Reducing Recycle Mill Fiber Costs By 20%, 1999 Recycling Symposium Proceedings

William P. Moore

Almost every recycle mill believes that it is procuring its supply of recovered paper at or below the market price. From our experience examining a large number of mill procurement systems, the historical price for secondary fiber has varied as much as $25 per ton from the highest to the lowest cost mill in any given region. This paper will examine the different procurement techniques that may permit individual mills, working with their suppliers, reduce their recovered paper costs.

Details about the following approaches to recovered paper procurement will be examined:
* Presentation of generalized historic mill cost data
* Type of supply agreements utilized (spot buying versus short and long term contracts
* Distribution of supply by type of supplier (broker, packer, generator, etc.) different approaches for different grades (e.g. old newspapers (ONP) versus old corrugated containers (OCC))
* Geographic buying zone considerations
* Inventory practices (JIT and cost of working capital versus procurement costs)