ReCellular Rings Green

Every time someone drops a broken cell phone into a plastic recycling mailer there’s a good chance it will end up in the hands of ReCellular. Last year alone the Dexter-based company reprocessed more than 3 million cell phones, more than any other recycler in the world.

Reports suggest the recycler controls more than half of the market share in its field and Inc. magazine recently named ReCellular as one of its "Green 50" --companies that are environmentally friendly in the U.S..

ReCellular started in 1991 as a cell phone rental company when the phones cost thousands of dollars each. As technology developed and the cost came down, the company found itself with a lot of old phones in a quickly dwindling market. Shifting its business model to refurbish old cell phones for resale and recycling outdated models, Recellular has experienced exponential growth, salvaging 1 million cell phones in 2002 and tripling that number in 2006. With revenues of nearly $40 million and double-digit growth, the company has added 22 employees since the end of 2005 for a total of 170.

And ReCellular expects to keep growing for the foreseeable future.

"We had 40 percent growth last year and we were a little disappointed," says Mike Newman, vice president of marketing at ReCellular. . "When you look at the statistic it looks fantastic but we know what the opportunities are in the market."

For the moment growth in the market seems limitless. As of 2002, it’s been estimated there are nearly 1 billion cell phones in use worldwide. Of those, an estimated 180 million are in use in the United States alone. With cell phone sales projected to exceed 1 billion units per year in 2009, estimates climb to 2.6 billion cell phones in use, according to statistics from a U.S. Geological Survey from the U.S. Department of the Interior.

But there are consequences for that rapid growth.

Cell phones typically only have a lifespan of 18 months. The U.S. Environmental Protection Agency estimated that 130 million cell phones were retired in 2005. Take those cell phones and millions more from years past and it’s believed that as many as 500 million obsolete cell phones are sitting in desk drawers, boxes or store rooms awaiting disposal. Less than 1 percent of these are recycled, according to the U.S. Department of the Interior.

While that may mean a potentially limitless market for ReCellular, it also means an increased possibility for dangerous pollution. Cell phones are filled with electronic circuitry that contains heavy metals, such as lead, arsenic and mercury. If dumped in a landfill, those toxic substances can leach into and pollute the groundwater.

"They can cause an awful lot of damage even in small quantities," said Mike Garfield, director of the Ecology Center, an Ann Arbor-based non-profit environmental organization. "It’s important to keep them out of the waste stream. There is a dark side to electronics. The dark side is what happens to our computers and our cell phones when we get done with them."

But recycling cell phones, and other electronics, can go beyond keeping groundwater safe. They can also help reduced the mining necessary to acquire these heavy metals.

When recovered from electronics and recirculated into the market, demand for new metals derived from mining can be significantly offset.

"For the most part, it seems that these cell phone recyclers are doing a good thing for Mother Nature," said James Clift, the policy director for the Michigan Environmental Council.

Beyond keeping harmful metals out of landfills and putting them back into circulation, ReCellular also refurbishes and resells cell phones, effectively extending their lifespan. This is a major component of the company’s business model.

Phones collected in recycling boxes at retailers across the country are shipped to ReCellular’s Dexter warehouse where they are sorted. Filled with cell phones, handsets, charging cords, cases and other accessories, Newman describes each bag that comes in as a "mystery" to what’s really inside.

Those cell phones that can be easily refurbished have the data on them erased and are tested before being sent out for resale. Those units that require more work are sent to a plant in Texas where they are repaired before resale. Phones that are obsolete are sent off to be ground up so the heavy metals can be extracted and recycled. The same methodology is used for the accessories. ReCellular makes sure to keep the turnaround time quick in order to refurbish as many phones as possible before they become obsolete.

"Old phones are a lot like produce: They can rot on the shelf," ReCellular’s Newman explains.

About half of all refurbished cell phones are sold in the U.S. while the rest are exported to nearly 30 other countries, such as the Dominican Republic and Brazil. They are often resold as prepaid phones.

“We try to find new markets for them around the world,” Newman said. “Only the phones that are too damaged or obsolete are recycled.”