Company aims to break new ground in garbage $45 million plant recycles, composts


Ronald W. Pickett says his company, located in the shadow o a man-made mountain known as the Quarantine Road Landfill, has a better approach to dealing with the nation's seemingly endless supply of trash.

"There's cash in trash," says the president and chief executive of F&E; Resource Systems Technology Inc. And he's out to prove it.

FERST's $45 million waste recycling and composting plant, which can handle 700 tons daily, is designed to turn up to 95 percent of the trash coming in the front door into materials sold out the back. That includes plastic, aluminum and glass, as well as composted foodstuff sold by the truck-load from the Curtis Bay plant to farmers or nurseries.

The company is planning a second plant in Prince George's County, even before its first one has moved into full production. The Brandywine plant, scheduled to come on line about this time next year, is expected to cost about half as much as the Curtis Bay plant and to handle half as much trash.

And if things go as planned, FERST's two plants will serve as models for others to be built across the country. "They will be demonstration plants," said Mr. Pickett, "and we'll use a cookie-cutter approach" to build two to three plants a year for sale to localities.

Not so fast with the cookie baking, warns Chaz Miller, manager of the National Solid Wastes Management Association in Washington. "Garbage is a tough business. Garbage is garbage, and we use that term to denote something that has no value. Anyone getting into garbage thinking there's gold in it is going to find it difficult."

The recycling industry is struggling for profits, Mr. Miller says. The recession has slowed demand from manufacturers. And with more and more materials being collected for recycling, the market is glutted. In 1988, for example, a basket of used aluminum, steel, glass, plastic and newspaper sold for $97 a ton; last year, it brought just $44.

Prices of paper, aluminum and plastic have improved over the past year, but still can't cover the cost of curbside collecting, he says.

"It's like the Orioles needing five runs in the 9th inning and they score three," he said. "They're still on the short end."

FERST itself is counting on the recycling/composting plants to bolster its bottom line. In recent years its sales have come from the manufacturing of spare parts for incinerators, but since going public in 1984, the company has lost money, overall.

In 1991, FERST earned $511,044 on sales of $1.75 million. The company will post a loss of "a couple hundred thousand dollars" for 1992, as a result of start-up costs associated with the Curtis Bay plant, Mr. Pickett says.

But once the Curtis Bay plant is operating at full speed, he expects the company to post profits of $8 million to $9 million a year.

The key, he says, is combining recycling with composting.

FERST is paid a "tipping fee" for each truckload of trash that is brought to the Curtis Bay plant by commercial collectors and is dumped into a pile. But Mr. Pickett laughs at the suggestion that the recently opened plant off Chemical Road is a money #F machine. "There's a lot of overhead," he said, including the salaries of about 100 workers.

At the plant, front-end loaders place the trash on conveyor belts where workers pick out the high-grade paper, plastic, glass, steel and aluminum. These products are dropped down chutes to be baled and sent on to buyers, including Reynolds Metals and Bethlehem Steel, to be made into new products.

Although the market value of recyclables has dropped in recent years, Mr. Pickett says he can still make money from selling them "providing you give it to the customers in the form they like. They like it baled or shredded without a lot of trash mixed in."

The remaining foodstuff is mixed with water and shredded newspaper, then moved into tunnels that are 75 feet long and 20 feet across. Under ideal temperature and moisture conditions, the waste is turned into compost in 14 to 18 days.

The compost is sold to farmers, nurseries in truck-load bulk for $5 a ton. Mr. Pickett said there are also plans to bag the compost and sell it to home owners for use on their lawns. What he calls high-grade compost would sell for about 10 cents a pound.

"We recycle all but about 5 or 10 percent of what comes in," Mr. Pickett says. "The rest goes to the landfill."

He says he still hasn't figured out how to recycle the occasional lamp or boot that makes its way into the plant.

FERST's approach to recycling likely will help it dodge the community criticism that has doomed other composting plants around the nation.

"So far all of the composting plants in this country doing over 150 tons a day have closed," said Mr. Miller. Their major problem: the odor. "There was tremendous political pressure put on them because of the odor from open air composting."

"If they succeed," the recycling association executive said of the FERST facility, "they will be the first in the country. Time will tell."

Mr. Pickett has no doubts about the company succeeding and insists that FERST has solved the odor problem by moving its composting, which accounts for about 65 percent of the recycling, indoors. Air from the concrete tunnels is filtered before being released.

"The big difference between us and all the rest," said Mr. Pickett, "is that we have odor control. We have a million-dollar scrubber on this plant, and no air is released unless it is treated."

Although there has been some community resistance to recycling plants in the Washington area, Mr. Pickett says FERST's projects have found no such opposition.

"It's an environmentally sound project," he said. "We have no waste runoff or pollution. It's the sensible way to dispose of waste."

That philosophy has helped FERST attract some important allies as it moved into recycling.

Chrysler Corp., through its Chrysler Capital Corp. subsidiary, has invested $7.1 million in the Baltimore project.

Chrysler spokesman Jack Ferry says the company took an equity interest in the FERST project as part of its strategy in 1991 to diversify into energy. Chrysler does not plan to be a partner in the Brandywine project because conditions have changed in the auto industry and Chrysler is putting more of its money into automobiles, he said.

To finance the new Brandywine recycling center, FERST wants to take advantage of a Maryland Department of Economic and Employment Development loan program that involves a bond offering. It has hired Alex. Brown & Sons Inc. to handle the financial negotiations and to underwrite a bond offering of about $25 million through the Maryland Energy Financing Administration. Financing arrangements should be completed in mid-March or early April.

This will not be the state's first involvement with FERST. Luther Miller, director of the energy financing administration, said the state was involved in a $35.5 million loan to help finance the Curtis Bay plant.

He says he feels comfortable with the loan.

"They have first-class engineering," Mr. Miller said. "That is one of the big difference between them and a lot of other operations."

He continued: "And they bought their equipment from reputable manufacturers. If their equipment operates as designed -- and it's guaranteed to operate as designed -- they should do fine."

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