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December 2004

Business Booms for Construction and Demolition Recyclers
by James I. Miller

During the 1990s, Rob Dorinson was a successful custom homebuilder in Las Vegas, Nevada, the fastest growing construction market in the country. But that all changed in May of 1997 when he grew dissatisfied with the debris box service provider on his jobsites.

“There was a monopoly in town for the pick-up of construction debris,” he said. “I saw an opportunity to improve things so we launched a new recycling business.” In the seven years since, he’s never looked back.

Today, his company, Evergreen Recycling, is among the largest privately held recyclers of construction and demolition materials in the region. “We process materials from hundreds of construction and demolition jobs every year,” he said. The firm accepts asphalt, brick, concrete, drywall, flooring, glass, metal and wood.

The upward trend for C&D recyclers is evident in markets across the country. Kwest Materials LLC in northwest Ohio reports business is up considerably over last year. Mike Hopkins, facility manager for the 25-acre concrete and asphalt processor said, “We’ve been in business now since January of 2001. Our growth has been phenomenal over the past couple years. The market is so strong in this area now, several other yards have set up shop in the region.” Kwest is the construction and demolition recycling operation of the parent MBC Holdings, Inc. of Archbold, Ohio. They handle over a hundred thousand tons of recycled material annually, and that figure continues to rise.

Growth in government projects
In spite of an almost universal budget strain at the state and municipal level, part of the activity for C&D recyclers is coming from government jobs. “Two years ago, we didn’t see anything in this area from the public sector,” said Rob Dorinson. “But that’s changed now. There’s a movement underway among architects and designers to produce buildings with minimal impact on the environment. Since the economy has improved, that style of thinking is great motivation for cities and towns to expand current facilities, or replace older buildings with leading edge construction,” he said.

Some incentive to recycle material from construction and demolition comes from the Leadership in Energy and Environmental Design, or LEED program. LEED is the work of the U.S. Green Building Council (USGBC) - a coalition of some 5,000 leaders in the construction industry working to promote buildings that are “environmentally responsible, profitable and healthy places to live and work.”

Dara Zycherman, LEED program assistant for the USGBC explains, “Under the waste management provision of the program, points are awarded for recycling specified levels of construction debris or material from demolition. Contractors that divert more material are awarded more points which results in a higher certification of the project. When more materials are recycled, everyone wins,” she said.

On the national scene, according to industry sources, new construction was reported at nearly $450 billion during the first nine months of 2004, an increase of roughly 10% from the same time frame last year. The 10% gain came from a near 20% boost in residential building, while commercial construction was up almost 4%. The gains were posted from February through August, with some cooling off since then.

By region, the greatest strength so far this year has been in the east, southeast and western states.

With new construction starts up, demolition of obsolete structures has remained steady for the most part. Some of this strength is reflected in the number of requests for proposals for the demolition of government projects.

In the northeast, demolition jobs are currently planned on U.S. Army bases in thirteen states. This activity is part of the Army’s long-term Facility Reduction Program, or FRP. In Florida, NASA is planning to move ahead with the demolition of obsolete buildings as well. That will mean even more business for C&D contractors and recyclers in the region.

“Right now, public works projects are 65% of our business said Mike Hopkins, of Kwest Materials. “We operate two portable crushers, and the usual compliment of equipment to support them. Recently, we’ve completed big jobs for the Detroit Metropolitan Airport expansion, the replacement of taxiways at Toledo Express Airport, school and hospital demolitions, a bridge and various road construction projects. There’s more in the works,” he added. Kwest sells its processed concrete and asphalt aggregate products primarily to the new construction trade.

Hurricane cleanup
The unusually tough hurricane season brought on a spike for C&D recyclers in all areas affected. In Florida, the damage and cleanup from four major events in the span of just weeks earlier this year was too much for area resources. Additional capacity for shredding, grinding and material handling was brought in from neighboring states, creating new business for recyclers as far away as the mid-Atlantic states and throughout the Midwest. Thousands of workers were hired to pick up, sort and process the wood, brick, concrete, roofing and related materials.

Terri Ward, director of marketing for Wilsonville, Oregon based SSI Shredding Systems, Inc. said, “We’re seeing a real increase right now in inquiries for larger shredding systems related to the hurricane cleanup. Now that the wood and general debris has been removed, much of the more difficult materials to process and dispose of are getting attention. Recyclers may need additional equipment to process the piles of material that remain from cleanup operations throughout the entire coastal southeast,” she added.

Looking up
With plenty of work and recycled material on the move, construction and demolition recyclers are generally optimistic. “We see nothing but great things ahead,” said Mike Hopkins of Kwest Materials. In the near term, we expect to proceed with plans to expand our topsoil product offering and add other products for jobsite enhancements. “We’re excited,” he said. For us, it’s a good time to be in the business.”

Back in Las Vegas, Evergreen Recycling has been upgrading their fleet, replacing aging vehicles with newer models. “The federal tax credits have helped a lot,” said Rob Dorinson. “We see a strong future. Next year, we plan to modernize the operation a bit by automating some of our material sorting functions and upgrade some of our processing capabilities as well.”

According to the Construction Materials Recycling Association (CMRA), construction and demolition material can account from between 25% to 45% of the solid waste stream in North America today. The figure varies, depending on the level of new construction in any given region, and the demolition of older structures to make way. At present, however, the CMRA estimates that just 25% - and that may be optimistic - of the North American C&D waste stream is recycled.