Over the Columbus Day holiday, thirty students from the Harvard University community, including several of HBS’ Green Living representatives, took a field trip to the FCR Recycling plant.
The trip provided the opportunity to learn about a booming industry around the efficient recovery of waste products for future use. FCR is the largest recycling plant in North America, and it is located only miles from Harvard in Charlestown, Massachusetts. Harvard University accounts for about one percent of the company’s revenues.
Students learned about the profitability of the recycling industry. The plant recycles and processes over 1,000,000 tons of material each year-material that is later returned to homes and businesses either in its original form, or as another useful product. The main objective of FCR operations is to obtain the “maximum product recovery and minimum residue,” which presents two opportunities for its clients-sharing in the revenues from recovering products and avoiding the costs of disposal.
Since FCR does not earn revenue from landfill operations, there is an incentive to maximize opportunities to recover recyclables from the commingled streams the company receives. FCR constantly tries to upgrade its equipment and to improve operations in order to lower residue rates while maintaining product quality. This process includes backup sorting systems and manual quality assurance sorting before baling and shipping.
Our trip was not the only one the plant received. Many of FCR’s facilities are equipped with Education Centers designed to educate the public, particularly children from kindergarten through eighth grade (so Harvard students fit right in), about how recycling affects the environment and about the recycling process in our facilities.
Overall, the experience was a lesson in how recycling can be profitable. The company sells most of its product via long-term mill contracts with floor prices and utilizes financial hedge contracts as well. Their marketing plan is designed for product movement, even in tough market conditions, which enables a stable pricing structure for customers. Students were well informed on the trip and saw how the Harvard recycling program is not only socially responsible, it also provides significant economic value for the university.