How Flagstaff Paper to Paper Wins In the Recycling Space Podcast Part I Part II TRANSCRIPT of the podcast (Bernard Ryan) Welcome everyone and welcome to the Flagstaff Group's first podcast for the recycling division. So I'd like to welcome Scott Simmons and Mark Christie from the Oatley Resources Company. So welcome guys. (Mark) Thank you, nice to be here. (Scott) Thanks mate (Mark) Thanks for asking us down (Bernard) all right so I wanted to do this podcast to actually showcase what we do here at Flagstaff by employing people with a disability as a social enterprise but also to actually just discuss what we do in the recycling space but then what sort of benefits we have for the environment by actually doing what we do and that's um baling cardboard or paper products and plastic products and then go out into the market as a commodity and then yeah what happens to it, how does it get processed, where does it go what sort of benefits does it have for the community generally what sort of benefits does it have for the environment. So I wanted to talk to you two guys because we first met about 12 months ago and I'm sorry, it would have been 14 months ago... (Mark Christie) COVID makes things a bit further ago than you thought it was because you've got to add on six months (Bernard Ryan) So I wanted to talk to you guys because, as I said before, you really impressed with your knowledge in the industry and when I first came into the industry I was pretty green in terms of um you know all the different markets out there and all the different ways to look at the industry and Mark, one of the things you said to me run true and, I've kept in my mind ever since, is that I need to start to look at, we need to start to look at, finding what products are needed out there and then make those products as opposed to making a product and then looking for a buyer and I've sort of kept that in mind with a lot of things that I've been doing you know if we get time I'll talk about something we're trying to work with Bluescope Steel with breaking the palettes up for this for use in their actual steel making process. If we get a bit of time we'll take about it. Before I do that Mark, let's start with you, can you tell us a little about Oatley Resources and how you fit in with the industry. (Mark) yeah well Oatley Resources. We're a commodity trading company and we we target or focus on specialize on recovered recyclable resources paper and plastics so what does that mean well it means good old-fashioned we buy those types of products from recycling companies and then we sell those products to the end-user markets or the processors so what we buy in bulk that's always an important thing to say like you know a load of your cardboard is what 20 tonne of material and we tend to buy and sell in that type of unit size that can be one truck or container it could be 20 trucks or containers you know so it's it's larger volumes. (Bernard) so to put that in perspective, and I'll help you through this, so at Flagstaff we've received cardboard from a company called Opal, Cleanaway, or Raimondis, Shopping Centres, you know, processing cardboard. It comes here, we put it through a baling process um and it comes out as a bale between about 900 kilos and a tonne yeah okay and we'll ship that to you guys um, it goes in a shipping container... (Mark) or a truck or so we so we will buy and sell both locally in Australia but we also are involved in buying and selling overseas so we're a locally based trader we'll buy and sell and and align and target local processing or end users but we also have a an overseas marketplace and that, I think, people find that quite interesting about the scale of an overseas marketplace so we'll buy paper products like cardboard and we'll buy plastic products like PET bottles for example and you know even in the last you know couple of months we've sent materials to Europe to North America to South America to India to Southeast Asia which I think most people consider an obvious target from Australia and until recently China we were still taking material so we really are playing in a global marketplace and it's a yeah it's an interesting point we try and share this with our supplier clients that what you do here is a mirror of what people all over the world are doing they're receiving maybe multiple loose material in small collection size quantities it comes to a facility that can consolidate those materials and when there's enough of those materials they can be transported or bulk hauled to end users it's just it's just interesting to note that an end user of that product could be as close as Sydney or as far away as Hamburg. (Bernard) Yeah for instance our cardboard is owned by a company called Opal and it goes to the Botany mill yes so it goes from being corrugated cardboard here, pulped in Sydney and right into cardboard or into paper that he's then made into carboard boxes. (Mark) yeah and going back to your note when we first met and the point that I made is is a key question to always ask is why are we doing this why do we recycle, you know and what we're doing with cardboard and other plastics or other materials such as plastic we are substituting the need to use raw product so you know the simple question is there a benefit to recycling if you take cardboard as an example a cardboard or a paper mill that wants to make paper has two choices and this is mirrored in