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Mechanical baler wraps up Impact’s recycling business

“Nicole Stefenelli and husband, Rod Nicolls have installed a new baler at their Richmond-based business, Urban Impact, to serve a global market.”

By Maurice Bridge
Vancouver Sun – Businesss – Wednesday, October 8, 2003

Some of the best ideas can arise when you least expect them. Just ask Nicole Stefenelli. Standing on a narrow steel platform 25 feet above the concrete floor of a North Reichmond warehous, getting showered with bits of paper as a constant stream of the stuff drops off a conveyor belt into the maw of a massive mechanical baler, it’s not hard to appreciate Rod Nicolls’ enthusiasm for the new machine.

The massive Bollengraaf HBC 110 is a remarkable device. It can process 5,000 metric tons a month, turning unwanted paper and cardboard into neat, wire-wrapped cubes 60 inches long, 42 inches high and 42 inches wide. The cubes are designed to pack neatly into shipping containers, and depending on what they’re made from – cardboard, high-quality paper, lower-grade material – they could be headed anywhere from Burnaby or Oregon to South Korea or South America to be pulped, de-inked and re-used. One place they won’t be headed for is the local landfill, which is the point of the whole business.

“We decided to take a really big leap instead of just a small leap, so we’ve gone from a machine that was doing five tons an hour to one that can comfortable do 25 on cardboard and 45 on paper,” Nicolls explains. “I don’t know everyone else’s numbers, but it’s probably the highest-capacity baler west of Winnipeg. Now that we’ve got this machine, we want to draw some tons to it.”

Nicolls and his partner in Urban Impact Recycling, Nicole Stefenelli, who is also his wife, are so pleased with their new baler they’re planning an open house this month to show it off. But for now, warehouse workers are hustling to clear the backlog from five weeks of down-time while the baler was being installed, racing around in Bobcats, pushing massive piles of paper and cardboard from recycling initiatives all over the Greater Vancouver Regional District.

Urban Impact has been around since 1989, which makes it a recycling pioneer in these parts. Stefenelli started it as a thesis project for a geography degree at UBC, using four restaurants as clients. When she finished school and was looking for a job, one of the restaurant owners challenged her to turn it into a real business.

Since then, she and Nicolls, who previously worked in the sales end of the lumber industry, have acquired a lifetime of business education and experienct, building their company into an enterprise with revenues of just under $3 million a year. “Our specialty is small-to-medium-sized business, that’s our niche market,” says Stefenelli, sitting in a simple office in a double-wide construction trailer on a corner of the company’s River Drive lot. “That ranges from a two-person office to a 100-person warehouse.”

A fleet of nine trucks services 3,000 pickup points, and customers pay anything from $30 to $600 a month to have their unsorted paper, along with other recyclables like glass, plastic and metal, removed. “It’s become a regular course of business, as opposed to something that’s done just by a few select businesses,” she says, “It’s pretty pervasive.”

It wasn’t always that way. When she produced her first brochures, she paid a substantial premium to have them printed with environmentally friendly inks. When she ordered reprints a couple of years ago, she reminded the printer about the inks. “They laughed and said, ‘Alll our inks are environmental.” It’s wonderful to hear that this is more of a norm than a freak, that you’re [no longer] being extraordinarily environmentally aware when the world around you isn’t.”

But environmental awareness doesn’t absolve a recyling business from the hard laws of commerce. Having spent $600,000 for the Dutch-made baler, Stefenelli and Nicolls are now focussed on finding more material to take advantage of its huge capacity. “If you look at a curve of baling cost per ton, we were totally flat-lined,” says Nicolls. “Each additional ton cost us the same as the ton before. With this one, we’re on a real sharp drop, because you amortize your capital cost over more units and this has extremely low operating costs.”

About 75 per cent of what the company process is from its own clients, and it buys the remaining 25 per cent from other recyclers. Stefenelli wats to change that ratio, and she and Nicolls believe the key to that is fair and transparent dealing with clients. It was the lack of that, says Nicolls, that drove them into baling in the first place. “We backed into it because we were being hosed on pricing. If they had only been taking their 30 bucks a ton or 40 bucks a ton that they needed, and that’s what they took and were transparent and disclosing what they were doing to us, we would have just focussed on trucking and staying with that. We wouldn’t have 40,000 square feet of warehouse and two acres, we’d have to have just a little shop for our trucks and we’d outsource all that stuff.”

But they’re not looking back: Their new machine gives them a capacity several times greater than the amount they’re currently processing, and they’re eager to work it harder. Their business cards describe them not as CEO and COO, but as “Customer Satisfaction Specialist,” and they’re confident that attitude will carry them to the next level.

“The margins are thin,” says Stefenelli, “but they’re there, and they’ll grow with volume.”