Austin American Statesman
The tractor-trailers started showing up 18 times a day, and they didn’t stop for a month. Each one backed up to the dock at Image Microsystems Inc. in North Austin with another haul of old electronics equipment. By the time the final truck pulled away, workers had unloaded 93,000 phones, computers and monitors. The caravan cleared out a massive warehouse where the New York Department of Education had stored the equipment for years, trying to figure out what to do with it all.
“If you take someone as educated as a department of education, you’d think they’d know,” said Jim Rollins, an executive vice president at Image.
But that lack of awareness is the problem dogging the electronics-recycling industry and one of the key issues recyclers, product manufacturers and environmentalists will take up at the annual E-Scrap Conference, which starts Wednesday at the Austin Hilton. Organizers say more than 600 people from 10 countries have signed up for the event.
“That’s what this conference is all about,” Rollins said, “educating people about what do to with that product and where to go with it.”
Spreading the word is easier than it was in 2002, when fewer than 400 people gathered in Orlando, Fla., for the first conference. Back then, the electronics-recycling industry was a scattershot collection of small companies. Today, it’s a billion-dollar market, according to the Environmental Protection Agency.
“We used to talk about why to do this business,” said Jerry Powell, editor in chief of E-Scrap News, which runs the conference. “Now, we talk about how to do this business.”
It’s a business that has grown easier in some ways and harder in others. A few high-profile protests, some forward-thinking companies and slowly increasing awareness have directed thousands of tons of electronics toward recyclers instead of landfills over the past five years.
The Texas Campaign for the Environment led a two-year campaign against Dell Inc., including a well-publicized 2003 incident in which members dressed in prison uniforms to protest the use of prison labor in the company’s recycling programs. The group’s two-year campaign and a growing number of recycling requests from customers persuaded Dell to change its policies.
Now the company is considered one of the leading computer makers when it comes to recycling and other environmental issues. It offers free recycling for any Dell product, whether the owner buys something from the company or not. Hewlett-Packard Co. also has extended recycling and take-back programs worldwide.
“When we started in 2002, H-P was really the only company that had this on their radar screen,” said Robin Schneider, the Texas Campaign’s executive director. “Now they all do. . . . There is much more cooperation than there has been in the past.”
That has led to a rush of new recyclers in Austin and around the country, Schneider said. Companies are popping up to grab a piece of the market, which had doubled to $1.5 billion in 2005 from three years earlier, according to EPA estimates.
“People recognize they have valuable stuff there; it’s not just a tin can or a glass bottle,” said Powell, the E-Scrap organizer. “But when you open the collection programs, the question they have is how, when and where.”
Most recycling firms do business solely with equipment makers or large customers and typically don’t market their services to consumers. So, most home users end up piling their old equipment in a closet or furtively tossing it in the trash.
“Five years from now,” Powell said, “everyone will know all Austin Goodwills take used computers.”
But new recyclers could have a tough time even if awareness grows to a point where everyone turns in their old electronics equipment, experts say. Despite the industry’s growth, they say, there will be less and less money to make on recycling and refurbishing old machines as manufacturers improve products and make them more environmentally sound.
Meanwhile, manufacturers such as Dell and H-P, both leading sponsors of the E-Scrap Conference, keep raising their standards. They have to guarantee customers that sensitive data will be destroyed and the equipment will be disposed of properly. And given that their customers reside across the country and world, the manufacturers increasingly prefer recyclers who have a broad presence.
“We need the support of a large network of participants to be successful,” said Tod Arbogast, who helps direct Dell’s environmental efforts. “We need them to drive efficiencies in the processes of recycling.”
That almost certainly means consolidation is on the way. Among the people registered for E-Scrap, organizers said, the most intriguing were the investment bankers.
“They’re seeing if there’s a play here,” Powell said.
The interest from outside sources of capital isn’t new. In August, Austin-based recycler Newmarket IT received $50 million from Catterton Partners, a private equity firm based in Greenwich, Conn.
“Consolidation and mergers are occurring in this business,” Powell said. “Some of the people coming to Austin are seeing it a bit as a dating bureau. They’re coming to the dance to be seen.”
The consolidation will help drive more volume, which in turn will help recyclers squeeze more return out of their scrap lines. But no matter how efficient they become, said Rollins, of Image Micro, “it’s a very hard thing to make true business sense out of. . . . You have to have other offerings to make up for recycling.”
Image Micro refurbishes some machines and re-sells them. Goodwill also re-sells refurbished computers as part of its partnership with Dell. The venture now offers free recycling at Goodwill sites in Austin, San Antonio, San Francisco, Pittsburgh and all of Michigan.
Unlike Goodwill, though, Image Micro is in the business to make money, so it has developed a range of products and services to supplement its recycling business. For example, it has installed presses that allow it to make garbage can wheels and rain gauge covers out of the plastics it recovers.
“The economic benefit is not from recycling electronic products,” said Hong-Chao Zhang, director of the Center for Advanced Manufacturing at Texas Tech University. “It comes from other businesses that accompany recycling.”
And although the rising participation in electronics recycling programs means more computers, cell phones and digital music players for companies to recycle, Zhang said, recyclers will have to diversify if they’re to survive.
“They hope someday this industry could become a major industry,” Zhang said.
“A couple years ago, I’d have believed that. . . . But without legislative support, I think this industry will still be struggling. There’s not much money in end-of-life products.”
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