Recycling businesses’ profitability hinges on a multitude of factors. On the front end, factors include the quality and volume of inbound materials and the tipping fees charged for loads. On the processing side, labor, energy consumption, equipment and speed play into the equation. On the back end, price, demand, quality, transportation and residuals each affect the bottom line.
Tracking all of the factors that affect profitability is a step many material recovery facilities (MRFs) take, but gathering data doesn’t do much good without analysis and follow-up action.
Dr. Ramesh Srinivasan founded Eco-Catalyst in 2015. He established the San Jose, California-based software and consulting firm with what he says was “a goal to help MRFs and recyclers extract value from postconsumption materials in a financially sustainable way.”
Srinivasan, who has a Ph.D. in mechanical engineering and has spent the last 30 years focusing on energy and waste management, says recyclers are struggling financially for various reasons. Commodity pricing and changes in the incoming materials stream are just a couple of issues they are facing, he says.
“We decided to work with MRFs and recyclers to understand their issues and find solutions for them,” Srinivasan says.
After more than a year of working with a number of clients, including plastics recyclers, single-stream MRFs and mixed construction and demolition (C&D) MRFs, on a pilot of Eco-Catalyst’s Smart EOL (End-of-Life) software, the company is now ready to make the software more widely available.
The software includes a dashboard with inbound and outbound materials charts showing recyclables streams and real-time commodity price charts. Reports illustrate composition trends for the inbound and outbound materials streams by weight and by revenue.
“The whole idea is to help [recycling facility managers] make a number of operational decisions,” Srinivasan says. “One of them is pricing of both inbound material and outbound materials. Based on the information from the analytics module, including the cost of processing and commodities prices, they are able to determine what the inbound pricing should be that allows them to be profitable.”
For San Jose-based Zanker Recycling, Eco-Catalyst’s software has been helpful in tracking financial data, according to Michael Gross, the company’s director of sustainability.
“It is a lot better way of looking at your numbers and figuring out what your real impacts are going to be. It is a good way to show and represent what the reality of your business is.” – Michael Gross, Zanker Recycling
Zanker Recycling operates two C&D debris processing facilities that handle more than 2,000 tons of mixed materials per day on 72 acres.
Zanker’s recycling diversion rates were recently certified by the Recycling Certification Institute (RCI), a Sacramento, California-based certification body that uses independent third-party evaluators to verify the accuracy of the recovery/recycling rates reported by recycling facilities.
“Our diversion rates are very important to us,” Gross says. “I get down pretty good on what is happening with my materials.”
By going through the certification process, Gross says, he realized that things he thought were true regarding Zanker’s operations were not.
“Before RCI, we thought we knew exactly what was happening with our materials,” he says. “This whole RCI exercise ended up helping us really get our records down and know exactly what is happening with materials. We track and weigh things going off the site and track internally on the site where materials are going.”
The company now tracks 170 inbound and outbound material types. Gross recalls thinking, “All this great data was awesome, so what are we going to do with it?”
He says that is where the Eco-Catalyst software comes in. It takes material data and turns it into financial data.
Numbers into action
Zanker imports monthly inbound and outbound material data into the software. Gross says, while on the surface, the company’s financial statements could look rosy, “when you start putting material mixes in there and see how one type of material has an impact on everything else, you start to see these great big trends and see where your data is lacking.”
For example, if tin is a fairly consistent inbound material, and then all of a sudden it is off by 10 percent, Gross can look into what is causing that variation. It could be a miscalculation or some type of trend in the industry.
Gross says the software can show him “what we’ve done in the past, where we are going now” and projects “out in the future what our impacts are going to be.”
Biomass is of particular concern to Zanker Recycling. Gross says the company made some projections with the data it entered in the software. With the large number of biomass facilities shutting down in the state coupled with dead trees from drought and related disease, Zanker determined it needed to raise its rates to keep its volumes at a manageable level.
Gross says using data from the software has allowed the company to make more informed rate increases.
“It is a lot better way of looking at your numbers and figuring out what your real impacts are going to be,” he says of the software. “It is a good way to show and represent what the reality of your business is.”
Explore the August 2016 Issue
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