Much more than paper

Late July marked the passing of a new law in France, the Energy Transition Law, calling for decreases in greenhouse gas emissions, landfill tonnages and the use of fossil fuels, along with an increase in the use of renewables for energy production.

It’s all welcome news for Paprec Group, based in Paris, a full-service recycling company that has focused its work on creating a second life from postconsumer and postindustrial material streams over incineration or landfilling. The company says it is the country’s No. 1 recycler when it comes to such streams as paper, cardboard and plastics, considering the volumes of these streams the company is handling. But there’s far more than that: Over the years Paprec has added electronics, battery and construction and demolition (C&D) recycling services as well.

At a time when postconsumer and postindustrial material streams in France can often be pulled toward landfill or incineration, Paprec has worked to focus instead on the business of producing raw materials from these streams.

Toward this end, the €900 million company made news earlier in 2015 as the first subinvestment grade French company to issue a Green Bond. The €480 million bond, issued in March, was heavily oversubscribed, according to the company. Those issuing green bonds promise to invest the funds on environmentally friendly and sustainable projects.

“This transaction gives Paprec the financial resources that will allow the group to continue the growth and expansion strategy that it has experienced over the last 20 years,” said Jean-Luc Petithuguenin, founder and chairman of the company, when the bond was issued.

That the company should have such impressive investment plans seems to continue the theme set up over the past 20 years, when Paprec built upon a history in paper and board recycling to offer a full gamut of recycling services across the nation and beyond.
 

Humble beginnings

Sébastien Petithuguenin, general manager of Paprec Group and Jean-Luc’s son, points to the company’s history and focus in comparison to major French competitors Veolia and Suez Environnement.

He also says France’s new energy law should bode well for companies like Paprec, which processes some 6 million tonnes of postconsumer and postindustrial materials each year.

“The switch we are seeing in the market is that more and more waste producers want to switch from the old ways to recycling,” he observes.

Both Sébastien and Jean-Luc continue to uphold the belief that the share of recycling activity in France versus incineration is growing, and Paprec is positioned to capture that growth.

Sébastien says the energy transition law, approved in July 2015, calls for drastic reductions in greenhouse gas emissions in the coming years.

“One of the key features is that we want volumes going to landfill to be cut by half in 10 years’ time,” Sébastien says. Thirty percent of that cut, he adds, is expected to be achieved within five years. This amounts to 10 million more tonnes recycled annually within the decade.

Paprec has been focused on recycling since its very beginnings. Sébastien relates how in 1994, Jean-Luc was managing director of the recycling and industrial cleaning group La Compagnie Générale des Eaux, now known as Veolia. He was charged with handling La Compagnie Générale des Eaux’s acquisition of a small paper and cardboard recycling company called Paprec, with 45 employees, one factory in La Courneuve and sales of €3.5 million ($3.8 million).

After the acquisition, La Compagnie Générale des Eaux promptly decided the paper recycling company was not in line with its mission, causing Jean-Luc to consider other options.

“They asked him to sell it,” Sébastien explains. “He decided to move forward and buy it for himself.” And so the elder Petithuguenin would reinvigorate a business while remaining true to its core strategy of sorting and selling marketable discarded materials. Business has grown steadily for Paprec since 1994, which at first handled just a half million tonnes of recovered fibre per year.

“Now, more than 20 years later, we are 4,000 people and about €900 million turnover,” Sébastien says. The company hopes to reach €1 billion in sales in 2016.

“The story of Paprec is that recycling is an excellent solution,” he says. The company added new sites pragmatically over the years. “We decided to create sites or take over companies when we thought it was a good opportunity to provide recycling in those areas,” he says.

Over the years Paprec has purchased more than 60 companies in order to consolidate activities, broaden services and extend its footprint. Today it operates just over 80 processing and collection sites located strategically throughout France, each serving a radius of about 200 kilometres. Twenty additional sites offer collections and logistics services.

“From this basis we can collect [materials] in both France and Switzerland,” he says, explaining that the company has coverage in most of both countries.

“What we tried to achieve is a very national, wide coverage with enough sites,” he says. Because Paprec has aimed to be a one-stop supplier offering both waste management and recycling, he says, “It was important for us to be able to answer demand.”

A related strategy was being able to offer recycling services for all the materials collected. Sébastien explains how Paprec’s industrial accounts, which generate a combination of board, mixed industrial materials and plastics, sought recycling solutions for all of this material. Along the way the company also added electronics and battery recycling, and the processing of C&D materials such as wood and aggregates.

