In one year, Envision Plastics has gone from being a start-up firm to one of the largest players in post-consumer high density polyethylene recycling. The company quietly has gobbled up two former U.S. Plastic Lumber plants and is expanding its operations dramatically.
Envision began leasing USPL plants in Chino, Calif., and Auburn, Mass., last year and has spent several million dollars upgrading them and its headquarters plant in Reidsville, N.C.
``We've done expansion of wash lines and extrusion capacity and several phases of debottlenecking'' in Reidsville, said Parham Yedidsion, Envision director.
The company nearly has doubled the size of the North Carolina plant to roughly 90,000 square feet, and has beefed up capacity at the former USPL plants, he said. By year's end, the Reidsville plant will be able to produce 60 million pounds of recycled HDPE a year, while Chino will have 30 million pounds of capacity and Auburn, 22 million pounds.
While the company is new, its owners are not new to recycling.
Parham Yedidsion and Massoud Rad previously owned the Chino plant, operating it as Ecosource Corp. until they sold the business in 1999 to USPL and got out of the post-consumer HDPE recycling industry. Rad is president of Envision.
USPL documents say Ecosource got 392,000 shares of USPL stock, which would have been valued at about $4.7 million in September 1999, when the sale was made. Since then, USPL stock has fallen to about 40 cents a share. Yedidsion declined to comment on the sale terms.
The pair, who also own compounder Ecoplast Corp. in Pomona, Calif., bought the Reidsville plant in August 2001 and got back into the market. A month later, they decided to lease the other two plants from USPL. Envision has an option to buy both factories.
``It would be difficult for someone new to come into this market and be competitive,'' Yedidsion said. ``We had the benefit of knowing the supplier base, knowing our customer base. When we came in, and with the cast we came into the market with, we were able to fill a gap.''
Several competitors in the HDPE market have shut down in recent years, and customers were looking for a supplier of recycled resin with a national footprint, Yedidsion said.
Ecoplast is the only company with a nonobjection letter from the Food and Drug Administration allowing it to use recycled HDPE in food-contact applications. Ecoplast previously bought similar technology from Union Carbide Corp., which had been the only other firm with FDA approval.
The market for that product is not significant now, but Yedidsion said he thinks recent decisions by Coca-Cola Co. and PepsiCo Inc. to put recycled PET in their bottles will make the public more comfortable and increase demand.