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Where old digital devices get restored, or get shredded

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Wilson Jaffa handles an old Chromebook the way many of us can only dream of treating an uncooperative laptop: He rips it apart, piece by piece, in very short order.

For Jaffa, it’s not cathartic. It’s business.

With a power screwdriver, Jaffa — a technician at Chester County electronics recycler Sycamore International Inc. — removes the Chromebook cover and loosens the circuit board. He prays out the valuable microprocessor, like an oyster shucker at a shellfish farm. One by one, the computer parts containing precious and rare materials are stripped and tossed into bins: the battery, the memory chips, the storage media, the circuit boards, the LCD screen.

» READ MORE: The Delco company where corporate America’s old phones and computers go to die

Each week, a steady parade of trucks filled with old digital devices arrives at Sycamore’s loading dock in West Grove, where the devices are sorted into two streams. The obsolete machines are disassembled by technicians such as Jaffa, and recycled for parts or materials. The usable devices are reconditioned after they go through a secure process to destroy any data. Every week, four tractor-trailer loads of dismantled or refurbished devices leave the facility.

“We’re excited about the future of this whole industry,” said Steven Figgatt, 36, who started an electronics reconditioning business in his mother’s West Chester basement, expanded into a garage, and then moved into a 28,000-square-foot former mushroom -growing barn in West Grove that Sycamore International calls home. He named the company after his favorite tree.

There’s no shortage of raw material for processors such as Sycamore. Americans generated an average of 46 pounds of electronic waste per person in 2019, according to the UN Global E-Waste Monitor, and only about 15% of that was recycled. US e-scrap, which includes such metals as gold, palladium and silver, is valued at about $14.2 billion, according to the UN

In the world of electronic waste, where several Philadelphia-area businesses successfully operate, Sycamore International has developed a niche: education. It pays school districts and universities in Pennsylvania, New Jersey, Delaware and other mid-Atlantic states to recover and dispose of their old student laptops. Figgatt says Sycamore works with school districts that have enrollment totaling 1.8 million students.

Sycamore also collects other e-waste from schools as a convenience to its clients, and also takes community drop-offs at its West Grove site. But its business is focused on laptops. It employs about 70 people, and is planning to build a new facility on its 15-acre property, doubling its footprint. Figgatt also sees a growth opportunity in recycling old servers and networking equipment from data centers, which seem to be constantly upgrading their systems.

The sale of the sorted bits and pieces of electronic devices is break-even, at best, said Jim Maguire, Sycamore’s vice president of accounts. Nothing goes to waste: There’s a buyer for just about everything, from the recyclers who smelt shredded hard drives into component metals, or processors who reuse the lithium in old batteries. There are even buyers for the plastic cases and keyboards.

But sorting it all out is labor-intensive. Memory chips called RAM are separated by whether they can be reused as a memory chip. If they’re obsolete, they’re sorted by whether they contain traces of gold or silver. All batteries can explode, so they need to be removed from devices and can’t be shredded. Then they must be sorted by chemical content, as many as 20 different types. Lithium-ion batteries are the most valuable, and fetch about 67 cents a pound, said Figgatt.

But Sycamore’s bread-and-butter business is not dismantling devices, but reconditioning old machines for resale. Its technicians clean and test the devices, and Sycamore sells them in bulk to resellers. It also sells a few refurbished Apple laptops and iPads at its Mac Mutt factory retail outlet in West Grove.

Every computer’s serial number is recorded when it comes into the facility, and when it leaves. Labels and stickers are removed from the devices so the previous owner can’t be identified. “Some kids put stickers all over their computers,” Figgatt said. Every month, Sycamore puts 30,000 reconditioned laptops back into the market.

About 60% of its reconditioned devices are sold in the US, mostly to online retailers. But an increasing volume is being exported through Dubai in the United Arab Emirates to East Africa, North Africa and Indian Ocean nations, where there is a robust market for affordable internet-ready devices, said Figgatt.

“I’ve visited some customers over there, and it’s amazing what they do with these assets,” said Figgatt. One Dubai buyer just wants corded computer mice by the thousand for reconditioning. Another buyer installs new circuit boards into old LCD televisions and sells them as a reconditioned devices after Sycamore has removed the damaged circuitry.

Resourceful businesses in developing countries are able to restore and to resell many devices that would be uneconomic to recondition in the United States, said Figgatt. “There’s way more demand for secondary technology from the US than we could ever fill,” he said.

As a certified information technology asset disposal (ITAD) facility, Sycamore International follows strict standards for handling and disposing of materials. The same goes for how data is destroyed on digital devices. The company adheres to standards for data destruction set by the Department of Defense and the National Institute of Standards and Technology.

Files that have been erased by a user from a computer can be recovered by a hacker unless the data undergoes a laborious overwriting procedure that can take several hours to wipe each hard drive. That means that at any time, hundreds of computers at Sycamore are plugged in, getting their hard drives wiped.

With so many laptops getting a digital cleanse, Sycamore’s process is energy intensive.

Figgatt is so committed to the “circular economy,” in which resources are reused to the greatest extent possible, that Sycamore this year installed a rooftop solar array and novel iron-flow storage battery system on site to assure that the business operates as its own renewable energy microgrid. Even if the regional electrical grid has an outage, Sycamore’s lights stay on.

Beyond the green-energy aims, there was a practical business reason for building a microgrid: If an outage interrupts the data-wiping process, Sycamore is obliged to start the process over again, according to the standards. “If you’re halfway through processing all these hard drives, and the power shuts down, all of these systems have to be started from scratch,” Maguire said. “So it’s like an immediate production loss.”

Figgatt says electronic waste is recycled at a higher rate in New Jersey and New York, which have credit systems in place to help pay for the collection and safe disposal of the products. The program is financed by fees on the sale of the devices.

State Rep. Mike Zabel (D., Delaware County) last month circulated a memorandum seeking co-sponsors for legislation that would expand Pennsylvania’s Covered Device Recycling Act, a 2010 law that critics say falls short of ensuring easy access of Pennsylvanians to recycling facilities. The program would be funded by a fee added to the price of new electronic devices sold in Pennsylvania. Zabel proposed similar legislation last year, but no bill was introduced.

Income from a state-sponsored recycling credit system might offset the impact of several bearish trends that are forming to Sycamore International’s business model.

Commodity prices for materials extracted from laptops has been falling this year, a potential recessionary signal that is causing Sycamore to reduce the price it pays to school districts. And Maguire says schools increasingly seem to favor cheaper Chromebook devices over more durable PCs and Macs.

“We’ve seen breaking rates at like 30% in the first year of deployment for Chromebooks, depending on the district,” said Maguire.

Perhaps unsurprising to parents, young teenagers pose the greatest test on the durability of electronic devices, said Figgatt.

“Middle schoolers are the worst,” he said. “Elementary schools, they treat their assets well. Highschoolers, pretty well. But there just seems to be something in the psychology of middle schoolers.”

Google also has built-in obsolescence on its Chromebooks because it stops updating the operating system after several years, said Figgatt. That means Chromebooks get pulled out of circulation and dismantled at a higher rate than costlier devices, rather than refurbished and resold. For Sycamore’s business, there is greater value in reuse than in recycling.