Over the years the company has continued to look for opportunities to either open or acquire waste and recycling companies. As such Sébastien says, “every site has its own story.”

One of Paprec’s largest acquisitions was the 2010 purchase of ISS Environment, the French waste and recycling division of ISS Group based in Denmark, an industrial cleaning services company. The division, now known as NCI Environnement, added some 800 employees to the company. Today NCI employs over 1,000 people across 10 divisions and more than two dozen sites and has sales of around €100 million.

In 2014 Paprec acquired Desplat, a recycler of ferrous and nonferrous metals based in the Burgundy region. The company is more than 100 years old, Sébastien says, and operates three sites in the South of France: Châlon-sur-Saône, Dijon and Auxonne. The subsidiary continues to focus on metals recycling but also processes paper and household waste.
 

Dedicated to sorting

Sébastien says that of the 6 million tonnes of materials Paprec collects each year, about 1 million tonnes cannot be recycled but is either landfilled, incinerated or processed into about 50,000 tonnes of refuse derived fuel (RDF). The largest recycled volume, at 2 million tonnes, is recovered paper, with the remainder split between plastics, metals and wood.

Sébastien says some Paprec processing sites can handle mixed industrial and household waste, while others are dedicated to specific streams. A dozen Paprec facilities handle plastics, seven are dedicated to electronics and 20 others focus on the recycling of ferrous and nonferrous metals. Paper, board, plastics and glass are processed at more than 50 “core business plants.”

Households in France are required to sort their waste and recyclables into three bins supplied by municipalities, Sébastien explains: glass; plastics, cardboard and packaging; and organics and nonsorted waste. Sébastien says the streams become the major material flows handled by its core facilities: glass and the combined board and packaging materials. Organics processing, offered on a limited basis, will be a future focus, Sébastien says.

Meanwhile, industrial accounts can elect to contract with Paprec for both collections and sorting or have collections carried out by the municipality. While most of Paprec’s services focus on processing, the company does operate a fleet of 1,200 collection trucks.

Sébastien says that many of Paprec’s newer sorting operations use the latest automated technologies, including ballistic separation and numerous stages of infrared automatic sorting equipment. This year the company inaugurated its newest sorting plant in Nimes, which has a processing capacity of 40,000 tonnes per year. Another new automated sorting facility will be opened in 2016 in the west of France, Sébastien says, offering a capacity of 68,000 tonnes per year.

This trend toward more automation has been implemented across many of the company’s plastics recycling facilities in particular. “This is the area we have developed specifically in the last five years,” he says, “and I think that we are still developing specific processes.”

Paprec’s joint venture in Limay, France with the SITA division of Suez Environnement is one example. The plant is dedicated recycling polyethylene terephthalate (PET) and the production of food-contact-grade PET pellets.

The company also has developed a polyvinyl chloride (PVC) recycling system that produces PVC approved for use in window production.

“Our resin was the first recycled resin authorised for that,” Sébastien says.

Currently the company is working with equipment supplier Pellenc of France to develop a new machine called Boreas, promising the ability to separate board and paper. Sébastien says the machine is being implemented in newer sorting plants, including the Nimes facility. And Sébastien says Paprec was the first in France to create a dedicated C&D sorting plant using a combination of trommel screens and heavy media plants to separate inert materials from sand, wood and gypsum.

“Again, it’s a combination of several technologies to be able to process construction [materials],” he says.
 

Trade balance

Overall Sébastien says there is strong demand for Paprec’s products. Much of these raw materials remain in Europe, however linerboard mills in China and Asia continue to be large consumers of low-grade paper and board.

“They are producing very huge volumes of board to pack with what they produce for the world,” he says.

Sébastien also describes a global balance of consumers purchasing Paprec’s commodities. “Although we are addressing different markets, we are offering raw materials in the world economy with customers around the planet.”

Looking to the future, Sébastien says France has not yet logged the recycling rates seen in some other European regions, such as Scandinavia and Germany. He points to the country’s historically lower landfill taxes as key factors. France charges about €15 per tonne, compared with €120 per tonne in the Netherlands and £70 per tonne in the U.K., he observes. However the new energy law could change all of that.

Toward that end, Paprec will push ahead with investments slated for the coming years, thanks in part to the hundreds of millions of euros in green investment funds that are coming its way. Sébastien has identified organics processing and anaerobic digestion among the technologies to be pursued.

“What we have in France are still a lot of opportunities to make the market grow,” he says.

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