Firms Find One Company’s Trash Is Another’s Treasure

Material used to make concrete pipes is much the same as the material used to make concrete catch basins. That may be trivia to most people, but for executives of Precon Products, of Simi Valley, it is a valuable bit of information.

Precon Products’ ability to recycle the cement waste from the manufacturing of pipes and use it to create catch basins and other concrete products has garnered the company a $1-million low-interest loan from the Ventura County Recycling Market Development Zone.

The recycling loan program is one of 40 zoned programs statewide funded by the California Integrated Waste Management Board. The programs are designed to encourage the use of recycled material in manufacturing.

“The concrete catch basin is made from a very, very dry concrete mix which is very similar to what is used for our pipes--we can use 100% of the waste material to go back into manufacturing,” said David Zarraonandia, president of the 36-year-old company. “We’re not a recycling business, so that wasn’t the main focus, but we saw there were funds available for recycling and we started to see what we could do.”

Precon is also developing cement shoreline protection products that will incorporate the waste materials. Zarraonandia said the loan will go toward the purchase of recycling equipment for the projects.

Precon Products was the second Simi Valley manufacturing firm in less than two months to receive a $1-million loan for use of recycled materials. Plastics manufacturer Poly-Tainer received a similar loan in February. Both loans are payable over 10 years, at a 5.6% fixed interest rate.

The recent loans are the largest issued since the recycling program was established in 1992. In all, 19 loans totaling $4.9 million have been made.

“The goal of our market development efforts is to raise the value of recycled material,” said David Goldstein, an analyst for the county’s Solid Waste Management Department and administrator of the loan program.

“There are three arrows to recycling--collection, processing and manufacturing a product to sell,” Goldstein said. “Most people only think about collection, but in this case Precon is setting up a project that will allow them to do all three arrows in one place.”

In addition to financing, the waste management program provides assistance on siting, permitting, business planning and marketing to manufacturers interested in using recyclable materials. Goldstein said there is a lot of untapped recycling potential among the county’s manufacturers.

“There are box makers, plastic manufacturers. We just need to continually remind them that we are here for them,” he said. “But even a low-interest loan is not reason enough for somebody to expand their business. Unless it’s going to improve their cash flow, there’s no reason for them to do it.”

In the case of Poly-Tainer, the loan, along with incentives from Southern California Edison, not only should improve cash flow but already has encouraged the company to remain in Simi Valley rather than move its 240 employees out of state.

“We were initially intending to move the company out of California and into Utah,” said Poly-Tainer President Paul Strong. “This made us re-look at the situation. We had the ability to get a low-cost loan that was on par with monies being offered by another state, and the lower costs of electricity were at or on par with what we would be getting in Utah.”

Poly-Tainer purchases recycled material and adds it to its manufactured products including shampoo containers and golf course rakes.

The Poly-Tainer loan and others issued by the Recycling Market Development Zone are funded through trash hauling fees paid by state residents.

“For every ton [dumped] at every landfill in the state, they collect a fee that goes to the state of California, and some of it goes into the [recycling loan] fund,” Goldstein said. “This is our money and we’re getting it back.”