kirstein began searching the New York City streets for textiles, metals, newspapers and other recyclables to resell. In 1930, Phillip relocated his family to Connecticut, and his eldest son, Abraham, joined the company, which was named United Paper & Metal at that time. In 1965, Harold, Abe’s son and father to Brent and Zack, started working in the family business, helping to expand the company throughout New England. The brothers joined the family business, then named American Recycling, in the late 1990s, learning the business from the ground up.
In 2008, Greenstar NA, which was owned by Ireland-based NTR PLC, purchased American Recycling’s assets. Brent and Zack transitioned to Greenstar, where they held management positions and learned global business structure and strategy.
The brothers’ desire to continue their family legacy in the recycling industry and to build a company that would be around for their children led them to start 4G Recycling in 2012.
“We started the company with one account out of our living room,” Zack says. “Today, 4G is servicing almost 500 locations in 48 states and marketing 450,000 tons per year to mills around the world.”
“Our exponential growth is a function of our attention to the suppliers’ needs, quality service and timely payments for recyclables,” Brent adds.
While the company exports recyclables to 13 countries, he says a large percentage of its sales are to domestic consumers. “We are U.S. based and recognize the important symbiotic relationship with the American paper industry.”
Building on tradition
American Recycling specialized in high-grade recovered fiber, which is a tradition that Brent and Zack have built on at 4G Recycling.
“It’s what our dad really did well,” Brent says, adding that American Recycling had a significant share of the New England printing and packaging market.
4G got its start in high grades shortly after the company formed, he says. It partnered with National Envelope, now owned by Cenveo Worldwide, to improve the company’s material handling processes with new equipment and a strategy that significantly increased its bottom line. 4G quickly found itself handling thousands of tons of hard white and plastic-window envelopes. In a short time, the company added a large paper converter to its customer roster, and thousands of tons of unprinted solid bleached sulphate (SBS) board were processed through an air-trim removal system that 4G installed and financed.
Today, Brent says, deinking grades and pulp subs account for roughly 70 percent of the company’s overall paper tonnage.
2019 proved to be a historically low year for the recycling industry, specifically for high-grade recovered fiber. The brothers say they believe the decline in the high-grade market was largely because pulp markets lost 50 percent of their value. In light of oversupply and weak demand, pricing for deinking grades and pulp substitutes plummeted.
“Understanding high-grade paper and marketing substantial tonnage has helped 4G foster great mill partnerships that solidify 4G as the go-to supplier for top-quality high grades,” Brent says. “One mill may not be able to take SBS board, another may take only soft white. One might like autotie bales, and others might be OK with downstroke bales. We understand what mill customers need, and we provide the right supply for their products.”
“Today, our business is comprised of 70 percent fiber, 15 percent plastic, 5 percent metals, 10 percent solid waste and tertiary services,” Zack says.
Low-density polyethylene (LDPE) accounts for the bulk of the plastics 4G handles, Brent adds. “We receive this grade from retailers, grocery chains, distribution centers as well as other recyclers that come to us due to our marketing partnerships and logistics expertise with spotting equipment for lower volumes.”
4G sells the bulk of its recovered LDPE to reprocessors that sort out contaminants and turn the material into pellets that are used to manufacture containers, plastic bags and building products, he adds.
“Other grades that we buy a lot of are PET (polyethylene terephthalate) bottle and sheet, EPS (expanded polystyrene), HDPE (high-density polyethylene) natural and colored,” Zack says.
Keeping things moving
The company contracts directly with trucking companies to transport nearly 70 percent of the material it sells, Brent says, moving an average of approximately 200 trucks per day.
Many of 4G’s recycling partners that process its material also provide transportation services for the company.
Brent says, “We don’t want to own a single truck. It’s too many headaches, and we prefer to outsource our logistics to local trucking firms in each market, which enables us to provide service excellence in all market areas.”
