Seizing the opportunity

Cheap landfills and medium-sized markets do not make for the most attractive business conditions for a construction and demolition (C&D) recycler, but that hasn’t stopped Landfill Reduction & Recycling (LR&R). The Appleton, Wisconsin-based recycling firm has secured its position in two Wisconsin markets as a viable option for C&D debris.

Jason Salisbury formed the company in 2011. “Before we were came on, there was limited recycling of construction material in Wisconsin in general,” says Salisbury. “Wisconsin is a particularly challenging market because of tip fees as well as a low concentration of construction material outside of the Milwaukee area. There is not a high density of waste in one specific area, so there are a lot of geographic challenges.”

Where some might have been scared off from even attempting a recycling business under those circumstances, LR&R viewed things differently. It saw a C&D recycling industry developing in other parts of the country and thought it could get a head start in Wisconsin.

“We saw it as an opportunity to get out ahead of it and kind of be at the forefront of starting construction and demolition recycling in the state,” Salisbury says.

GETTING STARTED

Salisbury looked at several potential sites for the facility and ended up finding an old pulp and paper recycling facility in Appleton. It was a quarter of a mile away from the regional landfill.

He purchased the property, put the equipment together and worked with haulers to verify tonnages. In January 2012, the facility opened for business. The operation started processing at a rate of between 80 and 120 tons per day. Salisbury says he learned quickly that would not be enough to be profitable.

“We needed to do a lot more than that based on disposal rates in our area, so we quickly expanded,” he says.

In that first year of operation, LR&R processed 18,000 tons. The following year, the company tripled its volume.

“A lot of our success has been partnering with lots of municipal organizations,” Salisbury says. “We do all the construction material for four of the largest county-run waste organizations in the state. Part of the ways we grew to this tonnage was securing the construction waste coming out of the Madison-Dane County area.”

For about two-and-a-half years, the county trucked between six and eight semi-loads per day on the two-hour trip each way to and from Appleton.

“That didn’t look very sustainable long-term,” notes Salisbury.

Salisbury met with officials from the county about modifying its existing transfer station into a C&D processing facility. They liked the idea. “From the time of the original idea to the time we were processing was 18 months,” recalls Salisbury.

The Dane County recycling facility opened in early 2016. It is owned by the county and operated by LR&R, which is under a 10-year contract. Under the agreement, the county is paid for inbound tonnage. A portion of the fee goes to LR&R. Whatever LR&R does not recycle goes to the landfill, and the company pays a fee to the landfill. “We are incentivized [to recycle] financially and environmentally,” says Salisbury.

In Appleton, in addition to local haulers, LR&R also partners with Brown, Outagamie and Winnebago counties for their C&D debris.

LR&R employs 50 people at the two facilities. That number has remained stagnant as LR&R increases its efficiency, explains Salisbury. The Dane County facility has 20 employees, while the Appleton facility has 30 employees.

MANAGING MATERIALS

The materials LR&R recycles are placed into two categories: primary and secondary. Its primary materials include wood, concrete, aggregate, metal and cardboard.

“Those are always our main focus,” says Salisbury. “Wood is our highest priority because of the concentration of wood in our waste stream. That can be anywhere from 15 to 30 percent of our waste stream of what we can actually sort out.”

Secondary materials include lead batteries, drywall, vinyl siding, rigid plastics, books, electronics, tires, carpet, carpet pad and ceiling tiles.

“The reason we call them secondary materials is they are not a primary concentration for us, but we try to pull out as much as we can that has value,” explains Salisbury. The company will evaluate the materials, and depending on the market price or the efficiency of sorting or shipping a particular material, the company will recycle when it makes sense.

“It if works, we continue it. If it doesn’t work, we put it on hold until we are ready to try it again,” Salisbury says.

LR&R usually does not process asphalt shingles because, according to Salisbury, Wisconsin has a fairly well developed market for asphalt shingles. Instead, LR&R will direct customers to two facilities in Appleton that handle that material and are located next to quarries.

