When the original environmental movement arose roughly 40 years ago, it touted activities like recycling or reducing dependence on fossil fuels because they were the right things to do for the health of the planet (and its inhabitants). The new version says they’re the right things to do—and you also can make money doing them. That’s the approach to business that Eagan-based electronics recycling firm Materials Processing Corporation seeks to follow.
“Reuse is the best form of recycling—that’s our overall policy,” says David Kutoff, the company’s CEO. “We’re going to find the best end-of-life solutions for the equipment that comes through our door.” Kutoff, whose grandfather founded Eagan-based lead recycling firm Gopher Resource, acquired Materials Processing in January with business partner Todd Schactman, now the company’s president of sales.
Most of that equipment originates from Materials Processing’s roughly 2,500 commercial clients. They range in size from one-person operations to Fortune 500s. “Every company has a different end of life for its electronics,” says Kutoff, who estimates that his company handles between 8 and 10 million pounds of electronics material annually. “For example, many of the bigger companies we work with are turning over their technology and computer systems every 12 to 18 months.”
Yet the equipment often has plenty of life left. Materials Processing collects old equipment for a fee and runs diagnostics on each piece. Computer hard drives are stripped clean to U.S. Department of Defense standards; they also can be removed and shredded. The reworked and repaired equipment is sold to individuals and organizations such as schools, nonprofits, and small businesses with limited technology budgets.
If a unit can’t be revived, Materials Processing will harvest its parts, including memory and processors, which have healthy markets of their own. In cases where the even those components aren’t reusable, the company will extract constituent (and environmentally unfriendly) chemicals like lead, mercury, and cadmium and sell them to specialty recycling facilities. “We’re going to take out everything that we can possibly resell,” says Kutoff, who claims that nothing gets tossed into the dumpster.
Materials Processing resells equipment directly to commercial or institutional clients, or to individuals through its on-site stores and online eBay stores. When an old piece finds a new home, its original owner gets a percentage of the sale. “Our goal for clients is a zero cost of recycling,” Kutoff says. “In the best-case scenarios, a company will even be making money back on equipment they would otherwise be paying to get rid of.”
There are about 500 electronics recyclers in the United States, mostly small and new companies, according to the New York–based International Association of Electronics Recyclers. “It’s a very fragmented industry right now,” Kutoff says. He and Schactman bought Materials Processing with the intention of expanding its operations nationwide and heightening the level of customer service to “e-cycling” consumers, who Kutoff says have typically associated recyclers with scrap dealers. Materials Processing wants to present a more professional image.
The company’s national rollout is underway: It has built a new facility in Baltimore and is readying new sites in Tennessee, Florida, and California. It also has set up a proprietary software system that will enable clients to track the sales status of their used equipment in real time. “We’ve taken what the original owners had done so well and rebuilt the foundation for national-scale growth,” says Kutoff, adding that the firm’s revenues have doubled since January.
“Everyone wants to help the environment, but we’re able to show customers that environmental stewardship meets the economics of business,” Kutoff says. “Green wasn’t always so green for businesses. Today, green also means more dollars—more revenue.”
