In order to build such profitable partnerships, suppliers and distributors must be able to guarantee not only competitive prices but also volume of sales over time. Strategic partnerships that increase the length of contracts can often be used to negotiate lower prices on recycled materials. And some suppliers consider their recycled stock to be a loss leader: it can be worth offering at a low price, provided business customers also negotiate contracts for products with better profit margins, such as letterhead or fine writing paper.
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Just five years ago, it was nearly impossible to find a printer who carried recycled paper, let alone one who could give a good price for printing on recycled paper. But numerous small and large companies that shop around today will find that printers can now provide letterhead, business cards, and envelopes on recycled paper at the same price as virgin stock paper.
This change in pricing has been brought about partly by business customers that have forced printers to compete and partly by manufacturers that have offered better prices to their customers. The goal: to compete with prices and quality that are the equivalent of virgin stock paper. In addition to paper, there are a number of other products that have become less costly than their virgin counterparts. For instance, Image Carpets makes both industrial and residential carpets out of 2-liter plastic soda bottles and sells them for less than most other carpets.
And for companies with large vehicle fleets, buying recapped tires can create real savings. Though once a serious concern, quality control is no longer an issue when considering recycled products. Office machinery experts now acknowledge that recycled-content paper performs better in modern copiers and laser printers because of improved conditioning of the paper fibers as well as better adjustment to humidity and temperature conditions. In addition, many people who use recycled paper report that the reduced glare is less taxing on their eyes.
However, quality also involves aesthetic definitions of products, a factor difficult to quantify and impossible to keep constant. Aesthetic misperceptions still greatly influence purchasing decisions. Consider plastic lumber. Plastic lumber picnic tables, benches, sheds, waste receptacles, retaining walls, and fences have all demonstrated immense savings over time due to low maintenance costs. Still, while plastic lumber represents a tremendous investment by the plastics industry and one of the best product applications for recycled plastics, the market has started to grow in only the last two years.
Although manufacturers have taken great pains to make their product look like wood, plastic lumber is still not wood. Both individual consumers and company purchasing managers think of wood as the material of choice because they are accustomed to it. In addition, wood has traditionally been associated with high quality. And in a corporate setting, the buyer of wood products and materials is usually not the person responsible for maintenance and repair. Phoenix Recycled Plastics, a Pennsylvania-based company, finds that the specifications it receives from purchasers often break project cost proposals into two separate categories: lumber in one category and paint and labor in the other.
Indeed, plastic lumber has forced the issue of life-cycle cost considerations in purchasing. To a certain extent, it has forced managers to weigh their aesthetic principles against practicality. Overcoming these barriers takes time. In many cases, it also takes a management directive to place the principle of positive environmental ethics on equal footing with the aesthetics of wood or of office products made from other materials. Quality control tests that were run products from and have little bearing products currently on the market.
Consider the case of remanufactured toner cartridges. In the late s, remanufacturers simply opened up old cartridges and repacked them with new toner. Now they strip down cartridges and refit them with long-lasting, high-quality drums and other components manufactured specifically to allow a toner to be recharged eight to ten times. Remanufacturers offer free servicing of laser printers as part of their standard contracts, and responsible companies promise to repair at their own cost any printer that malfunctions due to a faulty cartridge.
The increasingly good quality of recycled products points to another difficult issue. While restriction of trade is essentially illegal, recycled products, like any product substitute, call into question established markets. Such restrictive contracts can also be found for car parts, computers, telecommunications equipment, and many other high-tech products and services. In addition, franchises and authorized service companies will sometimes use the name of the manufacturer as a front for their own restrictions.
Where necessary, buyers and purchasing managers should force competition on service contracts and demand that manufacturers put into writing any restrictions on the use of their products. The availability of recycled products was a real problem just a few years ago and still is when certain businesses, particularly publishers, require large amounts of materials to meet a hard deadline. But most standard business products are readily available today.
Major writing-paper companies like James River now carry numerous grades of quality paper stock in a variety of colors. Based on this early success in New York, the company saw the market potential for developing recycled versions of a number of its plastic products, including trash cans, buckets, liners, and wheeled carts. Rubbermaid currently markets more than 70 products made from postconsumer plastic.
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Even in the case of newspaper and magazine publishers that require large quantities of recycled paper in a short time, planning and vigilance can overcome the availability problem. For example, Consumers Union, which publishes Consumer Reports, examined the feasibility of converting the paper its magazine was printed on to recycled content.
The driving force behind the use of recycled paper was Rhoda H. She believed that it was essential for her nonprofit organization to be sensitive to environmental considerations in its purchasing and publishing activities. With a circulation of over five million, Consumer Reports is the eighth largest magazine in the United States. However, Karpatkin and others persisted in their efforts. Consumers Union identified opportunities for producing many of its publications with recycled paper.
