The Recycling Product News team was in Toronto this week for the Waste & Recycling Expo Canada (aka CWRE) annual trade show and convention. We interviewed representatives from some of the innovative companies exhibiting on the show floor.
Surviving the changing mixed paper market
Global market swings require a rethink on how MRFs sort and separate mixed fibre streams
875 Embarcadero Drive
West Sacramento, CA
8935 Ridgemont Drive
In the last several years, North American recycling operations have seen overseas markets for fibre products that have historically been reliable become much more difficult to access. Rising global purity standards are either virtually unobtainable using traditional sorting and separation methods, or they are too costly to meet using options such as adding additional manual sorters.
China's National Sword and Blue Sky policies since 2017 have effectively closed the door of the world's largest purchaser of recovered paper. And it was just the beginning.
"Markets like Indonesia, India and Japan are all following China's example and demanding the same high purity standards for recycled material," explains Nick Doyle, recycling area sales manager west North America for TOMRA Sorting Recycling. He says the result is high supply, low demand and a market saturated with recovered fibre.
This has driven down the price of key MRF fibre products including mixed paper and corrugated boxes (OCC). Mixed paper now consistently sells at a negative value or zero (at best) U.S. dollars per ton in most markets, while OCC is trading at the lowest levels seen in a decade.
"It's the simultaneous drop of both commodity prices that is hurting MRFs," says Dan Gee, senior associate with Moore & Associates, an Atlanta, Georgia-based consulting firm specializing in the paper recycling industry.
Market indicators show this being more of a long-term industry trend, rather than a short dip in the market.
"There is no quick fix for mixed paper," Gee adds. "Most estimates are it will take a minimum of two or three years, possibly longer, for mixed paper to recover, and recycled paper quality required from MRFs will increase."
Gee says MRFs are handling these current market challenges in several ways. Some are renegotiating contracts with their municipal customers, if possible. Others are simplifying what recyclable material they will accept, while some are returning unmarketable material to the landfill. Some domestic buyers are not accepting any paper, while others are biding their time and hoping for a market rebound.
Better sorting, higher value
The United States recycles roughly 58 million tons of fibre products annually. (In Canada, according to Environment Canada, paper and fibre products account for more than 1/3 of all Canada's waste, with approximately 6 million tonnes of paper and paperboard recycled annually.)
With MRFs processing high volumes of fibre daily, sitting back and waiting for a market rebound could be a costly strategy.
"My customers tell me roughly 70 to 75 percent of their volume received is fibre - cardboard, newspaper, office paper, etc.," comments Doyle. "Most of the material inflow is sorted into products the operation either has to pay someone to take, or the value is a fraction of what it has been.
"MRFs must start looking at sorting their paper differently. While there isn't money in mixed paper, there is money if this commodity is further separated," he says.
Mark Neitzey, director of sales for Van Dyk Recycling Solutions, a specialist in turnkey sorting systems based in Stamford, Connecticut, tells his customers to examine the market from a supply and demand angle.
"Say you run a soup business, and for years your customers wanted this one soup recipe. It was your cash cow," Neitzey explains. "Unfortunately, demand for that recipe has vanished, but there are opportunities for you to switch to other recipes and make more money.
"What would the company do?" he asks.
"Think of mixed paper as the mirror image of being ‘greater than the sum of its parts,'" adds Doyle. "Mixed paper sorted into individual components can result in much more revenue for the MRF, measured in the thousands of dollars per day."
Focus on products in demand
To survive, MRFs must rethink their approach to their recycling streams and shift practices to focus on making more profitable products that are in demand.
"One MRF manager in the southwest put it well when he said, ‘We are no longer in the business of making commodity grades. We are in the business of making products,'" relates Doyle.
Even without plant modifications or adding new sorting technology, shifting focus to a product vs. commodity mentality can help MRFs pull more OCC from mixed paper, for example, which will increase profitability. Estimates show approximately 40 percent of North Americans shop online multiple times monthly, resulting in the "Amazon Effect," by which a significantly higher percentage of smaller OCC ends up in single-stream recycling.
"We are not seeing as much large cardboard in single stream anymore," comments Neitzey. "Virtually everything comes in boxes today, so there are a lot of small boxes and chip board in the stream."
Doyle agrees, "Many existing MRF sorting systems were designed to remove the larger cardboard boxes. Since small boxes act like paper, more cardboard and chipboard will end up in mixed paper. Further sorting mixed paper to remove the OCC will help to boost profitability."
