New Economics ($21.12) Pratt Recycling Shawn State

Transcription

1 New Economics ($21.12) Pratt Recycling Shawn State

2 Pratt Overview Today s Topics Pratt in the Carolinas Top Trends and factors in Recycling China 2

3 About Pratt USA and the Carolinas 3

4 Pratt Industries Overview ~$2.5+ Billion and Growing Fully integrated, privately-held packaging company Recycle 2.0+ million tons of recycled materials annually ~40 million trees saved annually 5 th Largest U.S. paper and packaging company 7,500 employees Largest 100% Recycled corrugated packaging company in North America % Recycled Paper Mills. Today Mills consume ~10 million pounds/day of recycled paper 68 facilites in North America 17 Material Recovery facilities (MRFs) 4

5 Close-the-Loop Integrated Pratt a true Circular Economy company 5

6 Our Customers

7 Pratt Purchases millions of pounds of paper EVERY DAY from the Carolinas. And, we need more! 7

8 Markets, Domestic and Global.. Impacts: What we Recycle How we Recycle The future of Recycling 8

9 Factors / Trends in Recycling - #1 Recycling Rate Obscurity Fuzzy Math Unclear Opaque Mysterious OVERSTATED! Truth is residential MATERIALS recycling rate = 10 to 15% maximum Why? 9

10 Factors / Trends in Recycling - #2 Everybody wants to be seen as sustainable Big push to put more in the bin Examples: Foodservice Packaging K-Cups Flexible Film 10

11 Factors / Trends in Recycling #3 Consumers also want to HELP WISHFUL RECYCLING 11

12 Factors / Trends in Recycling #4 American Recycling is stalling, and the big blue bin is one reason why Single-Stream is not exactly work out as planned Processing costs underestimated Contamination underestimated Volume declines worse than expected Wear and tear/r&m underestimated (plastic bags, glass), at MRFs, and Mills Commodity price volatility worse than expected Recent statements from Recycling Industry CEOs/COOs (not Pratt) we re still committed to recycling for customers that are willing to pay company is being more strategic with its decisions. This includes avoiding long-term contracts with decreasing value over time, closing unprofitable facilities AND absolutely will never go back to the old style of doing business in recycling as long as I am breathing 12

13 Southeast Pricing Volatility SOUTHEAST Mixed Paper #2 SRPN (ONP #8) OCC #11 DLK Cuttings Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr-18 May-18 Jun-18 Fiscal Yr 2018 $ $ $ $

14 Factors / Trends in Recycling #5 Contamination!! Most cities report increasing contamination levels Ruins good commodities - devaluation Adds unnecessary expense/processing costs/energy use Takes a much longer, costlier trip to landfill Distorts Recycling Rate China now says Enough is Enough 14

15 Southeast SS Value Commodity % of Stream Mix 45.00% Other Paper 0.00% ONP 0.00% OCC 11.00% PET 5.00% HDPE-N 1.20% HDPE-C 1.10% Aluminum 1.00% Steel 2.40% Trash & Low Value Recyclables 33.30% Totals % SS Value / Ton $48.88 ($21.12) 15

16 Rejects from our Paper Mill 16

17 Rejects from our Paper Mill Heading to Landfill 17

18 Factors / Trends in Recycling #6 OCC (Cardboard) curbside due to on-line shopping - Presents some challenges for communities with carts 18

19 Factors / Trend in Recycling #8 But, the biggest Market Influence today is Blue Sky

20 Factors/Trend in Recycling China and Export China Self-Sufficiency and Pollution Control 20

21 China Matters U.S. Recovered Paper Stats 52.6 Million Tons Collected ~15mm Tons or 28% To China ~7mm Tons 14% To Rest of World ~31mm+ Tons or 58% For U.S.A. Mills 21

22 President Xi Jinping s Recent Speech.What we now face is the contradiction between unbalanced and inadequate development and the people s ever growing needs for a better life, Mr. Xi said. He added improving people s lives included reducing pollution. 22

23 Factors/Trend in Recycling China Ban Never an issue of IF it would happen, but when Ministry Enviro Protection driven, not economic No longer wants our garbage Goal to improve local China collections Mixed Paper = BANNED All other grades = 0.5% Prohibitives We did it to ourselves 23

24 Details of China s Ban Effective Dec. 31, 2017 Filed with WTO Some 2017 Licenses already revoked 2018 not any better New import Licenses have been curtailed Mixed Paper is BANNED Other paper with >.5% contaminants is BANNED Inspections are and will continue to be very aggressive 24

25 So, What do we do now Don t focus on tons and percentages Focus on quality Low hanging Fruit first Glass Solutions not in Single-Stream Focus on paper, plastic #1 and #2, Aluminum cans, metal cans 25

26 THANK YOU 26