Value Puts Recyclables at the Top of the Heap : Landfills: Booming market in reusable goods spurs plans for a $56-million processing facility at Waste Management Inc.'s Sun Valley dump.

TIMES STAFF WRITER

Can by can, bottle by bottle, workers in face masks separate recyclables by hand in the midday heat at Sun Valley's Bradley West Landfill.

The manual sorting lines at Bradley West are a stark illustration of why many companies have long lost money in recycling: it's a tough, labor-intensive, cumbersome industry.

But Oak Brook, Ill.-based WMX Technologies Inc. is betting its future in Sun Valley on recycling profits anyway. The multinational garbage giant, parent of Waste Management Inc., which owns Bradley West, plans to spend an estimated $56 million over the next six years on a vast "recycling park" to replace the 30-year-old Sun Valley dump.

The plan reflects drastic changes that have swept the waste-disposal industry. Soaring prices of recycled goods in the last year have suddenly made recycling worth the hassle. The price of what the industry considers a standard mix of recyclables--glass, paper, tin, plastics and aluminum--has shot up from lows of $30 per ton in the early 1990s to $120 and up today, said Lynn Scarlett, vice president of research at the Los Angeles-based Reason Foundation, a free-market-oriented, public-policy think tank.

As a result, "recycling has become a more and more significant contributor to our revenues," explained Greg Loughnane, president of Waste Management's local operating unit and general manager of Bradley.

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As one of six recycling facilities contracted to handle waste from Los Angeles' curbside programs, Bradley gets about 750 tons per month of recyclables from Los Angeles residents, much of which it sorts on site and then sells to materials brokers or mills. It also takes material from commercial customers and some items rescued from garbage destined for the landfill.

Bradley landfill accepts a total of about 1.5 million tons of waste per year, worth an estimated $42 million in revenue. Last year, it recycled about 45,000 tons of that waste, more than double what it recycled in 1993. The company hopes to triple that figure by next year, and eventually aims to recycle 50% of what is brought to its site.

According to preliminary plans that WMX has submitted to the city, the recycling park would include a composting facility for yard waste, soil remediation to clean up tainted dirt, a tire-processing center to convert tires into roofing materials and other products, an alternative-fuels production facility using landfill gases, and a new $25-million sorting and materials recovery center for curbside recyclables.

Some of the work is already under way: A $1-million expansion of Bradley's green-waste recycling facility will be completed by the end of the year, and a $2-million gas-to-energy plant--which will convert landfill gases to electricity--is being permitted. When complete, the site would employ an estimated 230 people, up from 130 that work at Bradley now, Loughnane said.

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WMX spokeswoman Laura Field said that recycling for WMX nationwide is expected to bring in $700 million in revenues in 1995, up from about $460 million in 1994.

That's still a pittance compared to WMX's 1994 revenues of $10.1 billion, but it's a significant jump for an industry that has watched its garbage businesses falter in recent years.

For garbage firms everywhere, "recycling has been a growth business, whereas landfilling has remained flat," explained Allen Blakely, director of public affairs for the Environmental Industry Assns., a Washington, D.C.-based trade group. So waste-disposal firms are quickly abandoning their initial skepticism about recycling. "It's now seen as clearly an important part of the business," he said.

WMX's plan at Bradley is "a blueprint for what we'd like to do elsewhere," Field said. "Recycling has come of age. . . . We anticipate more investment in it, and we are actively looking at acquisitions."

A number of complex factors are causing the boost in value of recycled materials: chief among them are high demand for paper and plastics in developing Pacific Rim nations, and the fact that paper mills and other industries have completed investments in recycling infrastructure, a key component for stable markets, said Scarlett of the Reason Foundation.

But the lucrative recycling market is not the only factor driving WMX's ambitious plans at Bradley. In just five years, Bradley West Landfill will be filled up and covered over. That leaves WMX with 212 acres of dirt atop a mountain of garbage in a heavily industrialized part of urban Los Angeles for which it must find some use. Recycling is a natural, said Loughnane.

Also, the company is hoping the recycling park will give it an edge on the competition in the market for future city garbage contracts. Waste Management is one of six firms vying to become the long-term favorite for handling Los Angeles' municipal waste once space runs out at the city's own dump at Lopez Canyon.

By combining the recycling park with a railroad transfer station, the company proposes to keep accepting trash at Bradley West even after the landfill closes: Instead of being buried on site, the trash would be sorted and recycled or sent out on rail lines to Arizona, or remote Amboy, Calif., where a new dump has been proposed.

The recycling business is still fraught with trouble, though. As prices have increased, so has competition. These days, many companies compete with each other for contracts to handle Los Angeles' curbside recyclables, with the result that the city has been selling what it collects for a healthy price. "Before, we couldn't give it away," said Roland Silva, public relations specialist for L.A.'s recycling division.

By the same token, it's harder now to get used products for free. Paper drives, scavengers and small independent operators are diverting the stream of waste from public recycling programs. Tonnage of recyclables in the city's curbside programs fell two-thirds short of projections last year, Silva said. Waste Management has seen a similar decrease in the volume of recyclables it receives from curbside programs. "There's a pickup truck on every corner buying newspapers," Loughnane complained.

Moreover, price volatility is still a problem. The industry is becoming more stable, but few think the present price trend will last: "It's like a balloon you keep putting more air into--it's just a matter of time," said Bob Fagan, owner of Sun Valley Paper Stock, a WMX competitor.

Loughnane responded that recycling "is not for the weak of heart. . . . It definitely could be as profitable as landfilling, but you have to get out there and compete."

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