In Depth July 24, 2008, 5:00PM EST

Cash for Trash

(page 5 of 5)

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Zeigler makes his way through an arcade of 15 boxes, each the size of a construction dumpster. One is full of diskettes and CD ROMs destined for shredding. Zeigler brandishes a plastic monitor base from another box. "It's more than 20 cents a pound now, thanks to oil prices," he beams. A third box contains black computer mice and a fourth, white ones, all to be crushed for copper wire and plastic. Next up: aluminum heat guards and circuit boards that contain gold, palladium, and platinum. "We've seen a fourfold increase in value for these," Zeigler says, adding that a 16-square-foot box of memory sticks contains $15,000 in precious metals. Every bar-coded unit is tracked in real time, whether it's on the assembly line or awaiting attention in a locked iron cage. Employees must pass through a metal detector to get to the lunch room.

Still, the real money comes from salvaging working computers. "We don't look at hardware as e-waste," Zeigler says. "An American student can reuse an executive's laptop for maybe five years, an emerging-market customer even longer." The margins are solid. Fully functional laptops that TechTurn buys for $200 or so can be refurbished and resold at a 20% profit.

If only TechTurn could collect enough e-waste to feed the hunger for its goods. "Domestically and internationally, there is an insatiable demand for what we are selling," says Michael Farello, a partner at Catterton. "We could grow the business tenfold and still have a seemingly unlimited order backlog from schools, small businesses, and developing countries. The challenge is how much can be brought to us."

Not long ago people and businesses had few qualms tossing burned-out computers in Dumpsters. But as fears of the toxins inside e-waste have grown, some 40 states have drawn up special trash-handling rules for electronics. Worries over data pilfering make people all the more reluctant to junk old equipment. And so hidden assets sit idle in closets and basements. "People just don't know what to do with it," says Farello.

Hence the world faces a remarkable problem: There's both too much trash and too many businesses that can't get enough of it. Balance the equation, and recycling could grow by orders of magnitude. But no one has figured out how.

Remember glass recycler Tex Corley? He's merely one degree of economic separation from Donald, a 41-year-old homeless man on Manhattan's Upper West Side. That divide, so easily bridged in theory, says everything about the recycling boom.

On a cool April night, Donald roots hurriedly for returnable glass bottles in trash bags outside a Thai restaurant. He has nearly 200 in his rusty cart, having rinsed them out in a Central Park bathroom. A supermarket will pay a nickel apiece for up to 240 bottles, but only if he makes it by 10 p.m.

Donald and some fellow scavengers report that guys from New Jersey and Pennsylvania showed up in flatbed trucks months ago, offering 7 cents apiece—a two-penny premium—for unlimited quantities of color-separated returnable bottles. That is, says Donald, until the police caught wind of the underground market and told the out-of-towners to scram. In October, Mayor Michael Bloomberg, who suspended the city's glass- and plastic-recycling services in 2002 and then reinstated them, imposed stiff penalties on drivers who take curbside recyclables, often loaded with returnables Manhattanites can't be bothered to redeem.

For Donald, the crackdown means it's back to haunting grocery stores that, despite deposit laws, aren't eager to accommodate homeless men lugging bottles. "It's no good for business," says the manager of a 24-hour supermarket. With the emergency exit blocked by heaps of cans and bottles, he declares the bottle-collecting machine out of order even before his arbitrary 10 p.m. rule can kick in.

And so Donald and Tex Corley are out of luck. The glass will return to trash bins en route to some landfill. "I don't beg, I don't rob anyone," says Donald, pushing his cart up Broadway. He stops and holds up an amber bottle. "This—here, hold it—this is money. Money is on the streets. Money is in trash cans. Isn't that the stupidest thing in the world?"

Links

Like all human endeavors, recycling has its darker sides. Shortages inspire thievery and greed, and scavenging remains a risky business

GREEN—BUT HARDLY CLEAN

The global commodities boom is creating a new category of lawbreaking: green-collar crime. On Mar. 29, The New York Times (NYT) reported that thieves looking to cash in bits of platinum were ripping catalytic converters from parked cars. Six days later, the Associated Press noted that an Ardmore (Okla.) Pizza Hut (YUM) had been robbed of aluminum pans. On June 9, the South Florida Sun-Sentinel reported a rash of beer keg thefts from area bars. This after the region had fallen victim to thefts of graveside vases, unhooked flush valves from public toilets, and copper from foreclosed homes.

E-WASTE AT ITS WORST

In its January issue, National Geographic reported that much of the world's electronic waste ends up in Ghana and Nigeria, where children are paid pennies a day to salvage the choice commodities inside—exposing themselves to dioxins, lead, and other poisons. The rest of the waste, spanning everything from dot-matrix printers to surge protectors, ends up scattered in open dumps or washed out to sea.

Because of a production error, a photo accompanying "Cash for Trash" (In Depth, Aug. 4) repeated some background images, resulting in an enlarged, and inaccurate, view of a garbage mound at the Casella Waste Systems facility in Auburn, Mass. BusinessWeek's policy prohibits the altering of images in this way.

BusinessWeek Senior Writer Farzad covers Wall Street and international finance.