ASSOCIATE EDITOR

How to Succee Plastics recycling isn’t the Gold Rush some newcomers expected. But despite recession and low resin prices, a

in any other highly compet- itive business mvironment. [n fact, while recyclers do a lot of crying

the profit mar- gins of suc- z e s s f u l recyclers are 4 zonsiderably 6 h e a l t h i e r j

titive injection molders have lived with for years. Success all boils down to be- ing the highest-quality, lowestcost pro- ducer with the highest-value end market.

To find successful recyclers, PUS TICS TECHNOLOGY spent days visiting and ta lkbg to recyclers across the

four types: commercial producers, big resin companies, waste companies, and vertically integrated processors. Of the four, commercial brokers are strained the most, especially in HDPE (PET margins are better), and many are de- veloping their own downstream prod- ucts or striking alliances with resin

and can afford to wait for recycle prices to turn u p

recycling is no hard- 2r than surviving

a div. of Atwoods PLC in the U.K., bought a defunct car assembly plant a year ago to house a 200 mil- lion Ib/yr recycling venture (see PT, Aug. ’91, p 104) The original 200- million-lb deal is off and a 30 million

h/yr recycling line is u p and I-unning. I n the meantime, strip ping scrap iron f r o m the old as-

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TICS TECHNOLOGY I 1 AUGUST I992

in Reeyeling sembly plant was an added incentive.

Only the vertically integrated pro- -

t Maximize capacity/cost ratio. t Raise throughput. tCut operating costs. +Upgrade feedstock. +Minimize handling. t Seek higher-value markets.

RULE 1. SHIP CONSISTENT QUALITY

Product consistency is the single most important factor for success, re- cyclers say. “If I ship one box that’s of fantastic quality and three that are so- so, that won’t make happy customers,” says sales manager Kyle Wright at Ea- glebrook Plastics Inc. in Chicago, the largest commercial post-consumer HDPE recycler in the country and a large dealer in industrial scrap. “Cus- tomers want consistency. There’s a lot of competition out there waiting for us to slip up just once.”

So product consistency demands stringent testing of both incoming bales or granulate and of outgoing flake or pellet before delivety to a customer. Ea- glebrook has its own lab and says it tests each box produced for melt index, den si ty and con tam in ants , “The most important piece oi advice I can give is to test each box using the same method your cus tomer uses,” Mrright s a y s . “Othei-wisc. you‘ll inwitably have ar-

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cessors who recycle for their own use

in a falling market. They gain two ways: They have a captive market, and their recycled product is priced indepen- dent of virgin resin prices. Over the past year, as prices for baled o r ground bottles slid as much as 10C/lb, integrated recyclers en- joyed lower material costs.

Aside from such big strategy differences, recyclers have different technologies and feedstock strate- gies. And those who are succeed- ing do some basic things right:

are really in a position to make money ‘ i ‘ P n

4

*Ship consistent quality. .Control cleaning.

the material nearly worth- less. Two financially suc- cessful PET recyclers, Day Products Inc. in Bridgeport, N.J. (which licenses a process irom Rulgers University in New Brunswick, N.J.) and wTe Recy- cling in Albany, N.Y. (which licenses a process from Du Pont Co., Wilmington, Del.), recently beefed up lab staffs and product testing. Day expanded from four to six full-time lab technicians w‘re went troin one full-time and one part- time person in its lab to two full- and four part-time workers. Uoth staff their labs 24 h o u r s a day, seven clays a w w k , and say Ihcy test every box oim‘l-

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profitabl;. Day, which doesn’t buy

granulated bottles because of the PVC- contamination risk, tests washed flake for PVC before extrusion and for melt index after pelletizing. It has developed a five-point sampling method that only removes a few grains of material from a gaylord. Day president Terry Williams says Day was the first recycler to use so- phisticated rheometers to measure PI<Yl‘ degradation during diying and pelletiz- ing, though he says other recyclers arc now considering it.