“Our niche is mixed [C&D] processing. If the shingles are presorted, that is a better outlet,” he says of the dedicated shingles facilities.

The C&D processing systems in Appleton and Madison vary in design. Salisbury says the Appleton facility was pieced together as a single-line system with a wood conveyor underneath. It uses screening equipment from General Kinematics (GK), Crystal Lake, Illinois, and processes around 30 tons per hour.

“It saved us some money on the front end,” Salisbury says of the way the system was built, “but it has cost us money over time because it wasn’t a turnkey system.”

The system in Madison is a full turnkey system from Sparta Manufacturing, Notre Dame, New Brunswick. The dual-line system processes up to 350 tons per day of C&D debris.

Sorters on the A line pick the desired commodities, while the B line mechanically processes the middles fraction (6 inches in size), through a combination of mechanical processes, including an in-line magnet to remove ferrous metals; GK Finger-Screen to remove fines; and a GK De-stoner air classifier to help capture mixed aggregates.

LR&R processed 150,000 tons in 2016, and Salisbury says the company hopes to grow that yet again in 2017, particularly in Madison since it is newer and has more growth potential. With a year of operations under its belt in Madison, the company can now shift its efforts towards growth in that market. “Now that the facility is running well, we are looking to expand that and increase the amount of recycling,” Salisbury says.

BIG COMPETITION

LR&R doesn’t have much competition in the way of other recyclers, it’s the landfills that keeps the company on its toes. Prior to the Dane County facility, local recycling ordinances were not being complied with because they weren’t feasible. It was easier and cheaper to landfill the material. That is why staying inexpensive and convenient has been crucial to being successful in Wisconsin, according to Salisbury.

“In other parts of the country, construction materials recycling is really prevalent whereas in Wisconsin, we don’t compete with other recyclers as much as we compete with landfills,” Salisbury says.

What’s been LR&R’s solution? “The way we have been innovative is by partnering with the waste community, both with private haulers and municipal-run organizations, and being able to leverage the conglomeration of all the material together to reduce our processing costs to remain competitive for entities that want to recycle,” says Salisbury.

Another way LR&R has been able to keep its rates low is in the way it has developed its end markets “so we don’t need to get the highest rates on our tip fees.” LR&R has found some unique end markets thanks to Wisconsin’s heavy agricultural and paper manufacturing bases.

Drywall from the facilities are made into a soil amendment product and the paper sector consumes much of the wood for boiler fuel, though Salisbury says the boiler fuel market has taken a dive.

Even before the boiler fuel market dropping, Salisbury says LR&R knew it had to diversity its markets. “It was challenging because those markets were so strong, it was hard to pull material away from such a viable market and put it into something we were new to,” he says.

Now, in addition to boiler fuel, LR&R’s end markets include animal bedding, landscape mulch and an erosion control product. Aggregate is not a major end market for LR&R. According to Salisbury, a number of virgin quarries in the area sell their materials for competitive prices. LR&R also does not have the ability to crush aggregate on-site, so it is typically used for fill.

“It is better to use it for clean fill than to sort out a smaller percentage and landfill the rest,” he says.

The volatility of metals markets over the last 12 to 18 months is a reminder for Salisbury that the company needs to focus on the costs it does have control over as well as on diversifying.

“Anything can be solved with money and time,” Salisbury says. He advises working through problems and developing solutions. “As long as you put that effort in, and you set yourself up financially, you can solve it and succeed.”

Salisbury says the year ahead will be all about optimizing LR&R. The company’s massive growth in five years has been a bit of a whirlwind, according to Salisbury. Now the company is in a position where it can focus on strengthening its customer base and diversifying its end markets with a core group of people who can accomplish those goals.

“There are a lot of things we have learned but have not fine-tuned yet, and that is what 2017 is going to be for us,” Salisbury says.

The author is editor of Construction & Demolition Recycling and can be reached at ksmith@gie.net.