all types of recycling process you can use raw virgin product which a paper mill would use wood or wood chip or trees or you can substitute that by recovering the cardboard and reusing it so that's basically the model for recycling you're trying to recover the goods again so you don't have to use raw product now that might seem sort of a basic statement but when you consider that it of course it answers the question is this worthwhile because if you don't want to cut down trees you want to recover cardboard if you don't want to produce more and more new virgin plastic you'll try and recover the plastic that we've already already produced for re-processing or remanufacturing. (Bernard) So it's got a commercial aspect about it also an environmental impact as well. (Mark) yeah yeah and those those things have to be considered to make it all fundamentally feasible doesn't it you know there are lots of things that we could target to recover where there just isn't a commercial uh viable marketplace at the moment so it goes back to what you're saying is the comment we made before us if you think about why we're doing it we're using it we're doing it to recover products instead of virgin material it asks you have to ask yourself who's doing this who who are we doing this for and that's why we believe that the focus is on these end users or the manufacturers without them needing the products there's no industry whatsoever so it's about saying what is what are they doing for example you know Visy and Opal in Sydney are making paper to make more cardboard and if you understand what they're making you can work backwards to understand what you can give yeah yeah a mistake many people make in the recycling industry is they collect a product first because it may or may not you know be recyclable or recoverable and then try and work out where to send it. (Bernard) yeah yeah I want to take this opportunity now. Mr. Simmons, Scott Simmons, welcome back (Scott) thank you buddy um (Bernard) where do you fit in the um because I know that I deal directly with you I don't have a lot of direct contact with you, Mark, so I'll deal with you Scott as a customer um so you can just take me through you know a normal day with you and and how you fit in the Opal Resources business (Scott) yeah sure uh I guess I deal with a lot of the recyclers with it face to face or over the phone I guess more with COVID, and not been able to get around much in the last six or eight months but yeah I'm dealing with a lot of the recyclers and talking to them about what they're producing and where we can find homes for them or as mark suggested the other way around what they should be producing and what they can target in the marketplace and what sort of recyclables they can aim to recover that has a value and has an end user because that's you know as Mark's indicated that's a key thing rather than people coming to us and saying well we have this is there any homes for it where it's sort of all too late you've got it in your yard yeah yeah and if the answer's no everyone's wasted time to yeah I suppose we're trying to marry up what people have or what people need to what people have. (Bernard) Do you just want to talk to me about this is something that I've had some terms with recently we bale clear soft plastic. That's known in industry as LDPE4 that's low density polyethylene right yep and what our the customers that we deal with and go and collect on their behalf they just really don't get the businesses why can't I put a new plastic in it like why can't I put light blue plastic in it why can't I put plastic you can tear up or plastic you can put your finger through so when you're looking to buy a bale of plastic from me I'll ring you up and say Scotty I've got some plastic are you interested and you'll say send me some photographs as we know it's not just sending any sort of photographs I'll take you through that process what you're looking for from the processor like me for quality? (Scott) yes yeah well we obviously love photographs and you know if we can visit and get our own photos but so we can understand or try to understand the quality the quality again will determine what buyers were available for that particular material quality for plastic as we say as you said it's LDPE low density polyethylene a specific buyer some of them like the shrink wrap type of low density and then there's it even gets further there's an LLDP, aluminium low density there's a medium density there's a high density so there's all different plastic where people say plastic there's so many different variables within it. (Bernard) On the density, so so when it goes to the place you sell it to they'll melt it down into pallets right yeah so the density correct me if I'm wrong here that determines what temperature that it melts right? (Mark) Well I'm glad you've asked the questions you've asked because you've now officially made this podcast a 15 episode series so we can so we can correctly work through the difference. I'd probably take it one step back just to make the point on the question that you asked and and how interesting that already opens up the need for the real detailed feedback or educational knowledge even the phrase the film is LDPE could be actually not correct so plastics we really need to start everyone talking about polymers so just as we say metals and metals we all know could be silver or gold or aluminium