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Dr. Subodh K. Das. President & CEO Secat, Inc. Aluminum Recycling – Challenges & Opportunities Presented To: Can Manufacturing Institute Aluminum Association Aluminum Can Council May 17, 2006 Washington, DC. Items to be discussed. Enhancing UBC Recycling

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Dr. Subodh K. Das

President & CEO

Secat, Inc.

Aluminum Recycling – Challenges & Opportunities

Presented To:

Can Manufacturing Institute Aluminum Association

Aluminum Can Council

May 17, 2006

Washington, DC


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Items to be discussed

  • Enhancing UBC Recycling

    • Sloan Center for a Sustainable Aluminum Industry

    • Fayette County Recycling Laboratory

    • Six Sigma Studies ( Published in Light Metal Age, June 2006

    • Economics of Recycling ( To be Published in Journal of Metals or Aluminum Now ? )

    • Consumer Behavior Studies ( To be Published in Aluminum Now ?)

    • Future Studies

  • Emerging Trends in Aluminum Recycling


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Center for a Sustainable Aluminum Industry (CSAI)

  • Founded in Jan. 2005

  • Funded by several sources:

    • Sloan Foundation Industry Centers Program

    • Arco Aluminum, Aleris International, Wise Alloys, Nichols Aluminum, Logan Aluminum, Ormet, Hydro Aluminum, Century Aluminum

    • The Commonwealth of Kentucky

    • The University of Kentucky


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Sloan Industry Center-

Synergy of Partnership

Clark Distributing Co.


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Commodities Shipped from LFUCG Recycling Center

06/01/04 to 06/30/05, 12 months

Source: James Carter, Manager LFUCG Recycling Center


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Ratio of Revenues Generated to Weight for Commodities Shipped

From LFUCG Recycling Center (06/01/04 to 04/15/05)


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Beverage Can Recycling Update Shipped

Fayette County Program Update

  • “Green” Proclamation – August 24

    • Mayor Isaacs, President Todd, Superintendent Silberman

  • Calculating “True” Recycling Rate

    • Data available from recyclers (MRF, Wise, Baker)

    • Data available from distributors (AB)

    • Information needed from distributors (Coke, Pepsi, Coors, Miller)

  • Collecting “Real” Data

    • Supermarkets

    • Waste Composition Analysis

  • Six Sigma Methodology Initiated

    • Define Causes and Cures

  • Find Ways to Measure and Implement HigherRecycling Rates

  • Strategies


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Enhancing Aluminum Recycling Shippedin Fayette County:A Six Sigma Study

Dr. Subodh K. Das, President SECAT, Inc.

Dr. Pradeep Deshpande, President Six Sigma & Advanced Controls, Inc.

Margaret Hughes, Doctoral Candidate, Gatton College of Business and Economics, University of Kentucky


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Why Six Sigma for Aluminum Recycling? Shipped

  • Every “aluminum can” not recycled is considered a “defect”.

  • Finding causes of these defects and recommending strategies to enhance recycling rate.


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Six Sigma Application to Aluminum Recycling Shipped

Steps:

  • Find “true” recycling rate (first iteration - 39%).

  • Draw process map to show recycling loop.

  • Find “gaps” or areas of improvement in the recycling loop.

    (i.e. Rosies delivered/vending machines/businesses/apartments)

  • Alter the process map to plug gaps.



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Going Forward…. Shipped

  • Implement Changes in Fayette County

  • Replicate Warren County project

  • Re-measure recycling rate to calculate improvement

  • Formulate plan for sustainability and replicability

  • Results will be published in August 2006 issue of Journal of Metals


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The Economics of Aluminum Recycling: A White Paper Shipped

Glenn Blomquist, Professor

Brandon Koford, Research Assistant

Department of Economics

Gatton College of Business and Economics

University of Kentucky

CSAI Steering Committee Presentation

January 2006


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Review Economics Literature – Large! Shipped

  • Aluminum: U.S. and International Markets

  • Solid Waste Disposal and Recycling

    Pricing of Garbage

    Deposit/Bottle Bills

  • Curbside Recycling

  • Municipal Recycling Facilities

  • Determinants of Recycling

  • International Experience


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Why the Decline in Recycling? Shipped

  • T.Kinnaman and D. Fullerton “The Economics of Residential Waste Management” (1999, 2000)

    Curbside recycling factors:

    • Tipping fee higher, landfill savings

    • Population density greater, collection cost

    • Convenience and household’s time cost

    • Education, college degree

    • Membership in environmental group


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Price of Recyclable Material – Factor? Shipped

  • Price of recyclable materials falls → incentive to recycle is weaker

  • REAL Price of used aluminum cans:

    • Price RELATIVE to prices of other things

    • US Bureau of Labor Statistics

  • Real Price Index Value for Used Aluminum Cans = (Price Index Value for Used Aluminum Cans/CPI) (100)


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Socially Optimal Recycling Shipped

  • Average net benefit of curbside recycling for society as a whole is zero! (Aadland & Caplan, 2005)

  • Recycling that leads to an 8% reduction of waste is best for society (Palmer, Sigman, and Walls,1997)

  • Costs: $50 - $100 per ton more than landfill. Consumer time is a factor.

