NEW YORK TIMES GROWS UP?

November 13, 2008
For the Digitally Deceased, a Profitable Graveyard
By JOHN HANC

HARD DRIVES, printers, fax machines and cellphones move along a conveyor belt at the rate of six tons an hour into the gaping maw of a 16-foot-tall, 60-foot-long shredder at e-Scrap Destruction, in Islandia, N.Y.

Inside a chamber covered to prevent flying debris, the machine’s steel blades noisily chew through the components, reducing them to shards no more than four inches long. The shredded material goes back on the belt, where an overhead electromagnet removes material containing iron as the waste moves along.

There is something poignant about the process, the systematic destruction of these unwanted, in some cases never used, components. One more reminder of our disposable society.

This detritus of the digital age spells profit for Trace Feinstein, who founded e-Scrap Destruction two years ago.

“I saw computer recycling as the next big wave,” said Mr. Feinstein, 37, who previously ran a paper-shredding business with his father, Bob. “We did some research and found that not too many companies were doing it the right way.”

Finding ways to dispose of America’s increasingly large stream of e-waste is difficult: an estimated 133,000 computers are discarded by homes and businesses every day. In a 2006 report, the International Association of Electronics Recyclers estimated that about 400 million pieces of e-waste are scrapped each year. And while some prominent manufacturers, like Dell and Hewlett-Packard, have agreed to recycle their own equipment, such programs have so far made only a modest difference.

“It’s a huge problem, and it’s growing,” said Barbara Kyle, national coordinator of the San Francisco-based Electronics TakeBack Coalition, a group that promotes recycling of consumer electronics. “Think about how many gadgets you have now and didn’t have five years ago. We’re buying more and more things with shorter and shorter life spans.”

Ms. Kyle’s organization estimates that there are roughly 1,100 businesses in the United States and Canada that dispose of used electronic equipment, but that only a small percentage try to do it in an environmentally friendly way.

Many recycling companies, Mr. Feinstein said, “dismantle the equipment by hand, ship it overseas, sell it on eBay.” Anything with no value — for instance, the glass on computer monitors and central processing unit frames — often ends up in a landfill.” He and his father, the vice president of e-Scrap, decided that they wanted to handle the scrap more responsibly.

First, though, they had to show clients they could dispose of e-trash thoroughly. Enter the shredder: Mr. Feinstein hired Allegheny Paper Shredders in Delmont, Pa., a company he knew from his work in paper shredding, to build a machine capable of demolishing electronic components, for about $500,000.

“No way you can rescue any data from this,” Mr. Feinstein said, poking with a shovel at some shredded material.

Protecting customers’ privacy — ensuring that no personal or confidential data can be recovered from hard drives or memory — is a crucial selling point for e-Scrap.

That was the case with an important early client, the Town of Hempstead, also on Long Island. With 800,000 residents, Hempstead is one of the largest townships in the United States, and it has an extensive recycling program.

The town’s recycling coordinator, Sal Saia, said many residents were concerned about data security.

In fact, some people who brought their computers to the town’s recycling centers “would actually take the circuit boards out and start smashing them with a hammer,” he said. When he saw e-Scrap’s shredder in action in 2006, Mr. Saia said, he “was completely taken with their whole operation.” Since then, Hempstead has delivered all its electronics recyclables — about 12 tons a month — to e-Scrap.

The company’s pledge to recycle with minimal environmental impact was another reason Hempstead was sold on e-Scrap. That impact could be enormous — for instance, the picture tubes in computer monitors and television sets can contain up to 10 pounds of lead, a toxic substance.

From e-Scrap, the material is sent to MaSeR (Materials Selection and Recycling), a business in Barrie, Ontario, near Toronto, where it is reduced to base materials — glass, plastic, copper and steel — that are then sold. “We have a zero landfill policy,” Mr. Feinstein said, “and so do all our vendors.” He said he visited MaSeR periodically to ensure that the material was fully recycled.

At the end of the shredding process, the e-scrap — remnants of once dazzlingly sophisticated machines — is shipped in 2,000-pound storage containers to the refinery in Canada, where it is ground and pulverized into its very low-tech, base components: small particles of copper, plastic, steel, silver, gold, platinum. This material is then sold to companies that use it in other products.

Mr. Feinstein said his company’s revenues had increased 40 percent annually in each of the last two years, to about $1.4 million.

E-Scrap’s staff has grown to 10 from 6 the year before. And Mr. Feinstein said he expected such growth to continue, aided by a flurry of discarded television sets that is expected when the government-mandated switch to digital broadcasting occurs in February.

“We’re going to have to hire more people, more equipment,” Mr. Feinstein said. “Absolutely, I’m going to be working longer hours.”

So is that shredder.