wTe, which buys both ground anti baled bottles, tests evcry box o l incon-

‘ IT ’ ( S ILC I i l N 0 l O i i Y I AllGI JS[ lYY3 5 1

. . . . . .

ing flake and every other box of finished flake before pelletizing. If contamination is found, the in-between boxes are thrown out too, since they’re statistical- ly certain to be contaminated. wTe takes three cores, diagonally and down the middle of a box, totaling about 1 lb of sample. Vinyl contamination may not show up in the first test because it could be just one ground bottle. But in pro- cessing, those flakes disperse through six to eight gaylords of finished flake.

Inconsistent quality loses cus- tomers. It has driven some big buyers of recycled resin to recycle for them- selves rather than buy from commer- cial sources. For instance, Master Mark, a div. of family-owned Avon Plas-

is blown i ih , both for brightness and a b sence of microscopic paper fibers, which may cause gels. Next most demanding are monolayer containers, then coex- truded containers, which can tolerate some PP contamination but no paper. Drainage tile and extruded garden prod- ucts tolerate paper contamination and pigmented feedstock, but pipe won’t tol- erate PP, which lowers density. And the most forgiving are lumber products. In PET recycling, clear sheet for ther- moformed packaging is the most de- manding application, since a speck of PVC in sheet chars with the higher heat of forming PET and makes a black dot. Clear

very high ratios possible for systems that do only partial recycling. “For just washing equipment, you might get a 20:l ratio, while if you add extrusion and solid stating [for PET], you might be at a 3:l ratio,” notes Day’s Williams.

T h e high-priced approach for HDPE is exemplied by Phillips Plas- tics Recycling Partnership, which re- cently opened a plant in Tulsa, Okla., that has a capacity of 18 million lb/yr and cost about $5 million to d e v e l o p a ratio of 3.6:l. Union Carbide Corp.’s two turnkey recycling lines from Sore- ma Srl, with 50 million lb/yr capacity, cost about $10 million for a 5:l ratio. Graham Recycling in York, Pa., has ca-

Dacitv of about 35 million

CLEANING Contamination isn’t just a sourcing

md sorting issue. Metal, other resins, The, labels, and dirt are separated from flake with greater or less efficiency by xocessing. And the end-use application jetermines how clean recycle must be. f i e most demanding HDPE application

more than 10 ppm.

RULE 3. MAXIMIZE CAPACITY/COST RATIO

As a rule of thumb, profitable plants can make at least 5 Ib/yr per dollar of construction cost. The higher the ratio of capacity to capital cost the better, with

million for an 8.75:l ratio, while En- viroPlastics Corp.’s 15-million-lb/yr plant in Auburn, Mass., which is about 30% customized, cost slightly more for about an 8:l ratio.

But there are some far lower-cost systems out there. A home-built line at United Resource Recovery Inc. in Ken- ton, Ohio, has a capacity of 9 million Ib/yr and cost about $650,000 to build for a 13.8:l ratio (exclusive of staff de- velopment time). A $300,000 expansion will bring it to 18 million lb/yr for an 181 ratio. It serves monolayer bottle markets and blown film. Master Mark’s home-built line has a capacity of about 15 million lb/yr and cost $500,000, for a ratio of 30:l. And Desbro Polymers (Canada) Inc., a year-old commercial HDPE recycler in Toronto, has a 17.5

52 PLASTICS TECHN3tOGY ~ AUGUST 191

million lb/yr line that also cost $500,000 for a ratio of 35:l.

Why did these installations cost so much less? United Resource, Master Mark and Desbro are all parts of old family molding businesses, with at least two generations of experience devising and sourcing economical processing systems. United Resource and Master

flake, Master Mark designed and built its own gas-fired hot-air dryer, which is modeled on grain-drying equipment as a secondary drying stage. After dry- ing, flake is extruded and pelletized on second-hand equipment which Master Mark intends to upgrade.

