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The worldwide market for electronic waste rose at an AAGR (average annual growth rate) of 8.3% from $11.5 billion in 2004 to $17.1 billion in 2009. The recycled plastics sector registered the highest revenue growth, 9.1%, as demand increases for high-value, engineered plastics. Growth in metals mined from end-of-life electronic waste will continue to outpace the broader recycled metals market, growing at an AAGR of 8.1%. The market for recycled glass continues to be stagnant with low value attached to recycled glass. Market demand is strong and growing for recovered cathode ray tube feedstock reused in new CRTs.
In America about 80% of the daily trash ends up in landfills with less than 20% actually being recycled. Every year, an estimated 400 million units of obsolete electronics are scrapped. By 2010, three billion e-units will be in need of responsible recycling. An average of 220 tons of e-waste is dumped in landfills and incinerators every year by the US alone. These toxic items constitute as much as 5% of the US municipal solid waste stream and continue to grow rapidly. As much as 65% of US electronic waste collected for recycling is exported to Asia.
Every day, Americans throw out more than 350,000 cell phones, over 100 million per year and 130,000 computers daily - making electronic waste the fastest growing part of the U.S. use garbage stream. These e-waste items, if improperly disposed of, leak of lead, cadmium, mercury, chromium, and polyvinyl chloride, all materials known with toxicological effects that range from brain damage, kidney disease, to mutations, various forms of cancers affecting the quality of clean water, agriculture and soil used for food supplies.
Currently, the EPA oversees the export of only one type of e-waste – cathode ray tubes in old TVs and monitors enabling largely unregulated growth of e-waste exports to foreign countries such as China’s Guiyu southern providence. This significantly accounts for the Guiyu’s known health issues as the highest levels of cancer causing dioxins in the world and elevated rates of miscarriages.
The EPA is preparing to introduce new detailed e-waste disposal standards. The global e-waste crisis has generated significant growth opportunities for waste management firms such as Waste Management (WMI), Republic Services (RSG), and smaller players Waste Connections (WCN) and Casella Waste Systems (CWST). Garbage isn’t sexy, but tons of it is generated every day. The combined market share of both Waste Management Inc. and Republic is over 40% of the U.S. sector.
For example, Republic Services, Inc. reported net income for the three months ended March 31, 2009 of $113.0 million, or $.30 per diluted share, compared to net income of $76.1 million, or $.41 per diluted share, for the same period in 2008. Our first quarter 2009 financial results include Allied Waste Industries, Inc. (Allied) which merged with Republic on December 5, 2008. Operating income for the three months ended March 31, 2009 was $353.0 million compared to $142.2 million for the comparable period in 2008. Operating income before depreciation, amortization, depletion and accretion for the three months ended March 31, 2009 was $598.1 million, or 29.0% of revenue compared to $220.0 million, or 28.2% of revenue in 2008.
Republic reports revenue for the three months ended March 31, 2009, increased to $2,060.5 million compared to $779.2 million for the same period in 2008. Core price for the three months ended March 31, 2009 (assuming the merger with Allied had occurred on January 1, 2008) increased 3.5%. Internal growth for the three months ended March 31, 2009 (assuming the merger with Allied had occurred on January 1, 2008) decreased 8.6% (consisting of a 3.5% price increase offset by decreases of 8.0% in core volume, 2.9% in commodity prices and 1.2% in fuel charges).
Looking at Waste Management Inc., it throws off significant amounts of cash and has been buying stock and increasing the dividend. The current dividend rate equates to a yield of 4.9% and a 49% payout ratio. Available cashflow is large and growing. Cashflow for 2008 was $2.5B with about $1.2B spent on capital expenditures. The company expects cashflow to grow in 2009 and intends to lessen capex to only $500M as they've upgraded vehicles and equipment aggressively in prior years. That will leave around $2B of discretionary money. Most of their debt is long term and not at onerous rates so I expect the dividend to be increased again as it was recently.
What Happens to Waste Materials?
Currently it is estimated that only 20% of all E-waste in the United States is recycled. Much of today’s recovered E-waste is updated, re-worked or dissembled and then sold for re-use in developing countries around the world. In the coming decades, E-waste is rapidly becoming the leading recycled material stimulating significant long term revenue growth.
Disclosure: The author has no significant direct financial interest in the companies listed.
