Money Heap

Garbage was the ultimate commodity business until a young McKinsey consultant saw how REPUBLIC SERVICES could transform itself into a profit machine by pricing trash at a premium. Now he’s CEO and Bill Gates is cashing fat dividend checks.

- Chris Helman

In the Sheep mountains just north of Las Vegas, the Apex landfill receives 8,000 tons of trash per day, delivered by 280 trucks that roll off the interstate before laboring up a winding dirt road to what’s called the working face—an active zone of 3 acres where supersize bulldozers with spiked metal wheels crush and compact the trash. The heap is already 500 feet deep at spots, but there’s enough room left to keep burying Sin City’s garbage for centuries. Its owner, trash giant Republic Services, has a 15-year monopoly contract to collect trash and recyclables from the entire Las Vegas region.

“We prefer to call it a franchise,” says CEO Jon Vander Ark, 47, who kicks back 5% of contract revenue (which runs about $250 million a year) to Las Vegas County in return for exclusivity.

Republic trucks some 28 tons a day of buffet and other food leftovers from hotels and casinos to a farm adjacent to the Apex landfill, where it’s boiled into a yellow-brown stew slurped up by 3,500 hogs. Other organic material rots over time and gives off methane—euphemistically called “landfill gas”—which Republic captures and sells at a premium to industrial users. Meanwhile, a mining company pays Republic a royalty on the 150 trucks per day of pulverized mountain stone that it hauls out of the site to make room for more loads of garbage coming in. The removed rock gets mixed into concrete for Vegas sidewalks. Next up: a new regional “polymer center” to profit from food and beverage manufacturers’ willingness to pay more for high-quality recycled plastic than for virgin material.