Fresno-based Electronic Recyclers has yards in other cities too

Fresno-based Electronic Recyclers has yards in other cities too
Recycle: 'Flight to quality' observed
Monday, Dec. 15, 2008
By Sanford Nax / The Fresno Bee

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Commodity prices have fallen drastically, but Fresno-based Electronic Recyclers continues to expand, believing more volume helps overcome the depressed values.

In three years, Electronic Recyclers has boosted the amount of old computers, printers, televisions and other electronic waste it processes from 10,000 pounds per month to 11 million pounds in November alone.

The company has added a second facility in Fresno -- a 125,440-square-foot building that it leases a quarter-mile from its headquarters near Jensen and East avenues. It also has opened processing plants in Indianapolis, Denver and Seattle and spent almost $5 million custom-building a 120,000-pound "shredder" capable of handling 20,000 pounds of electronic waste per hour.

ERIC PAUL ZAMORA / THE FRESNO BEE

Sorted steel falls from a conveyor belt into a pile Monday in the center of Electronic Recyclers. The company’s success has resulted in a second facility in Fresno.
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At almost 400 feet long, the mammoth shredder takes center stage in the new plant in south Fresno. One conveyor belt weighs 6,800 pounds and can reduce a 1,600-pound server to precious scrap in seconds.

Metals are separated into tiny pieces and transported by way of container ships to smelters in other countries. Plastic also is sold to overseas recyclers, but Electronic Recyclers is perfecting a process that would separate the plastic by polymers, which would double or triple its value, said Pete Prinz, project manager.

John Shegerian, the company's chief executive, said the shredder produces waste that is so "clean" smelters and others are willing to pay twice as much for it.

"The metal is not contaminated with plastic, and the plastic is not contaminated with metal," he said.

The system can handle anything with a circuit board and a plug. The material is shredded into pieces as small as 11/2 inches and separated. A 7-ton shaker separates plastic from metal and, with the aid of a strong sensor, shoots the metal off in one direction and the plastic in another.

Prinz built the huge machine from 45 components obtained from a variety of industries and nations. He spent six months engineering and adapting the parts to the recycling industry.

For example, the "separators" on the shredder were adapted from a device that separates shells from nuts in the agriculture industry.

It is believed to be one of the largest shredders in North America. That's fitting in a way because the Fresno company has become one of the largest electronic recyclers in the nation.

"It's among the top five in size in the nation," said Jerry Powell, editor of E-Scrap News, a trade publication.

Powell said prices of copper, gold and other commodities harvested by Electronic Recyclers and similar businesses have tumbled significantly as demand by China dwindled after the Olympics, and in the wake of economic recession in the United States.

The price of copper has fallen a third from its record peak last summer, and steel, once $600 per ton, is now fetching $150 per ton. Many recycling companies have closed and a general consolidation is occurring.

Shegerian said he's aware of the falling values, but that higher volumes and frugality are helping compensate.

"It has been an amazing learning experience for us," he said. "Like an MBA on steroids. Surviving the tough economic times and the drop is commodity is prices is a real challenge."

Until commodity values rebound, Electronic Recyclers will use its heft to negotiate. "He'll ride it out better than most," Powell said.

The company estimates it will end 2008 with about $45 million in revenue, 225 employees in Fresno and a total of 315, and 140 million pounds of recycled waste.

Projections for 2009 are 225 million pounds of waste.

Powell said Electronic Recyclers uses its size to garner large contracts from big companies such as Wal-Mart and Best Buy, and benefits from a state contract that pays it to recycle computer and television components banned from landfills.

Shegerian said there has been "a tremendous 'flight to quality,' and our clients and potential clients do not want to be using 10 vendors anymore to handle their electronic waste. Two to three at most. So they ask us to handle all their materials across the USA or in specific geographic locations."

Seventeen states have banned or are about to ban electronic waste from landfills, and that number is likely to increase, Powell said.

Shegerian wants to be in position to capitalize on that, which is part of the reason he's opened plants in other states -- and is considering locations in New York or New Jersey, Texas and Georgia or Florida.

Shegerian plans to replicate the Fresno shredder in plants in Indianapolis, Texas and either New Jersey or New York. Meanwhile, Prinz continues to fine-tune the prototype.

The only remnant of 700,000 pounds of recycling is 200 pounds of dirt and dust, and Prinz said he has that dust tested for evidence of precious metals. "It could be sold if there is any valuables in there, and we would be 100% recyclable," he said.
The reporter can be reached at snax@fresnobee.com or (559) 441-6495.