Plastics_No Ads.indd - Moore Recycling Associates

Recyclers of other commodities can see plastics’ potential:
There’s ample supply, consistent demand, and they can start with equipment they
already own. That’s all true, but strict quality demands and high transportation
and storage costs can make recycling this commodity trickier than it seems.
depositphotos/kropic
By Theodore Fischer
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W
hy recycle plastics? Like any other commodity, it comes down to the economics
of supply and demand. On the supply
side, the manufacturing process generates vast quantities of postindustrial scrap, while
modern life generates huge quantities of postconsumer scrap containers, film, furniture, toys, and
many other items. On the demand side, processors and end users just can’t seem to get enough of
recycled material—so long as it’s clean and it’s the
resin they need. By weight, plastic “has the highest value, after nonferrous metal,” among recyclable commodities, says consultant Patty Moore of
Moore Recycling Associates (Sonoma, Calif.). “It’s
a growing commodity.”
But be forewarned: Recycling plastics might
not suit the faint of heart or capital. “It’s not for
everyone,” says Jonathan Padnos of Louis Padnos
Iron & Metal Co. (Holland, Mich.). “You have to
have the appetite to not make money—or even to
lose money—at the beginning, because there’s a
very serious learning curve.”
shift toward zero landfill, and it’s up to recyclers
to try to help them in that effort,” Padnos says.
His company has promised to accept any viable
material its largest customers want processed.
And that strategy is paying off: When Padnos
entered the plastics market seven years ago, it processed hundreds of thousands of pounds a year,
he says; “today, we do that in a day.” (To acknowledge its expanded horizons—into paper even
before plastics—the 107-year-old family-owned
business is changing its name from “Louis Padnos
Iron & Metal Co.” to simply “PADNOS.”)
Longtime industry observers tick off the reasons
they’re bullish on the potential for recycling this
commodity. First, they describe major shifts in
U.S. manufacturing and sales. “Sales are down
in ‘stuff’—cars, appliances, newspaper output,”
says Jerry Powell, executive editor of Resource
Recycling (Portland, Ore.), which publishes
Plastics Recycling Update, a quarterly magazine
and free e-newsletter, and produces an annual
plastics recycling conference. Further, he says,
the stuff that is being manufactured contains less,
lighter, and sometimes more durable material.
As part of that trend, plastics now replace many
metals formerly used in manufacturing, such as
in automobile bumpers, he points out. Also, as
consumer products get smaller and last longer,
“you don’t end up with as much scrap,” he says.
“Scrapyards have all the scales and the personnel
and equipment and trucks to do more recycling,
but they don’t have ‘stuff.’” Given these trends,
Powell predicts that recycling postindustrial and/
or postconsumer plastics will be virtually tantamount to survival for recyclers. “To be blunt …
metal and paper volumes have been flat, and this
is a growth opportunity.”
Some recyclers that started out in metals,
paper, and other commodities say they started
handling plastics to better serve existing customers. “Big industrial accounts are trying to make a
www.scrap.org rachel H. pollack
Now’s the Time
Those starting in plastics can just sort and bale the material they
collect. Many balers can handle plastics, but certain designs are
considered better at managing the slippery material and can tie
the bales automatically.
Starting requirements
Recycling plastics might not require a significant up-front investment. Some recyclers will
already have the recommended equipment,
starting with a baler. Whatever balers a facility
has “might not be optimal, but they would probably work,” Moore says. With the wide range
of recyclable plastic materials, the best baler
for the job will depend on what type of plastic
you’ll most often be baling. “And as [recyclers]
get more familiar and build their base of suppliers and buyers, they could expand” and
purchase additional balers designed to handle
plastics. Seven years ago, Texas Recycling/
Surplus (Dallas) only needed to purchase downstroke balers to add plastics to its existing paper
MAy/june 2012 _ Scrap _ 75
large units, and they operate on standard industrial power supplies, he says.
