Paint & Coatings Industry - December 2008 - (Page 19)

the Coatings Industry executives and senior managers from 17 leading manufacturing companies representing the manufacturing, consumer products, chemical and energy industries, which included paint manufacturers. The metrics of the survey quantified that raw material, energy conservation and packaging costs were identified for cost reduction measures in order for the companies to remain competitive.5 The coatings industry continues to attribute uncontrollable packaging costs as a leading concern while improving its sustainability. Closed-loop recycling allows an industry to manage the quality, supply and cost of their raw materials. Recycling tainers at any stage in the process can be sent directly to the reprocessor to enter the closed-loop system, thus eliminating container waste at the molder, manufacturer, distributor and retailer operations (Figure 3). Case Studies in Closed-Loop Recycling While the idea of assigning a value to a used container and calling for consumer action to return containers may seem all but improbable for coatings, the concept has been proven to work with great success in several other industries. In 1981, KW Plastics began a recycling program for automotive battery casings. The program was developed not necessarily to divert the casings from landfill but as a financially viable solution. The recycled resin was comparable to its virgin counterpart but of course with the economic advantages. Resin was sold back to the battery case molders and thus, a closedloop recycling system was created. The automotive battery manufacturers quickly recognized the value of the recycled resin, and within five years a second plant was established to better serve West Coast customers’ demand. Subsequently, more than 80% of the battery casings circulating throughout the nation are recycled and made with KW Plastics resin. Exchanging an old car battery for a new one is a common practice for today’s consumer, and an incentivizing deposit program further drives participation. FIGURE 2 | Residual return value in comparison to average sale price of container. The Value of Used Plastic Paint Containers Each plastic paint container has a price tag, not simply going to the fill-line but coming off the store shelves. The plastics scrap market follows the trends of the prime markets. Looking at historical pricing and trade indexes such as ChemData, the shifts in market value for plastics are visible but steady. Recycling allows manufacturers to control raw material and packaging costs by not contributing to the volatile market conditions of prime resin. As with all traditional commodities, plastics are driven by demand. Plastics recyclers are ready and willing to pay fair market value for properly returned used paint containers. When the average cost of containers is compared to the residual value of the used container, the container’s packaging costs shows significant reduction. The residual value, should the container be reclaimed and processed properly for recycling, can account for over 30% of new container costs (Figure 2). Residual Value of Container Container Price to Manufacturer How Closed-Loop Recycling Works The key to a successful closed-loop system is a careful analysis of the existing logistics infrastructure and distribution patterns of the product. Paint manufacturers wanting to reclaim used containers will experience the most success by identifying and implementing reclamation opportunities within their internal organization. The recycler should supply specifications and simple guidelines in preparing the containers for efficient transport and processing. While most material will be generated from postconsumer programs, it is worth noting that scrap con- PP one-gallon HDPE five-gallon Note: Pricing based on national sales and procurement averages for the U.S., 2007 PA I N T & C O A T I N G S I N D U S T R Y 19

Table of Contents Feed for the Digital Edition of Paint & Coatings Industry - December 2008

Paint &�Coatings Industry - December 2008 Contents Viewpoint Industry News Company News Closed-Loop Recycling: A Sustainable Packaging Solution for the Coatings Industry Calculating VOCs: Not All Low VOCs are Created Equal Products Supplier Showcase Buyers’ Guide Index Product Listings Supplier Listings Distributor Listings Classifieds Advertiser Index

Paint & Coatings Industry - December 2008

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