What's Good for the Planet Is Good for Economic Development

In Business, May-June, 2005, Vol. 27, No. 3, p. 27

Long-viewed by some as an adversarial relationship, recycling proves to be an activity that provides environmental protection while stimulating the economy.

Matt Ewadinger and Scott Mouw

MORE THAN a decade ago, the U.S. Environmental Protection Agency launched the “Jobs Through Recycling” (JTR) program to bolster recycling market development. Thanks in part to JTR, a number of recycling business assistance centers (or RBACs as they are commonly known) and recycling economic development advocates began to spring up around the country. In 1995, the Institute for Local Self-Reliance developed a report entitled “Recycling Means Business in Baltimore, D.C., and Richmond,” that examined jobs and revenues created by recycling. Many additional surveys, reports and studies focusing on the economic benefits of recycling have been developed since then. These reports and studies all came to the same conclusion - recycling not only possesses resource and energy conservation environmental benefits that were the impetus behind its early development, but it can also be an important economic development tool.

SPEAKING OF SURVEYS…
The North Carolina Division of Pollution Prevention and Environmental Assistance conducted a survey to examine recycling's impact on jobs and the North Carolina economy. This survey follows up a similar effort conducted in 1994 and documents the growth of the recycling industry over the past decade. (A copy of the full study can be found at: http://www. p2pays.org/ref/34/33911.pdf.) Some of the findings include:
o Recycling employs approximately 14,000 people across the state.
o In 1994, recycling employed 8,700 people, rising 60 percent in ten years to reach its current level.
o Recycling jobs as a percentage of the state's total employment has increased 40 percent in ten years, from 0.25 percent of the total labor force in 1994 to 0.35 percent 2004.
o Fifty-four percent of the businesses surveyed forecast creating more recycling-related jobs in the next two years.
o Recycling employs more people than the biotech and agricultural livestock industries in North Carolina.
o The number of companies listed in the state's recycling markets directory has increased from 306 in 1994 to 532 in 2004, a 74 percent increase.
The recycling industry can be expected to continue its growth in North Carolina, with expansion of existing firms and the advent of new companies resulting in a rising level of employment in this sector. The two chief obstacles to growth are access to materials that are currently being thrown away and sent to landfills and, as is the case with many small- to medium-sized businesses, access to capital.

ACCESS TO KARMA OR CAPITAL?
In an ideal world, we would measure a recycling company's success based on its positive environmental impact. In a market-based economy, however, success is measured by a company's ability to start-up, grow and remain financially solvent. To help these companies be successful, the N.C. RBAC collaborated with Self-Help, the state's community development bank, to create the N.C. Recycling Business Loan Fund. The loan fund nurtures fledgling businesses until they become bankable and graduate to full-service private sector financing. Since the inception of the loan fund in 1999, despite a somewhat sluggish economy, Self-Help has made $1,175,300 in loans and leveraged an additional $1,617,810 from other financial sources resulting in a total of $2,793,110 lent to North Carolina-based recycling companies. Forty-three jobs have been created, 18 jobs have been retained that might otherwise have been lost and 18,782 tons per year of capacity have been developed.
Why is there a dedicated Recycling Business Loan Fund? Banks can be reluctant to fund start-ups or companies in untested sectors. While venture capital is designed to take on higher levels of risk, those firms often want only very large deals and those with some form of management participation. The Recycling Business Loan Fund is designed to fill the gap between bank loans and venture capital.
What types of loans are available? The loans are structured as market-rate debt, and can be used for working capital, inventory, equipment and real estate purchases. The staff at Self-Help is well skilled at tapping existing Small Business Administration funding pools and guarantee programs to help with the approval of riskier loans. Self-Help often uses SBA 504 and 7(A) guarantees in its underwriting.
For more information about the N.C. Recycling Business Loan Fund, contact Fred Broadwell, environmental finance coordinator at (919) 956-4490, or e-mail him at fred@self-help.org, or visit the Self-Help Web site at www.self-help.org.

THE HUMAN FACE OF THE RECYCLING INDUSTRY
North Carolina's RBAC has developed “Recycling Means Business! The Impact of Recycling on North Carolina's Economy.” Unlike other recycling employment and business studies concentrating on economic statistics, this document provides a snapshot of the many faces of North Carolina's recycling industry. The 42 companies featured are just a few of the 540 state based recycling operations listed in the N.C. Recycling Markets Directory. The operations range from Fortune 500 manufacturers to single proprietary, family-owned businesses, handling hundreds of different types of materials and products. Some of these companies now occupy old textile factories and other industrial plants abandoned by some of the state's more traditional industries. A copy of Recycling Means Business! can be found at http://www.p2pays. org/ref/34/33912.pdf.

NORTH CAROLINA IS NOT UNIQUE
Every state could probably provide similar recycling success stories like those highlighted here. An amazing array of companies across the country help turn discarded materials into everyday products while creating jobs for our citizens and investment in our economy at the same time.
To help companies like these thrive, states can help create and maintain a business climate that supports the success of recycling companies. Local communities and states can help with policies, programs and incentives that drive materials out of the waste stream and into the hands of recyclers. Some recyclers struggle to compete against relatively low tipping fees for materials. Access to capital, discussed previously, needs to improve. Maintaining a strong network of technical, economic development and business planning assistance can give companies a strong foundation for expansion and improvement. A need to raise public awareness of the recycling economy exists. Waste generators, decision-makers and the public should know about the economic development, as well as the environmental benefits the recycling industry offers.
Recycling's environmental promise is matched by its ability to grow jobs and businesses and strengthen the overall economy. This message, now well documented, may hold the key to reinvigorating public commitment to recycling and to capturing the large amount of materials that are now mistakenly discarded as “waste.”

