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The fact that he was in the Big Easy was not lost on Steve Young of Allan Co., Baldwin Park, Calif., who was one of the keynote speakers at the Paper Recycling Conference & Trade Show in New Orleans this June.

Young told attendees that the title of his speech was “The Big Easy,” in reference to the “free and easy money” that fueled the fraud and accounting irregularities that both overheated the economy and then caused it to grind to a halt.

The president of the large-tonnage recycling company did not hide his disdain for executives who burned through the money of investors in the accounting scandals that have rocked corporate America. “We need to send the [convicted executives] of these firms to jail, and not for six-to-12 months. We need to turn them upside down and shake their pockets clean before we send them to jail,” Young stated.

Young made a prediction on Monday that turned out to be eerily accurate: “For a great many of our corporations today, the proper forms of disclosure do not exist. Watch our for more bond downgrades. These are signals that their businesses cannot support the debt load they are carrying.” The next day, officers of telecommunications company WorldCom disclosed $3.8 billion in accounting inaccuracies from the previous five quarters.

Concurring with fellow keynote speaker Dr. James Burke of SP Newsprint, Atlanta, Young portrayed the difficulties experienced by the paper industry the past couple of years. “The Internet is stealing classified ads from the newspaper industry,” he remarked. “The low prices of newsprint have made many mills non-cash flow positive.”

Domestic producers of the corrugated and kraft grades have also suffered in the past two years, although “we believe this market will improve,” says Young. “The picture going forward is bright, as domestic business will stabilize and improve.”

What has kept recyclers busy even through the domestic doldrums has been the booming Chinese market, according to Young. China’s per person consumption of paper products is expected to more than triple from 1990 to 2005, and in a nation of more than one billion people that signifies an incredible increase in the forest products industry.

To meet the demand new Chinese mills are being built, many of them consuming secondary fibers. China’s recovered fiber imports surged from 900,000 tons in 1995 to eight million tons.

Recyclers could still face a sluggish pricing market if U.S. mills continue to struggle, or if the collection of scrap paper in East Asia begins to increase to meet demand, Young warned.

Domestically, Young told attendees he does not see the trend toward single-stream processing being reversed, and in fact is hopeful that a national container recycling act can be introduced that will result in a national system to ensure that more containers are recycled.

In the meantime, “the profit streams of single-stream residential commodities cannot be ignored,” says Young. Allan Co. was among the first companies to adopt single-stream processing, and the company has been able to do so while staying in the black. “Currently all but two of our facilities, year-to-date, are turning a profit,” said Young, who noted that those two are the most recently acquired and are still being retrofitted.

But his message to recyclers in the Big Easy is that theirs is not an industry that can use accounting tricks to help live the good life. “Make no mistake, this is a tough, cyclical, non-cash-flow-positive, risky, low-return business. But I think we’re looking at a bright market for recovered fiber, and the demand from China helps make a marketplace that is not saturated with fiber.”