Commentary & Analysis
Maximizing Your Recycled Waste Revenue
Sometimes waste is something to get rid of. Other times, it can make money. Depending on your situation it can be your choice. With a bit of time and effort as well as assigning responsibility it can pay you dividends.
By John G. Braceland
Published: January 13, 2014
Recycled waste and trash is at the back end of most company’s operations and is not always given enough attention. This is complicated by the fact that some waste dealers may not work to maximize your revenue. With a little attention and due diligence with your local dealers you can increase your profits.
If you sell your waste as a loose product there are a few things you can do to improve your revenue. First, examine if further segregation can help, based on your waste stream. Separating coated from uncoated, unprinted from printed can make a big difference. This takes some time, education and organization. Focus on the press and cutter areas. Mark waste bins with the grade of paper. If you are producing perfect bound books, separate the side trim from the front trim. Examine each process where waste is generated to see if additional segregation is possible or profitable. Since this segregation increases your revenue and may decrease your waste dealer’s revenue not all dealers will help or encourage you to do this until pushed.
If additional segregation does not make sense, you may be able to negotiate a special grade for your paper if you have a small amount of a lower grade waste mixed in. For example, lightly printed, or a small amount of printed, is mixed with unprinted. Trimmed waste from a saddle stitcher may not have much printing and may be sold at a higher price.
Baling instead of sending loose waste may make sense if you have the room and generate enough waste of a specific grade. If you have older baling equipment it may make sense to upgrade. Newer equipment may save labor or make better or large bales. If you have room, a scale is a good investment to double check weights. If not, make sure your bales or loose waste is being weighed at a certified weigh station.
Pricing and payment are usually the thorniest issues with waste dealers. Independent publications, such as RISI’s Pulp & Paper provide a range of pricing from high to low or by geographic region. Are you paid the high price or the low, or a portion under or over the published price? Based on your volume, paper grades, and proximity to mills, your pricing can be negotiated.
You can also negotiate an open book arrangement. The waste dealer will pay you a portion of the mill receipt, which can work well with mill direct bale shipments. Make sure you can trust the dealer with whom you work. By working on a percentage of mill invoice, both you and the waste dealer have an incentive to increase your return.
Recycling is usually handled locally, so most printer’s contract with someone in their own back yard. However, national recyclers, brokers and mills will arrange for local pick up. Since they move more tons, they have much better leverage. The overseas market is also a big user of paper waste, which you can explore with the right waste dealer.
Are you calling your waste dealer each month to be paid or do you have agreed upon payment terms. The length of time for payment from fifteen days on out is also negotiable.
Aluminum is also a recyclable from which most printers receive some revenue. The London Metal Exchange, www.lme.com provides market pricing for aluminum as well as other metals. By charting pricing each month you can see if the price of aluminum is going up or down and by what percentage. You can use this to keep your recycler honest.
Properly managing your waste stream can not only pay dividends to you bottom line but also with your customers. You can demonstrate to your customers how “green” your product really is by showing that most of your waste is recycled.
Improving profits in recycling is a gift that keeps on giving. By increasing segregation, moving to baling or reducing your trash month in and month out the money keeps rolling in.