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November 07, 2019

Holtville Recycler Feels Heat From U.S.-China Tariff War

September 6, 2019

     The impact of the boiling tariff war between the U.S. and China has apparently trickled down to affect at least one business in Holtville.


     Retaliation from Beijing included a move to no longer accept the West's recyclables, much of it unsorted paper and plastic, as well as metals.


     "The market is bad. In two weeks the price dropped a third on aluminum cans, from 60 cents a pound to 21 cents,” said Javier Ornelas, owner of SoCal Recycling at 428 Walnut St.


     He added, “PET 1 plastics (went) from 21 cents to four cents a pound, and on glass, we're just breaking even, one cent per pound. I might have to tell a couple of guys not to come in Fridays and Saturdays, just work half staff."


     Now expanded to a second location in Imperial, SoCal Recycling started five years ago and, "it was beautiful" recalled Ornelas because of the price of aluminum. Ornelas also works for the Imperial Irrigation District and part time for Desert Concrete.


     The business that began with Ornelas and his brother now has four employees. He recalled when the business began he arrived at 10 p.m. after his day jobs to compact the aluminum, stored in chest-high super sacks, into 110 pound bales to sell.


     "In five years prices never fluctuated like this," said Ornelas. "The tons are not there. China is not buying and the trade war, that's not helping. The farmers are hurting too. There were 300 recycling centers closed in California the last year and a half."


     Consumers in California pay five cents on every California Redemption Value beverage container they purchase at retailers but when they take those containers to a recycler they get the five cents returned. But, by law, consumers are paid only for the weight of the containers that often still have liquid or debris inside or out so it often works out to four cents.


     SoCal Recycling pays customers $1.63 per pound for aluminum, which covers Ornelas’ costs for processing. He then sells if for more to the metal scrap dealers.


     Getting customers to properly sort and clean materials is a challenge.


     "There's 90 percent of the customers who do an awesome job," admitted Ornelas. "But some of the things my employees deal with are dirty diapers, food scraps, used motor oil, feminine hygiene products, hypodermic needles and dead mice. Cal Recycle (the state governing body) requires us to redeem the CRV based on weight. So the above contamination will be seen as an attempt to defraud the state's CRV fund."


     Being a small business, SoCal Recycling cannot run the risk of losing its state certification. Most concerning are the containers still half-filled with original liquids.


     An average family of four brings in 15-20 pounds of aluminum cans, 10-15 pounds of plastic and five pounds of glass monthly. Typically, there are 40-60 customers per day, mostly homeowners but also farmers who collect the recyclables of field workers. Vessey & Co. is an especially good customer, Ornelas said.


     "I'm hoping the market goes up because we want to keep the business open. We've never shut down except for vacation," said Ornelas. "We're open Monday through Friday 8 a.m.-4 p.m. and Saturday from 8 a.m.-noon. But a lot of people get here a few minutes before closing. I tell them, ‘Get here twenty minutes earlier.’"


     Scrap prices vary by area. San Diego dealers are paying 17 cents more per pound, but Ornelas does not do large enough volume to haul recyclables there.


     Ornelas recalled he found his way into the business when a scrap dealer refused to accept his aluminum cans because they had been at first crushed.


     "Lots of people bring in cans from Mexicali and Arizona and you can't identify their origins on crushed cans and those places don't have a redemption fee," said Ornelas. "So I took my cans to El Centro and sold them there. And then I thought, maybe I could do this."


     After completing a two-day recycler training, Ornelas passed his certification and then went to look for a location. A former auto repair shop, next to Humble Farmer Brewing Co. in Holtville, was available and he was soon in business.


     His next-door neighbor might prove to be a saving grace if the recyclable market continues to slide. An experienced griller, Ornelas contemplates converting his shop into a barbeque preparation enterprise that might attract brewery customers on busy weekends.

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