Matt Ewadinger is manager of the North Carolina Recycling Business Assistance Center, a cooperative effort of the N.C. Department of Environment and Natural Resources and the N.C. Department of Commerce. Scott Mouw is chief of the Community and Business Assistance Section of the N.C. Department of Commerce.

COMPANIES THAT SHOW RECYCLING MEANS BUSINESS OAKS UNLIMITED
Oaks Unlimited has more than 40 years' experience producing high quality hardwood lumber for both domestic and overseas markets. In 2004, Oaks Unlimited president, Joe Pryor, expanded operations to produce a hardwood-flooring product made from recycled pallet deck boards.
Located in Waynesville, Oaks Unlimited has worked closely with Waste Reduction Partners in Asheville to develop the flooring production process. Additional equipment purchases and a required building expansion were partially financed through grant funding from the N.C. Department of Environment and Natural Resources.
The “start-up” component of this new venture for Oaks Unlimited has been successful. From June to December 2004, Oaks Unlimited created one full-time position, and requires three additional part-time employees to meet the initial production schedule. As it ramps up to meet demand, production could be doubled using existing equipment and adding more employees.
Oaks Unlimited has used its experience in the production, marketing and distribution of high quality lumber to create a business that is designed to fill a niche in the hardwood flooring market. The final product is a three-eighths inches thick, solid hardwood flooring that is prefinished and ready for installation. The rustic flooring is marketed as a “green” product, and more than 250 tons of pallet deck boards are recycled annually in its production. This translates into 120,000 square feet per year of flooring. Increases in waste diversion rates are directly proportional to expanding market demand.
For more information about Oaks Unlimited, contact Joe Pryor at (828) 926-1621, e-mail: jpryor@oaksunlimited.com.
MCGILL-LEPRECHAUN ENVIRONMENTAL
Under the leadership of M. Noel Lyons, McGill-Leprechaun operates two compost manufacturing plants in North Carolina and is one of the largest solid waste composting companies on the East Coast. The company was started in 1991 near Harrells to help manage the growing amount of animal waste generated by the poultry industry. Now, its facilities in Chatham and Sampson Counties process more than 200,000 tons of compost per year. Feedstocks come from a large variety of generators, including industrial plants, municipalities and agricultural operations. The materials handled by McGill include industrial residuals, municipal biosolids, water treatment plant residuals, sheetrock, clean construction wood waste, commercial wood waste (pallets, shipping crates, etc.), food processing waste, grease trap waste, agricultural residuals, animal waste and source-separated organic solid waste (shredded paper, food scraps, waxed cardboard, etc.).
With more than 50 employees and $7 million in annual revenue, McGill-Leprechaun is poised to expand its operations to other parts of the state. It found large-scale markets for its finished compost, which is sold in bulk by the cubic yard to retail and wholesale customers throughout the Carolinas. McGill's products have been used effectively to eliminate the use of methyl bromide, an ozone-depleting chemical, in produce and crop production. The company's rapid growth and innovative technology earned McGill-Leprechaun the honor of runner-up for North Carolina Small Business of the Year in 2004.
For more information, contact Lynn Lucas at McGill (910) 532-2539, e-mail: llucas@mcgillcompost.com, or visit the company's Web site at http://www. mcgill-leprechaun.com.

BROOKS CONTRACTORS
Judy and Dean Brooks own and operate one of North Carolina's largest state-permitted composting facilities. In 1992, Chatham County's Brooks Contractors began accepting organics on its 30-acre facility to process into a valuable compost product. Brooks started out with only two employees, a couple of customers and a few hundred tons of organics to process. Today, Brooks has a substantial customer base, more than 55,000 tons to process each year, a fleet of trucks, and 12 full-time and a few part-time employees.
In the late 1990s, Brooks began offering collection of food waste to grocery stores, restaurants, microbreweries and cafeterias in Orange County. Food collection expanded quickly from 700 tons the first year to more than 24,000 tons from Orange, Wake, Durham and surrounding counties. Brooks has made major contributions to the food collection and composting industry. The company designed a collection truck that provides several functions not found on a typical waste hauling truck. The truck weighs the container before and after dumping its contents into the truck. The truck is also equipped with a high-pressure water system that allows operators to clean out and sanitize each collection container after dumping. This valuable and unique feature has been critical to making the food collection service a success by nearly eliminating odor and fly complaints.
In addition to its original compost, Brooks has expanded its product line to include more than eight different products, including topsoils, flowerbed mix and other compost blends to meet varied landscaping and agricultural needs.
For more information about Brooks Contractors, contact Judy Brooks at (919) 837-5914, e-mail: brooksco@
centernet.net.
WALLACE FARMS SOIL PRODUCTS
Huntersville's Wallace Farms Soil Products began operation in the early 1940s as one of the largest dairy farms in North Carolina. In 1990, the family-owned and operated business decided to diversify by leasing out its dairy facilities, and creating a soil processing and composting operation.
Because of increasing environmental concerns and regulations governing animal waste, the Wallace family set out to develop an environmentally friendly method of managing the dairy manure. Aerobic composting proved to be the logical solution, originating one of the few “real” composted cow manures available today. Wallace Farm Soil Products has since developed a high-quality line of soil and compost products, including blended topsoil, composted cow manure, compost-plus, potting soil and play sand.
With 22 employees, Wallace Farm Soil Products receives approximately 60,000 tons of organic waste a year and is one of the largest compost and packaging facilities in the state. The farm reaches out to other farms and industries to divert organic waste materials such as animal manures, food waste, wood waste and yard waste from landfills.
For more information, contact Eric Wallace at (704) 875-2975, or visit the company's Web site at http://www.wallace farmproducts.com.

Copyright 2007, The JG Press, Inc.