Service on tap: Jeff Kibler and Pratt Industries tap deep into the commercial stream to procure fiber for two U.S. mills

Recycling Today, June, 2004

A variety of circumstances make Pratt Industries (USA) a noteworthy contestant in the competitive corrugated box and paperboard industry. According to Jeff Kibler, executive vice president of the company's Pratt USA Recycling Division, Cowers, Ga., Pratt's Australian parent company Visy Industries is "the world's largest privately-owned paperboard company" and has been fancily-owned since being founded by Leon Pratt in 1948.

The company has also pioneered several techniques for using a mixed, secondary fiber stream as feedstock, and has served as a model of how to set up its own collection and supply chain to procure that stream of scrap paper.

RECYCLING ROOTS. The long-time commitment by the Pratt family to the use of recycled materials can be traced back to the company's first corrugating machine, which was built in 1948 using scrap metal parts.

In the subsequent five-and-a-half decades, Visy Industries, Melbourne, Australia, and its subsidiaries have made sustainability and recycling key parts of their mission and operating methods. Currently, some 1.35 of the 1.6 million metric tons of containerboard produced annually by the company is made from 100 percent recycled feedstock.

Current corporate chairman Richard Pratt, Leon's son, took over the reins of Visy Industries in 1969 and has overseen the company's growth from one with $ 5 million in annual sales that year to one with $2.2 billion in sales by 2001.

At the same time, the word "recycling" remains in the company's 24-word mission statement, and its commitment to recycling has brought it into additional segments of the industry beyond mill supply. (See sidebar, "Global Reach.")

The recycling ethic has taken hold within the U.S. operations, known collectively as Pratt Industries (USA). This division is chaired by Anthony Pratt, Richard's son and Leon's grandson. Text at the I.J.S. subsidiary's Web site (www.prattindustries.com) states, "At Pratt Industries, we 'harvest the urban forest,' because we are fully committed to recycling and the environment."

The Pratt USA Recycling Division collects more than 700,000 tons of scrap paper each year, with much of the collected material specifically prepared for shipment to the company's two U.S. mills in Conyers, Ga., ,and Staten Island, N.Y.

Kibler describes Pratt's U.S. operations as "fully integrated," with the result that a clear line can be traced from a small collection container at a modestly-sized retailer in suburban Atlanta to a finished corrugated box leaving the Cowers mill the next county over.

This same supply and manufacturing chain is duplicated in New York City and surrounding communities to supply the Staten Island mill.

The mill complexes themselves are more fully integrated than operations at many other containerboard plants, with Pratt Industries coining the term "millugator" to describe how scrap paper is turned into a finished box at the same manufacturing complex. "With the 'millugator' concept, material goes from recovered fiber to finished box in one-and-a-half hours under one roof," says Kibler.

While the Conyers and Staten Island mills are the centerpieces of Pratt Industries (USA), the mills are far from stand-alone operations. They are supported both by a series of additional corrugating and box-making plants on the finished product side and a network of recycling plants and collection sites on the feedstock side of the equation.

THE HARVEST. An outsider viewing the paper industry may think that procuring scrap paper to feed a mill would be an easy task, amounting to collecting a fraction of someone else's discards.

Industry insiders, however, are aware of the attention that must be paid to collecting sufficient tonnage in an environment made increasingly competitive by demand for scrap paper from mills both inside and outside the U.S.

The growth of the paper industry in China, in particular, has strained the limits of U.S. scrap paper supply in the past three years. "It's a very competitive market," Kibler acknowledges.

But he also notes that Pratt h as "brought some unique factors into play" to keep its supply lines open and productive.

The company has gone straight to paper generators with its "developer program," which keys in on smaller retail and office customers who may grow steadily into larger scrap paper generators.

As part of tilts program, Pratt supplies a baler (often a smaller, vertical model) and retains ownership of the machine. Customers are not charged a flat fee for either use of the baler or for pick-up of material. "If customers don't produce a lot of tons, they may incur a charge. We'll pay them for a high amount of tonnage, but they'll pay us if they're not reaching a certain level," notes Kibler.

The program has helped Pratt stay in the game in the increasingly competitive chase for old corrugated containers (OCC), a benchmark grade in high demand by both domestic and overseas buyers.

An advantage for Pratt in the U.S. market has been the use of its innovative pulping and screening technology from Australia, which allows it to use mixed retail and commercial paper grades when OCC is hard to find. "We basically have put technology in our paper mills that allows us to take this material without sorting," says Kibler. "When it comes into our recycling plants, we bale it and ship it."