Salad Days in Garbage

Garbage collection is hardly an enterprise that conjures up images of manicured executives, complex mergers and multimillion-dollar revenues. Yet it is one of the fastest-growing industries in the U.S. One reason for the rise is simply more garbage--the result of an expanding and increasingly affluent population. Further, as environmental concerns multiply and sanitation laws become tougher, there is greater demand for companies that offer modern processing, disposal and recycling techniques.

More and more city officials are discovering that it can cost some 15% less to hire a private garbage contractor than to run their own frequently featherbedded sanitation system. The city of Middletown, Ohio, for example, recently signed a threeyear, $1,000,000 contract with a private collection firm that will save the city an estimated $350,000. This week, for the first time in its history, Chicago will have a private firm process some of its refuse; Waste Management, Inc., will compact and dump into its own landfill up to 1,000 tons of garbage a day. Other cities that have turned over all or part of their garbage business to private hands include Boston, Omaha, Detroit, Dallas and Charleston, S.C. Indeed, only bureaucratic lethargy and union opposition prevent more cities from contracting with private companies. When Milwaukee, for instance, closed its antiquated city incinerators and hired an independent company to handle waste disposal, it incurred union wrath because 260 municipal sanitation workers were laid off.

To handle the big loads, the new waste companies must be markedly different from the old, small-time collectors, with their rusted-out dump trucks trundling loads of melon rinds and empty bottles to their final rest in the city dump. The modern companies process refuse by shredding, compacting or baling it before hauling it to landfills, which cost $4,000 to $10,000 an acre. The companies operate fleets of $25,000 tractors, $35,000 trucks and $80,000 bulldozers. Unable to afford these capital outlays, many of the nation's 10,000 small collection companies are merging with the giants. Of the five U.S. companies that made the most mergers in the first half of this year, three are garbage enterprises. They are:

> Browning-Ferris Industries, Inc. The largest of the chains, this Houston-based company was started only three years ago and has already acquired 60 firms, including 35 this year. B.F.I.'s 33-year-old chairman, Louis Waters, a Harvard Business School graduate, says that his aim is to have branches in every major city in the nation. B.F.I, collects from 55,000 companies and more than 500,000 residences, and its revenues in this year's first three quarters were $115 million.

> Waste Management, Inc. Headquartered in Oak Brook, Ill., W.M.I, this year acquired 50 companies in 16 states and Canada, making it the fastest-grow-ing garbage concern in the country. Its revenues reached $51 million in 1972's first nine months. In Pompano Beach, Fla., the company operates an advanced processing plant in which garbage is ground into odor-free shreds and sent by conveyor belt to a nearby landfill.

> S.C.A. Services, Inc. A Boston-based firm, S.C.A. has acquired 27 companies this year. Founded in 1969, S.C.A. operates 51 refuse firms in 20 states. So far this year, S.C.A. has collected $65 million in revenues, of which $35 million came from garbage and the rest from building maintenance and other services.

The new garbage men face more good years ahead, as a result of the 7% annual increase in the volume of U.S. solid waste (which now totals 360 million tons a year), as well as the expected increase in liquid waste from industrial expansion. But while entrepreneurs are finding gold in garbage, building owners often find the wages of waste disposal high. Louis Sudler Jr., who manages Chicago's 100-story John Hancock Building and other skyscrapers, stopped all incineration last year because "it was bad for the environment." Since then, his disposal costs have increased eightfold.

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