The US is overflowing in waste. The majority of the waste is not recycled and ends up at disposal sites across the country. This costs cities billions of dollars and has now led them to reconfigure the process from disposal to reduction and recycling. The Danish Trade Council in Chicago considers this an opportunity for Danish companies in the industry, and The Trade Council will therefore launch ‘waste’ as a new strategic focus area.
Chicago: The US, to a great extent, is an ‘use and dispose’ society. This shows at the country’s disposal sites.
Annually, Americans generate all-in-all 254 million tons in waste - over half of which ends up at the country’s disposal sites. But this will change in the coming years because the prices of disposal of waste in nature – and the consciousness concerning environmental issues within an increasing number of American citizens – are rising.
It costs billions of dollars to dispose large amounts of waste, and this has made the larger cities react. Thus, New York, Los Angeles, Austin and several other cities have decided to completely eliminate waste for disposal within the next decades. This is to happen through sorting, recycling and resource utilization, which the American waste industry is not yet fit to manage. Danish companies, on the other hand, are up to the task.
Danish companies need to take advantage of this opportunity, according to Team Leader of the Trade Council’s US Energy and Environment team, Jakob Andersen.
“It costs Americans billions to dispose of such large amounts of waste, at the disposal sites that are often placed far away in other states – environmentally, that is outrageous. That is why several cities and states now have quite ambitious plans of completely eliminating disposal. But in the US they are far from the level of waste management seen in Denmark. That is why we have recognized that these new ambitions present excellent opportunities for the Danish companies in the waste industry,” Jakob Andersen says. Based on the Chicago office’s work within the sector teams Wind Energy Advisory, Water Technology Alliance and District Energy Advisory, a similar model has been adopted and the Waste & Recycling Advisory established, as the Energy and Environment US team’s fourth strategic focus area.
Denmark is 20-30 years ahead
Based on preliminary market investigations, environmental engineer and strategic export consultant for The Trade Council, Peter Heydorn, points to the lack of political awareness regarding the challenges and potential in the amount of waste in the US over the past 20-30 years as an explanation of the significant build-up.
“The main motivation is that Denmark, contrary to the US, has in the past two-three decades had a political strategy concerning environment. That means we have achieved positive conditions within energy, environment and water, herein also waste and recycling. We set out to prevent waste build-up and next to recycle the generated waste as much as possible. If this was not possible, it has to be resource utilized. Through a strong collaboration between the public authorities, operating companies and private companies, we have thereby developed methods and systems over the years that has led to us now having the technology and knowhow to design the entire waste supply chain – and finance it,” Peter Heydorn explains.
Complex but strong market
The Danish companies Bramidan and Runi are examples of companies within the waste industry that, through the Trade Council’s Vitus-programme, have established themselves in the American market.
“For a number of years we had our eye on the American market, we conducted market analyses, participated at conferences, and so on. With the Trade Council in Chicago and the Vitus-programme, we were given an opportunity to take the final step in 2011 – and we can only say that we have not regretted that step. The US had an existing market for our products but the competition was characterized by relatively old technology and similar standards of security. We believed that we had a great opportunity to introduce something that was different than what they had been used to,” Jørgen Lassen, Export Manager in Bramidan, explains. Bramidan produces baler solutions for cardboard and plastic for retail, among other.
His perception of the American market is a big and competitive market with significant cultural differences and often a more conservative approach. However, in time Bramidan succeeded in convincing the American customers within retail, among other, that it is advantageous to comprise carboard boxes and plastic wrapping to reduce the need for waste pick-up to one tenth. Less pick-ups, more at the bottom-line. The result is that the US has become one of the company’s fifth largest markets. And it continues to grow.
“To enter the American market is a tough battle. Once you are in, however, there is a lot to gain,” Jørgen Lassen says.
Americans feel ashamed of disposal
Torben Dysager, CEO of the company Runi, that manufactures machines for separation of organic waste, compression of EPS, cans and plastic bottles, explains a different entrance onto the American market. Before the financial crisis, one third of Runi’s revenue came from the US but the crisis and the consequential dollar rate effectively shot down the American purchasing needs.
“Under Obama, a higher level of environmental consciousness and a better economy occurred so we thought that it was time to see if we could regain our position. We have since January 2016 been at it, which is why it is a little early to conclude anything, but I had expected more of the first year and a half,” Torben Dysager says. His experience is that it was far easier to get the signatures before 2008 despite solid business cases.
“It has been tough but right now it looks as if some things are cooking. The consumers put significantly more pressure on certain types of companies for them to be environmentally friendly. Parts of the American population really want management of environment and are ashamed of the huge piles of waste at the disposal sites. That goes to show there are definitely sectors that need work over here,” Torben Dysager says.
“Denmark has products and knowhow”
Both Torben Dysager and Jørgen Lassen are in agreement that it requires willingness to invest both time and money if you want to enter the American market, but both recognize opportunities for a Danish effort for waste technology in the US.
“I am not in doubt that Denmark has products and know-how that will fit well in the American market. Things are however done a bit differently in the US, where recycling is less used than disposing at disposal sites. That is why I think technologies specifically for disposal site operations or combustion will have good opportunities,” says Jørgen Lassen.
Torben Dysager is also thinking along the lines of system export.
“If five-ten companies could join forces and design and build an entire recycling station, then we would have a clear advantage,” says Torben Dysager, who also believes that there opportunities within waste to biogas.
System export is the way to go
The system export thought is exactly what the new focus are of the Trade Council in Chicago is founded on.
According to Peter Heydorn, the Waste & Recycling Advisory will be focused on the aspects of the waste industry where Danish companies can organize around total system solutions – first and foremost within the areas where the fruits are particularly low-hanging.
“The actors in the US are very big, which is why they focus on whole systems and complete technologies when they meet with suppliers. What we therefore need is competences and experiences to make strategies, to build organizational conditions, to build systems and methods for financing waste solutions, to educate and create an awareness among stakeholders, citizens, consumers. Someone to develop the systems, deliver the technologies and build systems from top to bottom,” Peter Heydorn says and states that the smaller Danish companies will typically be capable of this when they join forces.
Opeations to operations is the recipe for success
One thing is to identify the potential, make strategies and gather the diverse skillsets that the companies can offer. What is important is how entry is made. According to Peter Heydorn, the Trade Council in Chicago has through the las six years build a repertoire of important experiences within the three before mentioned teams that now have to be transferred to the waste sector.
“What we do now is use the very positive experiences that we have accumulated concerning the water technology sector in the Water Technology Alliance. It is a matter of introducing the right competences into the dialogue with the American stakeholders. Who more than anyone else has lived through the past 20-30 years of development? It is the companies that have been in charge of operations. It is the people on the floor. They can have a dialogue with their American colleagues without it becoming – pardon me – ‘sales talk’. They know what their colleagues are facing. They know what it takes. They have themselves used suppliers, advisors, financial institutions etc. They recognize the need and share their experiences and results. Thereby they can better involve their American colleagues in potential solutions, give them contacts and invite them on fact-finding trips to Denmark to see what we have done the past 20-30 years. It is the continuous mutual contact and dialogue between industry professionals that is often paving the way for new investments in the more complex infrastructural areas,” Peter Heydorn states.
The establishment of the Waste & Recycling Advisory is in the works. During the next couple of months, the dialogue with operations personnel, interested Danish companies and actors in the American market will begin.