Chinese company buying Tucson's recycled paper goods

2014-06-15T00:00:00Z Chinese company buying Tucson's recycled paper goodsBy Gabriela Rico Arizona Daily Star Arizona Daily Star

A Chinese company has signed on to buy Tucson’s recycled paper goods — from junk mail to cardboard boxes to newspapers that get tossed into the city’s blue bins.

America Chung Nam Inc., or ACNI, will export up to 100 ocean containers filled with recyclable paper each week from the Port of Tucson to China, where it will be turned into new paper.

The arrangement is possible because of the Tucson port’s designation as a dry seaport that can service ocean freight, said Eddie Yeung, senior vice president of logistics and planning for ACNI. Before last year’s port designation, all ocean cargo had to be loaded onto trucks and driven to the Los Angeles or Long Beach ports before sailing to China or other countries.

For ACNI, such an arrangement with Tucson would not have been cost-effective because the company would have had to send 100 trucks back and forth to collect the wastepaper, Yeung said. Now the company can send those containers on rail from Tucson directly to be placed on ocean vessels in California.

The United States is a big source of wastepaper, Yeung said. In China, it is manufactured into packaging paper, printing and writing paper, and newsprint.

The company that buys the city of Tucson’s recycling, ReCommunity, already had a relationship with ACNI at its other U.S. facilities, said Will Herzog, head of regional business development for ReCommunity’s West region.

ReCommunity’s 10-year contract with the city began in July 2012. The company ships about 2,500 tons of paper and cardboard per month from the Tucson facility, he said.

“ACNI has been a key partner with us for many years,” Herzog said. “They are one of the largest users of recovered commodities in the world, and they have a strong appetite for the materials we generate.”

Secondary benefit

The new export demand could be a boon for area importers.

“The problem — which is a great problem to have — is we need to produce more empty containers for them” to fill up, said Stefan Baumann, director of business development for the Port of Tucson.

There are several options for doing that:

  • Containers filled with imports that were unloaded in El Paso could be sent to Tucson to be filled with recycled paper and then sent by rail to Los Angeles and ultimately to China.
  • Import containers trucked from Los Angeles to the Phoenix market could be driven empty to Tucson instead of making the longer trip to L.A. Here, they could be filled with waste paper and put on rail back to Los Angeles, with ACNI footing that leg of the trip.
  • Large importers, such as furniture stores and big-box stores, could use the Port of Tucson as their seaport instead of working with brokers in Los Angeles. The importers would benefit by having to pay for only a one-way trip for their goods, since the bill for the return trip will be paid by ACNI.

“We could be exporting 300 to 400 containers a week,” Baumann said. “Importers are happy to see this option. Instead of having to pay a driver to make the trip to California, it’s now a local drive.”

He notes that if importers truck goods in from Los Angeles, they are liable for the empty container until it has returned to L.A. Baumann said importers who already use the Port of Tucson report transportation savings of 15 percent to 25 percent.

“We are replacing a truck round trip with a rail one-way trip,” Baumann said. “It’s going to change the landscape.”

The use of rail also allows for heavier loads — up to 20 percent more than by truck because of California’s weight limits for bridges, he said.

“This is a big economic development tool for our region,” Baumann said. He noted that some companies relocated to California to be close to the coast and keep transportation costs low. “Now we are like the Los Angeles port, but dry.”

Contact reporter Gabriela Rico at grico@azstarnet.com

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