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Building a niche: the residential housing boom has helped U.S. GreenFiber grow as an end market for recycled newspapers.

When people think of end markets for recovered fiber, they may think of a large newsprint mill. Others may see their recovered fiber end up in corrugated containers. Still some other people may find out that much of the recovered fiber ends up in some of their paper, tissue or boxboard products.

However, fewer people may be aware that the building products industry also is a significant consumer of recovered fiber.

But the building products business of U.S. GreenFiber LLC, Charlotte, N.C., depends as heavily on recovered fiber as any paper mill.

COMMON PURPOSE. U.S. GreenFiber is 50 percent owned by Louisiana-Pacific Corp. (LP), Nashville, Tenn., and 50 percent owned Casella Waste Systems Inc., Rutland, Vt.

The two parent companies come from different industries: LP is a producer of building products, while Casella is a national waste management and recycling company.

The GreenFiber venture, established in 2000, is comprised of two former insulation companies: Greenstone, which was established in 1994, and U.S. Fiber, established in 1997. The combined company has manufacturing plants in Charlotte; Atlanta; Delphos, Ohio; Denver; Elkwood, Va.; Norfolk, Neb.; Phoenix; Sacramento, Calif.; Tampa, Fla.; and Waco, Texas.

Along with the insulation plants, GreenFiber also operates a mulching operation, located at the company's Elkwood, Va., facility.

GreenFiber's largest volume product is cellulose insulation made from 85 percent recycled paper, primarily old newspapers and old telephone directories. The company also takes in small amounts of other grades of recovered fiber.

This niche, while not as well reported on as the paper industry's use of recovered fiber, has helped the company grow and use significant amounts of scrap paper in the past several years.

GreenFiber has a national distribution network for its Cocoon-brand insulation products. The company focuses its marketing efforts on three primary channels: contractor, manufactured housing and retail. The contractor market sector is comprised primarily of new construction of single and multi-family custom, semi-custom and production homes, but also serves applications in the retrofit market.

Cocoon cellulose insulation is marketed as having outstanding resistance to heat flow for thermal applications, as well as noise suppression for acoustical treatments and added fire resistance in the walls, attics, ceilings and floors of residential and light commercial buildings.

GREEN GROWTH. Dennis Barrineau, president and CEO of U.S. GreenFiber, says that the company's growth has been continuous, and he has expectations that demand will continue to push the overall production at the company's (far-flung operations to perhaps double where they are right now.

With 10 plants throughout the United States, the company consumes around 350,000 tons off recovered fiber per year, a figure that is expected to continue to grow as the company sees strong demand (for its finished product.

To meet this demand, GreenFiber purchases fiber (from materials recovery (facilities (MRFs) and curbside collection programs as well as printers. However, because of the need (for as clean a raw material as possible, the company is looking to work with more residential recycling programs with dual-stream materials collection in place. A dual-stream system keeps fibrous material segregated (from containers.

While demand (for its insulation products remains healthy, there are concerns on the horizon.

As with many consumers of scrap paper, GreenFiber is seeing the degradation of the raw material it takes in as a major problem. One of the biggest problem grades continues to be the one the company most relies on: old newspapers (ONP). The continued growth in popularity of single-stream collection methods means that, for GreenFiber (as well as many other consumers), quality questions may continue to be a major issue in its operations.

"Quality is a real issue," Barrineau says. "We have people sorting the material." In terms of increasing the amount of sorting that takes place at the front end of the processing system, the company continues to invest in installing disk screens, trommels and other cleaning equipment to extract plastic, glass and other contaminants before they enter the dry processing system.

Barrineau says that the situation will likely intensify, especially if markets remain strong. "As prices go up, there is no incentive to clean it up," he says of the ONP shipped from some facilities. While the company is capable of moving between ONP and the much cleaner grade of telephone directory paper, the fact that ONP is a more widely available grade will continue to make the company susceptible to the fluid nature of that grade's quality.

Beth Royse, in charge of procurement for the company's plants in the Eastern United States, says that the company takes in the material dry and unbaled. This gives the company several advantages. For one, taking out the baling process lowers the purchase cost. With loose paper it is also easier to do a sortation to pull out more of the contaminants. According to Royse, all but one plant in the GreenFiber system takes in material loose.

Another area that the company focuses on is receiving dry material. Because the company operates a dry processing system, the presence of wet material is a major deterrent.

TAKING STEPS. With 10 locations throughout the country, GreenFiber has both the luxury (or sometimes disadvantage) of not being totally linked to the market in one region. Barrineau notes that the company is seeing strong demand for products produced at its plants in the Southeast, West Coast, Rocky Mountain area and Midwest.

Reflecting the strong regional growth in some areas of the country, GreenFiber recently announced that it doubled its production capacity at its Phoenix plant. The plant services residential customers in much of the Southwestern United States.

On the procurement side, the company has to contend with supply networks in some regions that do not have identical quality levels. One step the company hopes to achieve is getting as much as 50 percent to 60 percent of its raw material from long-term sources as an incentive to receive a steady amount of material.