“We made the decision when we started the company that we wanted to be nimble and innovative,” Zack says. “We provide incremental tonnage to recycling facilities that is processed at wholesale rates. This combined with 4G’s mill partnerships enable us to provide the maximum rebate structure for our clients. Our business model is based on economies of scale and generating the cleanest possible material.”
Brent says the last year has helped to illustrate how important it is to keep its customers’ tons moving, even when markets may not exist. “Like our industry peers, the market dynamics of 2019 created many challenges, such as maintaining movement with a reduction in available sales orders,” he says.
“We take our obligation to maintain movement for our suppliers very seriously and at one point we had 15,000 tons stored in our warehouses,” Zack says.
For example, 4G stored several clients’ groundwood scrap in its Savannah, Georgia, warehouse because demand for that material was nonexistent for a while last year. “We recognized that we had to keep servicing no matter what,” Brent says. “It’s how we run our business with the customers’ needs first. We view our partnerships over the long term, and we make short-term sacrifices when necessary to ensure business continuity for our customers’ operations,” he explains.
“It’s all about customer service,” Zack says. “We guarantee our suppliers movement regardless of market conditions.”
Prior to the COVID-19 outbreak, the movement of recovered fiber was on track to remain challenging throughout 2020, particularly on the West Coast, given the uncertainty with China and whether it really will ban recovered fiber imports in 2021 and because emerging markets lack the capacity to handle all the U.S. material that traditionally has been exported, the brothers say.
“The exception to these West Coast markets is high grades, which we feel will continue to gain stability due to an increase in demand from Mexico, partially related to the new USMCA (United States-Mexico-Canada) agreement and the global pulp industry stabilizing,” Brent says.
Zack says that while India had been increasing its recovered fiber purchasing off the West Coast, which was improving premiums and available orders, that changed with the COVID-19 pandemic. “India canceled all orders abruptly,” he says, noting that the country was locked down for three weeks as of March 24 to contain the spread of COVID-19. As of press time, that lockdown has since been extended to May 3.
The COVID-19 outbreak has added to the challenges that have been affecting markets. The outbreak, which is thought to have originated in China in December of last year, led to shipping container shortages in areas of the U.S. and reduced shipping capacity.
Brent says 4G’s strong financial position will help it weather the COVID-19 outbreak and other challenges in the recovered fiber market. “We care about our people and have a strong workforce,” he says. “We’re taking pay cuts ourselves to keep as many people employed as possible.”
“We have invested in our people to develop one of the best leadership teams in the industry,” Zack says. “We collaborate weekly on the state of the company and make smart decisions on what growth opportunities to pursue. We have hired business coaches to help mentor employees to be the best service provider in the recycling industry.”
Exploring its options
4G purchased its Deerfield Beach headquarters in 2018 after ensuring it was zoned for expansion. Brent and Zack say the site has additional acreage on which to build, something they want to do in 2021.
In addition to adding office space, 4G has plans to work with software developers to fine-tune its custom customer relationship management (CRM) tool and bidding platform, potentially licensing or selling the applications so its peers can benefit from these systems, Zack says.
4G worked with developers to create RecyclingBid.com, a bidding platform it plans to use for its large clients. Brent says 4G has beta tested the software with a client. Using RecyclingBid.com resulted in 4G’s customer realizing more than $1 million in increased revenue compared with the previous year.
“Other online bidding platforms don’t seem to understand the dynamics of the recycling industry and are too cumbersome and inefficient,” he adds.
Zack says, “We take great pride in being outside-the-box thinkers and pushing the envelope to maximize efficiency for our clients and internally.”
4G’s custom CRM software was developed to streamline the company’s sales process and internal workflow. “Our custom-designed system holds 4G’s sales team to a high level of accountability regarding their decisions,” Zack says.
In addition to these projects, Brent and Zack say they have not dismissed the possibility of growth through acquisition, whether by purchasing another scrap brokerage firm or even a recycling plant.
“We want to be 5G,” Zack says, referring to passing the business on to the next generation of Kirsteins. “We want to keep growing this business.”