November/December 1997
Through wars, recessions, technological changes, and market turmoil, the Paper Stock Industries Chapter has maintained its identity and its focus. This retrospective gives an overview of ISRI’s only national chapter.
By Robert L. Reid
Robert L. Reid is managing editor of Scrap.
If you’re a scrap paper processor in North America, chances are you’re familiar with the acronym PSI. For more than 35 years, those letters—short for the Paper Stock Institute of America—were synonymous with the scrap paper industry.
What most paper processors may not know, however, is that PSI has been around even longer—more than 77 years, in fact—operating under other names as either a division or chapter of scrap industry trade associations. Through all of its name changes, however, the group’s goals have remained the same—drafting and revising industrywide specifications, providing a forum for paper processors to network and learn, and representing the industry’s interests in the public and government arenas, just to name a few.
What’s the story behind PSI and how it came to its latest incarnation as the Paper Stock Industries Chapter of ISRI? This summary of the group’s history provides some answers.
The Call for Specifications
ISRI’s current paper chapter traces its roots to the Waste Paper Institute, which was part of the National Association of Waste Material Dealers, an ReMA predecessor. Though this wastepaper division was formed around 1920, it existed in name only until about 50 years ago, says Dick Gordon, northeast sales manager for Paper Recycling International (Williamsville, N.Y.) and a 50-year industry veteran.
“Prior to 1947, the recovered paper industry was providing 25 percent of the fiber for what was then a 12-million-ton-a-year paper industry,” explains Gordon, also a co-chairman of the Paper Stock Industries Chapter’s new archives subcommittee. “But there were no grade descriptions, no trade practices. It was hectic and chaotic. When mills got full, railcars would get rejected without the seals being broken. Mills would buy grades that they really couldn’t use and then blame the processor for delivering inferior quality.”
So in 1947, with a boom under way in the construction of new paper plants and investment in new technology, a group of major packers in the Waste Paper Institute sat down with paper mill representatives to write the first comprehensive practices and standards for the scrap paper industry. Working from the simple grades that had formed the basis of World War II price controls on paper, this group of packers and mill reps spent two years developing the document that came to be called WP-49 (now named PS-97).
“WP-49 was based on a desire to come to a common understanding between packer and customer as to what paper grades really meant and what the average grade descriptions should be,” Gordon says. Though the standards and practices, issued in 1949, took a few years to be accepted throughout the industry, they eventually found widespread support. “Everybody was looking for guidelines, on both sides,” he notes. “This wasn’t a packer single-handed operation. It was a combination of mills and dealers working together that made the effort successful.”
And so successful did the new standards and practices become that “there have been few changes since the original document was made, other than to add new grades and take out those that no longer apply,” Gordon notes.
PSI Comes Into Its Own
As the 1940s ended and the 1950s dawned, paper processors and their institute faced a hectic market, with price controls being reestablished during the Korean War, followed by a long period of low markets, Gordon says.
The 1950s were a busy time, notes Joseph P. Jimenez, senior vice president of Schirmer Paper Corp. (Boston) and archives subcommittee co-chairman. They were also rather primitive times equipment-wise compared with today. “Nobody had fancy equipment,” Jimenez recalls. “I remember guys loading trucks with handtrucks because they couldn’t afford a forklift. They’d work all day and then at night they’d have their local association meeting and they’d be falling asleep at the dinner table.”
Technology was changing, though, as the ’50s moved into the ’60s. Big balers were being introduced, moving from 54-inch machines to 58-inch, then 60-inch, and up to 72-inch balers, Jimenez says. Advanced forklifts were making it easier for companies to move—and, hence, process—paper faster.
It wasn’t until the ’50s ended that the acronym PSI first became applicable to this association of scrap paper firms, as the old Waste Paper Institute changed its name to the Paper Stock Institute of America to “more clearly describe the commodities handled by the members,” in the words of Scrap Age magazine. PSI was then a commodities division of the National Association of Waste Material Dealers (soon to rename itself the National Association of Secondary Material Industries, or NASMI).