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This article has 8 comments:
The title of this article says it all: Recycling is big business--for those who profit from it, brainwashing the masses into believing it is helping the environment, when all they care about is making money.
Below is the comment I wrote here when this stupid topic came up in March. Our company is on track to save an estimated $51k this year alone, by doing the right thing and NOT recycling. So far, we have over 100 employees committed to not recycling at home, rewarding them with one extra vacation day.
If you are encouraging recycling at YOUR company then I guarantee you that your profits, along with your company morale and, most importantly, our environment, is hurting.
----------------------...
After years of wasting valuable time, money, facility space and other resources, our company initiated a ZERO-RECYCLING policy last year. In each of our six of our plant locations, we eliminated all indoor recycling receptacles in our offices and on our manufacturing lines. All outdoor industrial recycling bins were returned to our disposal company. All steps of the manufacturing process which directly involved recycling to any degree were put to a stop. We completely eliminated the company position of “material handler” and re-hired that individual to work in an open manufacturing position. All employees are forbidden to recycle at work and we encourage them to follow this same policy at home. We conducted workshops on this initiative for existing employees and all new employees also receive it as part of their orientation. Starting this year, we reward each employee who signs an agreement not to recycle at home one extra paid vacation day.
Why did we do this, especially given the current popularity of acting “green”? Because, after doing months of research and investigations (conducted both in-house and by two outside, independent agencies), we realized that recycling is just a “make-work” initiative, one that does NOTHING to benefit business or the environment, and recycling’s primary goal is to make uneducated, “green” people feel good about themselves.
As a “make-work” initiative, the main goal of recycling, and the companies that do it, is to create fancy-sounding jobs for people who are otherwise unemployable. We would rather create and contribute to a real, necessary, productive workforce economy, vs. standing standing behind a “green” facade. Most importantly, recycling and the companies that do it, have been proven, time after time, to actually do more HARM to the environment than good.
Bottom line: Recycling has been proven–without a doubt–to be nothing more than an expensive economic and environmental fallacy. Here is more information we used in our research:
www.heartland.org/poli...
www.ehponline.org/docs...
www.milkandcookies.com.../
By completely eliminating recycling and initiating a ZERO-RECYCLING policy, our company will save, on average, close to $40k/year, not including the salary of the “material handler” position which were able to completely eliminate. Even better yet, we have seen a huge increase in worker productivity, now that our employees–particularly in manufacturing–are able to focus on their WORK and not be burdened by recycling getting in the way.
The success of our trend-breaking initiative has drawn the attention of other companies in our industry and beyond. Almost every other day, another company calls us, asking for information on how they can eliminate recycling. We have hosted seven walk-through tours last year alone, including a company from Finland and one from the UK, and our VP of Operations has spoken at two business conferences so far this year, with another two scheduled this month and next. Although it is obviously somewhat controversial, we are very proud of our initiative and why we are doing it.
Clearly, in today’s business environment, companies large and small are finally realizing how damaging the scam of recycling truly is–to their bottom line and to the environment. If you, or your company, thinks it’s good to recycle, good to pretend to act “green”, and good to let the fallacy of recycling get in the way of real work, please get educated and start doing the right thing TODAY. We did, and we, and our shareholders, could not be happier.
At home, I try to not waste or buy many convenience disposable items not because it's "the right thing to do" but because it saves me MONEY!
I'm glad to hear your company has the stones to actually try to make more profit (novel idea)with the risk of offending the PC police. If your company is listed for trading, I'll be buying...
Thanks....
I completely agree that the 80% landfill 20% recycled in the US should be reversed, and quickly too. It may be that when we factor in disposal costs and price methane and CO2 emissions we'll be buying longer lasting products.
Let's hope so.
> jack
My position is that until we can recycle that which is currently recyclable in landfills, or still being manufactured, and at the same time stop manufacturing "useless rubbish" (I wholeheartedly agree on this one), while employing people (what's wrong with people having a real job?) to once-and-for-all get rid of the stuff that is recyclable.
You don't bother to commend those who are taking actual toxicity out of environment...you have to admit there is some there to be removed.
Until we reach a point where we don't manufacture waste, and don't have any lying around to wonder what to do with (think of those "islands" of trash floating off the East Coast out in the Atlantic), then we will always have a problem.
www.creaturefeaturepet.../