Future stakes: the year concluding was flat for most contractors and recyclers, but 2004 brings with it new hope - State Of The Industry

C&D Recycler, Nov-Dec, 2003 by William Turley

"The 2004 trend should be about the same.

"In 2003 the amount of feedstock provided to local processing facilities was up substantially due to our ReNu Division collecting and hauling more and more CDL debris and diverting business from solid waste haulers who may have otherwise buried the materials. We currently serve over 220 commercial construction sites in the region. This activity was achieved at a price disadvantage, as the response from the solid waste haulers was to aggressively slash pricing from their usual rates. There seemed to be no bottom to what sonic of the oligopoly members will do when their market is threatened, and we can't go down the rabbit hole on pricing like they can!

"This clearly shows that the marketplace (the generators) want recycling!

"Regional material generation levels are trending down slightly due to the impact on the general contracting marker base as fallout from the local economy's malaise drifts downwind. However, looking at the regional development backlog, this will trend upwards again in 2004.

"Tip fees, per se, have not gone down. That is landfill tipping fees, which remain at $82.50 to $89 per ton. CDL fees have gone down superficially due to the predatory price practices that some solid waste players have been practicing. This reduction is not sustainable, as they are often hauling the material to landfills, and tipping fee reductions are not supported by greater value of the material output. "The issues affecting the C&D recycling industry here are the same as most places:

* Regulation and regulatory interference, including municipal 'flow control;'

* Lack of understanding of the C&D recycling arena and possibilities for diversion;

* Entrenched incumbent solid waste haulers protecting their primary business model;

* Difficulty in permitting of facilities mad the "NIMBY" attitude local civic leaders have that belies their desire to be 'green;' and

* Infancy of end user markets for materials."

CALIFORNIA

This state remains a highly interesting case study in C&D recycling and a study in extremes. Where else can one concrete recycler proclaim the markets did well while another calls it "awful?"

California is a big state, and location did seem to matter. Most areas did poorly. For example, Dan Copp of Dan Copp Crushing, a large concrete/asphalt recycler in Southern California, sums up the market by saying: "2003 was awful and 2004 will be worse.

"California is in a state of chaos," he says. "Projects have been downsized or put off." There is stone private work-big-box retailers and housing tracts--but not much roadwork. Prices for crashing are down a third from a year ago, and the situation will only get worse when the huge El Toro military base in Orange County is dismantled and the material from that site is dumped on the market. "That will leave a huge glut of concrete on the market, making next year even more difficult," Copp says.

Bill Emery, of Emery Materials, Parris, Calif., is one recycler involved in those Southern California tract housing markets, and he says the market has been good. However, there are a lot of competitors around, and the natural aggregate companies still sell material very cheaply, he adds.