Recyclers Losing Money, Closing Plants

Sonoco Products is closing its recycled paperboard operation in Lancaster, Ohio. The nation’s largest municipal recycler, Waste Management, announced close to 1000 job cuts earlier this year. And Smurfit-Stone, one of the nation’s largest paper recyclers, reported a huge financial loss for the fourth quarter of 2008.

Unfortunately, these aren’t isolated incidents. The economy is squeezing just about every market sector, and recyclers are no exception. But they may be particularly vulnerable. Many recyclables are trading commodities, traded and priced on the Chicago Board of Exchange. Commodity prices have taken a huge hit, which means recyclers aren’t getting what they used to for a ton of white office paper or a bale of plastic.

It’s something we’ve learned first-hand in our building at 619 S. 4th Street. We instituted a recycling program last year to handle more than just the mixed paper the city collects from businesses. We are paid by the ton for the commodities we recycle, but our recycler charges us for expenses. Ideally, we’d make money, or break even. But because of those commodity prices, we’re holding our breath here over how much the next bill will be.