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New Recycling Law Opens Door to Firms Seeing Profit in Trash

September 28, 1987|VICTOR F. ZONANA | Times Staff Writer

TRACY, Calif. — Three mountains of discarded bottles glisten in the Central Valley sun as John T. Holzemer, recycling manager of Owens-Illinois' glass container division, takes a final swig from a bottle of Diet Coke.

His thirst quenched, he casually tosses the bottle onto one of the piles, soon to be fed into a 2,700-degree Fahrenheit furnace at Owens-Illinois' 2.8-million-bottle-a-day plant here.

"There goes tomorrow's wine bottle--and hopefully, next year's pickle jar," says Holzemer, as the spent vessel crashes down onto the mound of old and broken containers.

Recycling is suddenly hot in California and not just among such longtime champions as environmentalists. Seventeen years after tie-dyed activists celebrated Earth Day, buttoned-down businessmen like Holzemer are becoming born-again recyclers.

The reason is clear: The California Beverage Container Recycling and Litter Reduction Act has unleashed the profit motive in order to reach the law's goal of recycling 80% of the state's beer and soda containers--be they aluminum, glass or plastic.

Consumers will also be given an incentive to recycle. Beginning Thursday, they will be guaranteed at least one penny for each soft-drink or beer container they turn in.

That penny might not seem like much. But when multiplied by the 12 billion containers sold in California annually, the resulting sum is $120 million. Add to that the scrap value of the used containers--perhaps another $100 million--and you have the makings of a good-sized industry.

"The law provides an economic climate for recyclers to survive," says Rod Miller, legislative coordinator for Californians Against Waste. "It creates the infrastructure for a greatly expanded recycling industry."

A key part of that infrastructure will be the more than 2,000 state-certified recycling centers that must be opened between between Oct. 1 and Jan. 1, 1988. By law, the centers must be located within half a mile of all major supermarkets. As a practical matter, most will be in shopping center parking lots.

The penny-per-container payment to consumers will come from a state-administered fund that is being nourished by the one-cent-per-container levy that beer and soft-drink distributors have been paying since Sept. 1.

Besides the state fund's penny-a-container payment, recycling centers will have the option of paying consumers some of the scrap value of their used containers. That is about another penny per container for aluminum and less for glass and plastic.

Redeem and Make Money

California's supermarket operators support the new law because compliance is relatively simple. All they have to do to comply is to contract with a recycling center operator. In states with traditional deposit laws, grocers must hire workers and set aside space to take in, sort and store used containers.

"The supermarket's job is to sell groceries," says David F. Little, vice president of 20/20 Recycle Centers, a newly established company that has won contracts with Safeway, Albertson's, Lucky Stores, Stater Brothers and Hughes Markets. "Our job is to redeem containers and to make money doing so."

Based in Irvine, 20/20--a unit of a Canadian firm called Agra Industries--is the early leader among companies seeking to establish state-certified recycling centers. As of Aug. 31, according to the state Department of Conservation's Division of Recycling, 20/20 had won contracts or letters of intent to set up 819 collection centers, and Little says the company expects to eventually operate 1,100.

Next in line comes Envipco California, a Hayward-based unit of Environmental Products Co. of Fairfax, Va. Envipco had contracts for 433 locations on Aug. 31 and expects to operate a total of 600.

Mobile Recycling in Pomona had 376 contracts as of Aug. 31 and will handle the recycling requirements of Alpha Beta stores, state records indicate, while Innovative Recovery of Aurora, Colo., had agreements for 150 locations.

Different recyclers are taking different approaches to the business. The 20/20 Recycle Centers will feature four "igloos," or bell-shaped containers, one each for aluminum, glass, plastic and newspaper. (Although newspaper isn't covered by the new law, the company sees potential profit in newspaper recycling.) All together, Agra is investing more than $11 million in the new venture.

The containers are designed for easy emptying by boom-equipped trucks. The 20/20 centers will occupy about 300 square feet and be staffed by workers who will issue scrip redeemable for cash or products from local supermarkets.

"The resource recovery industry is still in its embryonic stages," says Little, who predicts annual revenue for 20/20 of $40 million. The firm's name comes from Assembly Bill 2020, the Legislature's designation of the new law.

Methods Differ

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