WMI Creates Recycling Alliance

Rumors have been bouncing around the marketplace over the past several months over big changes to Waste Management's recycling division. While various sources noted the possibility of selling its recycling division outright, the result was a move to spin off its recycling business into a consolidated subsidiary. At the same time, the newly formed company has combined its business with one of the largest privately owned recycling companies in the United States.

The newly formed organization, Recycle America Alliance, has been created to optimize the capacity and improve the profitability of the company’s recycling line of business by combining assets and operations with a number of other key domestic recycling processors and marketers. Recycle America Alliance will be a majority owned and consolidated subsidiary of Waste Management, Inc. The newly formed alliance will not be a spin off. Rather, the company will be a consolidated subsidiary of Waste Management.

Waste Management also announced that the first partner in the alliance is The Peltz Group, based in Milwaukee, Wis. Peltz handles more than 2 million tons of recovered fiber a year.

“We see this alliance as a great opportunity for Waste Management and other premier recycling processors and marketers to join together to improve efficiencies at their facilities and strengthen their marketing efforts,” said A. Maurice Myers, chairman, president and CEO of Waste Management. “We anticipate welcoming other important recycling processors into the alliance during the coming months, and we are very pleased to have The Peltz Group  - a     company with a long history of integrity and value – as an initial partner.”

“By combining operations, including both facilities and personnel, we believe we will be able to increase capacity utilization, in part by rationalizing our facilities. The recycling industry is still very fragmented in the United States, and processing capacity far exceeds demand,” said Steve Ragiel, vice president of Recycling for Waste Management. “This alliance reinforces Waste Management’s commitment to leadership and innovation in the recycling business, and it is expected to assist us in providing the best and most comprehensive recycling services to our customers. We believe that rationalizing costs and increasing capacity utilization directly leads to an increase in the sustainability of recycling in the U.S. and Canada.”

Harry Pelz, president and partner and partner of Peltz Group, said, “We are excited to be the first partner in the new Recycle America Alliance and take advantage of the opportunities that lay before us.  Waste Management has an outstanding team of people in place, and is a company with a proven track record of success.  These are two strong teams coming together, and we look forward to working with them on this venture.”

Under the agreement, Waste Management will combine the majority of its recycling processing assets with The Peltz Group’s assets to form a new company that will provide recycling, materials brokerage services, container processing and trading, a service that allows customers to stabilize the price of their commodities. According to Sarah Voss-Simpson, WMI presently has 190 MRFs in the United States and Canada that will be a part of the new alliance.

While at the present time both companies will maintain the names, over the long term the plan will be for the newly formed companies to bring their name out, while phasing out the previous name.

Under the present setup, Waste Management will own 90 percent of the newly formed alliance; The Peltz Group will own the remaining interest. The company will operate as a consolidated subsidiary of Waste Management and will be directed by a management team made up of former officers and managers of both companies.

Heading the operation will be Steve Ragiel of Waste Management. Other members of the management staff include the following: from Waste Management, Tom Riek, David McAdam, Victor Gaylor, and Bruce Jensen; from The Peltz Group, members of the management team include: Harry Pelz, Brian Fielkow, Arnie Peltz, Jonathan Vosburg, and Shawn Lavin.

As the alliance seeks out other partners, the percentage ownership will change, although WMI will continue to control a majority of the ownership in the company.

Recycle America Alliance will have approximately 3,300 employees; will handle more than 8 million tons of commodities per year; will operate 80 recycling plants and provide marketing responsibility for more than 190 locations in the U.S. and Canada. In addition, RAA will operate seven container processing facilities, one plastics recycling facility, and four electronics recycling facilities.

Waste Management’s recycling business is the largest collector of recyclable materials from businesses and households in North America and operates material recovery facilities in the U.S. and Canada that, prior to the formation of the Alliance, processed more than five million tons of recyclable commodities each year. Of the five million tons of recyclables handled, about four million tons are fiber-related.

The Peltz Group's Brian Fielkow said that the combination of Waste Management and The Peltz Group will give the alliance a well-rounded package to deliver to customers. Additionally, the alliance is diversified with plenty of non-fiber materkals.

The Peltz Group currently operates the A-1 Recycling Center in Milwaukee, Wis.; The Peltz Group plant in Menomonee Falls, Wis.; the Madison Recycling Center in Madison, Wis.; the Paper Valley Recycling Center in Menasha, Wis.; the Janesville Recycling Center in Janesville, Wis.; The Peltz Group plant in Superior, Wis.; and The Peltz Group plant in Cleveland, Ohio. 

Additionally, the company operates brokerage offices in Milwaukee, Atlanta, Chicago, Los Angeles, Minneapolis and Toronto, Canada.