By: Mike Verespej
March 19, 2012
ZANESVILLE, OHIO (March 19, 1:40 p.m. ET) — Slow growth doesn’t fit Brian Coll’s style or his strategy for Coll Materials Group LLC.
The rapidly growing plastics recycler, which has opened a plant in Waco, Texas, and purchased bankrupt Nicos Polymer Group in the past year, is making plans to expand again.
“We are investigating opening up a facility in the Pacific Northwest by the end of the year,” Coll told Plastics News March 14. “We are negotiating for a building as we speak.”
“We are a regional recycler with a national footprint, said the president and CEO of the Zanesville company that he founded by brokering materials in the basement of his home four years ago.
“We need locations strategically placed to take advance of where the feedstream is and where the customers are. We are the only regional recycler in the country that does both post-consumer and post-industrial resins.”
Coll did not disclose the cost of investing in another plant. But the Waco plant—which opened in November—represents an investment of $6 million so far, and the acquisition of Nicos a year ago cost $10.5 million. The company has also invested $12 million to $13 million in equipment for its Allentown, Pa., plant and another $3 million in equipment for its Zanesville plant, Coll said.
“The financial challenge is always having enough capital resources to buy equipment,” Coll said in an interview at the company headquarters and plant in Zanesville. “We have worked hard to remain cash-positive to be credit worthy. We believe you need to treat your business and your job like you would your own finances, and manage them prudently.”
As Coll Materials has grown from a $4 million company in 2009 into a $55 million to $60 million company that currently processes 120 million to 125 million pounds of recycled resin annually, it has also assembled an experienced management team — most of whom have between 20-30 years of experience in plastics manufacturing and packaging.
That team includes vice president of operations, Paul Fix, who previously was director of operations at J.M. Eagle Co., one of the world’s largest manufacturers of polyethylene and PVC pipe; and vice president of engineering Bob Combs, who previously was director of engineering at thermoform packager Fabri-Form Co., where Coll was a plant manager.
“We wouldn’t be here without some of the people in this room,” said Coll. “We’re humbled by where we’ve made it in four short years,” said Coll, who defines luck, however, as “where preparation meets opportunity.”
“We were very detailed in our strategic plan of where we wanted to be,” said Coll. “We over-prepared our strategic plans. And I don’t know how many times I asked our original team” — his wife, Renee, and vice president of procurement and supply Susan Bieterman, who was also the company’s first non-production employee other than the Colls — “to do Google searches to find out who the vendors and customers were in a region.”
That task of finding new locations now belongs to Matt Eli, vice president of finance and community development, who also works with state, local and regional economic development officials to work out the logistics — and to find potential grants — for the company’s plants.
“We are routinely looking for new locations and studying the feasibility of expansion of existing locations,” Ali said. “We have to look at whether there is an adequate feedstream of waste — both post-industrial and post-consumer, whether there are customers to sell that material to, and what is the compelling reason” to be in a certain location.
That analytical work helps drive the direction Coll takes in expanding its regional network of plants further.
But where the company is now — and where and what Brian Coll expects it to be a few years from now — are two different things.
For starters, he expects that over the next few years to ramp the amount of material processed to 200 million pounds. He is also leading the company into making finished products — the first of which are the railroad ties the company is making at its Waco plant for Axion International Inc.
“We’ve already become a significant player. We like our revenues and our pounds. We are satisfied with what we’ve accomplished,” said Coll. “But that doesn’t mean we are not going to work hard and that we are not going to look for opportunities to gain market share. We are not going to sit on our hands. Our target all along has been to build a $200 million recycling company.”
“We intend to have organic growth at our plants in Zanesville, Allentown, and Waco and we also intend to move up the value stream and do more value-added work at our plants,” said Coll. “We intend to add plants in new locations. Our third growth strategy is strategic engineering growth — developing something that doesn’t exist.”
“Brian doesn’t do anything slow or small,” laughs sales manager Gary Considine, who joined the company in mid-February and has 25 years of experience in sheet and film extrusion and PVC rigid calendered materials. “Coll has by far the most aggressive growth plan of any company I’ve worked at. I wanted to come here because I was looking for an opportunity in sustainable products markets and you don’t get a lot of opportunities to take on a business like this and take it up to the next level.”
“With the plans to make products, we could triple the growth and triple the business in an extremely short time,” said Considine who doubled the business five straight years at Han Rigid Plastics Corp., where he spent 15 years.
To move that growth further, Combs said he is “investigating and evaluating what products we can make that add value, and where the opportunities are.”
“You have to understand the value proposition of plastics scrap,” said Combs. “There is the collection side. There is the grinding, washing and pelletizing that adds value and then there is manufacturing something out of that plastic that gives you even more value-added.”
Combs said the company is looking at a number of companies that use recycled content in products near the Waco plant to evaluate how it can help companies in that region save money. “We want to give them the opportunity to have those products manufactured near where they are, rather than to purchase them and have them shipped cross-country to their locations,” Combs said.
“There are significant opportunities in the Southwest for thick-sheet extrusion,” he said.
“A large part of contract manufacturing is having a management team experienced in manufacturing,” said Coll. “All of our manufacturing team are ex-manufacturing or plastics packaging professionals with 20-30 years experience.”
Coll said the capacity of the Allentown plant is about 50 percent larger than the plant in Nazareth that was destroyed by fire. That higher capacity and additional equipment was added to recycle post-consumer plastics as well as the industrial plastics that the Nazareth plant had exclusively focused on previously.
“We would never open up a new plant just to do post-industrial plastics,” Coll said.
He added that the second railroad tie extrusion production line at Waco is still slated to start up on time in the second quarter. That plant also sells recycled resin to PVC pipe maker CertainTeed Corp. and does toll processing for Colorite Hose, which makes some of its garden hoses from recycled PVC.
Like all the Coll plants, the Waco facility recycles a variety of resins including high-density polyethylene, polypropylene and PVC. Additionally, the Allentown plant also reprocesses high-impact polystyrene.
“Recycling is a regional business,” Coll said. “Having plants in different locations allows us to provide recyclers with a steady flow of materials both in the East and west of the Mississippi and saves our customers freight costs.”
Coll said the company, as always, is looking at ways to continue to improve the efficiency of its recycling lines.
“We have started metrics to measure how well we are doing on each line in all of our plants,” in terms of pounds/day, quality and rejects, said operations manager Fix. “Right now, the plant that is being most successful is the Allentown plant” where the operations of Nicos were moved after the fire last August destroyed the plant in Nazareth.
To leverage that, Coll and Fix had that Allentown plant manager visit and evaluate the Zanesville and Waco plants in mid-February in order to “set targets” for improvement, said Fix. “We made a number of changes early on,” after he joined the company earlier this year.
“We bit a little bit of fine-tuning,” Fix said. “New processes are being put in.”
After starting four years ago with all used equipment, all the equipment at Coll’s three plants is new within the last two years, including eight grinders from Cumberland Equipment, three eight-inch extruders, three six-inch extruders and two four-and-one-half-inch extruders.
“There is not an extruder in the company that doesn’t run 24/7 to meet customer demand,” said Coll.
“The demand for recycled resins has significantly increased in the past few years and that all stems from the power of Wal-Mart,” Coll said. “That has been the driver. The carbon footprint of recycled resin is one-fourth that of virgin, so that is another driver and it all comes from sustainability as a whole.”
“This is an industry of opportunity if managed properly,” he said.
Coll will exhibit at NPE2012 in Orlando, Fla., at Booth 32020.