At WasteExpo 2018, held April 23-26 at the Las Vegas Convention Center, speakers in the Economics of MRFs session covered all aspects of opening and operating a material recovery facility (MRF). Speakers noted five to 10 MRFs are built each year in the United States, with a typical fully equipped facility averaging $20 million to $30 million. Equipment is half the cost of a MRF, speakers said, and more automation is being used in these facilities than ever before.
A great deal of MRFs today are going through retrofits. Nat Egosi, a speaker on the Economics of MRFs panel, discussed the difficult end markets for commodities coming out of MRFs and a reason for many of today’s retrofits.
“For sure we’re going to see more material in landfills than recycling because it’s not cost-effective to spend more a ton to get less a ton,” said Egosi, who serves as president and CEO of RRT Design & Construction, a Melville, New York-based consulting firm with extensive experience in the MRF design sector. “There’s significantly more labor and significantly less volume,” he later added.
What changes could MRF operators make to prevent more material from heading to landfill? What questions should they ask and how do they ensure they are not overbuilding? Egosi answers these questions and more in the following Q&A.
Recycling Today (RT): Research is part of the retrofit process— what kind of questions should MRF operators be asking?
Nat Egosi (NE): The presumption in doing a retrofit implies one is going to spend capital dollars and modify and change. Without spending money on equipment, a retrofit deals with your procedures, how you staff your operating hours, how you’re producing different grades, in what order you bale different products [and] how you process different materials. Traditionally, you wouldn’t put that under retrofit, but retrofit implies you want change.
Diving deeper, people who operate plants feel the best
In lieu of contacting equipment manufacturers, the best resource is to talk to other MRF operators and managers. In fact, the annual MRF & Recycling Plant Operations Forum coming up in October is a good opportunity to hear ideas on how they can change.
The first question [MRF operators should ask] is always, “What is the problem you’re trying to solve?” Is the problem you’re trying to solve an equipment problem? Probably not. It’s either a financial problem or a throughput problem or a material quality problem.
From there, one has to look at how those items are interconnected with each other [and] whether or not there’s efficient training going on in the facility. Is equipment reaching the point of obsolesce? Are there pieces of equipment that are bottlenecks in the facility? Is the incoming material different than what we’re used to, and, if it is, how can we quantify that? Do we really know what our performance level is if we don’t quantify that?
RT: Bid response is more than just response time—what should operators look for when selecting equipment manufacturers?
NE: In that particular question, there are a few areas of conversation. One area is production capacity of particular equipment. Another area is safety. Another is cost. What is the related cost to that equipment? What is [the equipment manufacturers’] flexibility to customize equipment? The quality of their operations manuals? Have the individuals from the engineering team studied and thoroughly analyzed how a piece of equipment might be the best piece of equipment? Equipment quality is critical [as is] the ability of the equipment to produce quality products.
Throughput capacity is important. Throughput capacity is measured by weight over time, meaning tons per hour—[it is] volume dependent, not weight dependent. If the incoming material fluctuates or changes, then the throughput capacity will be different for that exact same piece of equipment. When manufacturers provide their throughput capacity, the tendency is to overstate it simply because it elevates the perception of what the equipment can do to get the operator more bang for the buck.
Another area [operators should consider] is safety. There’s a clear difference in the equipment manufacturers and how they approach safety. When the salesmen are talking to the operators, do they talk about throughput, cost, [etc.]? Where is safety in that conversation?
How is access provided in particular on a retrofit when you’re trying to squeeze something into an existing space? Was safety fully considered before moving forward with the retrofit process? How does it impact the lighting? Movement of air? Will it block circulation? These may sound like housekeeping issues, but they fall under the banner of safety. Poor housekeeping always leads to trip-and-fall-type hazards and possibly eye injuries. One of the most important things OSHA (Occupational Safety and Health Administration) works for is the ability for workers to see what they’re doing. One has to look around the retrofit and see how it impacts everything in the plant.
RT: Other than equipment, what costs can operators anticipate As part of the retrofit process?
NE: As part of the retrofit process, I would say the top of the list is definitely a loss of production during the planning of the retrofit and the shutdown period.
Oftentimes, as part of the retrofit, operators delay a repair because they’re planning the retrofit anyway. Why fix this if I’m going to be replacing it anyway? That “anyway” process could take two years; meanwhile, you’re allowing a variety of issues to occur that are diminishing your production. That’s one cost that comes up on the bottom line.
In addition to production loss, after the retrofit process, it is time to ramp up and understand the full impact of the retrofit. In a week or two, you’re up and running, and the reality is that for the plant operator, even a modest project could take three to six months to really see how this cap ex changed their world. That should be normal. It shouldn’t be an instantaneous change. It takes some time for you to adapt.
