The New Alchemy: Manufacturers Find “Gold” in Waste
In the Middle Ages, alchemists worked to find a way to transform base metals into gold. Today GM’s pulled off a neater trick — they’ve found a way to turn garbage into a billion dollars of revenue per year.
In 2011 GM diverted 2.5 million tons of waste from landfills into more profitable uses, according to a recent article in Forbes. Considering that there are 7.6 billion tons of waste generated by American manufacturers every year, manufacturers are literally throwing away billions of dollars every year.
Step One: Avoid The Recycling Plant
Forbes gives an example of how to find profit in what would otherwise be waste: When GM stamps out a car door from a sheet of steel, it cuts out a hole for the window. What usually happens with those cutouts is that they’re collected and sold to a foundry to melt down and reuse, wasting a lot of energy in the process.
What GM does is sell the cutouts directly to steel fabricators themselves, eliminating the whole melt down and refashioning steps, saving energy and resources — as well as getting a much better price for their scrap steel. And the company who buys the scrap steel gets a better price too, since recycled steel is more expensive. Ta-da — everybody wins.
According to Two Tomorrows, identified as a “sustainability consultant” in San Francisco in Forbes, taking all of GM’s operations around the world, fully 90 percent of their manufacturing waste is reused or recycled: “GM has a total of 104 landfill-free facilities worldwide, including 84 manufacturing sites that reuse or recycle 97 percent of their waste, and convert the remainder to energy. Its goal is 125 landfill-free facilities globally by 2020.”
“Green” Means “Profitable”
Zero-waste manufacturing is an increasingly lucrative objective for more manufacturers. Sure, it’s nice to think that you’re helping the environment, but this is business. In all, GM officials estimate that their repurposing efforts generated $2.5 billion in revenue between 2007 and 2010.
Not to be outdone, in early 2012 Ford announced plans to use “seat fabric made from old plastic bottles for its new Ford Focus Electric and its other new vehicles for the next model year,” according to Earth911.c0m. Called “Repreve,” the polyester fabric is made from “a blend of recycled materials, including post-industrial fiber waste and post-consumer PET plastic bottles” — about 22 recycled plastic bottles per car, which Ford estimates will “divert about 2 million bottles in the next model year,” and save the company considerable fabric production costs.
Last December, IMT Green & Clean’s Christian Bonawandt wrote about how Ohio-based Bendix, with 2,700 employees in four locations, achieved an eyebrow-raising 92 percent waste divergence rate. Maria Gutierrez, Bendix’s health, safety, and environmental manager, said that in 208 the company started including trash in their waste numbers, realizing how much money they were spending just to have the trash hauled away and dumped in a landfill somewhere.
That trash was mostly wood, paper, plastic, and steel. Bendix found ways to use much of that in a new re-manufacturing operation. Today they divert “more than 8 million pounds of material from landfills as a result of the business,” salvaging “somewhere between 70 and 85 percent of the content,” according to Bonawandt, saving significant haulage costs in the bargain.
There’s profiting from eco-friendly ways to deal with waste, then there’s the even better, more profitable method of reducing waste before it happens — simply don’t manufacture what will end up as waste. Packaging manufacturers seem to be especially targeted by their retailer clients for eco-inspired improvements in the manufacturing process.
Wal-Mart: Green Manufacturing’s Poster Boy?
Companies have realized for some time that there’s bottom-line profit in much of what was traditionally dismissed as greenie eco fluff promoted by “tree huggers.” In 2005, Wal-Mart decided to work with suppliers to improve the packaging on one of their private toy lines. “By reducing the packaging on fewer than 300 toys,” GreenBiz.com reported in 2006, “Wal-Mart saved 3,425 tons of corrugated materials, 1,358 barrels of oil, 5,190 trees, 727 shipping containers and $3.5 million in transportation costs, in just one year.”
Flushed with the success of that initiative, in 2006 Wal-Mart embarked on a comprehensive, company-wide effort to reduce packaging, projecting $3.4 billion in savings over the next five years.
In 2012, Packaging Digest noted that while there haven’t been “a ton of announcements” from Wal-Mart since then, Brooke Buchannan, Wal-Mart’s director of sustainability communications, said, “Sustainability has been integrated into everday business.” In fact, in 2012, the Arkansas-based retailing behemoth hosted its seventh annual Sustainable Packaging Expo.
And since Wal-Mart does have a well-earned reputation for being hard-nosed when it comes to seeking profits, the fact that they’ve come up with some of the more creative ways to increase profit from eliminating waste is a vote of confidence in the bottom-line appeal of the zero-waste idea.
DuPont has also embraced the concept of making money off the trash generated by manufacturing operations. Last year, USA Today reported that the company has found ways to repair or shred shipping pallets into chips for animal bedding, and use scrap pieces of Corian in making new countertops or as landscape stone.
In 2010, GreenBiz.com reported that Procter & Gamble announced “its first zero-waste-to-landfill manufacturing plant in North America,” based in Auburn, Maine, which “will reuse all of its waste, with 60 percent or more being recycled, and the remainder used to create energy.” Profit off waste in this case is achieved by P&G bringing in an external solutions provider to incinerate non-recyclable materials to produce electricity sold to the local power company.
So, there you have it! The new alchemy for the 21st century: Turning garbage into gold.