WMI Merger Set To Amp Recycling Capacity

Lynn Schenkman

Waste Management Inc., (WMI) Houston, has formed the Recycle America Alliance (RAA) to help fortify the company's position in the global recycling market. As the basis of the alliance, the nation's largest privately held recycler, The Peltz Group, Milwaukee, is merging its assets and operations into WMI's new subsidiary. Electronicycle, Gardner, Mass., will provide RAA with electronic recycling. And during the next one to two years, WMI anticipates other solid waste companies and private recycling processors will join its subsidiary.

The alliance's goal is to increase capacity and improve profitability. “It's all about increased tons per month on a given site,” says Steve Ragiel, Waste Management's vice president of recycling. “In places where the capacity is up to the 80 percent capacity utilization mark, it's pretty good business.”

Already, the WMI-Peltz partnership brings 3,300 employees together to handle 8 million tons of commodities per year at 80 recycling plants. The alliance also will provide marketing for more than 190 locations in the United States and Canada.

By forming RAA, WMI expects 2003 revenues to increase $200 million and earnings before interest, taxes, depreciation and amortization (EBITDA) to increase $18 million. WMI will invest $58 million in RAA and will own 90 percent of the business. The Peltz Group will own the remaining 10 percent.