With weak market conditions and low prices, 2019 has proven to be a rough year for recyclers looking to move recovered fiber. Old corrugated containers (OCC) prices slid steadily from January to June, hitting a near 25-year low of $25 per ton that month. U.S. mixed paper prices have been hovering around zero dollars per ton since April 2018, and export demand for that grade hasn’t been great since China backed out of the market.
However, signs of improvement are on the horizon. Domestic demand for recovered fiber could rebound in a couple of years as many companies have announced domestic mill projects in 2017, 2018 and 2019. One of those projects announced in 2017 is Conyers, Georgia-based Pratt Industries’ construction of a new containerboard mill in Wapakoneta, Ohio. The mill is slated to open this month, and the company says it will consume about 400,000 tons of recovered fiber annually once it’s fully operational.
The company also operates a recycling facility just 2 miles away from this new mill. That facility will provide some recovered fiber to the mill; however, a majority of the mill’s furnish will come from other sources in the Midwest.
What sets Pratt’s containerboard mill investments apart from others is its unique ability to consume mixed paper.
According to Pratt Industries, the company selected the Wapakoneta site for its containerboard mill because it is centrally located to its box plant and sheet plant network. The company says the mill will support the hub-and-spoke business model that Pratt Industries Global Chairman Anthony Pratt has used with success throughout the company’s history. The Wapakoneta mill also sits in the heart of the Midwest with access to more than 45 million people who generate recovered fiber that can be used for the mill.
All of Pratt’s containerboard mills have the ability to consume mixed paper, and Pratt Recycling President Shawn State says this factor alone sets the company apart from other paper mills. “We’re unique in that we’re the largest consumer of mixed paper in the country because we have the newest technology in our mills,” State says.
He says Pratt ensures the mixed paper coming from its vertically integrated material recovery facilities (MRFs) meet its standards. He adds that the company operates 18 recycling facilities that provide a large percentage of the feedstock to its five paper mills.
While Pratt’s recycling operations can ensure better movement of its recovered fiber because of its connection to Pratt mills, State admits this year has been difficult for all recyclers.
“In every region, commodity prices are low,” he says. “Recyclers are having a tough go of it all over the country. Pratt Recycling is in a much better position than some of the recyclers who are not vertically integrated. Other recyclers are trying to make a profit based on their costs and commodity prices, which we do the same, but when conditions are as difficult as they’ve been, we know we will still be here to operate because we still have to supply our mills, whereas some of the other recyclers that don’t have vertical integration have struggled.
“Now, I don’t think it’s all doom and gloom,” he continues. “There are some upgrades to paper machines in the U.S. occurring now. Some mills are doing conversions that will enable them to start running recovered fiber and/or run more recovered fiber than they have in the past. There are announcements of new mills starting up and idled mills being purchased. Capacity is going to come to the U.S.—that is going to affect the market and help drive commodity prices back up, but I think it’s going to take a little bit of time.”
Using recycled materials is key for Pratt Industries: It’s something that the company has prided itself on since a few years after Chairman Anthony Pratt brought the company to the U.S. in the 1990s.
Pratt entered the U.S. market in the early 1990s when it purchased a kraft paper mill in Macon, Georgia. (It sold that asset more than 20 years ago.) Shortly after that acquisition, Pratt bought JetCorr and Georgia Box Group, local corrugators and converters in the Southeast. In 1995, the company built its first 100-percent-recycled paper mill in the U.S. in Conyers.
Since the mid-1990s, Pratt has operated a number of paper mills, recycling facilities and box plants to ensure it has a vertically integrated company with the ability to grow and expand its presence in the U.S. “Our recycling facilities support our mills, the mills support the box plants and the box plants support our converting operations,” State says. “One of our competitive advantages is our ability to ‘close the loop.’ We will collect recovered fiber (boxes) through our recycling network and then take that box that Pratt made and turn it into another box that [customers] can buy that Pratt made. It’s kind of like a circular economy within the company.”
Pratt Industries has launched five 100-percent-recycled paper mills, with locations in Conyers; Staten Island, New York; Shreveport, Louisiana; Valparaiso, Indiana; and Wapakoneta. It also has opened 18 recycling facilities across the U.S. The company also operates a total of 54 corrugated box plants and converting facilities, which ensure Pratt Industries is vertically integrated.
