State Moves to Pull More Jobs Out of Trash : Recycling: The plan is to provide incentives to build factories to produce finished goods from recyclables. Most such goods are from Asia.

Hoping to shift jobs here from Asia, the state said Tuesday that it will provide financial incentives to California companies that build factories locally to produce finished goods from recycled trash.

Most of the rich supply of recyclable plastic, metal and other materials now “mined” from industry and consumers in the Los Angeles-Long Beach region--the world’s largest exporter of trash--is shipped overseas, along with perhaps thousands of jobs.

At the Port of Los Angeles, containers that brought automobiles and machinery from Japan and Taiwan return filled with American waste. Workers in these resource-poor countries create finished products from the imported recyclables. Then some of the products get shipped back to the United States, in boxes made from California trash.

The plan, announced by the California Integrated Waste Management Board, aims to keep more trash-based manufacturing here by encouraging the building of plants through tax credits, low-interest loans and local permit streamlining in 12 locations statewide, including zones in Wilmington and Long Beach. The program could create thousands of jobs, the board said.

In the city of Los Angeles, more than 3,000 people are now employed in the recycling business.

Products that could be manufactured in the 12 locations include carpet made from recycled plastic soda bottles, decorative tile made from recycled glass, structural steel made from scrap metal and wood chips made from lawn clippings and leaves.

Industry executives said the plan is important symbolically, but they were skeptical that it would encourage many new businesses because it does not address the problem of weak demand for many finished goods made from recycled materials.

“The bottom line is, for a business to site itself in Wilmington and take advantage of low-interest loans and tax credits, that company must turn a profit. To do that it must have demand for its product. What’s needed is markets,” said Michael Kopulsky, chief executive of Envirothene Inc., a plastic recycler in Chino.

He said the state should increase requirements on companies and municipalities to buy goods--from trash cans to asphalt--with a minimum content of recycled materials. Mandating such content is essential to increasing demand, Kopulsky said, since recycled goods are not always competitive on a price basis.

Demand for recycled goods is dampened by cheap alternatives made from virgin materials. For example, recycled resin made from old plastic bottles (which is used to make new bottles) has to compete with virgin resin made from natural gas. In the last 18 months, the price of virgin resin has dropped by nearly half because of overcapacity, making recycled resin less competitive, Kopulsky said.

Today, the biggest problem recycling programs face is a glut of good trash. Municipal and corporate efforts to collect recyclable goods have been so successful that the supply of usable trash is far exceeding local demand.

Because state regulations will significantly increase the waste collected for recycling by 1995, “the issue of markets for the expected glut of recycled materials presents a major challenge for the state,” a release from the waste management board said.

Another disincentive for manufacturers of recycled goods to move to California is that Asia-based firms here bid up the price of trash, Kopulsky said. Because virgin raw materials such as trees and petroleum are scarce and expensive in some Asian countries, they are willing to pay more for used materials than U.S. firms with access to cheaper virgin materials.