Ever wonder what happens to the daily papers you bundle up and put out on the curb for recycling? Bales of them end up in Portland, Ore., dumped into a giant cement-mixer-like apparatus that shakes them until--whomph--they burst apart. Then, the newspapers, along with magazines, bags, and junk mail that got mixed in by mistake, are funneled onto conveyor belts, which zip along at 80 feet per minute past gloved and masked workers who separate the chaff from the newsprint. Forklift trucks growl up to the end of the line, pluck the rebaled paper--inspected to make sure it's 99 3/4% pure--and pile it in warehouses, where it waits to be reprocessed into recycled newsprint.
The ewner of this spanking new sorting center is none other than Weyerhaeuser Co., the forest-products giant. Rather than harvest more of its 5.7 million acres of trees, Weyerhaeuser is spending $5 million on the center, plus $375 million for a plant to leach ink out of newspapers and for a huge machine that makes newsprint out of recycled papers. Weyerhaeuser is a step ahead of the pack: More than 60 companies in the U. S. and Canada will invest as much as $8 billion in recycled-paper facilities over the next five years, says J. Rodney Edwards, who is a vice-president at the American Paper Institute.
That's an about-face for an industry that, until recently, didn't think much of recycled paper. "Two years ago, we couldn't sell the stuff except in small quantities," says Arthur H. King, vice-president of Bowater Inc., a Connecticut paper company. Now, new laws--and greater demand--are forcing a green revolution on papermakers that is wreaking havoc with the economics of the $131 billion U. S. industry and may depress profits for years to come. In many cases, it's more expensive to produce paper from recycled materials. Yet newsprint made that way doesn't command a premium price, although finer grades of paper made from recycled material sometimes do. Paper companies go ahead because they're afraid they'll lose customers otherwise. The entire shift is a lesson in how fast today's heightened environmental concerns can rewrite an industry's rules. Recycling has become "a question of survival," says Mark A. Fuller Jr., executive vice-president at Champion International Corp. in Stamford, Conn.
Behind the recycling binge is the landfill crunch that hit the U. S. in the late 1980s. With dumps overflowing, most cities started curbside pickup of used newspapers. To create a market for the stuff, seven states, including California and Connecticut, mandated last year that newspapers published in their jurisdictions be partly printed on recycled paper. Publishers in 11 other states and all major newspaper chains have followed the trend. To meet this demand, paper producers will boost North America's newsprint recycling capacity by 150% in the next two years, to 4.1 million tons, or 23% of newsprint production.
ALL PAIN, NO GAIN. Most don't like it, though. "My opinion is that there are no economic advantages to paper recycling," says Clifford W. Skarstedt, corporate development director with Canadian Pacific Forest Products in Montreal. That's because adding de-inking and other recycling equipment costs a fortune but doesn't increase plant output. And recycling has hit so fast that even almost-new mills must be retrofitted. Canada's Abitibi-Price Inc., for instance, is spending $56 million on its one-year-old Claiborne (Ala.) mill--just so it can make newsprint that is 40% recycled paper. Papermakers, gripes Champion's Fuller, are being made to pay for "a collective societal guilt trip."
If so, the trip is just getting started. The "next big revolution" will be the recycling of fine grades of paper such as magazine stock and stationery, predicts Carl C. Landegger, chairman of Black Clawson Co., the biggest U. S. seller of recycling machines. Fine paper is harder to recycle than newsprint because it must be blemish-free. Since virtually none of it is reused now, it accounts for an estimated 15% of all space in landfills, vs. 7% for newsprint. To change that, many states and cities now require their offices to buy recycled paper, even if it costs up to 20% more.
In the meantime, paper companies are scrambling to line up long-term supplies of old newspapers so their recycling plants can stay busy. Just a year ago, newsprint was so plentiful in the Northeast that many cities had to pay people to take the stuff. It often ended up in Asia or Europe because there weren't enough recycling machines in the U. S. Now, some experts are predicting a shortage of old newspapers. Even the most effective collection programs have a maximum recovery rate of around 50%, and the U. S. is already collecting 45% of its old newspapers. With so much new capacity coming on stream, collection efforts may not be able to keep up. So, paper companies are locking in supplies by contracting with municipal recycling programs and with garbage collectors such as Browning-Ferris Industries Inc. and Waste Management Inc.
AD SLUMP. This competition is making the price mf old newsprint wildly unpredictable. Waste newspapers are still cheap and plentiful in many areas: about $15 per ton on the East Coast, vs. about $45 per ton for wood chips. But tightening demand and a slump in advertising, which has reduced supplies of newspapers, have tripled the West Coast price in three years, to about $75 per ton, vs. $90 per ton for wood chips. That isn't enough to offset the added capital and pollution-control costs of processing newspapers. When Weyerhaeuser planned its new newsprint machine three years ago, it figured using recycled paper would save up to 15%. But now, says Peter G. Belluschi, vice-president of the company's newsprint division, "the economics on this facility are not particularly good, compared to virgin fiber."
Canadian companies, which supply about 55% of America's newsprint, may be hit hardest. "Many didn't expect recycling to develop so quickly," says Skarstedt. To catch up, the Canadians have committed $1 billion to retrofitting mills. But their mills tend to be farthest from the big cities that supply wastepaper, driving up transportation costs.
Everyone knows, however, that conservation pressure isn't likely to let up. Last year, the U. S. recycled one-third of all its wastepaper, a rate that is expected to hit 40% by 1995. That's still behind other nations: Japan recycles 48% of its wastepaper, Germany 43%, and the Netherlands 53%. Moreover, even with the huge increases being made, U. S. recycling is growing barely as fast as domestic paper consumption. If current trends hold, as much paper will be dumped into landfills in 1995 as now.
Alan Davis, the environmentalist president of Conservatree Paper Co., a California wholesaler of recycled writing paper, notes that Americans have steadily increased recycling since 1980--but the percentage is still not as high as in 1951, before the disposable society took hold. Doing more is unavoidable, he says. Otherwise, "Americans will end up buried in their own paper trash."