and we don't say that's a metal or we might start the conversation by saying that's a metal but then we'll ask ourselves what type of metal is it exactly the same plastics is the family name and within the plastics there are different polymers and those polymers are all fundamentally different just as gold and silver are different. Yeah they're they're you know they're they're fundamentally different now so one key thing is to say what polymer is that the next question to ask is what format is that polymer in now film is one format but just because it's a film might not mean it's LDPE polyethylene low density polyethylene it could be an HDPE film it could be a PET film or a PP film or a multi-layer film with all different polymers yeah so so the point is is that you can't actually make any initial assumptions until you actually identify what the material is the first thing to always do with anything you think might be recyclable or recoverable is actually identify it and that may need with plastics that actually i might need you know experienced people sure but even experienced people can often uh we don't have x-ray vision we you know we might need to send materials to a laboratory to get tested but the key thing is to actually identify it if we assume it's clean LDP film or we know it is at that point we can look for processes of LDPE film. (Bernard) Tell me about the red socks theory. (Mark) The red sock theory is just something I often share with people when for the example of LDPE if there's something else in that LDPE bale and it could be it could be as simple as a a piece of a PET bottle is in the middle and initially people might not think that is important or there's only a small piece of PET in a large piece of polyethylene. (Bernard) Sorry to interrupt mate because I want our listeners to hear this. When you say PET but is that the plastic top on your milk bottle? (Mark) No, no, PET is your coca cola bottle or your lemonade bottle fizzy drink bottles (Scott - your water drink bottle) yeah and your milk bottle is HDPE um natural but yes what can happen is uh I think the example we discussed it could be a different material in a say a bale of LDPE or it could be something that's a different color in a clear bale of something and for an end-user processor once they process it all it can only take one rogue red sock as i call it that when they produce the pellet out the other end they can contaminate the whole batch so for an end user it's very important what they buy is is pure the quality and pure material for what they need you contaminate it with something it could be very significant it might not be it might be not very significant but it can be the red sock and the white wash and the whole wash is shaded pink yeah so this is when people ask about how important quality actually is it if we're producing goods in lieu of virgin products then the quality needs to be as pure and clear as virgin products which is a high benchmark but that's actually what we need to try and achieve. (End Part 1)(Bernard) but surely that end user has a contamination process and they would have a regime around removing that sort of stuff? So on that, just before you get a chance to get on, Is it the case that there's a tolerance on there for the product like 95 / 5, 95 / 7, 91 / 5 / 7 we get with the contaminants? (Mark) There is always a tolerance or there's some call it sensitivity but again it always comes back to the same question who are you sending the material to because every end user's facility could be uniquely different subtly different so end user "A" might have a tolerance for three percent of something else. End user "B" might have a tolerance of 10 percent so and it's again another reason to find out what what they need, what do they want, what do they want, what do they take, what do they make, and the more that you learn that the much better place you are to to produce any product from recovery handling, baling, resorting you're going to do a better job because you're targeting end markets. (Bernard) I saw some footage on your website once. Where you gave some tips for processors like us at Flagstaff to help us know how you want photographs taken and I thought that was a really good tool for us to use in that was one of them was to actually take a photograph of the side of the bale so it reminds us how to describe it for our suppliers, but on the side of the bale so it shows all the products stuck together as opposed to the end so you can see the layers so so then if you're selling that to the end user they can see the layers go okay well then it looks pretty clear so to speak it's like continuous and consistent (Scott) I guess more and more of the buyers are saying that's great the photos look good but what's in the middle can you give me an audit of what's actually there? Have you pulled three bales apart and done an actual audit of how much cardboard's in there which brown cardboard, how much in colored cardboard, how much paper, how much contamination and that's just fibre. Each grade of plastics LDPE, HDPE, PPE, PET everyone's getting more specific what what they're actually buying I mean, as Mark suggested, a lot of these buyers are overseas so they can't come and touch the materials so they want to understand before it gets halfway around the world they're buying 300 tons of material what is actually in it? (Mark) The photos is an interesting