  • Benefits: less of - litter, raw material use, and garbage. Willingness to Pay surveys.


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Next Steps Shipped

  • Results to date will be published in August issue of Light Metal Age

  • Funding will be awarded to collect new data for one of the following two proposals to be selected for future study


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Proposal 1: Price and Time Shipped

  • Part of study of recycling behavior and marketing (Lexington)

  • Investigate the role of real price of used aluminum cans on recycling rate - statistical

  • Redemption rate experiments – individual, group

  • Convenience & time cost experiments

  • Reverse vending machines experiments


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Proposal 2: Ripe Cities Shipped

  • Identify cities with (estimated) positive social net benefits of more recycling and target efforts

  • Cost and Benefit information from Aadland and Caplan (2005)

  • Adjust to Midwest, Southeast, and East

  • Compare to current recycling rates

  • Cities with positive net benefits and low recycling rates are ripe for more recycling


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Understanding Recycling Behavior: Who Recycles and What Motivates Them

Dr. Fred Morgan and Margaret Hughes

School of Management

University of Kentucky

January 19, 2006


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Recyclers Relative To The U.S. Population: Motivates Them

  • Older

  • Larger incomes

  • Live in households with fewer members

  • More liberal in political orientation

So on balance, Kentuckians will be harder to motivate to recycle because they are younger, with less wealth, larger households, and more conservative politically


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Research indicates that the benefits of recycling (and most voluntary programs) are easy to understand by nearly everyone if the facts are presented clearly

What people need is to feel “connected” to the reasons for recycling so that they will participate without dropping out


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Explaining Recycling Behavior voluntary programs) are easy to understand by nearly everyone if the facts are presented clearly

- Theory of Planned Behavior

- Theory of Reasoned Action

- Residual Effect of Past on Recent Behavior

Taken together, these theories suggest that people act in ways that take into account:

  • consequences of their behavior,

  • ways others are likely to view their behavior,

  • factors that help or hinder their behavior.


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What These Theories Tell Us voluntary programs) are easy to understand by nearly everyone if the facts are presented clearly

  • Behavioral Beliefs (How will I feel or what will happen to me if I act in a certain way?)

  • Normative Beliefs (How will people I know expect me to behave and what will they think of me?)

  • Control Beliefs (What events or results or people could hinder my acting in a certain way?)

    These lead to behavioral intention.

    Then to actions.


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Perceived Consumer Benefits of Recycling from Empirical Research

  • Environmental

    • saving natural resources

    • saving energy

  • Economic

    • savings of using recycled aluminum

    • local jobs supported by recycling

    • community funds from recycling programs

    • Personal funds through compensation

  • Personal

    • participation in environmentally helpful activities

    • sense of individual importance in a global program

    • being recognized by others as being responsible


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Research Model to Be Tested Research

Reasons for Acting

Desire

Intentions

Overt Signal of Intentions

Actions


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Future Research Research

  • Investigate impact of economic benefit programs (ie couponing) on recycling for lower income households.

  • Investigate education programs to translate planned behavior into action.

  • Investigate effect of feedback processes.

  • Action steps:

    test programs – economic and educational

    cross-sectional interviews

    data collection


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Emerging Trends in Aluminum Recycling – ResearchReasons & Responses

Dr. Subodh K. Das,

President & CEO

Secat, Inc.

Presented to:

TMS 2006

San Antonio, TX

March 15, 2006


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Number of Primary ResearchSmelting Plants in the U.S.

2003: Fourteen (14)

Smelters Operating

SMELTERS OPERATING - 2003

  • 8 Alcoa

  • 2 Century

  • 1 Alcan

  • 1 Norandal

  • 1 Ormet

  • 1 Columbia Falls

?

SOURCE: LIGHT METAL AGE


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U.S. Trends Of Re-Melting vs. Smelting Research(000 Metric Tons)

SOURCE: SECAT, INC.


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Why Recycling? Research

1% change in recycling rate

has an economic impact of

approximately $12 million

Trashed cans contribute about $600 million to the nation’s trade deficit each year

National Aluminum Beverage Can Recycling Rate Trends.


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Impact of Recycled Automotive Aluminum Research

  • Two largest areas are cans and autos

  • Can recovery reached ~67% in early 1990’s – now at ~50%; cultural, societal and technical issues

  • Auto metal recovery >90%; aided by regulations, shredders and lack of individual choice.

  • Recovery of Al from autos has exceeded all other scrap sources since 2005

  • We have to learn to make as much new aluminum products as technically possible from recycled automotive aluminum in the US


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