In addition to adding balers, shredders, and
grinders, plastics recyclers can invest in “the
extremes of an eddy-current system” to extract
nonferrous metals, “some color-sorting systems,
and pelletizers,” says Mike Smith, vice president
and chief financial officer of Mervis Industries
(Danville, Ill.), which began recycling post­
industrial plastics in 1990 and now processes
55 million to 60 million pounds a year of highdensity polyethylene, polyethylene, polystyrene,
engineering grades, and film. Color sorting can
increase the material’s value, as can pelletizing,
which melts, extrudes, and cuts film or flake into
uniform pellets.
“You can get into plastics on a relatively low
budget, but be prepared to expand down the
road because it can get capital-intensive and
space-intensive,” Smith warns. Space becomes
rachel H. pollack
recycling business. “What we do is collect it,
bale it, and sell it to folks that will do the end
processing,” says Joel Litman, the company’s
co-owner. “They’ll either grind it or melt it.”
Eventually, Texas Recycling/Surplus also
acquired a handheld X-ray fluorescence analyzer to identify different types of plastics. “A
lot of folks will just burn it and sniff it, but if
you want to be more sophisticated and do it a
little cleaner, then you should invest in equipment that identifies what type of plastic it is,”
Litman says.
If they find sufficient customer demand,
some recyclers acquire plastic shredders,
grinders, or granulators to reduce the material
to pieces about the size of a fingernail, Powell
says, to increase the product’s density, making it easier to store and less expensive to ship.
Grinders start in the $10,000 to $20,000 range
for small units, with costs rising to $100,000 for
The available supply of recyclable plastics includes (clockwise from top right) postconsumer containers and film, rigid plastic
products, and plastics from manufactured goods such as electronics. The material might be readily available, but its bulk and light
weight make it relatively expensive to transport and store in an unprocessed state.
76 _ Scrap _ MAy/june 2012 www.scrap.org
an issue because of recycled plastics’ bulk.
“There are lots of different types of plastics, and
when you’re selling full truckload quantities,
you need additional warehouse space—more
than what you would imagine—on the front
end,” he explains. It might take as many as 20
Gaylord containers of scrap plastics to fill a single container with regrind, which “requires a
lot of warehouse space to make it worthwhile.”
On the bright side, recyclers probably won’t
need to hire personnel with specialized skills to
handle plastics. “The forklift [operator] can go
move bales of paper and then move a couple of
bales of plastics—there’s no difference,” Powell
says. “You already have the office staff, personnel who know how to pick up things and push
things and move things, so it’s just another
material.”
The Demand Picture
Scrap recyclers might wonder whether they’ll
find sufficient demand for processed plastic
scrap. Market participants say there’s no shortage of hungry buyers. “There’s a huge secondary
market for PET [polyethylene terephthalate] and
all other plastics—and there always has been,”
says David Cornell, technical director of the
Association of Postconsumer Plastic Recyclers
(Washington, D.C.). The market does have occasional hiccups—“for about six months every
10 years there’s a surplus of raw material,” he
says—but “the rest of the time we’re raw-material short.”
PADNOS fills orders from a wide spectrum
of domestic and foreign customers at different
stages of the supply chain. “We’re selling to
compounders, who take our regrind and make
a compounded pellet that competes against [pellets produced by] the big virgin resin manufacturers,” says Randy Knibbe, superintendent of
the company’s plastics division. “We’re selling
directly to injection molders, who take our
product directly into a new part or a new application, and we’re selling to sheet extruders and
thermo­formers. We’re selling overseas to India
and China, and we’re looking at opportunities
in Vietnam, Malaysia, Mexico, and Brazil. Once
you can make weight and fit [your plastics]
into an overseas container, the whole world
is your sandbox.”
Other potential buyers come in a variety of
shapes, sizes, and specs. KW Plastics Recycling
(Troy, Ala.), which got its start by recycling the
www.scrap.org polypropylene from automotive battery casings, says it’s now the world’s largest producer
of custom-engineered co-polymer resins from
recycled PP and HDPE. It’s always ready to buy
both natural (uncolored) and pigmented HDPE
as well as regrind PP. St. Joseph Plastics (St.