By 1961, PSI was ready to take an even larger step: launching its own annual conference. “Many of the factors that came up in the overall NASMI meetings were important to the operation of a small business and to a small scrap business, but they were more focused on scrap metal than on scrap paper,” notes 30-year industry veteran Phil Alpert, a partner with National Fiber Supply Co. (Chicago) and the third co-chairman of the archives subcommittee.
About 150 people attended PSI’s first conference in the fall of 1961, an attendance level that didn’t change much at subsequent meetings, Alpert notes. These gatherings enabled PSI to focus attention on issues specific to the scrap paper industry, such as the introduction of hot-melt glues for bindings—a major contamination problem because such glue-bearing paper couldn’t be repulped using the then-current technology, Alpert explains—and the problem of carbonless papers that contained PCBs, just then being identified as a potential carcinogen.
During the 1960s, PSI also helped form a liaison committee between scrap paper industry leaders and paper mill executives that “helped establish a dialogue to determine areas of mutual concern and where mutual effort could be brought to bear to solve problems,” Alpert says, noting that the liaison committee continues to this day.
The Recycling Era
While the Vietnam War had less of an impact on the paper industry than World War II and the Korean War, another major event of the late ’60s and early ’70s—the ecology movement—did have lasting repercussions.
Following the first Earth Day in 1970, recycling suddenly became all the rage, at least in the general public. But the scrap paper industry wasn’t used to this kind of attention, and so initially chose not to respond at all, Alpert recalls. “We weren’t recycling,” he explains, “we were selling scrap paper for reuse and reconstitution.” Likewise, the papermaking industry wasn’t out to save trees. Mills were “making a product and attempting to do it at a profit” based on the economic savings derived from using secondary fiber, Alpert says.
In addition, most people thought recycling simply meant collecting items rather than throwing them away. Few people worried about what to do with all the scrap paper that was collected. That’s why PSI “tried to impress on the public that recycling didn’t occur when material was set out at the curbside, nor when it was collected at a paper stock plant, sorted, and baled, nor when it was shipped to a mill and made into new paper—recycling only occurred when the new paper was sold,” Alpert explains, asserting, “everything up to that is preparation.”
In response, PSI worked one-on-one with state and federal government officials to spread the message of utilization before collection, says Gordon, PSI’s president from 1970-1972.
By the mid-’70s, however, the lessons of supply and demand hit the paper industry hard. “Mills shut down, demand dropped off,” Alpert says. “People were still collecting material, but there was no place for it to go.” As a result, the liaison committee between PSI and paper mills had to launch a public relations campaign “to explain the basics of the business cycle to a new and perhaps overly zealous public that thought the demand for recyclable material was infinite,” he says.
At the same time, Alpert notes, PSI was responding to questions from the federal government about how much recovered fiber to require in new paper. PSI felt that such mandates would be counterproductive and that the government was asking the wrong people about these issues. “Don’t turn to scrap processors and ask them how much recycled newspaper there should be in newsprint,” Alpert says. “Go to the people making recycled newsprint.”
Interest in the recycled paper industry was growing enough at this time for PSI to start holding a second annual meeting in addition to its fall conference. This summer meeting, originally called a roundtable, is now known as the summer forum and features speakers discussing trends in the paper and scrap paper industries.
Exports also began to take off during this period, expanding the U.S. scrap paper industry’s reach from traditional markets such as Canada and Europe to Mexico and especially the Far East, Gordon notes.
Boom Times, New Association
The 1980s began with a burst of prosperity, marked by a greater demand worldwide for paper with recycled content and long periods of no downturns for as much as five or more consecutive years—an unprecedented boom, Gordon says.
Of course, such good times attracted the interest of various groups such as local municipal and county governments, which decided to set up their own recycling facilities, thus challenging the industry with non-tax-paying competition and often flooding the market with collected paper.
Businesses outside the recovered paper industry also took notice. These outside companies, such as solid waste haulers, began buying processors during the ’80s, while other companies started buying paper mills and then selling off the various parts of the businesses. In addition, some paper mills were merging at this time as well as setting up their own scrap paper processing operations.
