Green Processing Co. Inc. is expanding into Alabama, a move driven by current customer demand to broaden its geographic reach.
The Windsor, Ontario-based plastics recycler already has three sites in its hometown as well as single locations in Laredo, Texas, and Cleveland.
The move to Birmingham, CEO Jeremy Berger said, is a natural.
“A lot of our automotive customers are expanding in that area. In Alabama and Tennessee, especially,” said Berger, also an owner of the company.
Green Processing relies heavily on Tier 1 and Tier 2 automotive parts suppliers for its business. The company refurbishes or recycles containers that transport parts from those suppliers. The company also recycles excess or damaged parts that end up not being used by automobile manufacturers.
But location is not the only reason Green Processing selected Birmingham.
“It’s just an awesome city. Part of it is just how much we enjoy the place. It’s kind of a weird reason,” he admitted.
Green Processing certainly considered other cities before deciding on Birmingham.
“We looked at Chattanooga. We contemplated Nashville. We even talked about South Carolina. We felt Birmingham is really central. Central for us in regards to Laredo and Windsor, it kind of bridges that gap,” Berger explained.
As operations manager and an owner of the company, Sam Farhat took the lead in helping select a new location.
Birmingham will open up new parts of the country that Green Processing has had difficulty handling on a competitive basis.
He pointed the “proximity to a bunch of different states that have an increase in the automotive sector. It’s easily accessible highway-wise. It’s close to a couple of big hubs like Atlanta and Tennessee. Accessible to the whole South,” Farhat said. “We’ve been kicking around the idea for probably six months to a year.”
“Alabama just fell in that perfect spot between the different areas we think we can target for customers,” he said.
The company anticipates spending between $400,000 and $500,000 on the new 25,000-square-foot leased site, which Farhat expects to be operating by early May. That figure includes both building improvements and equipment costs.
About half of that space will refurbish automotive parts containers. “The other 50 would be traditional plastic recycling — shredding, grinding. Mostly obsolete dunnage, but all types of industrial scrap,” Berger said.
Green Processing chiefly handles high density polyethylene, polypropylene and high-molecular-weight HDPE.
The company also handles metal containers, but they account for only 5 to 10 percent of the total business.
Green Processing is able to grow at a challenging time for the plastics recycling industry as chronically low oil prices have driven down the price of virgin resin. This, in turn, has put pressure on recycled plastic pricing, which is typically sold at a discount to virgin material.
Berger sees a couple of reasons for his company’s success.
Green Processing’s customer base, both buying and selling, is located in the United States, Mexico and Canada. This helps insulate the firm from worldwide pricing pressures.
“The other main reason is we’re very competitive. We have a really great customer base. So we have very loyal customers and they really work with us to help us grow,” he said.
Green Processing’s expansion into both Cleveland and Laredo both came when existing customers promised the company business at those locations. “The same is true in Birmingham,” Berger said.
The company has built that loyal customer base by providing quality service and prompt payment for the materials processed for its automotive customers, he said. “It’s two things that literally since day one we pride ourselves in,” Berger said.
Green Processing expects to initially employ 10 to 12 workers in Birmingham, but could see that number increase to 15 to 25 over time.
The company currently processes about 40 million pounds of plastic each year, and Berger said that number should increase to 45 million pounds this year with the addition of the Birmingham facility.
“We normally start off slow. We make sure we can handle everything and quality is up to speed,” he said about volume in Birmingham. “But that will grow over time.”