Making demands: the need for more fiber was a unifying message at the 2004 Paper Recycling Conference & Trade Show.

Concerns about scarcity provided a common thread through many of the sessions at the 2004 Paper Recycling Conference & Trade Show, held at the Renaissance Waverly Hotel in Atlanta in late June.

The conference, hosted by the Recycling Today Media Group and co-sponsored by the Paper Stock Industries (PSI) Chapter of ISRI, brought together some 500 paper recyclers, mill consumers and industry suppliers to discuss the latest trends and issues affecting their industry.

Many of those discussions centered around shortages, including concerns about future shortages of recovered fiber; a shortage of rail cars. trucks and drivers to keep scrap paper moving; and even backed up orders for processing equipment.

LOOKING FOR MORE. in any commodity market, supply and demand are seldom in perfect balance. Trouble can arise when the scale tips too far in one direction, which is where mine forecasters worry the scrap paper markets are headed.

Presenters at the keynote session of the Paper Recycling Conference had different messages, but all revolved around the notion that recyclers would have plenty of job security in the years ahead feeding the world's pulping machines and other scrap paper consumers.

Moderator Bill Moore of paper industry consulting firm Moore & Associates, Atlanta, set the stage by pointing out the dramatic increase in China's use of scrap paper as a feedstock for its booming paper industry. China's need for scrap paper has brought its mill buyers to Japan, Europe and North America to harvest an increasing share of each region's recovered paper.

Henri Vermeulen of The Netherlands-based Kappa Packaging (and the chairman of the European paper trade group CEPI), stated that it will be possible for the recycling industry to supply global needs, but that to explain how is similar to explaining how a bumblebee manages to fly in defiance of the laws of physics.

In Europe, federally mandated residential collection programs have produced considerable new supply, though Vermeulen noted that the world's markets have absorbed this material as quickly as it has been produced.

Such collection efforts in China would be a logical step to help supply meet demand. "At the end of the day, the market will find its own way no matter what every theory predicts," Vermeulen stated.

Simon Davies, president-Recycled Fiber of Georgia-Pacific Corp., Atlanta, noted that those only vaguely familiar with the company probably think of it as a timber company, even though its containerboard and tissue segments are now "over 50 percent reliant on recycled fiber."

Like Vermeulen, Davies pointed to the legislation that has driven European recovery rates and also mentioned the single-stream methods that are harvesting more tonnage in North America.

Despite these successes, Davies pointed to economist Woody Brock's "Chindia" description of China and India's emerging middle class of 600 million consumers. "It's a market the size of the EU and the U.S. put together--a huge emerging middle class that is driving consumption" of all commodities--including scrap paper.

Pieter Eenkema van Dijk, president of recycling equipment supplier Van Dyk Baler Corp., Stamford, Conn., predicted the trend toward fewer but larger recycling plains would continue in coordination with industry consolidation. He offered as proof: "We sell more and more large balers and fewer and fewer small balers."

In North America, haulers continue to dictate the move toward single-stream collection. "Ninety percent of new large curbside sorting systems are single-stream systems," he noted.

In Europe, landfill costs are higher, thus promoting recycling. However, much of Europe's recycling remains source-separated, van Dijk noted. Recylers on both sides of the Atlantic are studying optical systems and advanced screens in the drive to improve automated sorting, he remarked.

DRIVE TO 55. The organization representing many consumers of scrap paper made it clear that it sees recovering more of the commodity as important.

Statistics compiled by the American Forest & Paper Association (AF&PA) indicate that half of all paper used in the U.S. was recycled last year. Calling this "a significant milestone," the association says recyclers and mills should aim for a 55 percent rate by 2012.

"Americans have done a great job of recycling paper, but we all need to do more," said Fred yon Zuben, AF&PA Recovered Fiber CEO Committee chairman. He is also the chairman and CEO of The Newark Group, Cranford. N.Y.

At a press event held at the Paper Recycling Conference, von Zuben and other AF&PA officers said the additional 5 percent recovery will be needed as feedstock for North American paper mills. "Greater recovery of these paper products will help ensure a steady, reliable supply of recovered paper for our country's paper manufacturers," said von Zuben.

The AF&PA will work with the U.S. EPA and Keep America Beautiful to help educate and encourage Americans to recycle paper at their homes, offices, schools and other buildings.

GETTING IT THERE. A shortage of truck drivers is the biggest issue the tracking industry faces right now, and it is creating stress for industries served by truckers, too.

Speaking at a workshop at the Paper Recycling Conference & Trade Show, Jonathan Franssen of William Edwards Inc./Team Logistics, Verona, Va., predicted that the driver situation is "going to get better; it takes time."

Increases in fuel charges are contributing to the escalating rates charged by trucking companies, Franssen added, saying that in some cases, the rates have increased by more than $100 per truck load in the last year.

The driver shortage has spurred consolidation, with larger trucking companies buying out smaller operators. In the meantime, Franssen suggested that dedicated lanes and drop-trailer locations will help to ease the situation and keep costs down by helping to keep the trucks moving.