Moore & Associates' Gee mentions that a trend for some MRFs currently is to produce a sorted residential papers and news product (SRPN-PSI #56) from their residential paper stream, rather than from their mixed paper stream. SRPN consists of newspaper, junk mail, magazines, printing and writing paper, as well as other acceptable paper coming from residential material. Depending on the region, this "new" newspaper grade currently commands upward of U.S. $55 per ton.
Intelligent, high-tech Separation
MRFs also have the option to invest in high-tech sorting technology to further sort mixed paper contents and substantially improve sorted fibre revenue streams. Cognizant of today's market trends and tightening purity standards, optical sorting equipment manufacturers, such as TOMRA Sorting Recycling, have responded with a new generation of technological advancements to meet the sorting needs of today's MRFs.
While robotics is the hottest topic in the recycling industry currently, Van Dyk's Neitzey notes that savings from replacing manual sorters with robots can only go so far.
"While upgrading existing circuits is not as flashy as robotics, investing in intelligent separation through upgraded technology and rethinking sorting practices have the potential of saving the MRF hundreds of thousands of dollars a month in lost revenue," he says.
For example, the introduction of laser-based sorting technology within the last year promises to help deliver cleaner paper products like SRPN. Most MRF sorting systems include near infrared (NIR) technology to either positively or negatively sort paper. "NIR works great for sorting newspaper, white paper, magazines, PET bottles, milk jugs, etc." comments Neitzey. "However, this technology cannot see the black plastic bowl from a to-go container, or glass on the belt, allowing some of this material to end up in SRPN as impurities or prohibitives."
Laser-based sorting technology, such as TOMRA's Laser Object Detection (LOD), was designed specifically to identify and remove these traditionally hard-to-see materials from the paper stream, helping MRFs to pass a mill customer's sight-test.
"Since LOD detects items like black plastic and glass that NIR cannot see, combining LOD technology with our AUTOSORT system gives MRFs the ability to produce a cleaner paper product that meets today's purity standards," says Carlos Manchado Atienza, regional director Americas for TOMRA Sorting Recycling. "It can be installed as an add-on to an existing line to minimize investment cost or it can be a stand-alone unit on a new circuit."
SOP may be the key
Commanding over U.S. $100 per ton domestically and much more in certain markets, sorted office paper (SOP) may be the key to helping MRFs survive today's mixed paper market. This product consists primarily of white and coloured groundwood-free paper, free of unbleached fibres, and cannot contain more than one percent prohibitive materials, with outthrows plus prohibitives not exceeding five percent.
SOP can be separated from residential paper, but there is a catch. Unless the MRF has contracts with businesses or receives shredded paper, the percentage of white paper found in single stream can be limited, and it is market dependent.
"MRFs operating in a place like Boulder, Colorado, which has a high telecommute population, will tend to find more paper fitting the SOP parameters than those operating in urban areas," explains Neitzey.
Still, Doyle is a strong proponent of MRFs making the effort to sort out their SOP product and to consider changing business practices toward taking in more white paper.
"Say the MRF receives U.S. $148 per sorted ton of SOP," he says, "but is paying $2 per ton to offload mixed paper. That's a $150 per-ton swing toward profitability."
The next generation of optical sorting technologies available also aid in separating office-grade from mixed paper.
TOMRA's latest upgrade to the AUTOSORT system, called SHARP EYE, peers through paper into its molecular makeup to provide a cleaner paper sort.
"SHARP EYE can look through the colour to see if the fibres are completely dyed or if the paper is just colour-coated with a white base," explains Doyle. "It is capable of sorting the fully coloured fibres from the white paper wanted in an SOP clean product sort."
The latest TOMRA sorting technology also includes a larger, high-resolution lens not available on previous versions.
"We now offer customers the flexibility to choose between the standard resolution for regular sorting, and a high-resolution package, with SHARP EYE for sorting different products, including office paper that meets purity standards," says Doyle.
Manchado Atienza agrees and stresses to customers that purity is critical with sorting. "Classification volume is important, but without detection precision, the investment is useless."
Neitzey also advises customers who want to separate out office paper that tipping floor management is a very important aspect to consider. "Blending everything together on the floor will reduce the amount of white paper an operation can separate from the mixed paper," he says. "It's best to sort out as much of the white paper as possible on the floor. Some customers currently do this and dedicate two or three days a week for sorting office paper."
While targeting high-value products within the fibre stream isn't new, the consequences of not doing so within the confines of today's market conditions may be the difference between profitability and survival for MRF operators.
"Fibre is also the most labour-intensive process to which there is no financial gain, given today's mixed paper market plus labour costs," concludes Doyle. "If MRFs continue to ‘weather the storm' by increasing labour and decreasing throughput to make a negative-value product, I fear by the time mixed paper rebounds, we will have already lost much of our recycling infrastructure."
