Innovation, Flexibility in Lamp Recycling Propels Double-Digit Growth for Air Cycle

Environmental Business Journal, Volume XXI, Number 6, 2008

Air Cycle Corporation (Broadview, IL) wasn’t always in the waste management business. Founded in 1978, the company originated as a manufacturer and marketer of several product lines, including automatic air balance system control panels, which are used at more than 3,000 McDonald’s restaurants, as well as electronic lamp ballasts for specialty markets and advanced coffee dispensing machines.

The emphasis on waste management is about 10 years old, says Scott Beierwaltes, CEO of Air Cycle. The company “randomly got involved with lamps,” he says, “and one thing led to another.” Today, the company provides waste brokerage services for mercury-bearing lamps, ballasts, batteries, and electronic wastes, or e-wastes, such as discarded computers and peripherals, CD ROMs, telephones, and facsimile machines, To think of Air Cycle as simply a waste broker, however, is to miss much of the company’s story. Air Cycle’s services are built around its one of its historical product lines, including the Bulb Eater, which is a lamp crushing machine designed for use at universities and other locations where the generation of discarded lamps is substantial but the space for storage is limited. Bulb Eater models crush straight and u-tube lamps and, according to the company, saves storage space by roughly 80% and recycling costs by about 50%.

The obvious question was, “Now what do we do with these crushed lamps?” Beierwaltes says. It wasn’t just crushed fluorescents, either. Air Cycle’s customers also frequently used high-intensity discharge (HID) lamps, some of which contain mercury, and while these don’t tend to be crushed, they did present a disposal problem for Air Cycle’s clients. “We began brokering these HID lamps, and compact fluorescents (CFLs), and that opened the door to ballasts and batteries,” Beierwaltes says. Air Cycle has established relationships with 22 e-waste and lamp recycling and disposal facilities nationwide, operated by the likes of Veolia Environmental Services’ (Veolia ES) (Lombard, IL) Technical Solutions unit and Earth Protection Services, Inc. (Phoenix, AZ). Air Cycle’s services aren’t limited to pick-up and delivery for disposal, though.

Some of the firm’s clients are very large companies, with complex waste management needs that can vary considerably on a site-by-site basis. “The Bulb Eater machine is our niche, and more often than not it opens the door to conversations with clients to set up comprehensive lamp management programs,” Beierwaltes says. Under these programs, Air Cycle will set up custom web sites and reporting tools to manage and track the disposition of lamps and other regulated universal wastes. “We’re the only company offering both the on-site crushing system and a true national program coupled with it,” he says.

The provision of comprehensive waste management programs based on information technology is a relatively recent company development. Indeed, a clear highlight of the past year was a project that the company undertook for CB Richard Ellis (CBRE), a commercial real-estate giant with about 4,500 U.S. properties and more than 1.7- billion square feet of building space under management around the world. CBRE has a stated mission to reduce its carbon footprint and become a leader in the “green building” movement, but it faced the daunting challenge of tailoring different combinations of recycling services under varying regulatory jurisdictions to each of its properties. Working with consultant Rod Kincaid of Virginia-based Esquire Environmental Services, Inc. (Fairfax, VA), Air Cycle developed for CBRE its own custom web-based program for managing these complex waste management needs. The program provides CBRE staff with quick access to federal and local laws and regulations regarding the proper management of universal wastes and with powerful tools for tracking wastes and reporting on their waste management activities, Beierwaltes says. These reporting tools, he says, help CBRE and other clients that go the same route to make the “green” case to internal and external stakeholders, such as employees, shareholders, and customers. The CBRE program was initially implemented regionally for 50 properties but is now available to the firm’s nation-wide property base, Beierwaltes says. Also within the past year, Air Cycle established a similar waste management program on a nationwide- basis for facilities in the Marriott hotel chain. More web-based programs are in development for other large national organizations. In addition to providing the Bulb Eater and these IT-based management solutions, Beierwaltes also touts his firm’s flexibility as a differentiating attribute in the marketplace. He points specifically to the establishment of the EasyPak recycling program for smaller facilities that may want to recycle responsibly but doesn’t generate lamps or other universal wastes in the volumes that justify periodic pick-up by a semi-trailer truck. “If we’re talking about lamps, for example, under this program, the client would buy a 30-count box like the one that the lamps originally came in, and included in the price is the recycling of the contents and pre-paid shipping by FedEx ground delivery to one of our affiliated recycling centers,” Beierwaltes says. “We started this program up a couple of years ago, and we’re seeing good growth.”

Overall company revenue growth is in the neighborhood of about 30% annually, Beierwaltes says, and “we intend to continue that trend for the foreseeable future.” Air Cycle has about 5,000 customers nationwide, “and that number is growing,” he says. Driving this growth, Beierwaltes says, is the increasing awareness that mercurybearing lamps, and especially the increasingly popular CFLs, must be managed responsibly. He cites estimates that up to 700 million fluorescent lamps reach the end of their lifetimes each year, and yet only 25% of those waste lamps are recycled— figures that depict clearly both the challenge of raising awareness further and the opportunity for substantial market growth. Another driver for the solid business growth is the expanding need to responsibly manage the mountains of e-wastes that are piling up each year, as well as the data security issues that come along with it. Beierwaltes claims not to have noticed any negative impact on the business by the current economic downturn. The regulatory drivers for proper disposal of lamps are in place, through the U.S. Environmental Protection Agency’s (EPA) universal waste rule and the often more stringent state universal waste regulations. Some states have banned the disposal of non-residential lamps in landfills, and California has taken that one step further by establishing regulations for the disposal of residential lamps. Navigating this patchwork of regulatory regimes presents Air Cycle with its second-greatest challenge, Beierwaltes says. “Because we offer our program nationally, being up to date and providing general guidance to our client base is a challenge.” The leading challenge, of course, is helping to build that awareness of the health impacts of mercury and the regulatory regimes designed to address those health impacts.

A third challenge presents more of an internal issue, Beierwaltes says. “One of the things we pride ourselves in is being flexible and innovative, but sometimes there can be a temptation to be satisfied with the status quo. We’re constantly pushing ourselves to be in tune with what our customers need and how they want it. When you find something that works, it’s easy to fall into the habit of sticking with that and not listening to the customer,” he says.

This article originally appeared in Environmental Business Journal, a publication of ZweigWhite