As a result of the retrofit, there are certain inefficiencies. Solving one problem leads to others.
To consider the type of cost you’re going to incur above and beyond the actual equipment, you should be thinking about the cost of having to replace staff. It could be your facility is outgrowing their ability.
One should also consider spending money on training.
RT: How can MRF operators be sure they are not taking things too far or overbuilding?
NE: Not only is it an equipment manufacturer’s role to answer this question, their role also is to upsell you.
Develop a habit or culture or mindset that provides a degree of discipline for how far you are willing to go. Your limit could be your dollar expenditure. Your limit may be time: How fast can I deliver this? The limit might be how you can solve a particular problem.
If you’re already doing the retrofit, you should do this: Instead of spending half a million dollars, now it’s $1.5 million—the payback is the same. Why wouldn’t you do it? Well, the difference is $1 million.
Perhaps the biggest consideration is failing to see how these interrelationships work—solving some problems actually can disrupt other things in your plant that suddenly now work less efficiently.
For example, people will add air classification equipment to separate material into two different streams, heavy and light. These air classification systems are very large and consume a tremendous amount of electricity and can leak air, disrupting the air flow in the building. When you look at the material after it has been separated by this air classification system—how much of a difference did this piece of equipment make? Was that degree of separation worth all this money and the room it consumes and the ongoing operating costs to maintain it? Knowing if you don’t maintain the equipment, you’re not going to separate any material. The decision about air classification equipment has to be careful. If you don’t have the confidence level that you’ll be able to achieve a high level of separation, maybe you went too far.
RT: Operators should be thinking beyond their current business needs. How do they do that?
NE: In order to think beyond your current business needs, I would recommend that you need to know your customers. If you know what your customers’ needs are, then you know what your business needs should be to satisfy your customer. If you know where your customers are going, that will drive where you will be going.
We can have a conversation with a MRF operator, and it’s remarkable who the different customers are. Their customers are everybody who is bringing them the material they are processing, right down to the homeowner who is setting out the recyclables. Every recyclable that is put into the can was brought to them, and they are providing a service to those customers that are coming to them. They are represented by another whole group of people: politicians, corporations, the drivers who drive those trucks and who come in and bring in the material. If you’re not taking care of that customers’ needs, you’re not really focusing on your own needs. You have to intertwine your facility with your customers.
On the other end are the commodities that leave your facility. There are the brokers you’re dealing with, as well as the truckers and the mills themselves.
You’re like a manufacturing facility: You’ve got the materials coming in, and you’re sending them out. Those two bookends you cannot forget in the definition of customers.
This facility is owned by somebody, so operators have their customers all the way up the chain of command.
As you’re running your facility, you need to recognize everything outside the box. The box is the MRF—you’ve got things coming in the box, things happening inside the box and things coming out of the box. Those three groups have very different needs, and if you want to look beyond your current needs—what’s happening inside the box—you need to look outside the box and balance the three. As you push one end, you’re puling the other.
RT: For MRFs with limited space, what suggestions do you have to get the most bang for their buck?
NE: Sell the facility. There are a lot of MRFs that one should really rationalize and ask themselves, “I have very limited space. I need more room to do what I’m doing. Is it really smart for me to keep packing this thing in here?”
If you come to the conclusion that, yes, it does make sense to put in more equipment, then optical sorters provide the best bang for the buck in terms of capital and operating cost.
Another place that gives you bang for your buck is making the presort longer, wider or larger. If you can’t, as a consequence all the problems end up downstream, and now you’re spending a lot of money to overcome what you weren’t able to accomplish upstream.
RT: At WasteExpo 2018, speakers shared the growing interest in separating and recovering organics. What type of retrofits should MRFs perform if interested in this collecting material?
NE: The first item with separating and recovering organics is if it comes in a route truck and has been separated by the facility, you have a whole new traffic pattern on your property. To accommodate that traffic pattern, that truck will eventually stop and want to dump material in the tipping area. You will need to figure out how that material is going to be moved around before it’s put into equipment. The tipping area will need to be fully closed, and there is a completely different permitting process related to that unlike for recyclables. And why is that? That’s because the degree of decomposition of recyclable material is extremely low. It doesn’t give off any gases—it’s aluminum cans, plastic bottles, etc.
Now you’re introducing organics, which give off odors, VOCs (volatile organic compounds) and, if more time is allowed, it can also give off ammonia. It’s regulated very differently and would need to be under the umbrella of a solid waste permit. It also could impact neighbors who would complain.
Although it looks like a nice business for a MRF operator, if they have a transfer station, sure. But, if a MRF operator is only doing a MRF and nothing else, I would really pause. You’re back to putting that material in another truck. The traffic flow pattern and leaving and shipping are critical.