The industry speaks

In a market where profit margins are getting smaller, material volumes are steadily growing and the skilled labor force is shrinking, recyclers and demolition contractors have no lack of topics to discuss or ideas to share.

When the National Demolition Association (NDA), Washington, held its Demolition 2015 event in Nashville, Tennessee, March 21-24, ferrous scrap prices had just taken a dramatic dive of around $100 dollars per ton. Drew Lammers, manager for scrap processing firm Cohen, Middletown, Ohio, told attendees during a session on scrap markets that mills were getting pressure on the price of finished steel and the scrap market hadn’t corrected itself.

“We believe we’ve hit the bottom and this market is going to take time to work its way back up,” Lammers remarked. He was one of several speakers who gave short presentations referred to as Fast and Furious sessions, which took place inside the exhibition area during the convention.

Lammers noted that one of Cohen’s largest buyers went from purchasing thousands of tons of ferrous scrap per month from the company to zero tons in January 2015.

“As time goes on, these orders will come back,” he predicted.

While metals pricing may be a short-term concern for demolition contractors, the industry’s ability to find and retain skilled labor and implement succession plans for an aging workforce has much greater ramifications over the long term. A panel on workforce issues brought together several major demolition contractors from around the country to discuss these problems.

John Adamo, CEO of Detroit-based Adamo, described the situation as “an aging workforce with not a lot of young talent coming down the pike.”

Adamo noted that fewer people are willing to make a career as a skilled tradesman. His company has begun engaging potential workers at the high school level.

Jim Graham, principal at Winter Environmental, Norcross, Georgia, said more than 400 fossil fuel plants soon will be shuttered because of changes to the Clean Air Act. Combined with the general recovery of the economy, he predicted a plethora of demolition work will need to be completed over the next five to seven years.

He asked, “Where is the workforce going to come from?” Graham also noted that those receiving construction training are learning more transferrable skills than demolition, often leaving a pool of potential demolition workers with little or no education.

“It’s really created this paradox for us, and the situation will be challenging for some time,” Graham concluded.

Marc Ferrari, president of Ferma Corp., based in Mountain View, California, discussed how his workforce was 95 percent Latino with varying degrees of literacy in the English language. He said it is important when communicating procedures with his employees to start at the lowest common denominator of understanding and build up from that level.
 

An evolving industry

In its 21st year, C&D World 2015, the annual meeting of the Aurora, Illinois-based Construction & Demolition Recycling Association (CDRA), took place March 29–31 at the Music City Convention Center, also in Nashville. Speakers updated attendees on topics ranging from regulation revisions and scrap metal prices to equipment updates and the improvement in the overall economy as well as construction industry in 2015.

To adequately address equipment trends in the C&D recycling industry, it is important to examine the evolution of the industry itself, from advancing technologies to additional C&D recycling streams. That is what Howard Fiedler—head of recycling sales for Sparta Innovations, based in Notre Dame, New Brunswick—told attendees of C&D World 2015.

Fiedler, who presented during the “Trends in the Equipment Industry” session, which kicked off the conference, said C&D recycling companies today are “looking for more.”

From accepting more materials to adding equipment to existing systems, operators are considering all of their options, Fiedler noted. “Today, you see longer sort lines, which recover more material. Now there is grade A wood, grade B wood and concrete,” Fiedler said, adding, “Splitting the flow into A and B sort lines is a game changer.”

In addition to bulky, heavy materials, including concrete, asphalt, brick, metals and other building components, more C&D recyclers are integrating wood grinding into their systems to separate certain wood types, Fiedler observed. While optical sorting “has become very accepted” in recycling streams, Fiedler said, further automation is often required when sorting wood.

“Many customers are putting fixed electric grinders integrated into their C&D systems,” he said.

For one wood recycler, a first-of-its-kind screen is helping that company to handle large pieces of timber, said Dick Reeves, another speaker and resource recovery industry manager for General Kinematics (GK), a vibratory equipment manufacturer based in Crystal Lake, Illinois.

The GK SXS screen, which was introduced in August 2014, was developed for municipal solid waste (MSW) and single-stream and commercial and industrial (C&I) materials.

While one company uses the SXS screen to process only wood, the first recycler to purchase the GK screen runs C&D materials 80 percent of the time and MSW on a second shift, Reeves said.

The SXS screen has served these increasingly multistream requirements well, he said.

“What we’ve seen in multistream requirements is that you can be processing C&D materials four days a week and one day or a half day, process MSW,” Reeves said.

