Company News

Electronics Drive Business, Not Profits

YOUNGSTOWN, Ohio – For techno-geeks and computer history buffs, the rear portion of Southside Recycling’s 72,000-square-foot warehouse is a time capsule filled with obsolete technology.

Anything from the long-gone IBM personal computers with 3-inch disk drives to the massive rear-projection screen televisions since replaced by LCD TVs are stacked in cardboard bins, wrapped in plastic and ready for shipment.

Since September 2014, Southside has provided drive-thru drop-off service in Youngstown at 98 E. Florida Ave., for all manner of recyclables. That includes electronics, or e-waste.

E-waste intake has steadily increased, says the president and owner of Southside Recyling, Kenny Greco, and risen 30% to 40% over the last two years.

The company brings in an average of 200,000 pounds of such waste annually – batteries, cellphones, computers and their components, extension cords and power strips.

“Not one pound that comes to me goes in a landfill,” Greco says. “Anything I take, we find a way to recycle.”

Southside pays customers for their computers: 10 cents per pound for PCs, 15 cents for laptops. For TVs, Southside charges $2 per screen inch.

The items are sorted, stripped of any base metals and prepared for shipment to an Indianapolis-based recycler that processes them for fine metals, such as gold.

Despite increasing intake and new customers, Greco says collecting and transporting e-waste is not profitable. After his freight expense – about $4,000 to $6,000 per truckload – “I don’t make anything,” he says, but the service generates other recycling business.

“It brings people in. The guy who wants to get rid of the TV may also have some copper pipes,” he says. “The only way to do it is as an add-on to metal recycling.”

Business at Southside is almost evenly split between commercial and residential customers within a 60-mile radius, he says. Industrial customers bring in anything from scrap steel, copper and aluminum, to the shavings and grindings from machine shops.

“They were landfilling this,” says Greco, as he points to a bin filled with shavings that resemble a giant steel wool scrubbing pad. “The metallics in there have high value.”

For residents, Greco holds special Saturday drop-offs at township buildings where he serves free doughnuts and coffee. Residential e-waste customers come as far as East Liverpool and Lisbon, he says.

Southside Recycling also does pickups for medium to large-sized businesses and organizations, which include accounting firms, nursing homes, schools and township offices.

Customers receive a certificate of destruction that confirms all computers, electronic equipment and associated components have been dismantled and the data storage components were destroyed according to all laws and environmental regulations. This is important for offices that store sensitive information on their hard drives.

“They know as soon as I give them the certificate of destruction that they’re good,” he says.

Security is a top priority for customers, says Steve Klein, president of Ohio Surplus Inc. in Youngstown. For commercial pickup, technicians drill holes through computer hard drives on the spot “so they can see their data is destroyed,” Klein says. He’s looking to do the same for residential customers.

“We’ve never had any issue with anybody getting any data and we’d like to keep it that way,” he says.

Ohio Surplus incorporated in 2004 as a computer retailer and refurbisher, and got into e-waste recycling later. At its peak, the company received about 40,000 to 50,000 pounds of e-waste weekly until the Great Recession. In 2017, Ohio Surplus brought in only about 300,000 pounds, half of which came from New York City.

“Computers have gotten smaller and lighter,” Klein says. “The volume has gone from millions of pounds to a couple hundred thousand pounds. Two years from now, it might be a big deal to do 100,000 pounds.”

New technology contains less raw material, which uses by 10% to 15% less each new generation of computers, he says.

During the 1990s, early versions of the Intel Pentium processing chips had large, gold-plated caps, gold connector pins and gold wiring. Later versions were a third of the size and contained very little gold. Modern chips have no pins and the circuit boards are much smaller, Klein says.

These changes have made it difficult to operate on recycling revenue alone, he says. Recyclable material makes up 30% of Ohio Surplus revenues, even though it accounts for 90% of the scrap received.

To increase revenue, the company is offering refurbishment and surplus sales services and is remodeling its building, 1730 Hubbard Road, to accommodate the change, Klein says. About 10% of what the company brings in can be resold, yet the reclaimed parts comprise up to 70% of its revenue.

“If I take 10 computers apart for scrap, it’s worth $50 to $70,” Klein says. “But one of them might have a card in it that’s worth $100.”

Whatever doesn’t sell online or can’t be refurbished is stripped of any copper or steel, then sent to processors on the East Coast where they’re ground for the gold they contain. The company doesn’t take old cathode-ray tube (CRT) monitors because that involved recycling process has made it too expensive to ship to a recycler, he says.

CRT tubes were used in computer monitors and TVs that predate the modern flat screens. Each can contain up to eight pounds of lead, which is very difficult to remove from the glass, Klein says. A Missouri-based processor used to charge 25 cents per pound for such monitors, but now asks $20 to $30 each, he says.

“Around here, nobody’s willing to pay for it,” Klein says. “The cost has kept the people from recycling them.”

Because businesses “can’t technically throw them out,” many CRT monitors end up in storage until the company finds an outlet for them, he says. There have been documented cases of recycling companies abandoning warehouses full of CRT glass, which creates costly environmental issues.

A lawsuit brought in September against Closed Loop Refining and Recovery demands more than $14 million in payments to cover the cost of cleanup at its Columbus headquarters where authorities found more than 113 million pounds of crushed and mixed CRT glass. The lawsuit alleges Closed Loop brought in more than $20 million in “illegal revenue” at the site between 2012 and 2016.

E-waste in landfills remains an issue in the United States. Only about 15% to 20% of e-waste is recycled, reports the U.S. Environmental Protection Agency.

In 2010, the Electronics TakeBack Coalition estimated that just 40% of computers (423,000) and 33% of monitors (595,000) were recycled; the rest were trashed.

Southside Recyling still takes CRT monitors and transports them to processors, Greco says, because it’s better than them ending up in a landfill. All monitors and TVs – CRT and flat screen – are kept intact to avoid the release of any hazardous materials.

As more businesses rely on cloud computing, Greco and Klein expect companies to dispose of their flatscreen desktops in favor of mobile devices and thin client computers – stateless desktop terminals with no hard drive that rely on cloud-based applications and storage through data centers.

“I’m expecting the next wave to be the big desktops that we’ve had for the last few years,” Greco says.

Pictured: Southside Recycling president and owner, Kenny Greco and Andrew Kemmer, supervisor, bring in 200,000 lbs. of e-waste annually.

Published by The Business Journal, Youngstown, Ohio.