Maybe It's Not So Hard Being Eco-Friendly

More companies are finding the profit in recycled materials

For more than 60 years, USG Corp. (USG ) fed its wallboard mill in East Chicago, Ind., with gypsum dug from a quarry in Alabaster, Mich. The chalky mineral was carted out by tram over the shallows of Saginaw Bay to anchored freighters and then shipped north around Michigan's lower peninsula and down to the southern end of Lake Michigan. It was a long haul, requiring three days or more to complete the 500-mile journey. But the rock-bottom price simply couldn't be beat.

Today, the USG facility has a new source of raw material that is cheaper, purer, and better for the environment to boot: the smokestacks of coal-fired power stations. Under contracts the building-products manufacturer has signed with several electric utilities, the plant is getting all its gypsum from a chemical sludge produced when pollutants are scrubbed from smokestack gases to prevent acid rain. "We have turned a problem into an opportunity," crows William C. Foote, USG chairman and CEO.

Forget Kermit the Frog's lament, "it's not easy being green." Corporate America is finding it easier than many people thought. By now, of course, recycling of basic commodities is commonplace. Even circuit boards from old computers and catalytic converters from cars are mined today for precious metals.

But lately, the trend has broadened. Rather than merely using the same material over again, more companies are fashioning entirely new products from garbage. Dietrich Industries Inc., a Pittsburgh building-products maker, for instance, has just patented a plastic building stud molded from carpet resins. McDonald's Corp. (MCD ) is testing a Big Mac container made of discarded juice boxes. Next up: Scientists at New Jersey Institute of Technology are producing leaded glass blocks that can be used in doctors' offices to shield X-ray technicians from radiation. For feedstock, they use picture tubes from junked TVs and computer monitors.

Why this upsurge in eco-consciousness? The key is the other green that industry cares about: money. By culling their waste streams, manufacturers can lower disposal costs--which can be hefty where hazardous materials are involved. Often, they can then sell their refuse to other companies. Industrial consumers can come out ahead, too, since they can buy scrap or waste products for much less than virgin materials. "It's economics," concludes Reid J. Lifset, associate director of Yale University's School of Forestry & Environmental Studies.

In USG's case, the visible hand of government also helped. For years, the company had one source of gypsum: its own mines. Congress created an alternative in the 1990s by cracking down on power plants that were causing acid rain by burning high-sulfur coal. To reduce sulfur-dioxide emissions, many utilities began spraying a mist of water and powdered limestone in their chimneys. The byproduct: calcium sulfate, or gypsum.

DAILY DIET. Today, the East Chicago wallboard mill gets half of its daily diet of 1,320 tons of gypsum by truck from a NiSource Inc. (NI ) power plant 34 miles away. The other half comes by barge from coal-fired stations as far off as Pennsylvania. The average price of this synthetic mineral is $11 per ton, including shipping. The comparable price from USG's quarry is $23. That's a savings of $4 million a year or more. There's another plus: Power-plant gypsum is purer than the natural stuff scooped from the ground.

USG's utility partners also profit from the deal. NiSource pockets $5 per ton for its flue-gas sludge, or more than $1 million a year. If it had to dump that waste in a landfill, the Merrillville (Ind.) company estimates it might be forking out $1 million a year.

Finding a use for smokestack gunk isn't USG's only earth-friendly effort. The company uses old newspapers and boxes to produce ceiling panels. And USG consumes 150,000 tons of steel-mill slag a year to turn into ceiling tiles. Foote says he can't put a total number on the payoffs from using recycled or waste materials. But he boasts that the $3.8 billion company is the industry's low-cost producer--in no small part because of its green procurement programs. And that's no rubbish.

By Michael Arndt in Chicago

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