Vintage Tech to leave Will County electronics recycling contract

JOLIET – Citing rising costs and an "extremely unstable" market, Will County's longtime electronics recycling vendor – Vintage Tech Recyclers – is bowing out of its contract, leaving the county's popular e-recycling program with an uncertain future.

A similar story is playing out in the rest of the state, where a growing, unsustainable Illinois program is becoming a victim of its own success.

Electronics have been banned from landfills in Illinois since 2012, and under a state program, manufacturers that sell products in Illinois must recycle a certain weight of what is sold and pay to have those items collected and recycled.

Government bodies participating in the state recycling program do not pay the vendors with which they enter into contracts, as the state program is structured for manufacturers to cover the cost. However, once manufacturers meet the state-mandated annual goals, they no longer have to pay recycling companies.

When issues arose last year, a change to state law increased manufacturers' weight obligations from 36.2 million to 49.6 million pounds to meet manufacturers' demand.

Now, electronic manufacturers are at odds over price negotiations with recyclers such as the Plainfield-based Vintage Tech, forcing vendors into a tough position: Absorb the costs of local governments’ recycling programs, bow out, or exit the state program and charge local governments for services.

Dean Olson, who heads Will County’s Resource Recovery and Energy Division, said the county can choose to pay for a scaled-down program – estimated at $680,000 or more, depending on bids – or drop the program entirely.

“The bottom line is ... and I don’t like it either … my first reaction was, ‘Don’t pay it.’ But at the same time, our residents are used to having this service. We’re doing a great thing by taking it out of the landfill,” Olson said.

In the meantime, Olson will seek approval from the County Board to put out a formal bid for a new vendor.

“If [the bids come in] really high, it will be tough to do it,” Olson said.

Drop-off site services will end Feb. 11, and the recycler’s front-door residential pickup service will be evaluated for discontinuation, according to a memo dated Dec. 11 from Vintage Tech to the county.

The county’s contract with Vintage Tech doesn’t expire until May 2017, but a clause states the service is dependent on the company securing contracts from manufacturers. Olson said the Will County State’s Attorney’s Office is reviewing the contract.

Richard Hipp, president and CEO of Finland-based Kuusakoski, the company that acquired Vintage Tech in early 2015, said the company's decision had "multiple root causes," with a lack of contracts with manufacturers being a key driver.

“When we reached out to the [manufacturers], explained our costs and opened the books, [the contracts] weren’t accepted,” Hipp said.

Commodity prices for copper, metal and petroleum are also “worth a fraction of what they used to be,” he said.

“Throughout the year, the margin got squeezed because commodities kept falling and falling. You’re locked into a contract ... and last quarter, it was a bloodbath,” Hipp said.

Cathode ray tube glass

Complicating matters is cathode ray tube glass – a toxic material used in old TVs and monitors that’s extremely heavy, expensive and difficult to recycle.

CRT glass accounts for most of the material received by Vintage Tech, Hipp said, and companies are “losing money hand over fist” to properly dispose of the material.

Smelting factories that handle CRT glass are few and far between worldwide with limited capacity, Hipp said. And the India-based Videocon – the only remaining recycling plant in the world for CRT glass – shut down its furnace in late 2015, leaving recyclers with few outlets.

Most manufacturers ship material overseas, but a new option recently cleared by state lawmakers allows manufacturers the cheaper option of sending it to the Peoria-based CRT glass crushing plant opened in 2014 by Kuusakoski.

There, it would be stored at a landfill until it could be properly recycled.

‘The wild, wild west’

Walter Willis, executive director of the Solid Waste Agency of Lake County, said he believes manufacturers are trying to force the cost onto taxpayers by refusing to contract with well-reputed recyclers in the state program unless they go down to an unrealistic price point.

Lake County’s contract with Vintage Tech expires in May and the company does not plan to renew.

“It’s impossible to do business in this state with the way manufacturers are driving the lowest cost on the recycler. That’s my take. Quite frankly, they’re going to ruin the law in Illinois. They know. They’re killing the recyclers,” Willis said. “It’s been the wild, wild west out there.”

Jerry Peck, associate director of government affairs for the Illinois Manufacturers’ Association, said while he couldn’t speak to individual manufacturers’ reasons for not contracting, he said “everyone is looking for the best deal, the best way to [reach the weight goal.]”

He said he hears this argument every year during contract negotiations.

“It’s not uncommon to hear this story. It’s always a game of musical chairs to get the best price,” Peck said. “At the end of the day, manufacturers pick up the tab ultimately.”