Joseph, Mo.) is a 20-year-old company that buys
a wide variety of postindustrial plastic resins:
HDPE, low-density polyethylene, PP, highimpact polystyrene, acrylonitrile butadiene styrene, ABS/polycarbonate, nylon, and dust. Coll
Materials purchases a range of postconsumer
plastics. This four-year-old company based in
Zanesville, Ohio, with branches in Allentown,
Pa., and Waco, Texas, seeks mixed-color HDPE
(both loose plastic and bales), natural HDPE
bales, and clear or mixed-color PET bales.
“It’s like gold,” says John Aspland, owner of
Adirondack Plastics & Recycling (Argyle, N.Y.)
and Valley Plastics & Paper Recycling (McAllen,
Texas), of scrap plastics. “You’re always looking
for more.” Aspland’s companies are unusual in
that they started in the early 1990s as postconsumer plastics recyclers and only later
began recycling other materials to accommodate customer requests. In the early days, with
postconsumer plastics, “pricing was volatile—it
would swing every day—so we quickly got
out of that,” Aspland says. Now the company
handles postindustrial plastics from industrial
manufacturers of plastic parts. The supply of
such plastics has tightened in recent years, he
says, because many manufacturers now recycle
their own to improve their sustainability—and
to save money. “They’re processing it in house
and feeding it right into the virgin material,” he
says. “It cuts their cost down tremendously.”
Recycled plastic film also is in great demand
from companies such as Petoskey Plastics in
Hartford City, Ind. “We buy primarily postconsumer low-density and linear low-density
film—material such as stretch film, pallet wrap,
garment bags, [and] mattress covers,” says David
Price, division manager of recycled products.
With a capacity “north of 30 million pounds
a year,” Petoskey is always looking for more
raw material, which it turns into multilayered
engineered-film products such as automotive
seat covers, trash bags, and can liners for commercial and retail applications. “We’re getting
enough, but it does take work and effort [for us]
to procure that material,” he says. He’s willing
to compete on price for the right material, he
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Kent kiser
Companies that would like to invest further in processing
equipment can purchase shredders or grinders that reduce the
material to pieces about the size of a fingernail. Some buyers
prefer material that has not been size-reduced, however,
because they can more easily remove contaminants while the
products are whole.
adds. Petoskey is working to increase its supply
on several fronts. It purchases material from
brokers, it operates closed-loop, turnkey recycling programs for commercial warehouses and
distribution centers, and it even offers balers to
potential large-volume suppliers. “We go in and
say, ‘If you want to divert all your film out of the
landfill and reduce your waste disposal costs,
we’ll provide a baler at no cost or additional
expense, manage all transportation, and pay
you for the plastic,’” Price says.
Cautionary Notes
A low barrier to entry, a growing supply, and
ample demand—plastics recycling sounds like
a sure thing. Of course, if it were that easy
and that lucrative, everyone would be doing it.
Instead, recyclers give a variety of solid business reasons for entering this market with
caution.
One major problem is contamination. “Plastics
is much [less forgiving] than ferrous and nonferrous metals,” says Mervis Industries’ Mike Smith.
“In metals, you can have a little bit of contamination and still have a salable product. But many
times in plastics, if you have a little contamination, you’ve not just downgraded it by a few pennies, you’ve perhaps ruined the entire truckload.”
The contamination can be from different resins,
78 _ Scrap _ MAy/june 2012 plastics of the same resin made in a different
manufacturing process, or from nonplastic materials—even bits of paper. “What we’ve learned is to
make sure we keep [plastic scrap] separate from
any paper and other products that could contaminate it because the quality specs are very, very
tight,” Litman says. Further, he makes sure the
bales he sells contain exactly the kind of plastic
his customers want to buy. “If the mills want
Plastic A, they want only Plastic A—that’s what
their equipment and processing is geared for, and
it’s what their customers want. If you have any
Plastic B in your Plastic A, they will reject it, send
it back, and tell you, ‘You better get it clean, or
we’re not buying it from you.’”
