U.S. Plastic Lumber Corp. is on a one-company mission: to consolidate the plastic lumber industry.
The Boca Raton, Fla., company has acquired four firms since February and expects to add at least one company a month to its lineup. All of the acquisitions were done for stock exchanges and a small amount of money.
Earth Care, the company's plastic lumber marketing name, added Custom Pac Extrusions Inc., formerly of Chagrin Falls, Ohio, and Environmental Specialty Products Inc. of Gasti, Calif., in March. Custom Pac's operations were moved to Earth Care's 35,300-square-foot plant in Sharon, Tenn., where it makes patented plastic rings.
``All these acquisitions bring earnings to the bottom line,'' said Mark Alsentzer, Earth Care's president and chief executive officer. ``Our next step is in the raw materials side of the business. We plan to bring on companies that collect and process [high density polyethylene].''
``Our goal is to consolidate the industry,'' he added. ``By putting a number of companies together with talent in different niches, we can be the leader in the industry in a short period of time.''
The acquisitions have added a number of products to Earth Care's lineup. In addition to plastic rings used for handling drums, the plastic sign industry is another new market for the firm.
Environmental Specialty Products fabricates and distributes signs and plastic lumber from its 25,000-square-foot plant. Earth Care plans to expand the signage business and product line. The subsidiary designs and carves the plastic lumber signs using computerized routing systems and rotationally molded products.
Earth Care's subsidiaries include Green Bay, Wis.-based Recycled Plastic Industries, Earth Care of Tennessee, located in Sharon, and Earth Care Products of the Midwest in Lake Odessa, Mich. The five plants have a total of eight extrusion lines with a capacity greater than 15 million pounds per year.
The company plans to keep all management teams of the acquired companies intact.
In addition to plastic lumber, U.S. Plastic Lumber has a division that treats and recycles petroleum-contaminated soil and construction debris. The Clean Earth subsidiary is based in New Castle, Del.
Last year, Earth Care reported an operating loss of $3.6 million, bringing its accumulated deficit to $7.3 million. According to the firm's prospectus, filed in March, it ``expects to continue to incur losses for at least the next quarter or two and the success of its operations thereafter will be largely dependent upon its ability to substantially increase its sales revenue, and complete certain acquisitions, as to which there is no assurance.''
As a result, the prospectus states that investing in the company involves a high degree of risk.
Earth Care's sales last year were $6.6 million.
Earth Care manufactures a variety of recycled plastic lumber products made from post-consumer and post-industrial HDPE using a proprietary process. The company markets its products from a national sales office in Blue Bell, Pa., and from its corporate headquarters in Boca Raton. It has worldwide distribution rights and a patent pending for new plastic railroad ties.
Earth Care has four product units. These are: fabricated products, such as picnic tables, park benches and trash receptacles; building products, including decking systems and standard plastic lumber; engineered products such as marine pilings and guardrail spacer blocks; and railroad ties.
The lumber is manufactured in three stages. First the HDPE is ground and densified to produce a consistent particle size. The ground resins are then blended with colorants and ultraviolet stabilizers. Then the plastic is heated, mixed and compounded into a thick, molten composite that
is extruded through either closed-mold, roll forming or vacuum calibration finishing lines into shapes or profiles. Lastly, the extruded products are cooled, inspected and cut to specific lengths.
One of the firm's newest products is the Carefree decking system, a completely maintenance-free product never needing paint, stain or sealer.
``This is the first plastic lumber product to be configured as a complete decking system,'' Earth Care Vice Chairman and Chief Operating Officer David Farrow said in a news release.
Like other plastic lumber products, the decking system will not rot, crack, splinter or chip and it is impervious to insects, mold, mildew and water. In addition, the system is backed by a 50-year limited warranty and costs less than the least-expensive wooden construction once costs of milling custom profiles and painting are considered, Farrow said.
The Carefree system boasts a specially manufactured deck board that is lighter and stronger than a standard rectangular board.
The deck surface and stair treads are available with a knurled finish for extra traction. The system is available in a choice of four standard colors, and custom colors are available.