Gunma-based firm takes the lead with innovative industrial waste recycling

Around 1,500 people visit an industrial waste treatment facility in central Japan each year to see up close how the operator can recycle more than 99 percent of the solid garbage it receives from a variety of manufacturers and municipalities.

Nakadai Co., which covers the Kanto region, accepts 60 tons of waste each day, which it recycles and resells to about 50 customers. The waste includes wooden materials, plastics, cardboard boxes, personal computers, auto parts and fluorescent lamps.

Most industrial waste treatment companies specialize in handling a single type of waste for disposal. But Nakadai, founded as a scrap iron processor in Tokyo in 1937, has tried to diversify its sources of income by obtaining most of the nearly 20 types of licenses required for waste disposal since the late 1990s.

Sumiyuki Nakadai, the 44-year-old executive managing director and a son of the president, joined the company in 1999 after working at a securities brokerage. One of the skills he shows potential customers is how to distinguish polystyrene and polyethylene by the smells they produce when burned.

Waste treatment companies usually charge a fee to manufacturers, but Nakadai often takes waste for free as it can offset costs through reselling.

“The sale price (per kilogram) has jumped from ¥80,000 to ¥800,000,” Nakadai said.

Clients who want a particular metal extracted from the waste are willing to pay more after Nakadai separates the components of printed circuit boards, which contain copper, gold and other metals, for more efficient extraction.

The higher the price that Nakadai can charge, the bigger the discount it can give for waste treatment costs.

“We are fine as long as we have an appropriate level of profit,” he said.

The industry has improved the recycling rate for nearly two decades after the collapse of the bubble economy in the early 1990s, during which more waste was produced amid a shortage of dumping sites.

Since then, new recycling laws have been enacted, pushing firms to utilize packaging, home appliances, vehicles and construction materials.

“Awareness of garbage sorting among businesses has risen, leading to the improvement of the recycling rate,” said Jiro Furuki, a research director in the environment and energy division at the Mitsubishi Research Institute.

Between 2000 and 2014, the industry’s average recycle rate jumped in some categories of waste. The rate for wooden materials moved to 83 percent from 37 percent. For plastics, the rate increased to 59 percent from 25 percent.

“Mergers and acquisitions mainly by larger firms have been active for the past five years to enhance expertise and get licenses to treat a wide variety of waste,” Furuki said.

But the industry still lags behind Nakadai. The average recycling rate for the waste that Nakadai deals with is about 72 percent, and the national average for all types of waste is around 53 percent, according to the Environment Ministry.

Eight of Nakadai’s 51 employees are stationed at a nearby Procter & Gamble detergent factory and a Plus Corp. office furniture assembly plant in Gunma Prefecture, where Nakadai’s recycling facility is located. The employees help the clients sort out unnecessary materials generated in the manufacturing process.

The firm converts wooden material from Plus’s factory into wood chips, supplying them as fuel to a biomass power plant. Almost all of the material is used for the client.

Nakadai has also placed large recycle boxes for waste separation at a number of clients’ production bases to achieve higher recycling rates.

In 2013, the government honored Nakadai with the Design for the Future Award, given for products and business models that can reshape lives toward a better society.

Takayuki Shiose, 44, an associate professor at the Kyoto University Museum, describes Nakadai as “a game changer in revolutionizing the concept of industrial waste treatment.”

The precision engineering expert, who had also worked at the Ministry of Economy, Trade and Industry on various technological development research projects, has joined the government-backed forums with Sumiyuki Nakadai and encouraged attendees to look at things differently.

For the past few years, Nakadai has shared its expertise with an industrial waste treatment company in Okazaki, Aichi Prefecture.

“Half of my time is now occupied in preparing for the new challenge of the 2020 Tokyo Olympics and Paralympics,” Nakadai said.

The company approached the organizing committee last spring, proposing that it and industry peers reuse and recycle items from the athletes’ village and other venues, in the hope of making the Tokyo Games the first in history to recycle nearly 100 percent of the waste it produces.