Fastidious separation of recycled plastics
is essential and will remain essential for the
foreseeable future, APR’s Cornell says. “The
notion of taking mixed plastic and making
something useful out of it has been one of those
Holy Grail things folks have looked at forever
and a day,” he says. A process or additive “that
makes everything interchangeable with everything else has yet to be found.” One issue, he
explains, is that resins melt at vastly different temperatures. If you try to process them
together, “you’ll either not melt some of it or
overheat the other fractions.” (That said, John
Aspland
says he plans to install technology
to convert scrap plastics—even contaminated
plastics—into synthetic crude oil.)
On the collection side, recyclers face the high
bulk/low weight issue, which can make unprocessed plastics more expensive to transport than
other recyclable commodities. And, as mentioned
earlier, that bulk requires the collection of a large
volume of unprocessed material to generate a salable volume of processed material. “Plastics has a
volume reduction that averages about four or five
to one, depending on the substance. Loose water
bottles are probably 10 to one,” PADNOS’ Knibbe
says. “You can take in 10 van trailers of product to
make one 40,000-pound load of finished product
going out.”
As with other recyclable commodities, a
thorough understanding of your material and its
value is essential. “You can actually lower the
value of certain material by processing it,” Patty
Moore points out. “For example, you might think
that grinding is always a good idea, but it isn’t
… because, depending on the material, it [can
be] easier to pull out contaminants before they’re
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Getting Started
Recyclers who want to test the waters of plastics recycling can avail themselves of several
resources. ISRI’s Plastics Recycling Council
brings together plastics recyclers to network,
define material specifications, and shape ISRI
policy and programming for this audience.
The association also has a LinkedIn group for
members interested in plastics; go to www.
linkedin.com and search for “ISRI Plastics
Commodities Group.” (For more information
on these and other ISRI resources for plastics
recyclers, contact Jonathan Levy, 202/662-8530
or [email protected].) Resource Recycling’s
magazine, e-newsletter, and conference are
other sources of industry news and information.
The American Chemistry Council’s Plastics
Division (Washington, D.C.) maintains a
recycled plastics market database (www.plasticsmarkets.org) and a website with best practices
and case studies (www.recycleyourplastics.
org). Other associations focus on postconsumer
plastics (APR) or PET containers (the National
Association for PET Container Resources in
Sonoma, Calif.).
Above and beyond those resources, those who
have entered this market say there’s no substitute
for hands-on experience. “Visit and work in a
plastics recycling operation owned by someone
similar to you but geographically far away,”
Powell says. “A lot of plastics recyclers wouldn’t
open their plants to somebody who competes
with them, but when some guy in Denver arranges
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ground than afterward. You have to know the
supply, and know your buyer and what they want,
before you would do something like grinding.”
Litman agrees there’s a steep learning curve.
“You have to be patient; we’ve found that [plastic]
is more technical than paper or metal because
sometimes you see a piece of plastic that you
think is one thing, and by the time you analyze it,
it turns out to be something completely different.”
He also gives this advice: “Know who you’re selling to because there are a lot of folks in the business who will take advantage of your naïveté.”
And, last but not least, is the bane of any commodity market—volatility. Speakers at the ISRI
convention’s plastics spotlight session in April
pointed out that prices of natural gas, crude oil,
and chemicals such as ethylene, propylene, and
benzene all affect plastic prices, and those prices
can move several times each day.
Some recyclers take their clean, separated, color-sorted
materials and put them through a pelletizer, which melts,
extrudes, and cuts the plastic into lentil-sized pieces that
manufacturers can use as feedstock.
to see how a fellow industry member in Tampa
operates, there’s no competition—those two are
never going to compete for anything. Go look at
[the material], go touch it, go study.” (For a list of
firms that might be amenable to such a visit, contact Powell at [email protected].) S
Theodore Fischer is a Silver Spring, Md.-based writer.
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