one so like the red socks story a recent one I've been saying a few times is the the league table or the ladder as you would call it over this part of the world so we mentioned earlier that what you're doing here let's say for cardboard is what many other recycling facilities all over the world are doing now if you take on board the fact that the end user markets are a finite market that means that not everybody can sell all the product to the market let's say so you're really in competition with everybody that does what you do not just at the next town and the next state but you're also potentially in if you're marketing your materials for overseas you're in competition with everybody else so it can be a very subjective method of of marketing materials and selling so i always sort of try and paint the picture that if you can send the best photos that you can with the best description that you can which can be audits, as Scott said, and if you do that and 10 other suppliers send their photographs and a description to the same buyer and the buyer opens up their photographs and descriptions to the same buyers, and the buyer opens up their email that morning and reads all their offers as they do they open up an email do they like it yes, no, yes, no. If you have the best photographs and you have the best description you will at least get to the next stage those those that don't send good photographs and don't give enough information and may not be considered at all and it's an important point to make your you can picture you've got your you know and the question is where do you want to put yourself on the ladder you know so if you put yourself or aim to put yourself in that top part of the ladder you're going to give yourself more options yeah you know that's that's it almost sounds obvious yeah yeah you are you're in a competition with everyone else. (Bernard) I know I've been going well now I'm mindful of the time but I want to talk about our operations here at Flagstaff which is a big part. We don't just do cardboard we we do the security shredding in our facility here where we actually have a cross shredder. That businesses that want to destroy their records in accordance with you know regulations and laws. We provide them with a red bin. We go and collect that and then we bring it back here we put it through the shredding machine and bale it into i think they're about 1.4 tonnes and that's probably the biggest part of the business that we do together so can you just tell us Scotty where that goes who do you sell it to? (Scott) yeah that goes to a Paper Mill, in one of the busy paper mills in Melbourne and they recycle that in Australia there's no there's no mills closer than that that use the white paper there was previously a mill near Nowra, in New South Wales, but that shut down about 15 year ago now, I believe. So that was quite a big user of white paper in New South Wales so yeah it goes down to Melbourne now and they reuse it and turn that into a white paper which they use in their packaging for locally made goods. (Bernard) yeah so so part of the process that we do here we have what's called a Murf (MRF) a Material Recycling Facility where the paper goes on a conveyor belt. It's all under video surveillance so we can show the customers that their "secure documents" are secure before they get mixed with the other documents and shredded and destroyed so that provides um an opportunity for us to employ people with a disability that um to be quite frank probably some some of our participants probably wouldn't be able to be employed in open employment so it's a great social enterprise but it also does another thing - the great work they do is it's actually a person standing in the conveyor belt removing the contaminants. You guys have probably seen, I haven't, but you've seen these fantastic MRFs with their magnets that can remove metal and all sorts of stuff but it doesn't compete with actually a person sorting. (Mark) I agree yeah yeah it's it's a it's a very uh apt discussion point about you so what you're doing as you say that the the guys on the line are are sorting a product that needs sorting before it can go to the end user so if you just took your shredded paper or shredded at all it's different colors and there might be a little bit of metal in it and if that was to be baled and sent to the end user the end user would reject it yeah and so what has to happen is you have a bench and as you see there probably three or four people installed and they'll do their individual sort one might be taking out color one might be taking out metals or what doesn't belong so you are reprocessing or resorting material to end user quality that's an example it would be it's sort of a nice sort of link to even talk about you know the whole sector globally your example is is very worth is really worth talking about because if we think about the last couple of years in the industry the sector many people would be aware of you know sort of headlines China does not take recycling anymore which isn't entirely true what China did was they said we no longer want to accept recyclable materials that we have to sort again when we get them that's really what they did they just said we do want the materials but we just want to get pure well-sorted materials no different to the paper mill receiving your white paper and that has a niche that has pushed downstream all the way to