To compensate for the higher price, CR established a price preference fund that was partly fed by the savings from their in-house recycling program. The recycled content of Consumer Reports continues to increase: half of the press run for Consumer Reports is now printed on recycled-content paper. In addition, more than half the books published by Consumers Union are currently printed on recycled paper. During the next several years, Consumers Union expects its suppliers to develop both a consistent feedstock and competitive prices. Ironically enough, while plenty of people dutifully bundle newspapers for recycling programs, a number of local recycling programs have stopped collecting them.
While temporary, the glut in unprocessed newspapers highlights the problems caused by the time lag between collection and processing. In efficiently generating a supply of unprocessed newspaper, government programs have made a new resource available to industry. Manufacturers, in turn, are now scrambling to catch up by upgrading processes and creating new uses for recycled newspapers. By the year , every U. A similar desire to outrun legislation moved Bell Atlantic Directory Services to research the use of recycled-content paper for its phone books.
After extensive review of its options, the public utility learned that its only source of stock paper was a mill in Europe. The company has persisted in asking U. And in the next several years, a plant will probably be built in North America that can provide Bell Atlantic with all the paper it needs. Ten years ago, small U. However, as recently as the late s, most large companies were still investing in plant upgrades for handling virgin natural resources. In order to produce recycled products of equivalent quality and price, then, industry must now invest heavily in new technologies.
In fact, a number of products have been made with recycled stock for decades, including steel and aluminum cans, soap, and low-cost toilet tissue.
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For the past 70 years, companies like Fort Howard, Wisconsin Tissue Mills, and Marcal have used wastepaper from mills and printers as the primary source of their manufacturing processes. By doing so, they tapped a cheap resource that allowed them to create tissue products for the low end of the market. And with the increasing supply of postconsumer wastepaper, especially from office recycling programs, all three have upgraded plants to handle this new feedstock. Or consider Rubbermaid, which has pioneered the use of postconsumer plastic in both blow-molding and injection-molding technologies, forcing smaller competitors like Zarn and Toter to follow suit.
Using a small plastics-processing company to clean up the postconsumer LDPE, Rubbermaid buys stretch film from distribution centers for companies like Giant Foods. It ships them for processing and then buys converted pellets from the processor to use in the production of new products such as recycling containers or trash cans for resale to the same consumers.
In order to close this loop effectively—and profitably—Rubbermaid works with both the processor and Giant Foods to ensure that the plastics they recover for reuse are of the highest quality and virtually free from contamination. Quality management is key, since it allows Rubbermaid to produce products in a number of attractive colors rather than the usual black or gray containers made of recycled plastics. Of course, while Hammermill currently plans to price Unity DP competitively in the United States, it had other economic reasons for licensing the technology in Since the licensing agreement with Steinbeis is exclusive, it gives International Paper a niche in the growing market for environmentally responsible products.
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In addition, like most old-line industrial giants, International Paper has had its share of environmental disasters. Switching to more environmentally responsible processes will in and of itself help the company retain customers.
Not to mention the fact that the wood-pulp processing required to make virgin stock paper creates hazardous wastes that have become increasingly costly to clean up. This new type of container has been accepted by the Food and Drug Administration for use in direct contact with beverages. In order to gain approval for this new packaging technology, Coca-Cola had to convince the FDA that the company could handle any possibility of contamination or resulting health problems.
As a result of this pioneering work by Coca-Cola and the FDA, some of the outdated government regulations for hygienic quality in the packaging of recyclables have been changed.
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Now other food and beverage containers made from postconsumer plastic—including jars and bottles for salad dressings, peanut butter, and ketchup—are either on the market or in development. The plastics that Coca-Cola uses to make its new bottle can be reused to make the same product, closing the recycling loop. As a public utility, the phone company is subject to more government regulation than private companies, and, consequently, Bell has developed new manufacturing processes.
Among other things, Bell has eliminated the use of hot-melt binding glues that would literally gum up paper-pulp recycling operations. In addition, the company has done away with glossy paper covers.
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Bell Atlantic has invested in using recycled paper for its phone directories and in making the directories themselves recyclable. This public-private balance of costs is delicate; but it can spur the larger changes a complicated economic issue like recycling requires. Bell has also invested heavily in establishing working phone-book recycling partnerships with local public-sector recycling programs in its service territory. Local recycling coordinators are responsible for setting up the collection and public-education component of the program, while Bell pays for transportation to markets and guarantees that recycled phone books will not be landfilled.
One of the best examples of a government-business partnership driven by leading-edge ingenuity can be found in Recycled Plastics Marketing of Seattle. RPM receives a predictable flow of materials for its product, and the city guarantees payment on a large number of composters. Cooperative partnerships like this demonstrate the potentially positive effects of recycling on local economic development—as well as how business and government can negotiate mutually beneficial deals.
Some companies, of course, contribute to the public interest simply because they believe in the importance of doing so. Schools receive sorely needed supplies and recycled paper. From an educational standpoint, children get a chance to see the full recycling loop—from curbside collection to buying recycled products to recollection—in action. But coordinating business-government programs to this extent is no easy task, whether a participating company is driven by public or private interest.