Our trash becomes China's cash

CHESAPEAKE

Every other week, thousands of Hampton Roads homeowners wheel bins brimming with plastic bottles, glass, cans, paper, cardboard, newspaper and other items to the curb. It's a ritual grounded in faith that something good for their community and the Earth will come from it - that what's within can be reused by someone somewhere.

Most of it is.

Take the paper.

The company that collects recyclables in Hampton Roads - TFC Recycling - sorts it in a Chesapeake warehouse, compacts the paper into cubes and packs the cubes into truck-size containers.

Trucks haul the containers to the port of Hampton Roads, where they are loaded aboard cargo ships that have just unloaded other truckloads of consumer goods.

Then the wastepaper sets sail, much of it to China, where it is remade into the cardboard boxes that package televisions, computers and countless other consumer goods.

"The newspaper that you put in your newspaper bin - three weeks later, it's in the hands of someone in China," said Bill Moore of Moore & Associates in Atlanta, a consultant on recovered paper. "It's a fairly quick turnaround."

It's part of a global market that made recovered paper the No. 2 U.S. export, by volume, in 2008, surpassed only by iron and steel scrap, according to the Institute of Scrap Recycling Industries Inc., a trade group based in Washington.

"It's a commodity-based business, and we are mining valuable products from the waste stream," said Mike Benedetto, vice president/owner of TFC.

The Chesapeake-based company processes 15,000 tons of recyclables a month from households throughout Virginia and North Carolina.

More than half of that - about 8,000 tons - is wastepaper that it ships overseas, roughly 80 percent bound for China, 13 percent to India and the rest to Europe. TFC exports about 300 40-foot containers of paper a month from Hampton Roads.

In Hampton Roads, TFC takes recyclables from Virginia Beach, Norfolk, Chesapeake and other communities on the Peninsula and Outer Banks. All of it ends up on the floor of TFC's processing center in a 42,000-square-foot warehouse off Campostella Road in Chesapeake.

"This is how it comes out of the trucks," said Benedetto, pointing to a colorful mountain of what appears to be trash.

The mound generates millions of dollars a year for his privately held company, though he declined to disclose financial details.

At today's going price, the export wastepaper stream alone produces about $1.2 million a month.

What gets dumped at TFC's Chesapeake processing center should not include food waste, wet paper, plastic bags or other rubbish - but it doesn't work out that way. On occasion, there's TVs, computers and other electronics.

"We've gotten pool liners, deer heads and carcasses from hunting season," Benedetto said.

It all goes into a sprawling maze of conveyor belts that move at speeds of up to 600 feet per minute. The belts carry the material through rotating spikes that snag pieces of corrugated boxes while bottles, cans and heavy objects drop onto another track underneath.

Seven optical scanners are positioned over the conveyor belts. The scanners are synchronized with air jets that blow paper in one direction and bottles, cans and plastics in another. At other points, magnets snatch and capture metal cans.

Wet paper of any kind "really messes things up," Benedetto said. "String, ropes, plastic bags - those are the things that kill us."

As many as 30 times a day, a stray plastic bag or something similar will wrap itself around a cog in the machine and shut everything down.

The nearly $12 million system, which is bigger than a basketball court, was installed in 2006. At the time, it was "the largest, most expensive, most automated recycling system in the country," Benedetto said.

Recycling has been a way of life for Benedetto's family since 1897, when his great-grandfather began collecting rags, newspapers and trash with a pushcart in Brooklyn.

Benedetto's father, Joseph, moved the family business to Chesapeake in 1973 and called it Tidewater Fibre. It's been on the same site - now grown to about 14 acres - ever since.

Black-and-white photos from nearly a century ago hang on the walls of the company's offices, showing workers standing alongside moving conveyors of trash in New York warehouses, sifting and sorting.

Roughly 60 workers at TFC's Chesapeake facility still do pretty much the same thing today, working two eight-hour shifts a day, five days a week, helping sort what the machine cannot.

TFC produces two waste streams, one for paper products, another for everything else.

About 85 percent of what TFC brings to the facility is recycled. What can't be is trucked to Portsmouth, where it's burned for conversion to energy at the Southeastern Public Service Authority's Refuse Derived Fuel Plant, Benedetto said.

TFC sells the glass, plastics, tin and aluminum cans to mills up and down the East Coast.

The paper is baled into large cubes stacked like massive dice in and around the processing plant. Those cubes are stuffed into an array of shipping containers, most of which are trucked to the port for export.

TFC ranks among the top 20 wastepaper exporters in the nation, said Moore, the consultant. It is the nation's 39th-largest processor of scrap paper, handling 160,000 tons a year, he said. The largest is Waste Management Corp., which last year processed about 5.3 million tons of recovered paper, Moore said.

Butler Paper Recycling, based in Suffolk, is another player in waste paper. Unlike TFC, it does little curbside recycling, focusing more on corporate clients with tons of higher-quality office paper to dispose. The company ships about 100 40-foot containers a month, said John Case, Butler's vice president.

The Virginia Port Authority said that nearly 914,000 tons of paper and paperboard, including waste exports, left the port of Hampton Roads in 2008.

Census Bureau trade data for the same year showed about 410,000 tons of wastepaper leaving the port.

The Port of New York/New Jersey, by comparison, shipped nearly 3.7 million tons of wastepaper in 2008, according to Census Bureau trade data. Los Angeles/Long Beach shipped 6.2 million tons.

Last year, total U.S. wastepaper exports were valued at nearly $2.6 billion, down from almost $3 billion in 2008, the bureau found.

China is, by far, the biggest importer of wastepaper.

China's native paper stock lacks the strong fiber content found in U.S. products, so it imports and reprocesses the scrap paper into the cardboard boxes needed to ship its exports worldwide.

And the biggest player in the Chinese paper trade is America Chung Nam. Founded in 1990, America Chung Nam is the largest recovered-paper exporter in the United States, according to its Web site.

In 1995, its Chinese founders formed Nine Dragons Paper, which has become the largest container-board manufacturer in China.

Last year, a New Yorker article on America Chung Nam reported that, by 2001, "it had surpassed global giants such as DuPont and Procter & Gamble to become the single largest exporter, by volume, of freight from the United States. In other words, nobody in America was shipping more of anything each year anywhere in the world."

Buyers for Chinese firms such as America Chung Nam call Benedetto and, he said, negotiate for the best deal in pretty simple terms: "Here's my pricing this month - what do you have available?"

They pay in U.S. dollars, typically within 30 days, and cover shipping fees and insurance, which cost roughly $1,200 for a 40-foot container. While prices vary, depending on the grade of scrap paper, the value of a typical container-load is about $3,000, Benedetto said.

Case, of Butler Paper, also sells a lot to America Chung Nam, but also to India.

"We just move to who's paying the most money," he said. "Every month it changes."

Nationwide, the export price for old corrugated boxes is about $150 a ton, up from about $50 a ton in 2009's first quarter, Moore said. That's back up to what it was in 2008 before the global economy went into a tailspin, he added.

"Paper is moving up fast," said Bruce Savage, a spokesman for the Institute of Scrap Recycling Industries. "It's directly related to the economy, particularly the Chinese economy, which is very strong.

"Warren Buffet once said that one of his leading indicators was the construction and sale of cardboard boxes."

Robert McCabe, (757) 446-2327, robert.mccabe@pilotonline.com