However, he emphasizes, with equipment manufacturers now offering market-proven paper sorting technology advancements, such as LOD and SHARP EYE, the resources are available for MRFs to use the demand for purity and product diversity to their advantage. RPN
President of Z-Comm LLC, Rick Zettler is an Iowa-based writer, photographer and award-winning PR & marketing consultant.
This article was originally published in the September, 2019 edition of Recycling Product News, Volume 27, Number 6.
More from Paper Recycling
While the recycling industry faces challenges stemming from China's restrictions and bans, things are looking up in the form of increased investment from both MRFs and end markets. Today, there are more opportunities than ever for food and beverage cartons to find a second life in products ranging from paper products like towels, writing paper, tissues and cups, to eco-friendly building materials.
FCC's new single-stream facility in Houston revitalizing neighbourhood while cleaning up contaminated stream
Running since March of this year, FCC Environmental Services has opened up a new single stream plant in Houston, TX. The plant will accept residential single stream material from throughout Houston for a minimum of 15 years. FCC has also made the city the new home of their U.S. corporate headquarters, settling into the East Houston community. The district has embraced the recycling facility as a welcome investment in an underdeveloped part of town. FCC has employed many local citizens at the site, including some from a second-chance labor provider, to really make themselves part of the local landscape.
The first robotic sorting systems in Canada were installed in the Fall of 2018 by Machinex, at the Sani-Éco MRF in Granby, Quebec, and soon after, at the Chatham-Kent Recycling MRF in Merlin, Ontario. At both facilities Machinex installed a double robotic sorting system, using two SamurAI robotic sorting units placed in succession on a single line. This summer, Machinex installed three more robotic sorting units at a MRF in Toronto and one machine at a MRF in Winnipeg.
Since its inception in 2010, the Carton Council of Canada (CCC) has worked to deliver long-term solutions to help increase carton recovery and recycling in Canada.
In apparent retaliation to the U.S. Administration's recent announcement of tariffs on Chinese products to begin in September and December, the Chinese government announced last week its intent to levy additional tariffs on $75 billion worth of goods from the United States. These tariffs add on to those already in place from announcements in 2018.
Santa Barbara County, California has buried about 200,000 tons of annual trash in its Tajiguas Landfill since 1967. The landfill was on track to hit its capacity in about six years from now, until the announcement of a renewable energy project that is expected to extend its life by an additional decade.
This past spring, BACE, LLC announced the launch of the first-ever, fully-integrated Ecosystem for balers and compactors, powered by the IntelliBACE Platform. This August, BACE announced issuance by the United States Patent and Trade Office (USPTO) of US Patent No.: US 10,377,518, which protects the IntelliBACE Platform.
While headlines over the past few years might lead some to believe otherwise, the reality is that Americans say they are still recycling at the same rate, despite having little confidence that their recyclables actually get recycled. A national poll conducted by Mason-Dixon on behalf of the U.S. based Carton Council showed that 85% of respondents report they recycle.
In June, RPN had the opportunity to visit Canada's only turnkey MRF technology provider, Machinex, at the company's headquarters in Plessisville, Quebec. The company is very busy, with multiple MRF design/installation and retrofit projects across Canada currently and through 2020 - which will mark Machinex' 50th anniversary in manufacturing.
merQbiz, a solutions and analytics provider for buyers and sellers in the recovered paper (RCP) industry, introduces BaleVision, providing companies actionable insights into their RCP quality. Combining a leading quality assessment tool with comprehensive data, BaleVision helps RCP buyers maximize supplier performance and sellers earn a fair price for their product.
Republic Services is tackling head-on the crisis of overly contaminated waste streams in today's MRFs. With current residential contamination levels reaching as high as 30% or more, it is critical that processors send a clear message to the community about what is accepted in the recycling program, while also employing the most advanced, flexible technology on the market to separate this evolving stream.
A new report from NPC Partners is now available in the U.S. and Europe through Atlanta-based paper recycling consulting firm Moore & Associates. NPC Partners is a global consultancy based in Hong Kong with offices in Beijing, Shanghai and Atlanta. NPC Partners is committed to assisting the pulp and paper industry innovate and grow based on winning strategies and new market insights.
