Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, November 5, 1995 TAG: 9511030017
SECTION: BUSINESS PAGE: F-1 EDITION: METRO
SOURCE: JOHN LEVIN
DATELINE: LENGTH: Long
And that absence of a significant financial incentive may explain why the movement has built slowly over the past decade.
Manufacturers buy about $5 billion a year worth of glass, paper and plastic that they can reuse, according to the National Recycling Coalition in Alexandria. The organization estimates 3,000 U.S. companies make 4,500 products that contain recycled content.
As significant as those figures sound, only a third of virgin materials are being recycled currently, according to Richard Bobell, a financial analyst for the Chicago Board of Trade and project manager of its Recyclables Exchange.
The Chicago Board of Trade, one of the nation's chief commodities markets, last month opened the new exchange as the initial national electronic marketplace for used materials.
"There's tons of interest out there," Bobell said. But the reason tons of waste goods still go to landfills is that industries interested in reusing them can't be guaranteed sufficient quantities at reasonable prices.
The new exchange, actually just a glorified computer bulletin board, allows sellers and buyers to post and bid prices for old plastic, glass and paper. They can negotiate sales and rely on the board to help resolve any disputes.
An annual subscription, equivalent to a seat on a major stock exchange, costs $1,000 a year. Browsers can cruise the system without charge by calling (312) 986-9780 and following automated instructions for logging in.
In its initial weeks, the exchange has drawn 143 users, about 75 percent of which are municipalities looking to unload solid waste. The remainder are large companies, primarily paper mill operators, seeking sources of recyclable materials. The exchange's first trade was of 100 tons of old newspapers at $90 a ton. Oswego County, N.Y., sold it to Weyerhausuer Co. in Tacoma, Wash.
Bobell said the exchange subscribers have been posting an average of 71 listings each day and that is growing by about 10 percent a day. The exchange is considering adding aluminum cans and rubber tires to its list of recyclable commodities.
"The materials we're looking at are really recyclable resources. They can be used over and over again," he said. "It's a shame to waste those things. We can't afford to be a throw-away society anymore."
The main deterrent to a truly national marketplace for waste is transportation, said Bruce Brenner, president of Cycle Systems Inc. The company, which processes and ships recyclable materials in Roanoke, Lynchburg and Richmond, buys those materials from localities and accepts donations from individuals. In turn, it sells them to manufacturers who use them to make new products.
That's provided the sources and users are within 300 miles of each other.
The cost of transportation accounts for about 30 percent of his costs, Brenner said, meaning it can easily take any profit.
He's lucky that Roanoke Electric Steel Corp. is a nearby buyer of scrap steel, that Reynolds Metals Co. in Richmond is a convenient buyer of aluminum cans and that a newsprint supplier from Georgia who delivers fresh product in the Roanoke Valley is happy to take used paper on the trip home.
While Brenner said he's interested in the new Chicago exchange, he's not figured out a way to ship cardboard worth $40 a ton to Wyoming and still make money on the deal.
So that means it will be a while before you and I can trade trash for cash.
Not only do most individuals lack the means to transport recyclables to potential buyers, but most lack the storage to accumulate huge quantities that factories need on a reliable basis.
"Ask your wife if you can stockpile it in your basement," Brenner joked. "Then go next door and ask your neighbor so you can get a zoning change" to put it in the back yard.
Rather, most of us can feel rewarded by knowing tax dollars are being saved by reusing materials. Recycling operations are budgeted to cost Roanoke's city government $487,266 during the current budget year, or about 9.5 percent of the $5.2 million cost of dealing with all solid waste. The benefit of the 3-year-old effort is that the cost of handling recyclable materials is $74.15 a ton, about 17 percent less than $89.22 for other waste that goes to a landfill.
The difference is the savings on landfill fees and the fact that the city gets revenue for selling recyclable waste to Cycle Systems. In September, the most recent available figures, Cycle Systems paid Roanoke $30 a ton for old newspapers, $5 a ton for glass, 32 cents a pound for aluminum and 2 cents a pound for other metal cans.
Those prices can vary widely, and Laura Wasko, the city's recycling coordinator, said having more users might improve prices.
Roanoke collects recyclable materials every two weeks from about two-thirds of the city's households, and is adding 7,000 more homes Monday.
It also collects mixed paper and corrugated board from downtown businesses five nights a week.
John Levin is business editor of The Roanoke Times.
by CNB