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Author: Gordon Forward and Andrew Mangan
By taking "wastes" from one company and using them as raw materials for another, industry can turn a negative into a positive - for the environment and shareholders.
At first glance, it's hard to imagine how anyone could get excited about slag, a by-product of the steel-making process. But when managers of Chaparral Steel got together with their counterparts at a Texas Industries Inc. (TXI) cement plant, they came up with a surprising discovery: Steel slag could be converted into a valuable raw material for cement production.
Together, they developed a patented process, now being marketed worldwide, that uses steel slag in a cement kiln to create high-quality Portland cement. The partnership has increased profits for both companies, cut energy usage, and reduced greenhouse-gas emissions.
The collaborative venture is a successful example of "by-product synergy," a growing practice that is changing the way business looks at so-called wastes. By taking the by-products of one company and using them as valuable raw materials for another, businesses can turn a negative into a positive. Like fallen leaves that break down in the soil and nourish the plants around them, these by-products can be recycled and reused.
The Chaparral-TXI partnership also spurred the creation of a new company, Applied Sustainability LLC, which is helping businesses around the world identify ways that their wastes can become someone else's treasures. The company recruits clusters of businesses in regions around the world and helps them establish synergy projects. This partnership provides a model of how industry leaders can overcome initial corporate skepticism and make by-product synergy work.
What makes the Chaparral-TXI case unusual is that the companies were willing to consider how they could improve their operations by collaborating with another industry. In this case, the collaboration came naturally, since Chaparral is a subsidiary of TXI, the company that runs the cement plant in Midlothian, Tex. Chaparral was also already an experienced recycler. Much of the scrap steel that the company recycles into steel products comes from its adjacent automobile shredding facility, which transforms more than 750,000 old cars annually into raw material for steel production.
Steel, Cement Reps Get Together
However, the first time representatives of the steel and cement companies got together to consider possible synergies, the gathering was awkward. They weren't accustomed to thinking about -- much less working with -- managers from another industry. But as the talks continued, the awkwardness ceased and a palpable excitement filled the air. The participants, who ranged from executives, supervisors, and academics to government regulators, began to consider several interesting questions: