Portfolio Company Spotlight
A feature on a Closed Loop Partners investment
From 20 Tons Per Day to 20 Tons Per Hour
Lakeshore has the long-term contract to process residential and commercial recycling in the City of Chicago and surrounding areas.
The Closed Loop Infrastructure Fund participated in the financing of Lakeshore’s MRF, to increase profitability through an innovative business model that increased throughput from 20 tons per day to 20 tons per hour, with increased revenue opportunities and savings.
Since opening, Heartland, Lakeshore’s MRF, has been generating nearly $100 per ton in revenues from commodity sales. Operating costs per ton (including disposal of residue) are approximately $50 per ton, making Lakeshore’s net operating profit at Heartland nearly $50 per ton. In addition, the broader operations benefit from transportation and tip fee savings.
For nearly 20 years, Lakeshore Recycling Systems has provided recycling and 100% waste diversion programs to businesses and homeowners.
Impact Highlights
Heartland is projected to divert more than 110,000 tons of recyclables per year. By 2025, that will mean more than 1 million tons out of landfills.
3,030,000 metrics tons of GHG emissions avoided by 2025
The opening of the Heartland single-stream facility has created over 100 Cook County jobs
Lakeshore is continuously optimizing the Heartland MRF to recycle all that it can, which means that the team must regularly scrutinize the inbound materials mix coming from third-party sources and outbound commodities pricing.
As of August 2016, they’ve been able to maintain average revenue of approximately $100 per ton on outbound sales of commodities, with 92% of inbound material being single-stream. Unlike other facilities around the country, they are keeping glass in the single-stream mix, which they are able to sell to a nearby glass processor.
The Results
Lakeshore is a best-in-class operator with a relatively atypical model that serves as a strong example:
- Established success with pure play model: Lakeshore’s model is predicated on not having a landfill, and is therefore not “conflicted” over inexpensive disposal costs. The company has successfully managed other MRFs in the area prior to the Heartland facility.
- Integrated operations: Lakeshore operates residential and commercial hauling services, MRFs, C&D recycling and an organics program, creating leverage across businesses and greater opportunity for diversion. Heartland is co-located with the C&D operation, providing additional leverage.
- Significant market share: Lakeshore controls nearly one-third of the region’s material, ensuring sufficient volumes.
- “Good Neighbor” to local operators: Lakeshore attributes its success, in part, to its ability to maintain excellent working relationships with local private operators and municipalities alike; most are located within 20 miles of its facility