Thi article first appeared in the St. Louis Beacon, Aug. 21, 2012 - Republic Services, a waste hauler operating in Missouri as Allied Waste Services, is spending $19 million to upgrade its two St. Louis recycling processing facilities. The investment — which the company is calling the largest of its kind ever made in Missouri — will bring new sorting technology and higher efficiency to facilities in Hazelwood and Bella Ridge, tripling recycling capacity at each.
When completed in December, the updated facilities will add 20 new permanent jobs to the 631 it has in the region, according Brent Batliner, Republic's St. Louis-area recycling manager. While any new jobs are good for the area, industry experts say the announcement may be even better news for Republic.
The talk in waste management does not now revolve around tipping fees per ton at landfills, but the value to be extracted from a ton of post-consumer recycled materials.
"Republic as a corporation, we're chasing that evolving ton. We know that times have changed, and we want to be the leaders in keeping up with those changes," Batliner said in an interview earlier this summer.
Republic's announcement this spring came with a direct challenge to St. Louis consumer: If you recycle, recycle more; and if you don't recycle, start. The possible economic and environmental benefits, a press release said, are too good to pass up.
Cash is green, too
Public benefits may well be real, said waste industry veteran Gary Gilliam, but private companies do not make multi-million dollar technology investments unless there is money to be made. Gilliam is the St. Louis sales manager for Resource Management, a St. Louis County recycling processing facility that contracts with major haulers across the region. In recent years, he has seen the recycling and resale industry become increasingly profitable.
"For us, there had to be incentive. There are no not-for-profit waste companies," Gilliam said.
"There's no doubt about the economics about this," Batliner said. "We had to make a $19 million investment to build this thing."
An almost $9.4 billion industry employing approximately 24,500 in Missouri alone, the recycling industry is the great unheard-of success story in an era of shrinking jobs and wages.
Environmentalists and lawmakers have pushed recycling to the forefront of civic consciousness in recent decades. They have helped recast the three Rs — reduce, reuse, recycle — into a more fashionable shade of green. But little has been said of the economic side, which has other green factor: cash.
The conveniently evolving ton
Recycling is the story of what you put at your curb or in Dumpsters and what happens to it afterward. For decades, that story went like this: Half-eaten food, newspapers, old clothes, unwanted paint, toiletries, grass clippings — basically anything a homeowner wanted to dispose of — were set out two days a week; and men in trucks drove by, collected the material, and dumped it into a landfill.
Landfill operators levied tipping fees on haulers based on the amount of waste they dumped. State and local governments also got fees, and all were passed to homeowners.
Waste haulers were profitable, but not impressively so, and they had a straightforward business model.
But late in the second half of the 20th century, the model began to change. Yard waste was separated out and composted for mulch and fertilizer. Slowly, paper and plastics began to be separated for repurpose — at first in separate containers, but eventually in what's called a single stream.
According to Gilliam, that shift allowed for a revolution in the industry's economics. Haulers could simply pick up recycling instead of trash one day a week. They use the same trucks, the same employees and charge customers the same price, but turn a costly endeavor into a revenue-generating one.
Recycling gave haulers "economics that they had never seen before," Gilliam said.
Joseph Martinich is a professor at the University of Missouri-St. Louis' College of Business Administration who has studied the recycling industry in Missouri for more than a decade. He says once waste companies began to see the benefits, everything changed.
"You're making money in two ways. When that hit home, and waste management companies have gone in with both feet," Martinich said.
From subsidy to private profit
Waste companies were not initially enthusiastic about recycling. Without established habits or markets, recycling was expensive, and private business saw no incentive to start. John Haasis, head of St. Louis County’s solid waste division, said that in the early days, local governments subsidized efforts to get over the aversion from residents and haulers.
"That whole collection aspect can be costly. If you are not doing it on a large scale it can be really expensive. So the private waste haulers, they didn't want a part of it, because from their point of view it was just sending a lot of extra trucks to collect the same amount of trash," Martinich said.
In practical terms, government support took the form of new landfill surcharges that funded grants, education and marketing. Funds generated at landfills went to the St. Louis-Jefferson Solid Waste Management Division, which in turn issued grants to projects promoting recycling and repurposing. The SWMD covers St. Louis city and county as well as Jefferson and St. Charles counties.
Abstractly, though, government's real job was to shift the way people thought about waste. If recycling was to succeed, haulers and consumers needed to realize that not all trash was trash.
"That part of our mission is to turn the thinking of people from it being garbage and waste that you just bury in the ground into realizing that it is a resource," Haasis said.
Gilliam explained it a different way. Why, with something like an aluminum can, would you want to go through the expense and time of mining and refining the metal again and again when you already have the resource at your fingertips.
"If I take a can and drink it and put it in the trash, its value goes to zero, and it never has value again," Gilliam said. "But if you recycle that can, the value become huge."
Though commodity prices still rise and fall with great irregularity, the markets have stabilized enough in recent years that the message has finally reached waste companies that they stand to make huge profits. Saving a forest a day in recycled paper is a nice offshoot, Gilliam said, but you cannot argue with hard cash. At least for now, the more eco-friendly the waste business becomes, the greener its wallet.