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Salvage operation

0614tactics3In Portland Far West’s competitive advantage is an old-school one: strong, long-term relationships. The fact that it’s been in the area longer than other mixed-material recyclers has enabled the company to forge bonds with — and thus get better prices from — material buyers such as the International Paper Co. in Springfield, says Ristau. “We all talk to the same guys, but it comes down to relationships,” he observes.

But if contamination continues to muck up the business, relationships may not be enough. The local market has never been flexible enough to accommodate significant change. Because Oregon was an early adopter of recycling, the state is now the most competitive recyclables market in the country, with the three mixed-material sorting centers owned by Far West jostling four owned by competitors such as SP Recycling and K.B. Recycling. 

Far West is working with the city and the various haulers to curb contamination by holding residents more accountable for putting garbage in their recycling. Metro, meanwhile, has convened a group of more than 50 stakeholders — including representatives of local governments, haulers and recycling companies — to come up with a solution to the problem. The Oregon Department of Environmental Quality is also studying the issue, and Ristau says there’s a possibility the state will provide recycling companies a subsidy to purchase the costly equipment needed to process the “dirtier” shipments their facilities are receiving. 

Even with a subsidy, though, recyclers such as Far West aren’t convinced that it makes financial sense to sort out all of this trash. “You’re getting something out which you have to pay to get rid of,” Ristau notes, referring to the cost of dumping garbage at landfills. Indeed, with the price of their products — such as paper — going down and the cost of their production going up, these companies aren’t sure the mixed-recycling business itself pencils out anymore.  

“It’s gotten to be unprofitable to sort through curbside recycling,” Ristau says.

Far West’s solution, and the solution of many recyclers, has been to get out of mixed recycling as much as possible — and to diversify. In 2000, before plastic and metal became part of the mix, paper sales comprised 98% of the company’s business; today that figure is 51%. 

“We’re trying to grow our metals business. We’re getting into plastics more. We just started a Styrofoam program,” Ristau says. Far West sources these materials, which can’t be recycled at the curb, from recycling depots and metal buy-back centers throughout the metro area. “We’re not jumping ship completely,” says Ristau. “But we’re trying to get our hands in more things.”

Despite the obstacles, if any business should be able to remake itself in a new, more diversified image, it’s a recycler. Back in Ristau’s office, the CEO points out items that were likely manufactured from recycled materials. He raps a picture frame: reclaimed plastic. Toes the carpet: plastic fibers from milk jugs, believe it or not. Through the eyes of a recycling executive, the world is full of things that can be made anew. Why not one’s own company?

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