Merger was also the chief concern of PSI’s parent association, which by then had changed its name to the National Association of Recycling Industries (NARI). In 1987, NARI joined with the Institute of Scrap Iron and Steel to form ISRI, a move designed to end their duplicative efforts within the scrap recycling industry, notes Alpert, PSI president during the merger.
Given that PSI had been a minority within NARI, it became an even smaller part of the combined associations. “There was a strong apprehension that we’d be even further lost,” Alpert says, “but the final realization was that although we were a small part and ISRI’s objectives may not always be the same as ours, the necessity of speaking with one voice outweighed any other consideration.”
Unfortunately, the new ReMA organizational structure dispersed scrap paper companies into geographically based chapters. It was common for paper processors to find themselves as the one or two paper recyclers within a chapter of a hundred or more scrap metal processors. In the fall of 1990, however, this situation was corrected when PSI became the only national chapter within ISRI, with seats on ISRI’s national board of directors “to ensure our adequate representation and voice,” Alpert explains. Soon after, the chapter’s name also changed to the current Paper Stock Industries Chapter.
During the 1980s, the computer and other office equipment industries took off, creating initial fears that the so-called “paperless” office might harm secondary paper markets. “But whatever paper was saved by computer transactions, the computer printout paper and fax machine output has more than compensated,” Alpert notes. Thomas F. Bowers Jr., president of Schirmer Paper Corp. and the chapter’s current president, agrees, noting that “the amount of paper produced in the workplace, and the amount collected and recycled, has increased tremendously. And even as we see the next millennium coming and higher uses of PCs and so forth, paper still continues to be a product that always seems to be with us.”
As the ’80s ended, PSI also added a third annual meeting to its busy schedule—an executive committee meeting in March, timed to coincide with the paper industry’s annual spring “Paper Week” meeting in New York City.
Into the ’90s and Beyond
The late ’80s ended and the ’90s began with a protracted recession in the scrap paper industry. Too much paper, too many facilities, and not enough demand coupled with a downturn in the general economy to get the decade off to a rocky start.
By the mid-’90s, however, the situation reversed itself—temporarily. Paper mills suddenly found themselves pushed to the limit on production, leading to higher prices and greater demand for scrap paper. Likewise, the federal government’s decision to require minimum recycled content in the printing and writing paper it bought, together with intense public support of curbside recycling programs, led to a growth spurt in the construction of deinked-pulp mills, Alpert notes, especially because new technology enabled mills to deink paper that contained contaminants from glues to rubber bands to staples.
And although the mid-’90s boom didn’t last—“Every time we have a booming economy, we suffer for it afterward,” Gordon says—the chapter certainly has. The group, in fact, is celebrating its 36th annual conference this November and is looking forward to marking the 50th anniversary of its first standards and practices in 1999.
Working with other industry groups such as the American Forest & Paper Association (Washington, D.C.) and the Canadian Pulp and Paper Association (Montreal), the Paper Stock Industries Chapter also plans to launch a new campaign this fall promoting the use of the proper terminology for recovered paper, urging people to replace the term “wastepaper” with secondary fiber, recovered fiber, scrap paper, or paper stock, Bowers notes.
And looking further ahead, Ray Petermeyer, vice president of E-Z Recycling Co. (Portland, Ore.) and PSI’s incoming president—not to mention a 50-year veteran of the scrap paper industry—says membership recruitment will be a leading priority for the chapter in the coming years.
As for the benefits of membership, Jimenez says the chapter has enabled him to come into contact with more people in more places than he’d normally meet on his own. “I can call somebody in Chicago, I can call somebody in Kentucky, I can call somebody in Texas,” he says, noting, “you start to pick up points from these people, and before you know it, there’s a good chance you’ll do a piece of business.”
This serves as proof that the chapter’s networking function is as alive and well today as it was in the group’s early years as the Waste Paper Institute. And it’s a good bet that the chapter will still be serving its members in this and other unexpected ways well into the future.•
Through wars, recessions, technological changes, and market turmoil, the Paper Stock Industries Chapter has maintained its identity and its focus. This retrospective gives an overview of ISRI’s only national chapter.