Printer Friendly

Year in review: C&D recyclers discuss the past year's market and look ahead to what 2007 has in store.

That the construction and demolition materials recycling market is growing is the consensus of virtually all who study the industry. Many factors are causing it, including the green building movement, landfill issues and the fact that it has become increasingly more profitable to recycle than to just dispose.

To get a handle on what is actually happening out there for this report, C&D recyclers across the country were asked what was going on in their markets. They also weighed in on what issues are facing the industry and what is needed to improve those situations.

CALIFORNIA DREAMING

Last year started out slow in Southern California for Hanson America, Long Beach, Calif., according to Michael Rogers. But in the last seven months of the year it picked up in the developing areas for the concrete/asphalt recycler, especially in southern Orange County. "In Los Angeles County there isn't as much roadwork going on because they are mostly resurfacing the roads," says Rogers. But 2006 ended as a good year, surprising after how it started out.

For 2007 Rogers expects the market to stay somewhat flat, which means it should be another good, but not great, year. Among the challenges he sees for the industry is the difficulty in keeping recycling yards in urban areas because of the rising value of land in Southern California. As the price rises, a recycling plant is not the best and most profitable use of the land, unless the recycling company owns the property. He doesn't have the answer for the situation, but because of the shortage of natural aggregate in Southern California he hopes the market stays hot enough to keep the prices going up so recycling remains economically viable. "The option is to be squeezed out or move to the outlying areas, where you lose your trucking advantage," Rogers says.

He adds he has seen the concrete/asphalt market becoming more creative in finding and nurturing new niches, such as the use of recycled concrete in new concrete and even one company using the material for recycled asphalt.

For Downtown Diversion, a mixed C&D recycler in Los Angeles, 2006 was the inverse--the first half of the year was better than the second. Mike Hammer of Downtown Diversion says he expects that "with the economy slowing and the housing market halting, we are anticipating a slowdown for 2007."

Part of the reason, he says, "is in Southern California it is still cheaper to landfill debris than recycle it. Also, a number of cities with recycling ordinances do not strictly enforce them." The best way to fix those problems is stronger enforcement from state and local agencies, and perhaps even a disposal ban for recyclable C&D material.

But a decrease in local landfill capacity, along with an increase in municipal C&D recycling ordinances, is what helped fuel a steady 5 percent increase in the Bay Area in the northern part of the Golden State, according to Michael Gross, Zanker Road Landfill, San Jose, Calif. He says this situation is not a problem, just a business opportunity for C&D recyclers. This opportunity should spill over into 2007 as Gross says, "We are expecting a modest increase in volumes for next year, mainly because of the decreased disposal capacity and an increase in tipping fees in the region. We also expect increases in fees for biomass and roadbase, while other commodities should remain constant."

MIDWEST OUTLOOK

Iowa's markets tightened in 2006 because of opposition to alternative daily cover (ADC) made from C&D material from a small segment of the local landfill industry, says Rob Hosier, General Companies, Des Moines, Iowa. Getting material is not the problem, but the markets for ADC are not there, he says. However, there has been development of a market for C&D fines used as land abatement material in rural areas, and Hosier expects that to continue to grow in 2007. In addition, he is expecting an expansion of the wood fuel market, even though it is pretty solid already.

The issues he sees for C&D recycling are markets. "It's going to take government mandates to open different markets for materials such as renewable fuel," he says. One example he cites is an ethanol plant powered by C&D wood. "Why not?" he says. "They can use auto fluff, and our material is better than that."

"Pretty steady" is how John Kurtz, Kurtz Brothers, Independence, Ohio, describes the C&D market in 2006. "There has been no great trend one way or the other." For 2007 he expects that his company will do more recycling if only because it is putting in a major new processing facility. The incoming steam of C&D he expects to stay about the same. "We have seen more focus from our customers on LEED projects, and this system is a response to that," he says.

Issues Kurtz is concerned about include regulators who want to put the same restrictions on C&D recycling facilities as they do for solid waste facilities, which he says does not make sense. He has seen a lot more support from the Ohio EPA and DNR for recycling, but sometimes there is the old double-edged sword that while they support recycling, or say they do, it can cut into their own funding because they are supported by a tax on material sent to a landfill. Kurtz says he has suggested that the fee to dump be raised enough to cover any shortfall caused by recycling. Another possibility is those who do recycle, including the companies doing the processing, their customers, and the city and county governments who support C&D recycling, be given a small rebate for recycling. "Those who throw away will have to pay, and those who recycle won't," he says.

SOUTHERN COMFORT

In Sarasota, Fla., Dave Richardson, Crush-it, has seen a slowdown recently as the housing market has fallen off. "It had been very good in 2006 until a few weeks ago," he says. " Florida was booming and we had doubled our production from 2005."

He is not expecting the same success in 2007, as he expects the market will level off, although he says at a level twice as much as in 2005 is pretty good. The company will stay in a wait-and-see mode before making any further equipment purchases, but certainly Richardson doesn't expect to sell any equipment or make any lay offs.

Thanks to cost of fuel and metals, keeping that equipment running in 2006 cost Crush-it more. Blow bars for the company's impact crushers rose in price from all sources, to the point that Richardson started buying them by the trailer load to get a bulk discount. And fuel surcharges were put on some customers, which never went over well, he says.

NORTHERN EXPOSURE

In New England the C&D market in 2006 remained flat compared to 2005, according to John Adelman, Commercial Recycling Systems of Scarborough, Maine. In 2007 Adelman thinks the market may slow down somewhat, but commercial construction should be strong thanks to the university system, hospitals and other municipal projects.

Politically, the C&D market has received more attention. The main question in Maine is whether the state is a "dumping ground" for Massachusetts' C&D material. A commission has been established in the state to study the issues of C&D and wood fuel into the biomass market, Adelman reports.

But the establishment of the commission has slowed down any action on the regulatory front.

He adds that what the industry needs to do is have dialogue with and educate government agencies, such as state departments of transportation, on the need for greater utilization of recycled products in their projects. "This will push the price point of our services and recycled products up in order to maintain cash flow for making the necessary investments in machinery to be as efficient as possible," Adelman says.

MORE VIEWS

Comments from several other contractors and recyclers can be found in an exclusive Web sidebar at www.CDRecycler.com.
COPYRIGHT 2006 G.I.E. Media, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2006, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:STATE OF THE INDUSTRY REPORT
Author:Turley, William
Publication:Construction & Demolition Recycling
Date:Nov 1, 2006
Words:1342
Previous Article:Theory of evolution: New England Recycling evolves to match an increasingly sophisticated mixed C&D recycling industry.
Next Article:Yellow flag: after several years of scrap markets gaining at stock car speed, the brake pedal may finally be tapped in late 2006.
Topics:


Related Articles
Joining forces.
A matter of trust: strong communication between recyclers and clients can help recyclers ensure they are FACTA compliant.
CMRA board responds to industry issues.
Rate of recovery: Attendees gather in the Chicago area for conferences that address paper and plastic recycling.
CMRA tackles legislative issues.
Wild wild west: San Antonio welcomes the CMRA Annual Meeting at the C&D World Exhibition & Conference.
California firm creates joint venture with Mexican company.
European Conference dates announced.
Texas welcome: C&D industry professionals network and learn at C&D World 2007.
Texas welcome: C&D industry professionals network and learn at C&D World 2007.

Terms of use | Privacy policy | Copyright © 2021 Farlex, Inc. | Feedback | For webmasters |