Fact Sheet: Source Exchange Adds Dollars to Your Profits

September 1994
#9406

December 1989
#8903A

Environmental Services Division
State of Michigan
Departments of Commerce and Natural Resources

Every business generates wastes - things that are unwanted, unneeded or simply in the way. At the same time, every business buys raw materials, supplies and equipment. Many times, one business will buy what another business is disposing. Both would benefit if the transactions were with each other. This is the principle of Resource Exchange.

Wastes as Resources

Resource exchange is often called waste exchange, but "waste" indicates that something has no use - at least to the current owner. On the other hand, "resource" indicates that something has use. Most wastes are useful for something. In fact, they may have high value in the hands of some users (i.e. a desert is a waste to most everyone except a solar energy generator).

Who Should Consider Resource Exchange?

Profit Enhancement

Businesses should not look at their wastes as unusable or unneeded resources. Earnings can be increased - as revenues and as reduced disposal costs - when resources are used rather than disposed. Recognize that most wastes have value and that value can add to your company's profitability.

Reuse Hierarchy

The preferred method of disposing unwanted materials or equipment is to find a secondary use within your own operations. Make sure that every department within your company knows that your unwanted resources are available to them. Circulate "Surplus Lists." Encourage your waste reduction teams to "brainstorm" ways to reuse the items.

If "in-house" reuse cannot be accomplished, the next preferred approach is to seek reuse by other companies. Talk with companies in your immediate area. Most resource exchanges happen because two companies find out that one company's waste fulfills the other company's need.

If a business-to-business partnership cannot be worked out to exchange resources, use the services of a local, regional or national resource exchange. Start with the local exchanges since the economics of exchange become increasingly unattractive as the distance between generator and user increases. Transportation costs may discourage some exchanges. However, regional and national exchanges can be successful, particularly with special waste.

How do Local, Regional and National Resource Exchanges Operate?

Local, regional and national resource exchanges are often called "waste exchanges." Their common objective is to bring generators of unwanted materials and equipment together with potential users. Most exchanges are subsidized by governments or business organizations Few make a profit. Modest fees for exchange services are usually charged to offset costs of operations.

Resource exchanges operate by publishing list of "available" and "wanted" items and coordinating mail or telephone responses. Some exchanges make the information available as an on-line database. These "passive" approaches have some success. A few exchanges, however, actively seek to make matches. These "pro- active" exchanges have greater success in matching generators with users. Of course, their fees are somewhat higher than those charged by "passive" exchanges.

Resource exchanges do not usually enter into negotiations to establish the logistics and financial arrangements for exchanges. Generators and users do this by themselves. Generally, companies accepting resources provide the transportation. They sometimes pay something for the resource. Of course, for the exchange to be of interest to the user, total cost must be less than the resource would cost new. It is expected that resource donors will provide samples and available test data to help enable users to evaluate resources. Ideally, resource exchanges benefit both parties equally.

Which Exchange Should Be Used?

Currently, there is one local resource exchange in Michigan, the West Michigan Waste Exchange. The Exchange serves Ottawa, Kent and Muskegon Counties. The organization holds an annual exchange where companies display their available scrap materials. The Environmental Services Division is available to assist other local associations in developing similar exchange services.

Currently, there is one regional resource exchange in Michigan:

The Polymer Wire, Inc.
P.O. Box 215
Cedar Springs, Michigan 49319
616/696-2200

As indicated by the name, this exchange specializes in plastics, however, it will seek to find reuse opportunities for other materials, as well as equipment. Services fees are charged for both listing and "pro-active" search services.

The National Materials Exchange Network is a national waste exchange. In fact, the database for this exchange is tied into several resource exchanges that operate in Europe, Asia and South America. The exchange is operated by the Pacific Materials Exchange in Spokane, Washington and includes databases from many regional and local exchanges.

Exchange Success Stories

A foamed polyurethane molder noticed a "Material Wanted" listing for virgin polyol resins in a resource exchange listing. It had accumulated hundreds of gallons of contaminated and obsolete resins, which it negotiated to give to the listing company at no cost. The company saved about $20,000 in avoided disposal costs. The receiving company, a carpet backing manufacturer, obtained needed raw materials for just the cost of transportation.

An electronics company was using pure sulfuric acid in its printed circuit board production line. Contaminated acid was generated as a production by-product. The company was introduced to a nearby steel producer that used low purity sulfuric acid in its pickling process. An exchange of 1,800 gallons of the waste acid was make. The electronics manufacturer saved almost $6,000 in disposal costs, while the steel producer saved several hundred dollars in acid purchases. Both companies profited!

Out-of-State Regional Exchanges That May Be of Help to Michigan Businesses:

California
California Materials Exchange (CALMAX)
Sacramento, CA
916/255-2369
New York
Northeast Industrial Waste Exchange
Syracuse, NY
315/422-6572
Canada
Canadian Waste Materials Exchange
Mississauga, Ontario
416/822-4111
North Carolina
Southeast Waste Exchange
Charlotte, NC 704/547-2307
Florida
Southern Waste Information Exchange
Tallahassee, FL
800/441-7949 - or - 904/644-5516
Texas
RENEW, Texas Water Commission
Austin, TX
512/763-7773
Illinois
Industrial Materials Exchange Service (IMES)
Springfield, IL
217/782-0450
Washington
Industrial Materials Exchange (IMEX)
Seattle, WA
206/296-4899
Indiana
Indiana Waste Exchange
Carmel, IN
317/574-6505
Pacific Materials Exchange
Spokane, WA
509/325-0551

For more information, contact the:

Environmental Services Division
P.O. Box 30004
Lansing, MI 48909
(517) 335-1178

Toll-Free: 1-800-NO-2-WASTE


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Last Updated: November 10, 1995