As for the quality of the material, while recognizing that the company, like other suppliers, has to operate in the marketing environment that exists, Barrineau says that it tries to differentiate between different suppliers. "We reward good suppliers, while we discontinue purchasing from suppliers with poor quality," he says.

The company also visits suppliers and has suppliers come to its various plants so there is a better understanding of what the operations entail.

While many of the supplier companies are aware of the quality requirements, Barrineau says GreenFiber still has to invest in more equipment at the front end of the system to keep out any contaminants.

The importance of delivering quality material is heightened because the GreenFiber process does not involve the cleaning washes that paper and paperboard mills use in their pulping processes. In fact, the actual production process, known as a dry processing procedure, is fairly straightforward.

The delivered material is shredded to roughly the size a quarter. From there the material is fed into a disk refiner, also known as a fiberizer, where the fire retardant is added. From these steps the material is then packaged for sale.

For GreenFiber's purposes, moisture content is a critical issue. While many consumers have wryly said that some suppliers will wet down a load to increase the weight, for GreenFiber, the need for a dry shipment relates to the actual end use. Paper companies use a tremendous amount of water to pulp the recovered fiber. However, because GreenFiber's processing system is a dry system, dampness creates significant problems on the manufacturing side.

With moisture closely watched, Royse says that in her territory there are not many moisture rejections. While relying on MRFs for much of its supply, the company also has been eyeing an expanded role working directly with municipalities that are close to some of the company's plants.

Recognizing the aggressive nature of some paper and paper recycling companies to place containers for old newspapers in certain targeted areas, Royse says this is an area where GreenFiber can become more active.

While competing for material with major consumers of recovered fiber (domestically and offshore) is a challenge, the nimble nature of the company has allowed it to work closely with suppliers who have been able to meet GreenFiber's needs.

While sourcing quality material is a major concern for GreenFiber, its relationship with parent company Casella Waste Systems provides an effective collection relationship with FCR, the recycling arm of Casella. The arrangement works, despite the fact that "we are an arm's length from our parent companies," Barrineau comments.

In at least one market, GreenFiber has been able to use its relationship to request material of higher quality. FCR's Mecklenburg County, N.C., MRF feeds the collected material right to the insulation plant in Charlotte.

Another step the company takes to get the cleanest, best quality material delivered to its plants it to contract as a steady supplier, rather than jumping in and out of the market.

While it sees good growth prospects down the road, the company expects to remain strictly a U.S. operation. While Canada may be an avenue for growth, in the short term the company feels that its best growth prospects are within domestic markets. And, with home ownership so strong, U.S. GreenFiber is gearing up for steady to strong purchases and growing capacity on the domestic side.


CORP. STRUCTURE: A joint venture between Louisiana Pacific Corp. and Casella Waste Systems

PRINCIPALS: Dennis Barrineau (pictured at left) is president and CEO. Beth Royse is Eastern Procurement Manager. She handles purchasing for the company's plants in the Eastern half of the United States. The plants in this territory include facilities in Ohio, Georgia, Florida, Virginia, North Carolina and Nebraska. Fay Fisk is the Western Procurement Manager. Her territory covers GreenFiber's plants in California, Arizona, Colorado and Texas.

LOCATIONS: Headquartered in Charlotte, N.C, with a plant also located there; nine additional plants in Atlanta; Delphos, Ohio; Denver; Elkwood, Va.; Norfolk, Neb.; Phoenix; Sacramento, Calif.; Tampa, Fla.; and Waco, Texas.

TONS OF RECYCLED PAPER CONSUMED ANNUALLY: 350,000, predominantly ONP and telephone directories



While U.S. GreenFiber LLO, Charlotte, N.O., targets old newspapers (ONP) as a raw material, the company is critical of the grade's status in today's market.

Beth Royse, GreenFiber's Eastern Region procurement manager, says ONP is not being sorted to specification. "What used to be a No. 8 (de-inked news) is now a No. 6, while a No. 6 News is now a mixed paper," she adds.

Therefore, the quality issue continues to provide major challenges for the company as it sorts and uses ONP delivered to its plants.

To compensate for suspect quality, GreenFiber pre-qualifys every source to be sure the material coming into the plant meets its quality expectations.

On the West Coast, the heavy presence of single-stream collection programs makes defining the grades an even more daunting challenge.

Royse says GreenFiber seeks out "morn and pop" MRFs that are conducting a much cleaner sortation rather than pushing single stream.

The growing presence of the Chinese market also affects the company. As China, and to a lesser degree other consumers outside North America, make a strong play for U.S. recovered fiber, competitive forces will continue to make GreenFiber work hard to guarantee that it procures enough raw material to meet its demands.

The author is senior editor and Internet editor of Recycling Today and can be contacted at
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Comment:Building a niche: the residential housing boom has helped U.S.
Author:Sandoval, Dan
Publication:Recycling Today
Article Type:Company Profile
Geographic Code:1USA
Date:Jan 1, 2005
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