Schupan COO Tom Emmerich Looks to the Future of Recycling in Michigan
“It's been a great partnership over the years,” Emmerich says. “Not only are we at Schupan big Michigan State fans, we're fans of what you do and what your radio station puts out to the greater public. You cover a lot of really important subjects and we are thrilled to be a part of that.
“Schupan is a locally owned, Kalamazoo, Michigan based company. The owner is MSU alumnus Marc Schupan and his family. Mark is the CEO and the company has been around for 53 years; it has evolved into an amazing organization. When we talk about Schupan, we have five different business operating units. We started in the scrap business, your regular industrial scrap. We have aluminum and plastic sales distribution and manufacturing businesses.
“Schupan Recycling is our beverage container recycling business. We have a materials trading division that does business internationally. Then we have electronic scrap recycling that we call asset management. So that's Schupan. When we talk about Schupan Recycling, it's the beverage side of the business where we handle a large percentage of all the containers in the state of Michigan.”
What's the state of the company and the industry? Where is recycling and Schupan going?
“That's an interesting question. I think you could ask anybody in any industry the same thing and you'll get somewhat of a similar answer. The pandemic has probably been good for some companies and some organizations and some industries, and it's been really hard on others.
“Being a diversified organization, we have divisions that have done pretty well through it and the future looks pretty bright. Then we have other areas, in particular our manufacturing and distribution, that are having a much harder time coming out of it. All in all, our company is strong. Our future is bright. Do we have challenges? Of course, but I'm very excited. In fact, we just initiated a strategic roadmap. That's our long-term vision for where we're going to go as an organization. It's really people-centric and it's going to help us take our company to the next level.
“Our business will continue to grow. I think the economy is stronger than most people thought it would be coming out of the pandemic. We're all challenged with employee issues. I think eventually that's going to work itself out. It's a real problem for not just Schupan but all businesses. I hope within six months to a year that gets behind us. Then I think you'll really see the economy take off.”
How is the state of recycling in Michigan? We've heard that we lag other Midwestern states. How are we doing recycling wise?
“There have been a lot of efforts to try to increase what we do in Michigan. Do we lag other states? We absolutely do. We have like an 18 percent municipal and recycling rate. That's up a couple percentage points, but it still lags behind the Minnesotas and Wisconsins and a couple other Midwestern states.
“What I think is important to point out is that those states actually invest a lot of money in recycling. I don't have the exact numbers, but it's like $20 or $25 million in Wisconsin and $15 to $18 million in Minnesota. They put money back into recycling. Michigan doesn't do that. We only spend a couple million dollars a year in Michigan, and that's relatively new.
“We have relied on the deposit law as our marquee recycling program in Michigan, and it's been incredibly successful. There's no reason to look at changing that, but it really comes down to funding. How much money is the state willing to put back? And mandates. Michigan has really no mandates on banning certain things from landfills. Other states do. The states that do have much higher recycling rates.”
Emmerich details the specifics of legislation pending in Michigan designed to increase the state’s recycling rate.
“I testified for two different bills, House Bill 4443 and House Bill 4444. Those bills were pretty much introduced by the beverage community where they are looking for a half cent per container income tax credit that would help them invest back into the deposit system. Distributors are responsible for the program. A lot of people don't understand that. Since day one, they initiate the deposit. They're required to pick the containers up at retail and properly recycle them.
“That's where companies like Schupan come in. They've hired us and others to help them with that process. As costs have gone up over the years and money was taken away from distributors back in the early to mid-nineties. They haven't asked for a penny from the state to help them with infrastructure costs.
“It's just gotten to the point where our business is no different than anybody else's. Our costs are up well over 25 percent in the last five or six years. Coming out of the pandemic, they're even more. We're paying much more for labor than we did pre-pandemic. Everybody's doing that.
“Now the problem with that is anytime these pieces of legislation start to get introduced, you get the folks who want to get rid of the deposit laws start coming out and you get the folks who are benefiting from money from the state for recycling. They definitely don't want to see things like this happen. It's very political.
“Where things stand right now, which you might find interesting, is that the two bills passed out of the House and they're in committee in the Senate. There are discussions going on between legislators and the governor's office to see what they can come up with that makes sense so that her office will be accepting of where they're going. We're close. I'm not sure if it's going to happen. I hope it does because it's definitely the right thing to do.
“We're looking at a significant investment in our Wixom operation that we built 16 years ago. It's like your car. Your car can only run so long. It needs to be repaired at some point or replaced. That's where we are. If we don't, then the cost of maintenance is just going to go up and our ability to service retailers and the consumer is going to go down, and nobody's going to be happy with that.”
Is it cheaper for municipalities to throw stuff into the landfill than to recycle it?
“Curbside recycling is expensive. You'll hear folks say that aluminum being in the deposit system is a revenue stream that that takes away from those types of efforts. That is true, but it's also not the golden goose because there's another huge issue that nobody ever wants to talk about, and that's glass. We are handling over 300 million pounds of glass going through the Michigan deposit system. It's very clean. It's 100 percent recycled and it's left out of curbside streams. When that stuff ends up in curbside, it contaminates everything and it makes the curbside process much more difficult.”
Emmerich shares his 4 E’s for a successful recycling program.
“My last name begins with an E, so back in a management meeting years ago I said, ‘We've got to come up with something collaborative for why it makes sense to recycle.’
“The first E is education. People have to know what's recyclable and where to go to do it. The second one is ease. It has to be easy or convenient to do. The third one is efficiency. You have to have efficient logistics and operations so that you can properly handle the material. Lastly, and maybe really more important than the others, is that recycling has to be economically viable. In other words, you have to have a semi-lucrative market to sell the material. If there's no end market for the material, you can't have sustainability. You can't close a loop and you won't have an effective recycling program.”
Emmerich says Schupan is a people-friendly place to work.
“I mentioned earlier that companies all over the country and all over the world are struggling getting employees and we're no different. We think we're a very unique place to work. I would encourage folks to go to our website if they're interested in getting into a career, whether it's recycling or any of the five areas in which we do business. We have plenty of job openings and plenty of opportunities throughout the state of Michigan. We'd love to talk with folks about that.
“Regarding the general state of recycling, I think the future is bright. I think it's exciting. I think there's going to continue to be pressure put on the packaging industry, especially in plastics, due to the plastics in the ocean and the waterways. The packaging brand owners are all saying the right things. They really are trying to do the right thing to put more recycled content back into their bottles. I think that effort's going to continue. That's exciting.
“I talked about mandates earlier. They won't all do it without mandates. I prefer to do it without mandates. But again, market conditions and the commitment to true sustainability efforts by the brand owners and the packaging companies are going to drive that. If they don't want to be mandated or legislated, then they need to do everything they can. And they are. I'm encouraged by that, for sure.
“We keep a close eye on that. I think the future of recycling, not just beverage container recycling, is still bright. We'll work hard with all our partners like Michigan State and others who are interested in that effort. We'll continue to work with them.”