Recovered fiber demand from developing countries is surging, and the U.S must step-up its paper recovery efforts before shortages impair domestic supply.

[This column was exerpted from Mr. Von Zuben's keynote address at the Recycling General Session during AF&PA's 2005 Paper Week convention in New York City.]

Today, there is a greater reliance on recovered paper for new paper production in the United States. But the supply and demand equation is being impacted globally unlike any other time in our history. As the global economy grows and trade prospers, the paper industries of emerging or aggressive-growth countries rely heavily on recovered paper from more advanced nations. The United States is the former and our export numbers today are staggering.

At Senator Jefford's recent Recycling Industry Roundtable on the basis of the scarcity of quality recovered materials, he suggested that, “Companies are finding it increasingly difficult to obtain the quantity and quality of recycled feed stocks needed to meet demand. Some companies reportedly are facing the prospect of either increasing reliance on virgin material or shutting down their operations.”

Paper recovery and recycling have been part of our domestic paper industry for more than 100 years. Over the last 20 years, with the public's greater concern for the environment and the industry's enhanced environmental stewardship, recycling has grown to be a large and essential part of our business.

The paper industry as a whole, including box converters, employs 500,000 people and has sales of approximately $150 billion. The recycled paper and paperboard manufacturers alone have nearly 140,000 employees and $49 billion in annual receipts.

Through organizations such as AF&PA, the paper industry has educated the general public about the importance of paper recovery, and has continued to raise recovery goals in significant increments.

For the first time in 2003, 50 percent of the paper consumed in the U.S. was recovered for recycling. This achievement, which represents more than 50 million tons of recovered paper, helped gain national attention for an activity that is essential to our industry and is recognition of the millions of Americans who recycle every day and want to do more.

Given both the environmental benefits and current market pressures, AF&PA has announced a new goal of 55 percent recovery by 2012. Not only does the increase from 50 to 55 percent recovery represent a sizeable hurdle in sheer volume, but it presents additional factors to consider.

The demand for recovered fiber abroad is surging at unprecedented rates. U.S. exports of recovered paper are projected to increase another 35 percent during the next five years-an increase that could hurt domestic supply unless recovery increases.

Further, we have witnessed a decline in the quality of fiber being recovered for recycling. A decline such as this can translate into increased costs for mills including additional processing, employee health and safety costs, increased land filling and disposal fees, and even downtime to repair equipment damaged by non-paper materials.

As the industry has expanded into a global market, the dynamics have changed. We are now working to collect data on a broader scale in order to understand and respond to demand. While focus on recovery remains local, demand for recovered paper is now global, bringing with it new challenges.

The paper industry has the enthusiastic support of citizens in the U.S. and Canada for our work in recycling and we must make every effort to maintain their trust and expand our endeavors. There are many critical players in the recycling process between collection at homes, offices and industries and the end users of recycled paper products. We will need a best effort by everyone to make this happen and, most important, we will need it to be a cooperative effort which has not always been the case. Let us all work to make the 55% goal a shorter term program.

Fred Von Zuben is chairman of The Newark Group. The Newark Group is an integrated global producer of 100% recycled paperboard and paperboard products with significant manufacturing and marketing operations in North America and Europe

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