D.J. VanDeusen began his career in the paper industry in 2011. He served as director of business planning for RockTenn, Atlanta, at the time of the company’s acquisition of Smurfit-Stone Container Corp., Chicago. In 2014, he advanced to the position of vice president of commercial operations for RockTenn.
Following that company’s merger with MeadWestvaco Corp. in 2015, the newly combined company took the name WestRock. Shortly after the merger was completed, VanDeusen was named to the post of senior vice president of recycling.
VanDeusen says it has felt “somewhat like drinking from a fire hose learning this industry in the last seven years,” but he is quick to add that he can’t imagine himself doing anything else. “People who find their way into this industry tend to stay.”
WestRock’s recycling division is responsible for securing 5 million tons of recovered fiber for the company’s mills annually. Van- Deusen says less than 1 million tons come from WestRock’s physical recycling facilities, with the remainder coming through its trading and brokerage activities. WestRock’s mill furnish is “heavily OCC (old corrugated containers),” VanDeusen says, adding that the OCC grade accounts for 80 percent of the company’s total recycled fiber furnish at its containerboard mills.
As the domestic recycling landscape changes in response to China’s recovered fiber import policies, WestRock has looked to other sources of recovered fiber, including paper food service packaging.
In the Q&A that follows, VanDeusen shares his thoughts on how the paper recycling industry has evolved during his time in the industry and why WestRock announced its intention earlier this year to begin accepting food service packaging.
Recycling Today (RT): How has WestRock’s business evolved during your time with the company, and how has paper recycling and papermaking changed?
VanDeusen: We are at our core a paper and packaging company. While the recycling business is critical in providing 5 million tons of paper to our paper business, we also play a significant role in our product sustainability and working with the product managers as we’re developing new products.
Some of the things that have changed in the time I’ve been here is that it feels like there is such a push for more things to be added to the residential recycling stream that probably in a vacuum are absolutely recyclable and do have value. But the collection process, the sorting equipment and then the end market for that material all put some real constraints on that because it’s still fundamentally based on capitalism. There needs to be an economic market for what is being captured out of the streams so that those processors have a way to make a little bit of money while they’re doing it, while the municipalities have a way to not add costs to their recycling programs and realize some additional value.
We’re supporting our primary interest as a company to make packaging products that are sustainable and responsible and, then, how do we ensure that they’ll truly be recycled.
There have been moments of volatility in the past, but it has been an incredibly volatile marketplace almost since the time that I’ve been in this industry. A lot of that obviously is a result of all the actions China has taken and because of their significance in the global industry for recovered fiber. Actions they take immediately impact the global market.
We have a primary responsibility in the recycling division to supply those 5 million tons of fiber to our paper mills at the lowest cost and right quality and set up supply chains and methods to be able to fiber those 27 mills at a time of great volatility, and that has been a significant challenge.
We are not a huge exporter of material. We obviously participate in the export market with the roughly 3 million tons that we have in excess material, but the bulk of that material is traded or sold domestically with partners that we have. The global economy is something that obviously directly impacts our paper mills and impacts our ability to market and sell the fiber that we do control or produce at our recycling plants.
The other thing that’s changed dramatically in the last year is the incredible inflation with transportation, so being able to secure fiber for our mills closer and closer to the paper mill is critical. When you think of the value of a truckload of recovered fiber, the transportation cost is such a pacing item.
We are really looking at our complete supply chain to ensure that we are doing the best we can to minimize the cost of transportation. I think it’s impacted the industry in general because what used to be a radius of 300 or 400 miles probably doesn’t work anymore; it continues to shrink, which starts to make recycling markets domestically even more localized. It’s one of the many reasons that we do a lot of work with The Recycling Partnership, and the big reason for that is we operate 22 recycling facilities, not all MRFs (material recovery facilities), but recycling facilities that are basically there for the purpose of creating secure low-cost, consistent fiber for our paper mills.
RT: What prompted WestRock to begin accepting mixed paper bales that contain paper food service packaging, and what kind of investments did you need to make to do so?
VanDeusen: We sit firmly in one camp because we believe in its recyclability and reusability within the process, but the volume of material available and how you make it fit [in the recycling stream] is something that I think a lot of folks wonder about.
We had been contemplating [adding food service packaging] for a number of years; that was something that had been in the works. And then, last year, we ran successful trials on our poly-coated material to ensure that through normal, continuous pulping operations we could extract the fiber. Those went extremely well. So, that was sort of validating that, without having to make significant investments at the mill level, that material was going to be, one, pulpable through the normal process, and, two, that the contamination levels weren’t dramatically changing. Those were the two biggest things we needed to validate that led us to work with the city of Chattanooga, Tennessee. That was our first big effort.
We have a paper mill in Chattanooga, we have converting operations in Chattanooga and we run a single-stream MRF in Chattanooga, so WestRock has a significant presence in the city. We didn’t make any significant investments at our MRF to collect it. The equipment that we had allowed us to successfully extract it from the stream we were collecting and then that led us to the announcement that across our paperboard mill system—so the eight mills that are on the paperboard side of our business—that the mills will accept that material.
