PROCESSING: MRF Growth Was Substantial In 1995

Eileen Brettler Berenyi

Robust markets for recyclables in 1995 have stimulated the growth of the materials recovery facility (MRF) segment, according to a study released by Governmental Advisory Associates Inc. (GAA), Westport, Conn.

Since 1991, the number of mixed waste processing facilities (MWPF) and MRFs has grown substantially from 104 to 386 projects in 1995. More than 90 percent of these projects are operational or under construction.

Currently, MRFs are e-venly distributed across the country (see chart). This is a change from just a few years ago, when the Northeast contained al-most one-half of all MRFs. In contrast MWPFs re-main concentrated predominantly in the West, with a few located in the Northeast.

Contrary to earlier predictions, the number of MWPFs is not increasing rapidly. Possibly, this is due to the longer planning associated with these larger, more complex facilities, according to the study's author. In addition, health concerns for workers sorting through municipal solid waste is a factor.

The states reporting the largest number of MRFs are California, New York and Pennsylvania. On av-erage, all the MRFs surveyed process 116 tons per day, totaling ap-proximately 10 million tons of recyclables annually. MWPFs have a much higher average capacity of 627 tons per day. However, only about 40 percent of this amount are recyclables; the remainder is non-recyclable refuse.

Also, MRFs are accepting a much greater variety of materials than ever before. Different paper grades such as OCC, office paper, junk mail, old telephone books and aseptic packaging are routinely processed. Furthermore, many MRFs are accepting various plastic grades and other metals, in addition to aluminum and tin.

Glass, however is a different matter. Although it's currently processed at nearly every MRF, operators concede that it can cause equipment and marketing problems. For these reasons, some MRFs are considering not accepting glass, or designing projects which keep glass out of the main process stream. For example, Rabanco, Seattle, Wash. and Deffenbaugh, Shawnee, Kan., currently separate glass from other materials.

MRFs employ a spectrum of high-tech and low-tech processing approaches. Of the plants surveyed, 63 percent rely on low-tech, labor-intensive designs and 37 percent fall into the high-tech, heavily mechanized category. These percentages have remained steady since 1993, indicating that most MRFs retain more simplistic designs.

The most commonly used MRF equipment are conveyors, balers and magnetic separators. It is worth noting that few MRFs, even high-tech ones, use advanced technology such as automated optical sorters for plastics or automated bag openers. Even new MRFs are based on fundamentally low-tech designs.

While the application of technology in MRFs has remained stable over the last several years, efforts have intensified to achieve collection efficiencies. Attention has shifted beyond plant confines to recyclable collection practices and facility siting, the study concluded.

MRFs are being built adjacent to landfills, transfer stations, composting facilities and waste-to-energy projects. Collection practices, including blue bag programs, single stream recyclable collection and co-collection with non-recyclable refuse are being implemented by localities to reduce costs.

The average capital cost of a MRF is approximately $3.4 million. For a MWPF, the average increases to $11.4 million. In total, about $741 million and $500 million has been spent on MRFs and MWPFs respectively. By adding capital expenditures for retrofits and up-grades which total approximately $35 million, total capital investment for all MRFs and MWPFs surveyed amounts to $1.3 billion as of 1995.

Most MRFs are not charging a flat tipping fee to cover their processing costs. Rather, processing fees may be covered by per-household charges or tax revenues or incorporated into a recyclable collection or processing contract with a private firm. Due to the strong markets of 1995, many processing contracts contain clauses that permit local governments to share in revenues generated from recyclable sales.

The MRF segment is dominated by 11 companies which operate 46 percent of the facilities. The largest operators are Waste Management Inc., Oak Brook, Ill., and. Browning-Ferris Industries, Houston.

For MWPFs no dominant company is involved. A few of the large private haulers, particularly in California, operate these plants.

A new development, not yet fully reflected in market share analysis, is paper companies' entry into the MRF segment. Firms such as Tacoma, Wash.-based Weyerhaeuser Co. are purchasing MRFs in order to secure steady streams of recycled fiber, complementing their fiber procurement activities.

The major source of capital funding for MRFs and MWPFs comes from private investment, reflecting the dominant role of the private sector. However, public sources of funds, namely state grants, G.O. bonds and revenue bonds also finance these facilities.

In order to guarantee a steady waste flow, most facilities rely on contracts with suppliers. In particular, private operators often incorporate processing fees into their collection contracts. Flow control is rarely used, given its highly tenuous legal status, the study reports.

In this era of market competition, materials marketing and supply are becoming increasingly sophisticated. Municipal and other local government managers, the study advised, must realize that they are entering the world of commodities and materials markets when they begin to collect and process recyclables.

Strategies for choosing collection systems, siting projects, pricing and marketing materials and sharing revenue and risk must be assessed, the study concluded. The goal is to minimize total processing costs and maximize material quality and sales.

For more information or to order The Materials Recycling and Processing Industry in the United States: 1995-96 Yearbook, Atlas and Directory, contact: GAA, 25 Sylvan Rd., S., Suite E, Westport, Conn. 06880. (203) 226-3238. Fax: (203) 226-3239.