Desbro’s abbreviated washing line is Japanese-engineered and is

tions, you can run a 10-million-lb recy- cling line profitably,” says Gerry Claes, director of environmental programs at Graham Recycling. “But if you put a turnkey system into a dedicated facili- ty, you have to have 25 million lb/yr to be successful. Otherwise, overhead on the building will kill you because all your other costs are fixed-rent, light,

Mark both built alot of the equipment based on a batch, themselves and bought used compo- 180-gal industrial nents. Remarkably, United Resource wash unit. Flake has a grinder, cyclone, air classifier and i s tip p e d fro m

phones.” Graham expand- ed its own system’s capac- ity by about 30% through debottlenecking. Then this

- 1 , 1 1 , , . I . \ I . . - . I 1 extruaer. IMasLer iviarK ana u e m r o year, wanam aaaea a sec- don’t grind but start with flake. Also, ond line. bringing the pro- both use extra long float-sink tanks, duction to 25 million lb/yr high-attrition washers with relatively on a five-day basis (on a long cycles, and caustic cleaners. And seven-day basis i t is 35 Desbro has no extruder. But compared with elaborate turnkey recycling sys- Even recyclers with tems often costing several mil- grinders of their own, lion dollars, like Eaglebrook and abbreviated systems gi wTe, buy granulat- a 3-4CAb advantage in ed material these lower depreciation days. It is cheaper costs. They also have to process and it maintenance cost raises through- advantages. In put. I t also cuts short, there’s a lot handling costs in less to go wrong. half because a

1000-lb gaylord of HOW ABBREVIATED P I X flake takes SYSTEMS WORK half the space of the

Abbreviated system ivalent in bales. “At at Master Mark and Desbro 11 R ve m a n y si in i I nri t i es--a 1-

gayioras onto a conveyor, which feeds a top-load- i n g , cold-water prewash tub with

though Master Mark separates before washing while Desbro does so afterward. Also, Desbro doesn’t pel- letize. At Master Mark, gaylords of flake are tipped into a 40-ft long float/sink trough with a dozen slowly turning pad- dles, which sink heavier metal, PVC and PET. “Recyclers usually aim for 3/s- in. granulate, but I want a minimum of 1/2-in. because you have no fines with big flake,” says Master Mark‘s Reum. Flake then goes to a commercial attri- tion scrubber with a small amount of caustic. Aggressive washing reduces paper to a pulp, which is removed by rinsing the flake with boiling water as an auger conveyor lifts it up an inclined cage. Large flake is important for this rinse stage because small flake would wash out through the screen. Rinsed flake goes to a commercial Carter-Day centrifugai dryer. Because that report- edly leaves about 20% moisture in the

ag i ta - tion. Each batch is about 750 lb, and the cycle is 10 min. Flake is then auger- fed to a hot-wash tank with caustic (or- ange-peel based) and taken by a variable-speed dewatering auger to a rinsing machine. After rinsing, flake goes into the first of two open 12-ft troughs, the second slightly below the first. This creates a lip or weir, holding back most of the heavy contamination in the first tank. Desbro made the tanks out of welded half-inch clear PP sheet since this was cheaper than stainless steel and just as strong (it al- so lets operators watch flake circulate). Each tank has one paddle.

RULE 4. RAISE THROUGHPUT To be profitable, many recyclers

say they must raise throughput rate. “If you put a low-investment system into a building already used for other opera-

sources of bales and have them toll-ground, but MRF quality is now good enough that we feel safe dealing with [HDPE] flake,’’ says Master Mark’s Reum. Flake size also affects through- put. Desbro, for instance, requires 3/s_ in. flake because throughput is 10-15% higher than I/a-in. (A gaylord of 3/8-in. HDPE flake weighs 650-700 lb vs. 450- 500 lb for 1/2-in.) And Resource Ener- gy Management in Niles, Mich., an HDPE recycler that started last Octo- ber, requires 1/4-in. flake for the same reason.

