P.O. Box 20444 Indianapolis, IN 46220-0444 Not-For-Profit Corporation Phone & Fax: 317-283-6226 e-mail address: [email protected] March 1997 Newsletter Co-Editors: Mark Davis and Julie L. Rhodes National Perspective

NRC Corner
Drop in PET Market...

by Laura M. Dellinger
As many of you know, the Indiana Recycling Coalition(IRC) is an official affiliate of the National Recycling Coalition (NRC). Members of the IRC who wish to become members of the NRC can receive large savings on their NRC membership dues, discounted registration for the NRC's Annual Congress, and a share of a nationally significant voice in support of source reduction, recycling, composting and buying recycled.

As an NRC state recycling organization (SRO) we are represented on the SRO Council. We receive regular updates on NRC activities and will be sharing this information with you through a regular column in the IRC newsletters.

This month, the primary news from the NRC is urgent. Those of you who are NRC members may have already received a letter from NRC president, Susan Hubbard, asking for financial assistance in the form of a contribution of $50 dollars. The letter explains that the request is to help retire an outstanding debt that represents a significant financial crisis for the organization.

Many things went into the making of this crisis-the current stress in recycling markets, hard times for all recyclers, less-than-professional financial management on the part of some members of the staff. For the past few years, the NRC has accumulated year-end debts that were rolled over into each subsequent year. The organization took on too many program obligations too quickly, overextending itself financially. Serious examination of their personnel, processes and practices has resulted in some very strong corrective actions. They have radically down-sized their staff and office space, programs were economized, tight spending controls were instituted, and they have sought additional in-kind services and pro bono assistance.

The deficit will not be eliminated by controlled spending alone. More than half of the liability is 60+ days old and must be dealt with immediately. Additional memberships are needed, as well as fund-raising activities with current members. From Nov. I, 1996 through Dec. 31, they had a boost of $ 19,000 in dues from new or renewing members, they received donations of stock from some individuals, and some contributions of funds from the Buy Recycled Business Alliance Steering Committee and some of the SROs.

The request for donations should be taken seriously, and assistance would be helpful, if it is possible for you to do so. With this campaign, they are putting the practices of the past behind them and are building a future on a sounder management base. They now wish, and need, to retire this inherited debt so they can get back to the business of being the nation's.leading voice of recycling.

In discussing membership in the IRC, many people have asked me, "What does NRC membership get me? What has the NRC ever done for me?" The real questions are, "What do the many activities of the NRC get us? What has the NRC done for recycling?" The NRC is there to advance the state of recycling by giving us a national voice to affirm how recycling improves our quality of life, conserves precious resources and creates economic opportunity.

Recycling is under scrutiny by the press and elected officials. Local programs and businesses are struggling to remain viable. Now, more than ever, we need an organization to keep the profile of recycling high and to give us the tools and assistance we need to ensure recycling's future. The same can be said, on the state level, of the Indiana Recycling Coalition.

NRC membership grew by almost 30% during the time that they were experiencing these financial problems. This speaks to the strong need for an NRC which is the ONLY national organization representing all of the sectors, public and private, that make recycling work. That is a powerful combination of forces working to advance recycling. By our contributions, we can help ensure that it stays together.

DROP IN PET MARKET SPURS INTEREST IN MINIMUM CONTENT LEGISLATION

A surplus in the plastic market caused PET prices to drop. The drop in prices has lead recycling advocates to push for minimum content legislation in some states. The legislatures in California, Wisconsin, and New York are starting new sessions and may look at bills that require plastic bottle manufacturers to make products that contain a certain amount of recycled PET.

A bill being considered in Wisconsin would require plastic bottles sold in the state to include 25% recycled content for the first five years after enacted. After five years the bottles would be required to contain 50% recycled content. Manufacturers that did not comply would be fined. Wisconsin's current minimum content law allows manufacturers noncompliance if the state has a 10% recycling rate. "It's not so much the [drop in] prices as the way it has come about," said George Dreckmann, Recycling Coordinator for the City of Madison, WI. "If it were a simple case of supply and demand, then there's not much you can do about that."

Dreckmann is referring to the fact that large amounts of virgin plastic and "off-spec" resins were dumped on the market recently. "Off-spec" resins are virgin plastic that are sold as low grade resin. It most closely competes with recycled plastic. "It's common in plastic and paper for companies to go on expansion binges," said Chaz Miller of the National Recycling Coalition. With PET "they did it to an extent never seen before." Miller estimated the current prices of plastic at about $.30 per pound. Off-spec PET is between $.20 and $.25 per pound. Prices in regional markets vary.

Eventually the amount of off-spec resin will stabilize and eventually disappear from the market, thus clearing the way for recycled PET resin to surge again, predicted Dennis Sabourin, Vice President of Wellman Inc., a plastics manufacturer and recycling company in Shrewsbury, New Jersey. Sabourin said it may take a few years for recycling rates to grow though, because of the large volume of virgin PET on the market. The recycIing rate dropped from 34% in 1994 to 32% in 1995. The rate is expected to drop below 30% for 1996.

However, Quinn Davidson, the director for the National Association for Plastic Container Recovery, disagrees with minimum content legislation to stop the decrease in recycling. "What's happening now is a natural progression. The free market will correct itself."