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Posted on December 30, 2012 by mcooper

 

After two decades in the software business with companies such as Oracle Corp. (ORCL) andHewlett-Packard Co. (HPQ), James Kao grew disillusioned by the waste created when people ditched the latest technology dreamed up by his industry.

Angered that old computers, televisions and other gadgets from U.S. consumers were ending up in landfills in China, Africa and other parts of the world, Kao decided to do something. He started Green Citizen, a company that collects and disposes old electronics in the San Francisco Bay area, tracking everything to ensure the gadgets are recycled back into raw material, or refurbished and resold.

The holiday gift-giving season will bring a fresh crop of electronic waste to Green Citizen, part of the 2.4 million tons tossed out each year, according to the U.S. Environmental Protection Agency. As consumers buy new gadgets from Apple Inc. (AAPL) and Samsung Electronics Co. (005930) and trash their old wares, Kao, Green Citizen’s chief executive officer, expects his company to see a 30 percent rise in waste from November to February.

“The holiday period is the biggest buying time for most consumer electronics and it absolutely results in more e- waste,” said Barbara Kyle, national coordinator of theElectronics TakeBack Coalition, an electronics-recycling advocacy group. “Our ferocious appetite for the newest gadget is absolutely contributing to increased amounts of e-waste and holiday buying is a huge driver.”

Avoiding Landfills

Green Citizen’s end-to-end approach is unique, said Kyle. As both the collector and monitor that ensures waste doesn’t end up in dumpsites, Kao’s company only partners with certified recycling companies that can prove material isn’t shipped overseas or put in landfills.

Kao and his team expect to collect about 700,000 pounds (317,500 kilograms) this holiday season. Waste Management Inc. (WM), the biggest U.S. trash hauler, also said it expects a rise in electronic waste.

“When it comes to recycling, it’s an afterthought,” Kao, 55, who has also founded two software companies, said in an interview. “All the energy is going to how do we get the next revenue, from the new best gadget, and there is never a thought in to how to get it back.”

In addition to helping the environment, Green Citizen is also profitable, said Kao, without disclosing the company’s earnings. The company expects about $2.5 million in revenue this year, and double the next. He wants to expand to Los Angeles, Chicago and New York.

Contaminating Villages

The inspiration to start Green Citizen came while Kao was taking time off after selling Managize, a supply-chain management software company, in 2000. Up late one night watching television, he saw a documentary that showed dump sites in China, Africa and the Philippines overflowing with old computers, televisions and other electronics from the U.S. and Europe. Components containing toxic elements such as lead and mercury were cast into rivers and landfills.

“It was contaminating whole villages,” Kao said.

He spent two years educating himself, traveling to meet with companies and government officials. Limited awareness and lack of convenience keep the general public from doing more, Kao said, while poor accountability and oversight make it difficult to ensure enterprises do their part.

Green Citizen hauls disposed devices to a large warehouse in Burlingame, California, a few miles south of San Francisco’s airport. Technicians determine whether a gadget can be fixed and resold. Repaired devices are put up for sale on Internet marketplace EBay Inc. (EBAY) Kao said about 21 percent of electronics Green Citizen handles can be refurbished, generating about half its revenue.

Breakdown Factory

An old security X-ray machine from a consulate in San Francisco has been among the stranger items collected, along with computers, TVs, printers, phones and other gadgets, Kao said.

For devices that need to be recycled, a team in the warehouse uses drills and screwdrivers to take them apart. Different components are sorted in bins for plastic, circuit boards, glass and other base materials.

Much of Kao’s material goes about 100 miles (161 kilometers) north of San Francisco to Sims Recycling Ltd.’s 200,000-square-foot facility in Roseville, California. There, pieces are put through shredders, including one with 4-inch blades driven by a 400-horsepower engine. The broken-down materials are then sold to companies seeking aluminum, plastic, glass or other recycled material.

Latest, Greatest

Cupertino, California-based Apple encourages consumers to recycle their old iPods, iPhones, computers and other products, offering store credit for items with monetary value and discounts for bringing in old iPods. Collected electronic waste is processed locally, Apple said.

While Green Citizen is trying to offset gadget waste, Kao said that still isn’t a match for a consumer culture that encourages people to seek the latest and greatest technology. About 80 percent of U.S. electronic waste ends up on container ships and then ditched in developing countries, where companies hire workers to extract the core minerals without any environmental or worker-safety oversight, he said.

“It’s going to get worse and worse,” Kao said. “Initially, I tried to fight it, but you can’t.”

To contact the reporter on this story: Adam Satariano in San Francisco atasatariano1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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