na largest glass recycler at crra€¦ · various shades of green, blue, and other: 7up, sprite...

Strategic MaterialsNA Largest Glass Recycler at CRRA

Company Confidential. All Rights Reserved.

• Who is Strategic Materials?

• Why Glass?

• Markets & Demand

• Our Challenges

• How Can We Do Better Together?

Company Confidential. All Rights Reserved. 2

Agenda


Strategic MaterialsWho We Are

Strategic Materials

We are the largest glass recycler in North America, with nearly 50 locations.

With over 100 years of experience, we are a recycling market leader for glass.

The markets we serve with our recycled glass helps to reduce manufacturing costs and improve sustainability.


Markets Served

We recycle nearly 3 million tons of glass a year into a variety of applications.

Strategic Materials


Our History

1896 1994 20042002 2008 2015

Strategic Materials got its start in glass recycling as the BassichisCompany.

Bassichis Company was purchased by Allwaste Recycling

1989

During this time we developed new, innovative glass recycling techniques. We also acquired a number of regional glass recyclers, becoming the first nationwide glass recycler.

In 1994, Strategic Materials, Inc. officially spun off from Allwaste to become its own company.

1990s

In 2002, we acquired NexCycle, a glass and plastic recycling business in Ontario, Canada.

In 2004, we acquired Container Recycling Alliance, expanding our U.S. footprint

Acquisition of American Specialty Glass, coloring glass with glass-melting furnaces with proprietary methods & formulations for landscape, terrazzo, and fireplace markets.

In 2015, New Age Blast Media* was purchased, manufacturing crushed glass air blast abrasives for the surface preparation industry.

Throughout our 100+ year history, we have remained focused on creating value for our customers through innovation and customer improvement.

*New Age Blast was rebranded as TruAbrasives in 2017


Why Glass?Viability & Market Demand


It is a sustainable, versatile, cost-saving material.

Glass never wears out and can be recycled forever.

One 6-pack of recycled beer bottles produces enough fiberglass insulation to fill a standard wall cavity.

Recycling glass takes 30% less energy to produce glass from virgin materials. Recycling one glass bottle saves enough energy to light a 100-watt light bulb for 4 hours.

Recycled glass demand is more than current supplyin the container glass and fiberglass insulation

Why Glass?


Overview of Key Customers

% of Glass Volumes Select Customers

GlassContainers

Fiberglass

Other Glass Products

64%

28%

8%

• Mega Beer 26%• Wine: 24%• Food & Bev: 8%• Spirits: 3%• Craft Beer:: 3%

SMI services virtually every major glass and fiberglass manufacturers and a growing number of other glass product manufacturers


End Markets

28%

64%

8%

SMI EXPOSURE BY END MARKET (2016 VOLUMES)

FIBERGLASS GLASS CONTAINERS OTHER

Where does our cullet go?

12%

5%

5%

40%

38%

GLASS CONTAINER PRODUCT MIX (2016 VOLUME)

FOOD & BEV SPIRITS CRAFT BEER MEGA BEER WINE


Key Markets

GlassContainers~$7bn N.A.

Market

Fiberglass~$4bn N.A.

Market

Abrasives~$6bn U.S.

Market

Flat Glass~$4bn U.S.

Market

Highway Bead~$1bn U.S.

Market

• Food & Beverage (F&B) industry is the primary end market for glass containers – predominantly beer, wine and spirits

• Glass container production volumes have been stable across economic cycles for over a decade• ~37bn units sold annually in N.A.

• Primary application is insulation in residential and commercial insulation• New housing starts trending to historical norms• ~3.2bn pounds of fiberglass produced in N.A.

• Diverse uses: blasting activities (e.g paint stripping), .sharpening, polishing, sanding, finishing, cleaning

• Alternative to coal abrasives, addressing health safety and regulatory issues

• Primarily used for windows, glass doors, transparent walls and windshields• Demand driven by automotive and construction (commercial and residential) markets

• Reflective paints for highway striping• ~90% of highway bead is composed of cullet• Massive anticipated increase in government infrastructure spend, both federal and DOT, on

roadway maintenance and refurbishments.


Our pricing for incoming glass is now tied to the quality of the supply. Key factors that drive processing:

• Non-Glass Residue % and local landfill rates• Undersize %, plant capabilities and local disposal options.

Color Description Examples Normal Target

Amber Brown container glass Beer bottles 80% |20% other glass

Flint Clear container glass Food and beverage bottles 95% | 5% other glass

Emerald Green (and Others) Various shades of green, blue, and other

7up, Sprite green, wine bottles, blue bottles 60% | 40% other glass

3-Mixed glassBrown container glass, clear container glass, and shades of green or blue

Beer bottles, beverage bottles, wine bottles

50% amber, 30% flint, 20% emerald green

Single Stream Curbside, MRF glass Post-consumer food or beer bottles, other recyclables

78% glass, all colors10% non glass residuals12% undersize

PricingBetter Supply = Better Pricing


We perform inbound quality inspections and rate them based on the percentage of usable glass, generally clean glass with minimal or no visible contamination, and amount of ceramic, rock, or color contamination.