Franssen concluded by saying that while on-time shipments are suffering in light of the driver shortage, the situation should ease in 10 to 14 months.

Casey Carmody of CSX Transportation, Jacksonville, Fla., said operational issues are putting stress on the rail industry fleet now that the economy is showing signs of improvement.

He said that rail offers savings over trucking because rail cars are capable of holding the cargo of from two to 3.5 trucks, providing economies of scale.

CSX has access to 95 paper mills in the eastern U.S., Carmody said, which offers natural opportunities for backhauling.

BOOM TIMES. Mixed paper is being recovered more frequently in North America, and presenters at a session on the grade discussed the opportunities available to recyclers. Also discussed were ways to increase the amount of the material collected by considering the roles of the public and private sectors and various strategies for opening up new sources for mixed paper.

Peter Engle of Moore & Associates, Atlanta, served as moderator for the session. He presented figures detailing the increase in mixed paper relative to OCC on the domestic and export markets, saying that mixed paper is collected at a pace of 62 percent, compared to OCC for domestic consumption, and from 60 percent to 70 percent of OCC for the export markets.

Engle said the high price of mixed paper relative to OCC creates new recovery opportunities for the grade. However, a number of challenges exist.

Recyclers must overcome collection economics, as it is currently too expensive to collect mixed paper from small to medium-sized companies, Engle said. Additionally, single-stream collections, the traditional private collector/packer business model and the involvement of the public sector in the form of recycling mandates and landfill bans also offer challenges to increased recovery of mixed paper.

Engle added that the impetus to increase the supply of mixed paper is demand-driven, unlike with old newspapers (ONP) in the 1980s. Another factor that distinguishes the mixed paper boom from the ONP boom of the 1980s is that the grade contains fiber of higher value.

Sharyn Dickerson of Athens-Clarke County, Ga., addressed mixed paper from a municipal viewpoint. The community employs a pay-as-you-throw system with a two-tiered fee structure and has seen a 17 percent decrease in trash volumes since 1999.

The program uses a dual-stream system that segregates mixed paper from bottles and cans. The area's recycling rates for mixed paper, however, have declined in the last fiscal year from 655 tons in 2002 to 619 tons in 2003. The program recovered the most mixed paper in fiscal year 2001 with 700 tons.

Allen Stein of Gulf Coast Recycling, Beaumont, Texas, offered a private-sector recycler's view. He said that domestic demand for mixed paper has not grown much since 1997. Export demand is the primary driver behind the grade's growth, having increased from 1.5 million tons in 1997 to 4.7 million tons in 2003.

Stein said that the recovery rate for mixed paper currently stands at 30 percent, while OCC is at 70 percent, adding that the best opportunities to increase recovery for mixed paper are in areas with high tipping fees.

Jeff Kibler of Pratt Industries, Conyers, Ga., commented on the mixed paper boom as a collector/packer and end user.

Kibler said that if the market is there and the price is right for mixed paper, the processing technology will follow in time. "Mills must embrace new technology to accept varied fiber sources," he said. He added that he believes that the supply of mixed paper can be expanded without denigrating the quality of the material.

The contamination Pratt sees in its mixed paper grades are similar to those that it sees in its typical OCC supplies--glass, plastic and wax. Kibler suggested addressing contaminants at the source, with sales reps and drivers serving as an integral part of Pratt's quality program.

"Collection of commercial mixed paper can be economically viable for both the supplier and procurer," Kibler said. "One can collect varied mixed tons as long as the mill is willing to try new fiber sources," he added.

PRULLAGE WINS MILL BUYER AWARD

Gregory L. Prullage of Graphic Packaging International Inc., Kalamazoo, Mich., has received the second annual Mill Buyer Award, it was announced at the Paper Recycling Conference & Trade Show in late June in Atlanta.

Prullage has been in the recovered paper business for several decades. He started his career at the Fort Howard Company, which has subsequently gone through several mergers and is now part of Georgia Pacific Corp. "As many people know, 'The Fort' produced many alumni who are considered some of the best buyers in the industry," says Bill Moore, president of the Atlanta-based paper consulting firm Moore & Associates and one of the judges for the Mill Buyer Award.

After a stint at the Recycled Fibers Division of The Newark Group, in 1994 Prullage moved to his current position as manager of fiber procurement for Graphic Packaging's Kalamazoo, Mich., mill. The mill is one of the larger clay-coated boxboard mills in the U.S., using more than 800 tons per day of a wide range of recovered paper grades.

"Greg is highly respected for his integrity and communications skills as a buyer," says Moore. "He knows how to get the best quality and price for his mill, but has a reputation as being one of the fairest people in the business. Through a long career that's included many companies at a small number of mill sites, Greg has maintained continuity as a buyer that has served his employers well."

The authors are editorial staff members of Recycling Today and can be contacted at [e-mail] or at [e-mail].