That doesn’t mean that immediately food service packaging materials are going to be included in mixed paper or sorted office paper bales that are showing up at those locations. We just announced our willingness to accept them. Now, as we work through and expand on what we’ve done in Chattanooga and expand on what we’ve done in Louisville, Kentucky, can we do something similar in the Twin Cities in Minnesota? The key to that is going to be developing programs at the grassroots level with education in those communities to allow the materials to be collected responsibly so that they ultimately end up being delivered to one of our paper mills.
Primarily, food service packaging is going to mixed paper. In a commercial setting where the likelihood is that that food service packaging cup would end up in a paper recycling bin, there is a potential that that ends up part of sorted office paper (SOP). We expect that the majority of it will come through mixed paper in the residential stream.
As part of our core role as a paper packaging provider, we produce a lot of different forms of food service packaging products. So, in order to close the loop on that product, that’s part of our reason for the emphasis on the education and processing it through our facilities and accepting it at our mills.
When we started, we weren’t sure if there was going to be an investment required in cleaning equipment or sorting equipment. What we found is that the investment dollars that we’re spending are really on the education side. That’s making sure the inbound stream supports all the things we know we can do once we’ve got it.
And the food service packaging stuff—the hot cups—it’s great fiber. It’s a long, strong fiber. And even though it’s got a poly-coat or otherwise, even with the extraction process of removing the polymer coating, we’ve seen that it’s actually a yield pickup on mixed paper.
I think the challenge has always been the broader market and the willingness of many to accept that material is what ultimately determines its fate. It’s great to know that there are eight WestRock paper mills that will accept it. We hope we are the start of a surge of people that realize the benefits of accepting it. But we also realize that if those are the only eight mills in the country to accept it, it will continue to be a challenge for processors and collectors to make it make economic sense.
RT: How will the changes that are being made to China’s scrap import regulations affect paper recycling and papermaking in North America?
VanDeusen: A fundamental shift appears to be occurring from the standpoint of what grades of recovered paper are being consumed where [globally].
Historically in the U.S., the OCC 12-like material—the grocery, retail, high-quality OCC—was a staple foundational volume for furnish for U.S. mills. And the MRF-recovered fiber material was being exported to China.
Now, with all the quality and contamination requirements in China, it’s very difficult for MRF material to meet that spec. That traditional U.S. mill supply chain of grocery and retail volume has now become extremely attractive to the paper mills in China and is being shipped there. And the U.S. mills are having to adapt to potentially accepting more MRF material.
Will there be investments required in U.S. mills to handle the material? I don’t believe so because I think the recycling industry is taking a lot of steps to really clean up the output of that material. So, there’s an overall lift.
I think we’ll all be better for what China has put in place. It’s just incredibly disruptive right now.
We’re seeing the Chinese papermakers investing in mill assets or pulp producing assets here in the U.S., so there’s an increase in demand for recovered fiber in the U.S. that’s not just to make paperboard or containerboard.
Potentially, as the demand for recovered fiber decreases from China based on their restrictions and pending ban on imported material, activities in the U.S. are going to replace at least some of that lost demand in China.
I think the big question that everybody has is how is China going to secure enough recovered fiber to meet that demand when potentially 10 million tons of fiber that were being imported aren’t going to be at some point. I think the papermakers in China have the same question. I don’t think anyone has an answer to that yet.
RT: Why is it important for WestRock to help fund The Recycling Partnership? What other recycling-related initiatives does the company support?
VanDeusen: We are working with The Recycling Partnership in the communities that we serve to help improve the inbound quality of material to ensure that material that has value in the recovered fiber market is being allowed into the stream but done responsibly. So for us, while we have to act as a global company, our ability to really act in the communities where we have recycling facilities, where we have paper mills, The Recycling Partnership has been one avenue for us to help, one with education, which is incredibly important, especially when we’re talking about allowing new material into the stream, but just in general for the pure quality of the inbound material.
There’s a lot of discussion today about how processors can produce higher quality output, and at its core there’s a limitation to what you can actually sort. The real answer to that dilemma is going to be improving the inbound feedstock to those facilities and education is the [way to do that].
Education is hard because it requires a significant investment and it takes a little while to see the results. But in the communities where we have worked on that, where we have made a specific effort—in Chattanooga, specifically, where we allow for the addition of food service packaging, we have not seen a degradation in the composition of the material we received at that facility. But the allowance of food service packaging into the stream was almost like a secondary message: This is how you recycle. Oh, and by the way, you can put food service packaging in there. I think because education was upfront, it wasn’t about putting food service packaging into the stream, see how it goes and then we’ll try and educate people later. Before they were ever told they could do it, they were receiving education on the broader recycling program. That potentially is a model we’re looking to replicate.
We accept food service packaging in Louisville, Kentucky, where we run a large MRF. And it is the same concept there: educating to allow for really important fiber for our mill system to enter the stream properly.
I think we’re seeing brand owners, the packaging producers and the recyclers/waste haulers starting to work together more frequently on the challenges that we all face, whether it’s in product development or once a product is out there.
Obviously, we’re an active member of the recovered fiber sector of AF&PA (American Forest & Paper Association, Washington), so that is another platform for us to help shape where the investment dollars will go and how we address education and policy around it.
If we’re going to actively support the inclusion of the material that we produce as a paper and packaging company and that we want for consumption at our paper mills, the third leg of that stool is to make sure that we are helping with the education piece so that we’re not wishful recycling; we have responsible recycling. I think we’ve realized that part of our strategy has to account for the requirement for educational investment.