all of us even arguably in our homes and our bins outside that we have to get our heads together about well what's the best way to do this you know we historically mix a lot of things together and then we try and unsort them and we have facilities that arguably it's a are challenged to sort the materials to end user qualities and your your your shredding paper is a perfect example you you couldn't just receive it trade it and send it you have to action it better you have to sort it to a particular quality. (Bernard) In line with today's policies, one of the strategies used is that, you know mixed recycled products won't be allowed to be exported by the end of 2020. and that that's that's fine but sorted stuff can still be sold. So our white paper bales for instance could be sold out still. (Mark) Well to my knowledge at this stage that we're aware that cardboard bales well-sorted bales and there's definitely still a gray area for discussion in terms of how the whole legislation spits out. Initially there was going to be a an export ban on all unprocessed call it recyclables cardboard or baled cardboard or sorted-to-a-quality baled cardboard we believe as an exemption and will be allowed to be exported in terms of the detail of different grades of paper i can't actually categorically state if that's the case. (Bernard) Because that's going to affect the price isn't it because to be honest guys since I've been in the industry the price for cardboard and white paper has just remained stagnant. Already dropped down at particular times but it's been quite an incredible market because it's been it goes from being an international market to this national medium. There's a lot on the market so it's all about supply and demand isn't it So we open up those international markets then that's going to open up the prices. (Scott) I guess it keeps the local reprocessors honest I mean if they don't have anyone to compete against they can set their price yeah there's as much cardboard used locally is there is exported so there'll be if there's no government exports there'll just be a flood in the market and you can also be able to pay what they want to pay for it. (Bernard) Yeah I must admit one of the things that I was asked by my executive when I first started here was to to actually to not price gouge or or to try and get that extra ten dollars a ton with with my main customers like Oatley Resources or Opal because when times are tough we need to call upon that relationship we've built. That's not to say that you guys don't cru out if the product's not right which i think we've had some discussion once with the plastic bale I think that was a bit dodgy and we had to renegotiate the price you know we we had a purchase order where it's a great price and you're aiming to learning you know this is a bit and yellow so don't go almost renegotiating your price because that's about that professional relationship and continued business. (Mark) And baled product as Scott mentioned earlier once something's been baled it is actually quite difficult to know the quality. You can subjectively look at it from the sides, you can take photographs, you can have an indication but until it gets opened at the end user or the it's not until then you generally discover if something's gone astray yeah yeah so that can sometimes that if we are shipping things overseas we might not find it out for eight weeks and it's eight weeks later we might get a call from the end user or the buyer and saying there's been a quality issue with what you sent us and you know but as long as it's documented and photographs are taken and we understand that it's generally everyone really acts generally very well when it comes to that yeah. (Bernard) What we find at the moment. I don't know whether our listeners will understand this but...some of our product comes in the front lift bins so you'll see, the listeners may not understand but, they see a truck with those big hooks at the front, that hook the bin and flick it over to the back (Scott) commercial or retail. Well those particular bins honestly we'll offer them, parties out there on the street will see them open them up and throw in your containers. So we're finding, you know, a surprise mix. So when we thrust them them in we ask to deduct the load, the tonnage off the load, because at the end of the day the only way to change behaviors, I think would be to make it attract a fine from an executive order. The things you load up, you think you get a full load. (Mark) ... or legislative as well. (Scott) A lot of those larger industrial bins, the problem is, whether it be say a shopping centre you'll have 16 different shops using one bin and someone else would take ownership of this. So no one needs will worry about anyone putting anything else in it wont have an effect anywhere. But as you know, if people put rubbish in and contaminate a full load. It might be one bin load. It can happen at home with one rubbish load and you will fill your recycling full of rubbish, it can contaminate a full load which might have 330 other bins. That will all go to landfill. (Bernard) I reckon that's another podcast to talk about. (Mark) um that's the red sock again That's the red sock. (Bernard) We need to think about the curbside like the Fogo thing that just started in the Illawarra. We might keep that for another podcast because that's a whole new subject. (Mark) um But your front