Successful expansions are invari- ably in one location. Several recyclers have tried regional expansions and failed because they doubled operating costs without generating increased re- gional sales. In the late %Os, Eaglebrook set up an Eastern division in Middle- town, N.Y., but closed it after a year. Wellman tried recycling I-IDPE in Al- lentown, Pa., with PET in Johnsonvillr,

PlkSl ICs IECHNOLOGY I 1 AUGUST I Y92 5 3

S.C., only to move the Allentown line to Johnsonville a year later. Wellman’s investor relations manager Jill Rea, says its planned 90-million-lb/yr PET ex- pansion will entail additional equipment in its existing plant and a new facility to be built next to the first plant. Origi- nal plans for the Du PontfWaste Man- agement Inc. Plastics Recycling Alliance called for five regional plants starting with Chicago and Philadelphia. Now I” Signode Corp., Glenview, Ill., which is buying the assets of the two plants, is combining them in the Chica- go facility.

RULE 5. CUT OPERATING COSTS Costs for water, electricity and la-

bor vary by region. Costs are higher in the cities. and the South is aener-

order to reduce effluent even more. Desbro Polymers has water fil-

tration and discharges 3 gal/min. A high water user is Du Pont’s technol- ogy. Du Pont’s system at the two PRA plants with capacity of 30 million lb/yr (on a seven-day basis) each originally used 60 gal/min, but were improved to 40 gal/min. Du Pont technology at wTe also used to be “thirsty” (90 gal/min.), b u t now u s e s only 27

RULE 6. UPGRADE FEEDSTOCK Several successful recyclers say

they track incoming material by lot numbers through their lines and deduct from payments to suppliers for exces- sive contamination. United Resource says it accepts up to 3% contamination, adjusts the price over 5%, and sends it back over 15%. Desbro also specifies no more than 3% contamination and deducts a penalty, but gets 30% con-

tamination in some Canadian MRF material. Desbro matches incoming and finished weight and figures the difterence is contamination. The penal- ty doesn’t really compensate for what contamination costs in lower through- put, but it’s an incentive for MRFs to clean up.

Eaglebrook takes a similar ap- proach to baled HDPE bottles. A truck- load of baled bottles is so often different from what’s stated on either the bill of lading o r purchase order that Eagle- brook has a system of backdating pur- chase orders so bales are correctly priced according to contamination. ‘We weigh and check bales as they come off the truck and then write the PO,” says Eaglebrook‘s Wright.

The opposite approach to punish- ing suppliers for contaminated feed- stock proved a costly mistake for the Du Pontmaste Management PRAven- ture, which ran as high as 20-2516 con- tamination. Instead of withholding payment to Waste Management for bringing contaminated material, PRA paid a 6CAb premium to Waste Man- agement (and then paid them 5C/lb again to landfill the contamination). PRA also sold to Du Pont at a compa- rable discount. By buying high and sell- ing low, there was little way the venture could ever have made money. After their joint venture dissolved in late ’91, PRA got better quality (con- tamination dropped to 2-3%) and costs went down. Du Pont’s ultimate cost for HDPE was 25C/lb plus the cost of bales. But Du Pont had to sell compet- itively at 2023CAb.

RULE 7. MINIMIZE HANDLING Material handling-transportation,

sorting, baling, unbaling and grinding- are major recycling costs. In fact, many recyclers say labor is their single biggest expense. And a struggle is tak- ing place now with collectors trying to push sorting costs onto recyclers by supplying only commingled plastic bales. In turn, recyclers are pushing costs onto collectors by seeking sorted, ground bottles, sometimes for the same price as bales.