June 12-13, Machinex and the Carton Council of Canada invited Recycling Product News to Quebec. The first stop was a tour of the Machinex manufacturing facility and HQ in Plessisville, about 2 hours East of Montreal. Secondly, the Carton Council of Canada and Machinex hosted customers and press for a tour of Sani-Éco's MRF in Granby, Quebec where Machinex recently installed the company's latest Mach Hyspec optical sorting technology, along with a pair of SamurAI robotic sorting units for handling both cartons and PET/HDPE plastic.
Last month, in an effort to crack down on illegal shipments, the Indonesian government imposed new regulations on imports of recovered paper. The rules included a 0.5% contamination limit and 100% pre-shipment inspections, including separating containers into bales. The government has now announced that it will instead use the Institute of Scrap Recycling Industries (ISRI) specifications for recovered paper which set a standard of 1-2% for prohibitives and 3-4% for outhrows. It is also using the specifications to define its use of the word "homogenous" in describing the condition of bales.
After a two-month construction and installation period, Area Recycling launched its new state of the art material recovery system this week. The facility expansion and equipment upgrade represents a $3.5 million dollar business investment for PDC, Area Recycling's parent company, based out of Illinois.
Moore & Associates, a paper recycling consulting firm based in Atlanta, recently announced the availability of the 2019 China Recovered Paper Market & Policy Advisory Report. From Hong Kong-based NPC Partners (a premier and innovative consultancy firm for the pulp & paper industry), the new report presents a view from inside China, including insights and analysis on China's new recovered paper policies, markets and global impacts.
ZWS Waste Solutions, LLS (ZWS) of Rochester, Massachusetts, has opened one of the most advanced recycling facilities in the world.
The City of Lethbridge, Alberta held the grand opening of their new single-stream material recovery facility on May 8. According to Machinex, their sorting system at the facility, commissioned in mid-April, will allow the City to process residential recycling materials generated by a new blue cart program that is currently being set up.
Machinex attended the official ceremony this week marking the major upgrade of the Sani-Éco material recovery facility located in Granby, Province of Quebec, Canada. The owners of the recycling management company reiterated their trust in Machinex, which provided them their sorting center more than 18 years ago. This modernization will allow an increase of their current sorting capacity in addition to bringing a direct improvement to the quality of the fibers produced.
Bulk Handling Systems (BHS) has launched the Max-AI AQC-C, a solution that is comprised of Max-AI VIS (for Visual Identification System) and at least one collaborative robot (CoBot). CoBots are designed to work safely alongside people which allows the AQC-C to be quickly and easily placed into existing Material Recovery Facilities (MRFs). BHS launched the original Max-AI AQC (Autonomous Quality Control) at WasteExpo in 2017. At this year's show, our next generation AQC will be on display along with the AQC-C.
RePower South (RPS) has begun processing material at the company's new recycling and recovery facility in Berkeley County, South Carolina. The recycling system, provided by Eugene, Oregon-based Bulk Handling Systems (BHS), is one of the most advanced in the world. The highly automated system is capable of processing more than 50-tons-per-hour (tph) of mixed waste to recover recyclables and produce a fuel feedstock.
Machinex recently carried out a full design review of the MACH Hyspec optical sorter. As part of this process, the decision was made to totally revamp the overall appearance of the unit.
Niagara Recycling was incorporated in 1978 as a non-profit social enterprise company. Norm Kraft started with the company in 1989, became CEO in 1993, and has never looked back.
Only a few years ago the standards for recycled paper and board in China were not high. As a massive importer, China is now known to reject entire container loads based upon one inferior bale. Responding to this reality, Valorizaciones Vilar Guillén SL (V V G) set out to streamline their entire business to deliver against tight specifications, earning respect and repeat business as a result.
Between summer 2017 and 2018, Dem-Con Materials Recovery in Shakopee, Minnesota retrofitted their single-stream MRF with three new MSS CIRRUS optical sorters for fiber from CP Group. The units increase recovery, improve product quality and reduce sorter headcount on the fiber QC. A fourth MSS CIRRUS sensor is currently in production and will install this summer.
MSS, Inc., the optical sorting division of CP Group, has received a patent for their PrecisionFlow eject hood for optical sorters.
Canada Fibers awarded contracts to design, build and operate two technologically advanced recycling facilities
Canada Fibers Limited (CFL) has been awarded two contracts to design, build and operate advanced single-stream post-consumer Material Recovery Facilities (MRFs) in Winnipeg, Manitoba and Peel, Ontario. The Company is constructing an 80 thousand square foot greenfield facility in Winnipeg and is retrofitting the Region of Peel's existing MRF. Both projects involve advancements to recovery technologies in response to increasingly rigorous quality standards from industries utilizing post-consumer recyclable materials.
