Service on Tap

A variety of circumstances make Pratt Industries (USA) a noteworthy contestant in the
competitive corrugated box and paperboard industry. According to Jeff Kibler, executive vice president of the company’s Pratt USA Recycling Division, Conyers, Ga., Pratt’s Australian parent company Visy Industries is "the world’s largest privately-owned paperboard company" and has been family-owned since being founded by Leon Pratt in 1948.

The company has also pioneered several techniques for using a mixed, secondary fiber stream as feedstock, and has served as a model of how to set up its own collection and supply chain to procure that stream of scrap paper.

RECYCLING ROOTS. The long-time commitment by the Pratt family to the use of recycled materials can be traced back to the company’s first corrugating machine, which was built in 1948 using scrap metal parts.

In the subsequent five-and-a-half decades, Visy Industries, Melbourne, Australia, and its subsidiaries have made sustainability and recycling key parts of their mission and operating methods. Currently, some 1.35 of the 1.6 million metric tons of containerboard produced annually by the company is made from 100 percent recycled feedstock.

Current corporate chairman Richard Pratt, Leon’s son, took over the reins of Visy Industries in 1969 and has overseen the company’s growth from one with $5 million in annual sales that year to one with $2.2 billion in sales by 2001.

At the same time, the word "recycling" remains in the company’s 24-word mission statement, and its commitment to recycling has brought it into additional segments of the industry beyond mill supply. (See sidebar, "Global Reach.")

The recycling ethic has taken hold within the U.S. operations, known collectively as Pratt Industries (USA). This division is chaired by Anthony Pratt, Richard’s son and Leon’s grandson.

Text at the U.S. subsidiary’s Web site (www.prattindustries. com) states, "At Pratt Industries, we ‘harvest the urban forest,’ because we are fully committed to recycling and the environment."

The Pratt USA Recycling Division collects more than 700,000 tons of scrap paper each year, with much of the collected material specifically prepared for shipment to the company’s two U.S. mills in Conyers, Ga., and Staten Island, N.Y.

Kibler describes Pratt’s U.S. operations as "fully integrated," with the result that a clear line can be traced from a small collection container at a modestly-sized retailer in suburban Atlanta to a finished corrugated box leaving the Conyers mill the next county over.

This same supply and manufacturing chain is duplicated in New York City and surrounding communities to supply the Staten Island mill.

The mill complexes themselves are more fully integrated than operations at many other containerboard plants, with Pratt Industries coining the term "millugator" to describe how scrap paper is turned into a finished box at the same manufacturing complex. "With the ‘millugator’ concept, material goes from recovered fiber to finished box in one-and-a-half hours under one roof," says Kibler.

While the Conyers and Staten Island mills are the centerpieces of Pratt Industries (USA), the mills are far from stand-alone operations. They are supported both by a series of additional corrugating and box-making plants on the finished product side and a network of recycling plants and collection sites on the feedstock side of the equation.

THE HARVEST. An outsider viewing the paper industry may think that procuring scrap paper to feed a mill would be an easy task, amounting to collecting a fraction of someone else’s discards.

Industry insiders, however, are aware of the attention that must be paid to collecting sufficient tonnage in an environment made increasingly competitive by demand for scrap paper from mills both inside and outside the U.S.

The growth of the paper industry in China, in particular, has strained the limits of U.S. scrap paper supply in the past three years. "It’s a very competitive market," Kibler acknowledges.

But he also notes that Pratt has "brought some unique factors into play" to keep its supply lines open and productive.

The company has gone straight to paper generators with its "developer program," which keys in on smaller retail and office customers who may grow steadily into larger scrap paper generators.

As part of this program, Pratt supplies a baler (often a smaller, vertical model) and retains ownership of the machine. Customers are not charged a flat fee for either use of the baler or for pick-up of material. "If customers don’t produce a lot of tons, they may incur a charge. We’ll pay them for a high amount of tonnage, but they’ll pay us if they’re not reaching a certain level," notes Kibler.

The program has helped Pratt stay in the game in the increasingly competitive chase for old corrugated containers (OCC), a benchmark grade in high demand by both domestic and overseas buyers.

An advantage for Pratt in the U.S. market has been the use of its innovative pulping and screening technology from Australia, which allows it to use mixed retail and commercial paper grades when OCC is hard to find. "We basically have put technology in our paper mills that allows us to take this material without sorting," says Kibler. "When it comes into our recycling plants, we bale it and ship it."

The company has also been pleased with the response to its "Anything That Tears" program for commercial and retail generators. Kibler says the program places eight-yard boxes intended to collect any and all scrap paper produced by retailers, light manufacturers or other businesses. "We decided we needed to make recycling as easy as possible," says Kibler. "We can go into the marketplace and call on any business with this program."

Although mill technology and innovative programs can offer advantages for Pratt Recycling, providing good service is still a key to success in procuring material.

"We basically sell service—we must go out and take care of the service," Kibler remarks. "We have to be there to keep the containers empty."

The nature of the small-to-mid-sized generator stream Pratt reaches also means routes must be coordinated carefully. Kibler says the trick is to amass customers within targeted, dense retail areas. "If you call on enough businesses, you densify the routes pretty quickly," he comments.

GOING WITH THE FLOW. In its 15 years in the U.S., Visy Industries has enjoyed steady growth. Starting with the acquisition of a single paper mill in Macon, Ga., in 1989, the Visy U.S. operations—renamed Pratt Industries (USA) earlier this decade—now consist of the two integrated mills in Georgia and New York as well as 26 box plants in the U.S.

On the recycling side, the company operates nine collection facilties in the Southeastern U.S.

Even with its attention to procuring its own supply of fiber, Pratt Industries must also monitor recycling collection and processing methods of other companies that supply material to its mills.

That means that, much like other mill companies, Pratt has watched developments in single-stream collection and processing carefully.

Kibler notes that major single-stream processors, such as the RecycleAmerica Alliance division of Waste Management Inc., Houston, are on their "third or fourth generation" of single-stream processing technology, and that the improvements are noticeable.

"I think paper mill operators must address the single-stream collection concept," says Kibler. With Chinese buyers continuing to place significant orders for American scrap paper, the overall tonnage collected must grow. "We need to continue to expand the technology. Mills are going to have to handle this material. It’s here to stay, so let’s find a cost-effective way to handle this material."

FUTURE ENDEAVORS. Visy Industries has remained a viable family-owned competitor in an era of paper industry consolidation and mergers.

Although it does not have access to stock market financing, the company has continued to make acquisitions to give it the heft it needs to compete with its publicly financed counterparts.

The Pratt Industries (USA) division has enjoyed some recent successes in the form of important box supply contracts to Ford Motor Co. in Michigan and to cargo shipper Federal Express and vinyl siding manufacturer CertainTeed.

Kibler believes the desire to innovate ingrained at Visy and Pratt is a built-in advantage that will continue to help the firm. "If you don’t have that entrepreneurial spirit, pretty soon you stop trying, and it gets to be very frustrating," he says. "But to have the mill technology that we do allows us to try new things, and the mill is very supportive. This company embraces trying new technologies and new ways. If we can make a quality product from it, this company is willing to try new fiber streams."

For Kibler, the advantage of working for a family-owned company (even a multi-national one) is enormous. "Everybody is entrepreneurial here," he remarks. "Our motto here is, ‘Status quo just won’t go.’ We’re all pushing the same rock up the same hill. It is stressed from Anthony Pratt on down that we’re here to provide a quality product and to be profitable while we take care of our customers and our suppliers."

The author is editor of Recycling Today and can be contacted via e-mail at btaylor@RecyclingToday.com.