World view: the long reach of Georgia-Pacific's Harmon Associates is beginning to extend beyond North America

Recycling Today, Oct, 2005 by Brian Taylor

Georgia-Pacific is a corporate name that most Americans find recognizable, which is why it is also a name that Harmon Associates turns to when striving for economies of scale.

Harmon Associates, the scrap paper trading arm of Georgia-Pacific (GP), employs approximately 150 people around the world who procure secondary fiber for GP'S own mills as well as for mill customers seeking scrap paper.

Harmon, based in Jericho, N.Y., is managed as its own profit center within GP, but also calls upon the wider resources of its parent company when seeking optimal freight rates and other arrangements that can help it provide what it calls the best value proposition for its mill customers and scrap paper suppliers.

HEAVYWEIGHT CLASS. Marc Forman (pictured at top), vice president and chief operations officer of Harmon Associates, is able to talk about annual tonnage handled by the subsidiary in millions rather than thousands.

"In 2005, we anticipate that we'll invoice about 5.6 million tons of scrap paper, with about 5 million tons of that coming from North America and the rest [from] overseas," says Forman.

Much (roughly 60 percent) of that tonnage is being purchased to furnish Georgia-Pacific mills that make products ranging from tissues and towels to corrugated packaging. "Where we specialize is in the de-inking grades," notes Forman. "GP is the largest user of de-ink fiber in the world. When you combine what Harmon buys for GP with the de-ink tons Harmon buys for all its other customers, we are by far the largest seller in the world of these grades."

But as a way of serving both recyclers from whom it buys product and the mill customers to whom it sells product, Harmon trades in "the entire spectrum of scrap paper grades," says Forman, saying this involves "well over 100 grades of paper." The company also trades some types of plastic scrap.

Linking sellers and generators of scrap paper with buyers is the primary activity of Harmon Associates. "For the most part, we are about as close to a pure trading company in our industry that you can find," notes Forman.

But the company does have physical operations under the name Ecosource in plants operated in tandem with GP mills in Green Bay, Wis., and Muskogee, Okla.

Additionally, Harmon helps oversee the placement and maintenance of some 350 balers located at generation sites it serves. "As a part of how we secure tons, we have a very active equipment program," says Forman. "We'll work with an account to supply a baler in exchange for the fiber," he notes, remarking that those balers can range in size from small vertical models to high-volume horizontal balers.

The tonnage traded by Harmon Associates comes both from generating sites (printing plants, converters, supermarkets, distribution centers) as well as from paperstock dealers and other recyclers who arrange for Harmon to act as their trading agent to the consuming mill side. -Any place scrap paper is found, we're actively trying to buy that paper," says Forman.

"It's a traditional model where, because of our need for fiber, we basically have an entree into just about any paper dealer in the U.S.," he continues. "Our strongest relationships are with the paper packers, I think because we have a solid value proposition for them."

ROLLING ON. Part of the value proposition Forman refers to comes in the critical areas of transportation and logistics. It is an operational aspect where the resources of Georgia-Pacific provide an advantage.

Robert Burns, senior manager of communications with GP, notes that the company "is among the top five dry van freight buyers in the U.S." GP's considerable transportation buying power also extends to rail shipping and intermodal container transportation.

GP's size allows Harmon to tap into solid fleet arrangements with some of the largest trucking shippers serving North America, such as J.B. Hunt Transport Inc. and Schneider National Inc., and to provide timely and reliable service to both paper recyclers and consuming mills.

Additionally, when scrap paper is bound for GP mills, the company can almost ensure that trucks will leave those mills with finished paper as a backhaul. "For example, when we take a load of OCC into one of our containerboard mills, we can bring out finished product," says Burns. "Just about every one of our trucks into a GP mill is part of a backhaul arrangement," he adds.

"Being part of GP sets Harmon apart; we're able to tap into the corporate strength in logistics and technology, says Forman. "The transportation services we provide are valuable. Packers want to turn their inventory, and we supply a steady home and a steady transportation line at all times," he continues. "Our position within Georgia-Pacific gives us a tremendous company behind us, both financially and physically, to support operations."

In addition to transportation, the other critical part of the equation is the consuming demand of GP's paper mills. "We offer homes in all markets," says Forman. "We can take that position because we have large mills behind us that use 10,000 tons per day of secondary fiber."