Our delivery inspection is either by:• Visual inspection - in the case of Mixed Window Plate

(MWP), Clear Window Plate (CWP), whole or 3-dimensional flint, amber, green or mixed color or

• Sample analysis - in the case of 3 Mix (single stream) glass from a Material Recovery Facility (MRF)

Testing ProtocolsInspections


Glass Specifications

Industry specifications are a key component of our business. It is critical that our product meet or exceed the standards set by each of our manufacturing clients.

Criteria Description Examples Target

NGR Non-Glass-Residual found in municipal recycling program

Paper, Plastic, Aluminum, steel 10% Maximum

U/S Undersize Glass particles < 3/8” (or < 1/4”*) Mixed color glass particles 12% Maximum

Other Criteria Target

Ceramics Broken bits of household ceramic Dinner plates, mugs, cups 2% Maximum

Moisture Excessive water mixed with glass** Rain, snow, ice 5% Maximum

Excluded Waste Other, possibly hazardous waste

Any glass ceramic blends, such as PyroCeram or Neoceram, mirror, leaded glass or any CRT glass, batteries, medical waste, or any radioactive, volatile, corrosive, bio-hazardous, toxic, or hazardous material as defined by applicable law

0% (Zero

3-MIX Single Stream Specification

* Undersize target depending on plant’s capabilities**See Additional Description in Moisture Definitions above WARNING: Excluded Waste is NOT acceptable and is subject to immediate rejection. Examples: batteries, needles, corundum, quartz glass,

gypsum, desiccants, and all types of grinding media


China’s ImpactInternational implications on U.S. glass recycling

Strategic Materials

China created new strict specifications for recyclables• Approximately 25% of U.S. paper was exported to China for recycling• Since MRFs are having a harder time exporting which meets China’s new spec:

• Paper & aluminum value decreased• Cost to MRFs increased


China’s Implications on Glass

MRFs are looking for ways to save money on all recyclables to help offset losses

Glass has become more scrutinized at the MRF level and is an “easy” solution to remove from programs to save costs.

However, by removing glass from MRFs, is it really saving money?

Glass

The answer is ‘NO’. Here’s why:



Plastics

Glass

Paper

Scrap Metal

Aluminum

MRF Recycling Value Example

Other, Residuals

$0

$$${($)

By removing glass from MRFs, is it really saving money?

Before

Plastics

Glass

Paper

Scrap Metal

Aluminum

Other, Residuals

$$}($)

After

If glass is removed from program, landfill costs will increase. If MRFs are receiving money for it (above $0), their landfill costs will replace the “cost savings”.

Glass

Educate MRFs; Investment in better equipment to increase value of glass



Plastics

Glass

Paper

Scrap Metal

Aluminum

MRF Recycling Value Example

Other, Residuals

$0

$$${($)

The solution?

Before

Plastics

Glass

Paper

Scrap Metal

Aluminum

Other, Residuals

$$}($)

After

$$.$}Plastics

Glass

Paper

Scrap Metal

Aluminum

Other, Residuals ($)

Other Implications

• MRFs may also slow down the speed of production to try to achieve cleaner product, slowing down inbound glass supply to Strategic Materials

• Slower sorting speeds at MRFs can also result in an increase in idle glass material, causing mold and bacteria, making the material harder to accept and exacerbating the glass recycling challenge



Our ChallengesPreserving Glass Recycling


Single Steam Challenge

As recycling becomes more prevalent in American households, the amount of single stream glass material has become a larger part of our supply base. We perform a sample analysis of the material for to determine glass content and undersize, ceramics, moisture and hazardous wastes. This allows us to most accurately price the incoming material, giving each supplier a pricing matrix, based on glass content.

Raw Material Processing Sorting Final ProductSUPPLIER

More non-glass material yields increased disposal costs

Separating glass from non-glass items requires more equipment and more processing time.

More glass is unrecoverable and color sorting is less accurate.

Final product has unintended glass loss and must also meet stringent specifications.

Cost Drivers

Allowable ceramic levels have been lowered by as much as 50%.

Allowable green (emerald) glass levels in amber (brown) mixes has been lowered significantly.

CUSTOMERSPECIFICATIONS

Pricing MatrixBased on quality


How Can We Do Better?

There are several ways to improve the cleanliness of recycled glass from single sort recycling:

• Educate residents through social media or website about what is acceptable to recycle

• Improve or develop regular maintenance practices for MRF equipment

• Invest in new or upgrade equipment


Glass is Viable

We believe recycling glass is viable and should continue to be a part of city recycling programs.

Glass never wears out. Demand for recycled glass products continues to be high. Our glass recycling business employs nearly 1,200 people in North America.


Thank You


Thank You

Primary Contact, your Regional Sourcing Manager:

Matt Zwicker | [email protected]

Other Notable Contacts:

Credit, Accounts Receivable: [email protected]

Accounts Payable: [email protected]

Facebook.com/strategicmaterials

Twitter.com/stratmaterials

LinkedIn.com/strategicmaterials

Laura Hennemann | Director of [email protected]

mailto:[email protected]



na largest glass recycler at crra€¦ · various shades of green, blue, and other: 7up, sprite...

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