For C&D recyclers, when regulatory and rulemaking processes are put into question their daily operations could be vastly affected. Jason Haus, CEO and co-owner of Dem-Con Cos., Shakopee, Minnesota, experienced this firsthand when the U.S. Environmental Protection Agency (EPA) introduced the Non-Hazardous Secondary Materials Rule (NHSM) in 2012.

Haus updated attendees on different legislative rulings affecting the C&D industry on a national level. “This is one of the most important issues facing the CDRA in its history,” Haus said of NHSM.

He explained that EPA’s NHSM rulemaking process related to regulations on C&D wood fuel would put some C&D recyclers at risk, including his own company. The rule’s intent is to clarify whether materials accepted by a facility are a solid waste.

“For those people who operate plants with a solid wood market, it’s an incredible revenue driver,” Haus said. “One of the things we needed to do with this rule is make sure none of our end markets are stripped away.”

The company has been working with the EPA on the use of clean wood material in biomass plants, Haus said. Dem-Con has participated in data collection and analysis, which Haus said proves that wood separated from C&D MRFs with proper oversight and training can produce clean, high-quality materials.

NHSM, in its third year of contemplation, is finally coming to a closure, Haus said.
 

Providing an oasis

Tighter margins for recycled commodities didn’t stop thousands of people from converging at the Las Vegas Convention Center June 1-4 for WasteExpo. While many MRF (material recovery facility) operators and haulers are feeling the squeeze that lower revenues are creating, energy was still high. With an estimated 12,000 participants, WasteExpo was one of the best attended conferences in the show’s history.

Recycling market woes were expressed during the Heavy Hitters Panel, a keynote session with some of the leading waste management companies in North America. Moderated by Michael Hoffman, managing director of St. Louis-based Stifel Financial, the session took a close look at the factors affecting profitability in recycling, including pricing structure.

David Steiner, president and CEO of Waste Management (WM), Houston, told attendees his company hasn’t invested in recycling in the last two years and is only bidding on contracts where it can get a certain return on its investment. He said the firm has to be able to cover its processing costs, adding, “This is a crisis.”

Ron Mittlestaedt, CEO of Waste Connections, The Woodlands, Texas, explained that the cost of recycling is two to three times that of landfill. He estimated it costs $80 per ton to recycle material versus $30 per ton to landfill it. While that may be the case, the added cost of recycling is often not passed on to the customer.

Richard Burke, CEO of Advanced Disposal, Dearborne, Michigan, suggested MRFs be viewed as manufacturing plants, where the raw materials are the recyclables that come into the facility. He said that as the business is structured currently, the MRFs are “bearing too much of the risks.”

According to Mittlestaedt, the majority of Waste Connections’ MRFs are on the West Coast. “The West Coast has an acceptable return on capital,” he said.

Waste and recycling volumes remain down about 30 percent from the economic downturn, according to Steiner. He said other industries that were affected negatively by the Great Recession have seen growth levels well exceed where they were prior to it. Panelists agreed that if housing starts would reach the 1.2 million level, then waste volumes would start to go back to 2007/2008 levels.

Burke said industrial volumes started to pick up in the Southeast last year and C&D volumes have increased this year.

Joeseph Quarin, president and CEO of Progressive Waste Solutions, Vaughan, Ontario, which provides recycling and disposal services to 13 states, the District of Columbia and six Canadian provinces, said volumes also are picking up in the regions his company serves, but he added, “The pace of recovery has been slower.”

Also during WasteExpo, a panel on C&D recycling was an opportunity to share what mixed C&D recycling facilities are doing in various areas of the country. Patti Hamilton, vice president of marketing and communications for Sun Recycling, Davie, Florida, provided an update on efforts the CDRA has made to supply resources for the industry. The CDRA has aggregated regulatory profiles on C&D recycling for all 50 states. It also commissioned a white paper by Dr. Timothy Townsend and his research team at the University of Florida on the benefits of C&D recycling.

Avi Golen, co-owner of Revolution Recovery shared how the Philadephia-based company grew from a small hand-picking operation to operating sophisticated processing equipment at facilities in Philadelphia and New Castle, Delaware. The company also works with the nonprofit Recycled Artists in Residency (RAIR) to allow them to use materials from Revolution to create artwork.

Dem-Con’s Haus also discussed his firm’s decision to build a ferrous and nonferrous scrap yard at its integrated campus, which includes a landfill, single-stream MRF, shingle processing yard and a C&D recycling facility. While he says the scrap metal yard will do light processing and use third-party processors, Hamilton noted that Sun Recycling owns a shredder that can process metals for higher end-market value.

Haus concluded by saying, “We work just as hard to keep markets as we do to get them.”

The authors are editor and associate editor of Construction & Demolition Recycling and can be reached at ksmith@gie.net and mworkman@gie.net.