Machinex and Canada Fibers partnership to result in two of the most technologically advanced single-stream facilities in North America
Toronto-based Canada Fibers Ltd. (CFL) is building two single-stream recycling facilities in 2019 that will include the most advanced, high-tech fibre and plastics sorting and recovery systems in Canada. In Winnipeg, Manitoba, a completely new 30-tonnes-per-hour facility (approximately 80,000 square feet) is currently under construction and scheduled to open in the fall. In the Region of Peel, Ontario, the existing Peel Integrated Waste Management Facility MRF, owned by the Region, will be retrofitted for 31.5-tonnes-per-hour capacity, with the updated facility (approximately 85,000 square feet) scheduled to open in the first quarter of 2020.
The good news for recovered paper exporters as the calendar flipped to another new year was China's issuance of almost six million short tons worth of import licenses in December. The first batch of permits issued by China's Ministry of the Environment, covering about 5.5 million tons, was more than double the amount of recovered paper allowed by China's first batch a year earlier.
Balcones Resources celebrated its 25th anniversary in business this month, growing from a small Austin-based paper recycler to a comprehensive environmental services company with facilities in Austin, Dallas and Little Rock. Balcones marked the milestone with a reception featuring a presentation of $25,000 in total donations to five Austin-area environmental organizations: EcoRise, Hill Country Conservancy, Keep Austin Beautiful, Shoal Creek Conservancy and Waller Creek Conservancy.
TOMRA Sorting Recycling has announced two additions to their North America product support team. Sean Hyacinth has been added as a field service engineer for TOMRA optical sorting equipment, while Kevin Javier Montalvo assumes the newly created position of customer project manager, recycling. Both team members will work directly with TOMRA dealers and customers to strengthen equipment service and project management throughout North America.
ZenRobotics Ltd. has appointed Wolfgang Schiller as the company's new CEO, effective immediately. Prior to ZenRobotics, Mr. Schiller was the Vice President Electronics Industry at KUKA AG, a leading supplier of intelligent automation solutions. According to ZenRobotics, as CEO, Schiller will be responsible for further developing ZenRobotics' business and accelerating the uptake of intelligent robots in waste management.
In the spring of 2018, Plessisville, Quebec-based Machinex introduced its new SamurAI sorting robot, which, according to the manufacturer, has since generated a lot of industry interest. Nearly six months after its launch, the response of the market has been very positive and nine robots have been sold to date. The first two SamurAI in Canada have just been installed in Quebec while six more robots will be installed by next year in Canadian sorting centers. Moreover, the company says they continue to have regular requests from customers who are greatly interested in this cutting-edge technology.
Greif, Inc., a global provider of industrial packaging products and services, announced December 20 that it has entered into a definitive agreement to acquire Caraustar Industries, Inc., the leading recycled paperboard and packaging solutions company, from an affiliate of H.I.G. Capital, in a cash transaction valued at $1.8 billion. The transaction is expected to close during the first quarter of calendar year 2019, subject to customary closing conditions, including regulatory clearances.
The Institute of Scrap Recycling Industries (ISRI) recently announced the release of its seventh annual Recycling Industry Yearbook, providing the most up-to-date information and statistics about the U.S. recycling industry and global scrap marketplace. With a greater spotlight on the industry in the wake of rising trade protectionism around the globe, the publication provides the most comprehensive analysis of where the industry stands based on the most current data compared to previous years. It will also serves as a baseline for years to come based on the new global market realities.
The purpose of paper recycling is to produce high quality recycled paper, responding to the high-quality specifications required by paper consumers either from the graphic, hygiene or packaging sectors. In consequence, any collection scheme should be designed in a way to provide grades of paper for recycling adapted to the requirements of high value recycling, according to the EN 643 to the paper industry, either directly or after sorting. (EN 643 is the European List of Standard Grades of Paper and Board for Recycling.)
CP Group, the San Diego-based recycling solutions provider and equipment manufacturer, unveiled their Virtual MRF over a year ago. Now for the first time, it will be on display internationally at Residuos Expo 2018 in Guadalajara, Jalisco Mexico.
TOMRA Collection Solutions has become the first reverse vending provider to offer digital vouchers as a payout option for container deposit schemes, where consumers receive refunds when they return their empty bottles and cans for recycling at a reverse vending machine.
Mondi, a global leader in packaging and paper has partnered with One Young World, the global forum for young leaders, on the Lead2030 initiative - a competition to find youth-led practical solutions to drive progress on the United Nations' Sustainable Development Goals (SDGs). Mondi has committed $50,000 to fund a project that will make a tangible contribution to SDG12 ‘Responsible Consumption and Production'.