Steve Shew, general partner at industrial plastics recycler Waste Alternatives Inc., headquartered in Mount Vernon, Ohio, is finding a way to survive in a tough, turbulent market for recyclers.
He is lending a hand in the warehouse, looking for new sources of material, adding new services and continuing to find ways to make operations more efficient to decrease costs and improve yields.
We have started to do toll grinding and to do warehousing of materials for other companies, Shew said. We are making modifications to equipment to make them more efficient. We want to get to the point where we have the same throughput with less labor.
From a volume standpoint, we are only seeing 30-35 percent of the material we saw last year before the economy crashed in the fall, he said. The end of the year was not a fun time and 2009 didn't start off gangbusters, either. We are seeing a little bit of an increase, but volumes are still below half of what they used to be. We saw a little bit of an increase in April, and volumes improved in May as well.
I'm in the Midwest in the middle of the automotive world, he said. There is a lack of scrap when it comes to generating plastic, and what is available often comes from closeouts, plant shutdowns or companies cleaning out excess inventory.
Since August, Waste Alternatives has had to make three rounds of layoffs in its 140,000-square-foot warehousing/grinding operations in Mount Vernon, reducing its manufacturing workforce from 35 to three, and eliminating its agricultural film recycling program. Only two of its six grinders are currently running, and only for one shift.
The company has another six people working in the office, a sales representative in Texas, and 11 people at a 38,000-square-foot facility the company opened in Indianapolis at the end of 2006 that operates as a materials recycling sorting and baling facility for the Wal-Mart Stores Inc. return center in that city.
The Mount Vernon operation recycled about 24 million pounds of material in 2007 and 2008, and about 98 percent of its business was plastics scrap.
In Indianapolis, the company recycled about 10 million pounds of material in 2008 almost equally divided between plastics, metals and cardboard. Surprisingly, in this economy, there has not been much of a slowdown in our Indianapolis operation, Shew said. Cardboard and steel are baled and sold to domestic mills, and mixed plastics a lot of it polyethylene and polypropylene are baled and sold to buyers in China.
In Mount Vernon, we are focused on value-added material that is, material that needs to be sorted or cleaned up, Shew said. We are trying to help companies who want to recycle more than one material.
The challenge is moving materials for prices that are a whole lot less and moving those materials at a time when you are also moving a lot less material, he said You have to make yourself more efficient, because in the recycling business, whoever can do it least expensively wins.
Waste Alternatives which began as broker for recycled plastics in 1997 and began reprocessing plastic scrap in 2005 recycles more than a dozen types of plastics. Recently, it has taken in a lot of polypropylene, a lot of high density PE, and a decent amount of nylon, Shew said.
The key is riding this out, taking things one day at a time, he said. Everything we do, we have to do as efficiently as possible. The recyclers left at the end of this downturn will be stronger and we intend to be one of them.
I'm thinking that we might be looking at the second quarter of next year for a recovery, Shew said. The key is what manufacturing is going to be doing because we get a lot of our materials from automotive, and we sell into the housing, construction and automotive markets.