Still, some sorting efficiencies are possible even with commingled bales. Resource Energy has an ingenious and mutually beneficial arrangement with

its collector. Resource Energygets com- mingled bales brought in and waste hauled away for free. After taking out the plastic it wants, Resource Energy greatly reduces the waste by grinding it for its waste hauler. The company also devised double-ended canvas bags like gaylords that can load from the top and open at the bottom. These sacks move with overhead hoists for loading into the washer. That compares with recyclers like Eaglebrook, which rely on a far costlier fleet of forklift trucks to move gaylords.

Resource Energy, which has pro- duced 6 million lb since last October, works three shifts of seven people each: a supervisor, two operators and four sorters. It will soon go to two 12-hr shifts. Graham and Day raise sorting ef- ficiency by running two lines off one sort station. At the high end, Union Car- bide uses two shifts of 18 sorters each, for roughly 12 million Ib production (still in startup).

Such handling costs are greatly re- duced by starting with flake or other- wise presorted material. That’s the attraction of auto batteries, industrial scrap and deposit-return bottles. All are known, uniform material. Tiny Tur- tle Plastics in Cleveland, an ll-year-old vertically integrated recycler with $2 million in sales, is developing unusual variations on this theme. A pilot pro- gram at Turtle plans to take 5000 worn- out blue vinyl rafts a year from Disney World’s “Typhoon Lagoon” ride, cut off the handles, grind and wash the rest, and send it to an injection mold- er to make floor tiles, which are sold back to Disney. Turtle’s staple busi- ness is converting about 2 million lb/yr of contaminated plant scrap from vinyl automotive side trim with adhesive on the back and metalized PET film on the front into black industrial floor tiles.

Savings from just-in-time ap- proaches to recycling are possible in areas where recyclers cluster. Near Al- bany, N.Y., three recyclers cooperate to ship each other material often on a one-day call. Clearvue Resource Man- agement Ltd., in Amsterdam, N.Y., with a home-built low-cost system, pro- cesses vinyl for Occidental Chemical, BFGoodrich and Georgia Gulf, a s well as HDPE for sale as flake or pel-

lets. It gets rigid HDPE from nearby North American Plastic Recycling in Fort Edward, N.Y., and basecup HDPE from nearby wTe, along with any PVC its neighbors find. North American takes PE film from the other two re- cyclers, both of which are outlets for other collected materials. And wTe takes PET from the other two.

Clearvue, which started up four years ago as an incubator company from Rensselaer Polytechnic Institute, Troy, N.Y., keeps feedstock for about 48 hours’ running time and maintains only three to four truckloads of finished goods on-site. “Right now, if we can’t sell it, we don’t make it. We know we can’t afford the storage,” says Clearvue partner David McGraw. Inventory costs can kill you, as both PRA and Graham found out. At one time or another, each found itself in the red on storage and handling costs.

RULE 8. SEEK HIGHER-VALUE MARKETS

The success of vertical integration can be measured by the quiet expan- sion of so many vertically integrated bottle, fiber, carpet, and trash bag mak- ers’ recycling operations despite tough market conditions (PT,]uly ’92, fi. 99). Wellman v.p. Dennis Sabourin says the point is “to have an end use that com- petes with virgin resin or better. The point of competition shouldn’t be in- dustrial grade.”

Wellman, the granddaddy of ver- tically integrated recyclers, uses all its 120 million Ib/yr of recycled PET in fiberfill and carpet f iber, both of which sell for more per pound than vir- gin PET. Commercial PET recyclers, however, must undersell virgin. Well- man also makes even higher-end, polyester textile fiber, and is testing prototype equipment that could, if suc- cessful, upgrade PCR to this higher- value fiber.

In a difficult market, many recy- clers say only the highest quality s u p pliers and those with high-value end markets will survive. “If you started in business in 1990 and made agood prod- uct, you’d have been profitable the first year,” says general manager Hank Traweek of United Resource. “In ’92, if you don’t have a superior product, you’ll be a loser.” El0

ASTICS TECHNOlOGY I1 AUGUST 1992 55