The Conyers MRF, near Atlanta, is Pratt’s newest recycling facility, which was built four years ago. State says it’s also the company’s largest MRF and handles residential recyclables from the city of Atlanta, DeKalb County and the surrounding area. He says 9,000 tons of curbside collected recyclables run through the MRF monthly.
“There was a need for a facility in the Atlanta market,” State says. “We also need the fiber supply for our paper mill in Conyers, and it made sense to place it right next to the paper mill for the cost reasons. There’s essentially no freight from the MRF to the mill.”
Because of the size of the Conyers MRF, the company also invested in “state-of-the-art” technology for the facility. State says the MRF features optical sorters and ballistic separators. He adds that the company is working to install more optical sorters and robotics in the first quarter of 2020.
Getting the word out
Beyond helping the recycling industry by consuming recovered fiber, Pratt has taken steps to work with municipalities to clean up residential recycling streams and debunk recycling myths circulating in mainstream media. Michael Altobelli, Pratt Northeast region recycling vice president, says there has been “so much negative press … about recycling and the recycling crisis” in the last year, which has led to confusion in municipalities among residents.
To address some of the confusion in New York City, Pratt Industries launched the Manhattan Paper Challenge this summer. From July 1 to June 30, 2020, the 12 community boards in Manhattan will compete to see which board can achieve the highest increase in its paper recycling rate. The top three community boards will receive grant prizes each quarter, and an annual prize will be awarded to the top three boards next summer.
The initiative aims to increase paper recycling participation in Manhattan. Altobelli says Pratt wants to see the amount of paper recycled in Manhattan increase as result of the initiative.
New York City supplies about half of the material that Pratt’s Staten Island mill consumes, so Altobelli says it’s important that residents know the guidelines for recycling and about the need for recycled paper at Pratt’s mill in New York City.
“New York City is fortunate to have a paper mill in its city that can consume recovered fiber and to not have the same problem that many other large municipalities have today,” Altobelli says. “Pratt has a mill here using the majority of municipal mixed paper. New York City has a sustainable program and recognized how important it was to partner with an end user.”
Since opening in the late 1990s, Pratt’s New York City paper mill has produced more than 7 million tons of 100-percent-recycled paper. “We continually invest in educational programs in NYC, such as the Manhattan Paper Challenge, to ensure NYC residents are aware that the paper recycled right in this city is a valuable resource and is used to create high-paying green-collar jobs right here in the five boroughs,” State adds.
State has been working at Pratt Industries for the past 19 years, and he started working for the Pratt Recycling division about 12 years ago.
He says Pratt has a fast-paced, entrepreneurial culture that’s focused on growth, with Pratt Industries doubling in size about every five years.
“Capacity is going to come to the U.S.—that is going to affect the market and help drive commodity prices back up, but I think it’s going to take a little bit of time.” – Shawn State, president, Pratt Recycling
The company also has expanded its geographic footprint. Last year, Pratt Industries expanded to the West Coast when it opened a corrugated plant in central California after acquiring Robert Mann Packaging. Today, Pratt Industries has 70 factories in 27 states and 9,000 employees.
Pratt Industries Global Chairman Anthony Pratt says he firmly believes in the future of American manufacturing. In 2017, he pledged to invest $2 billion in the USA over the next decade to create 5,000 jobs, mainly in the Midwest. Since then, Pratt has invested about $800 million and is ahead of schedule on this commitment.
The company says Pratt also believes that America is over-packaged in comparison with Europe and Australia, which is why Pratt Industries’ mills specialize in producing lightweight liners and mediums to make boxes lighter yet just as effective as those made with heavier paper grades.
Since China backed out of the U.S. recovered paper market, State says Pratt has had the opportunity to consume more mixed paper and OCC.
“Mixed paper predominantly comes from households and curbside collection, so we’ve been able to consume material that others haven’t been able to consume,” State says. “That in turn has helped keep curbside programs going. It has to have a place to go.
“When Southeast Asia started clamping down on quality and cut off mixed paper from coming into their countries, Pratt was the go-to recycler and paper mill for these folks that had mixed paper that was generated from curbside systems.”