Security Shredding and Storage - a shredding industry publication
by Kim Fernandez

There’s no question about it: the U.S. paper market is growing. With demand coming from the housing industry and overseas, the boom in paper shows no sign of stopping.

The Federal Reserve reported that as of March 5 that the U.S. commercial paper sector had grown to 1.860 trillion, which was up $19 billion from a week previous. And with paper recycling programs at an all-time high, in both the private and commercial sectors, paper suppliers and shredders are enjoying a boom themselves.

Perhaps nowhere is that more true than in the southeastern United States, where paper providers are scrambling a bit to meet the huge demand.

“It’s definitely on the upswing,” says Stacie Dierks, mill coordinator, The Traylor Group, Inc., Rainsville, AL. “OTC has gone up, and that’s our main core—that’s what we do.”

Experts agree—more people are recycling and more mills are relying on recycled materials for their production. The Institute of Scrap Recycling Industries, Inc., (ISRI) says that more than 50 percent of the paper needs in the U.S. are met with recycled materials and that a whopping 200 paper mills in the country use only recycled paper for their production. Additionally, ISRI says that 16 million metric tons of paper was exported to other countries in 2006.

Those numbers are complimented by the number of Americans and American companies that are recycling their waste paper. According to the American Forest & Paper Association (AF&PA), 56 percent of Americans had access to curbside recycling programs in 2005, and another 64 percent could leave their recyclables at drop-off facilities.

Additionally, the AF&PA reported significant growth in the numbers of mixed paper grade recycling programs since its last survey in 2000, meaning that more people and businesses could recycle things like phone books, mail, and paperboard. Additionally, the association found that more communities were adding mixed-paper recycling to their existing curbside and drop-off recycling programs.

Ralph Simon, SP Recycling Corp. Atlanta, says he expects a new paper grade to be approved this year by ISRI. That grade, he says, is #36, unsorted office pack, and would include printed and unprinted papers that are typically generated in an office—manila folders, uncoated papers, and other general office paper grades.

“This will address the tonnage that the industry has created,” he says. “It’s a growing generational material. We thought we should have a grade out there for it.”

Simon anticipates that the new grade might encourage mills that don’t currently buy shredded paper to start doing so. “This attempts to standardize things between two different qualities,” he says. “This is a huge business and it should grow. There are an awful lot of mills in the southeast that consume product from this particular market.”

Additionally, he says, defining an unsorted office grade might help standardize exactly what kinds of paper is acceptable and help avoid contamination. That’s not unheard of, he says.

“We had a problem one time when we got paper that came from the clean-out of a drug company,” he says. “We got the material and it had ground-up medications in it. It sent several people to the hospital.”

If the new grade is approved and used to specifications, he says, “Perhaps some of the communication problems that might exist between buyer and seller can be refined.”

The Environmental Push
“The whole ‘going green’ thing is really sticking in people’s minds,” says Dierks of the upswing in paper in the southeast. “Some companies, especially industrial companies that are Japanese-owned or European-owned, are demanding recycling. They demand it of their employees as part of their commitment to not landfilling everything.”

She says the private sector has followed suit. “I get calls from people who tell me they’re moving out of their homes and they want to know if I can take stuff,” she says. “I can’t, but I try to redirect them to resources they can use.” And while municipal recycling programs aren’t everywhere in the southeast, they are trickling down to that section of the country. Residents of Georgia, for example, have access to 365 sources to recycle newspaper, 287 sources of cardboard recycling programs, and 280 local places to recycle magazines.

Thanks to overseas demand—and growing domestic demand—for recycled paper, many municipalities are finding themselves being offered attractive terms for collecting recyclables, including paper products. Several municipalities in Georgia have teamed up to collect and sell their recyclables in bulk; a few of those are actually turning a profit on those kinds of arrangements.

Paper mills, too, have worked with municipalities to help encourage residents to recycle their paper waste. It provides a steady stream of materials to the mills, which compete for raw materials with Chinese mills, who already offer very competitive prices to American sources.

“The export market is so strong, especially with corrugated, that it’s causing the domestic mills to push to get the materials they need,” says Nancy Womack, senior broker, Doraville Recycling Plant, Caraustar Recovered Fiber Group, Doraville, Ga. Her mill only uses recycled paper, and she says others are following suit.

“Office paper in the southeast is really growing,” she says, adding that tissue mills are adding new machinery to take advantage of the increase in available materials in the area.

“The market right now is at $225 on the yellow sheet,” says Womack. “Eight years ago, it was at about $85 per ton. And corrugated was at $55 eight years ago, and now that’s at $125. It’s a very strong market.”

She says that because prices are so competitive, paper recyclers are willing to go the extra mile to collect as much material as possible. Offices, especially, are seeing the introduction of recycling programs that weren’t available five or 10 years ago.

“There’s really a push to get more paper out of offices,” she says. “In the past, it’s been logistically challenging to get people to participate and get the material down an office tower to one centralized location. But with the price of fiber paper as it is now, there’s more room being made available for collection. If we have to go pick it up, we’ll go do that to get the return.”

In great demand right now are recyclable books. That’s because there’s a push for recycled materials in books and book covers—in much the same way the region saw a huge demand for recycled office paper stock a dozen years ago.

“We need textbooks, library books, hardcover books, and paperbacks,” she says. “We use those in our mills to produce the boards for hardcover books.”

Because of that, textbook and other book recycling programs are being established across the region, by municipalities that can turn a profit with them.

Womack says she used to work for a municipal recycling program, and found it frustrating when she had to turn away people who wanted to recycle books. But that’s no longer the case, she says.

“The municipalities we deal with are starting book recycling programs at their centers,” she says.

Dierks says her company has gone into schools and businesses to talk about recycling and make people more aware that they can recycle just about all the paper they use at home and at work.

“You see people doing their shopping at Wal Mart and they’re getting those Glad containers and flipping them over to see what [recycling grade] they are,” she says. “The generation coming up is way more aware of recycling than we ever were. And we have to do this as a way of life.”

On the flip side, she says, are businesses and municipalities that are finding they can profit off paper that would have been trash a year or two ago.

“People can make a rebate on it,” she says. “Why throw it away if you can make some money?”

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