lift bin is an example of maybe going back to mentioning the the method...we have to rethink in many cases what we do because if you're mixing products together that means you have to unmix them or you know or build facilities or and a front lift bin has different materials in it so by definition it it needs to be checked and things pulled out of it. Very similar to our household bin at home our recycling bin we put lots of different materials in it and those materials will have to get un unmixed i think sorted it's probably the better word but unmixed seems good yeah. (Bernard) The way I would tackle it at this stage, and I take the point of your visit, someone else would come in at this stage, A particular supplier that comes here, saying we just use cardboard. The product doesn't . . . (Mark) Front lift bins have been already nominated and targeted by the mills in in Sydney and Melbourne it's been because when China raised the bar on the export of cardboard they were the first to really raise the bar as we mentioned they don't didn't want badly sorted material so now a couple of years ago China said we'll only accept cardboard at 0.5 percent and immediately if if one country which is a group of paper mail says that then the other mills you would think would follow suit because nobody wants to be left with the low grade and we saw that here locally as well that the the expectation was raised and it had has been mentioned that the front lift rear lift type quality just can't achieve that there's unless you were to completely reprocess or what's known as polishing the material you take the material and send it to another facility to get sorted out completely traditionally we can't achieve it with those types of bins because it's mixed product and it's a mixed product is definitely the we've given ourselves a real challenge with mixing things for sure (Bernard) Now I'm sorry Scotty... (Scott) I was just going to go a bit farther on what Mark said that China sort of set the bar i mean up until three years ago they were importing 60 million tons of recyclables a year if you can imagine say five percent of that is waste you know they're importing 3 million tonnes of waste. Something that they're paying for, now they have to find somewhere to put. (Bernard) To a smaller degree, I get that too because I have two large bins here that we fill up, that's accompanied by an environmental levy and a cost to get rid of it. Yeah, I'm hearing you. That's a fair bit of discussion along that path. (Mark) that's what i mean 16 episodes no that's it (Bernie) Well we might be able do this again we'll see how we go and do it again with the major topics but just to finish up on a couple of stats with um with recycling that we've all read the stats in regards to you know a tonne of recycled cardboard can save up to 23 trees so so i get a bit of a kick out of what we do here at Flagstaff not only because and mainly because when a social enterprise provides employment with disability our vision is to see only abilities not disabilities and um yeah so we're an organization that um has great values and um and provides you know benefits to the community and I'd like to tell you some of the stories about the interactions we've had with our participants and their families over the last four months and maybe that could be another podcast so yeah we would be doing a good thing for the environment and I think for our community for employment. (Mark) And you do in a good way that's what i was leaning to about the MuRF thing I think metropolitan big metropolitan big MuRFs that have to unsort lots of product might not be able to achieve what they need to do the model of a MuRF or a recovery facility that has more manual labor rather than machinery is actually a really good model to consider all sorts of recycling recovery I think we should definitely be looking at that model more for to produce good outcomes of quality. (Scott) .. and specialised trained labour as well, trained specifically for the job they do they're not just day-hire sort of labor they're skilled employees. (Bernard) Oh yeah that's a good one too and we spoke about that MuRF one - we have a range of skill-sets of our participants, because our participants are people with a range of disability and I'll give you an example we have the guys that drive our trucks and forklifts, you know, and I got a forklift license and a couple weeks ago we we had a couple guys off sick for a range of reasons and I've had to drive a truck and I've never had such stress in my life. It takes such a high level of skill to be able to do that and the way they do it every day without you know (touch wood) without any injuries we have some pretty strict safety protocols in place but to do that with the trucks without loading incidents, it's really it's a it's a great thing to see. So yeah we have a different set of skill sets across the board and um and that's why it's um it's good to be a viable business whilst we are not-for-profit, we still have to remain viable because the government funding can only go so far so as long as we're in the market and providing good product and i'm sure that there's a long history but also a bright future here for the Flagstaff Group. So, on that point, gentlemen, thank you very much. (Scott) thank you (Mark) Thank you, and thanks for having us and let's hope to do it again. (Bernard) Yeah, 100%. See you later guys.