Senate bill may seal fate of plastic cover in envelope industry.

Senate bill may seal fate of plastic cover in envelope industry

Southern California envelope makers could find their business coming a bit unglued if a bill outlawing the use of plastic windows in junk mail and billing statements is passed by the state legislature. At least 10 billion envelopes are produced in the Southland each year.

Last Tuesday the state Senate's Committee on Governmental Organization approved legislation that would ban the use of envelopes with plastic windows in advertising mailers, sales solicitations and billing statements mailed in California after, the end of 1992. The bill, authored by state Sen. Milton Marks (D-San Francisco), is designed to cut the amount of non-recyclable wastes going into landfills.

Mills that recycle waste paper into new products have trouble processing envelopes that contains plastic windows, Marks said, because plastic contaminates the pulping process and leaves blotches on the finished product. The price of disposing of 600,000 tons of junk mail mailed in the California each year is $42 million, according to the Californians Against Waste, which is sponsoring the measure.

But envelope makers say the economic and environmental impact of the bill is about as certain as the price of stamps in the next century.

"This bill could be a traumatic thing" for the industry, said Jan Nathan, executive director of the Direct Marketing Association of Southern California. "The plastic envelope has been a real boon in our industry. It's the carrot that makes people open their mail, but like any other product, the industry will probably be able to find something to take its place."

And the economic incentive for that is no third-class matter.

While the Southern California envelope business lags behind other mailing hubs like New York and Chicago, industry sources say the roughly 25 envelope companies that operate here post annual revenues between $200 million and $300 million.

An official at one envelope plant, who spoke on the condition of anonymity, said if the Marks bill became law it would have "a major economic impact" on his company because 80 percent of the 1 billion envelopes it produces use plastic windows.

The general manager at another envelope-making plant questioned the economic rationale for the bill. David Junkin, who oversees American Envelope's Santa Fe Springs plant, said recyclers routinely accept "100 percent" of the waste generated by his plant, plastic and all.

"It's a little bit confusing because recyclers can separate the paper from the plastic by moistening the paper," Junkin said. "This bill is unusual, but we haven't assessed the impact yet."

Junkin predicted that direct or junk-mail advertisers will lobby the hardest against the bill because of limitations on their "creative ability." Financial institutions, he said, may also worry that window envelopes without plastic windows could jeopardize confidentiality.

American Envelope, with about 200 employees, makes more than 1 billion envelopes a year for insurance and utility companies, banks and direct marketers. Roughly 35 percent to 45 percent of all envelopes now produced by American Envelope -- like the Southern California industry as a whole -- use plastic windows, Junkin estimated.

Alternatives for envelopes that don't use plastic may be available. One, used in billing at Pacific Bell, is to send out envelopes that don't require a plastic cover over the window.

But doing that can cause problems for the post office's sorting machines because they can catch on open-window envelopes. It can also mean trouble for envelope makers, who rely on the plastic windows to prevent the envelopes from being torn when they are stuffed for direct mail advertisements or bills.

Robert Kubat, plant manager at Transo Envelope Inc., said one alternative to the plastic ban could be to use glassine, a type of wax paper that the industry stopped using decades ago because of its poor clarity. Kubat, who oversees a Glendale-based plant makes about 900 million envelopes a year, disagreed that the ban would cause much economic hardship.

"It won't be a major problem for us," Kubat said. "It would if it meant we didn't produce as many envelopes."

If the bill passes, companies that produce or send out envelopes with a plastic-window cover could be fined up to a $1,000 a day. The senate's Natural Resources and Wildlife Committee must vote on the Marks bill before it goes to the full senate for a vote.

A related provision in the Marks bill would restrict the use of rubberized address labels in cases where alternative labels could be used.