C&D Industry Cements Concrete Recycling Deals

When Houston-based Cherry Cos. started in the construction and demolition business decades ago, wasted concrete was a problem. It paid steep tipping fees to bury the massive tonnage they tore up daily.

Things have changed.

Today, the company's biggest challenge is wrangling enough of it to sell as it has become a hot commodity, especially for use in road construction. Concrete aggregate is now the most recycled material by weight in the United States, according to data from the Construction and Demolition Recycling Association (CDRA). A growing number of transportation agencies are incorporating recycled concrete aggregate, which has proven at least as durable as virgin aggregates and about 15 percent to 20 percent cheaper.

Cherry started out moving houses but soon found that it was more lucrative to tear them down. Later, it added both large residential and commercial demolition to its platform. That’s when the firm’s leaders realized they’d stumbled into a potential gold mine and opened their first recycling yards for concrete aggregate. There, the company crushes it, screens it to size it, and removes metals, preparing it for highway subsurfaces.

“Our residential and commercial demolition projects could not generate enough material for road construction, so we opened a road removal division to get more of it,” says Joe Rizzo, Cherry’s vice president of business development. “Still we could not get enough aggregate, and started reimbursing independent truckers who hauled the material and our customers—highway, road, and bridge contractors.”

Cherry ships more than 10,000 tons of concrete daily within the greater Houston metroplex. Recycled aggregate, including stabilized aggregate, comprised 80 percent of the company’s $127 million revenue from all divisions in 2015.

The market varies

Concrete meets infrastructure needs, spares landfills and reduces environmental impact of mining and transporting virgin materials. But it is not a cash cow nationwide. Greater Houston is a C&D recycler’s sweet spot because there are no quarries (the alternative material source) within 100 miles. Other geographic and market factors dictate who will make money where—from engineers’ perception of recycled aggregate versus virgin materials, to state regulations imposed on the industry.

In New Jersey, construction and demolition contractors in 11 of 21 counties are required to recycle concrete, asphalt and block, all used in road construction.

“So it’s a big deal getting rid of concrete. You don’t have a choice. This is the case in few states,” says Gary Sondermeyer, vice president of operations for Bayshore Family of Cos. in Woodbridge, N.J.

The tight regulatory environment has bumped both competition and demand in the Garden State. But processors have one major obstacle: convincing engineers that post-consumer aggregate is as good as natural aggregate, despite that it must meet the same specs.

Further, unlike in Houston, geology does not work in New Jersey C&D recyclers’ favor.

“We have four geological provinces, and one has a lot of glacial outcrops, which are great opportunities for quarry," Sondermeyer says. "So we have competition from 122 class B recycling facilities and quarry."

Disposal costs are a major driver

There are two options for aggregate: landfilling it or doing something beneficial with it. When deciding, it comes down to the cheapest way to manage the material, says Bob Gardner, senior vice president of Long Beach, Calif.-based SCS Engineers, an environmental, engineering, consulting and construction company.

“In the Southeast and East where disposal costs are high, it makes sense to recycle to the extent you can,” he says, citing Southern Florida where tipping fees are over $45 dollars per ton.

The middle of the country is another ballgame. “For example in Oklahoma City, where landfilling is in the low $20s per ton, recycling aggregate does not make financial sense,” he says.

The regulatory landscape

State regulations are all over the map, as demonstrated by a CDRA report generated on behalf of the organization’s members. Among key findings, 19 of 23 states require solid waste permits to process mixed C&D (from residential projects). But only five of 23 states require recycling facility permits for source separated and co-mingled C&D debris (from industrial and commercial projects). Twelve of 23 states impose C&D landfill bans. And diversion goals vary; Florida’s are the most aggressive: 50 percent by 2015, 60 percent by 2017 and 70 percent by 2021.

Sondermeyer has advice for stakeholders thinking about getting into C&D recycling, specifically infrastructure.

“You have to be totally compliant with environmental law. You have to invest in good equipment and replace parts fairly often; they wear out fast.”

But the carrot is that more big players like the U.S. Department of Transportation are recognizing recycled concrete’s value as it becomes an ever-growing part of the $7 billion C&D recycling industry. “The specs are always comparable to virgin materials, and it’s usually cheaper. That means you can compete on a level playing field,” he says.