United Resource Recovery Corp.'s recycling strategy might be described as ``develop locally, act globally.''
The Spartanburg company is not a big player in the U.S. market. It only has about $6.7 million in PET recycling sales, 44 employees and a small 10 million-pound-per-year pilot PET recycling plant.
But its footprint is global. Using the company's patented technology, an approach it calls partial depolymerization, URRC is building a large PET recycling plant in Mexico for Coca-Cola de Mexico and several partners, on top of two large plants in Europe that currently use its technology.
When the Mexico plant comes online late this year or early in 2005, the small South Carolina firm's technology will be used in plants with more than 110 million pounds capacity. That, company officials say, will make it one of the most widely used technologies worldwide for making recycled plastic that's clean enough to be used back in a beverage bottle.
A key driver of the growth, said President Carlos Gutierrez, is that those countries are putting more emphasis than the United States on building up recycling.
``Most everything around the world hinges on government incentives or penalties,'' he said. ``That's what triggers recycling.''
Gutierrez and Vice President of operations Gerry Fishbeck sat down at the company headquarters in late March for a wide-ranging interview.
The company has seen the ups and downs of the PET recycling market of late. It announced last year, for example, that it was putting on hold its plans to build a commercial-scale recycling plant in the United States because it was having trouble getting financing.
Still, it's not having trouble expanding around the globe. Gutierrez said he hopes that a deeper move into designing and building plants will strengthen that push.
URRC recently formed a joint venture with Chicago engineering firm Azure Technologies Inc. that calls for Azure to design recycling plants using URRC's core technology. The joint venture, called URR-AZ, is designing the new Coke recycling plant in Toluca, Mexico.
Gutierrez said the venture would let URRC provide turnkey plant construction services around the world. Previously, the company only licensed its process.
The company will not be licensing the technology in the United States, however. Instead, it will continue to operate its plant in Spartanburg, saying it wants to keep its fingers directly on any operations in the United States.
``We want to demonstrate to everybody that we know how to make a profit,'' Gutierrez said.
It continues searching for investors to expand its U.S. operations, but the company has struggled to find financing in part because investors tend to want to control the technology, something URRC does not want to yield, he said.
Plus, Fishbeck said, investors are skittish about how supplies of recycled PET in the United States have stagnated during the last few years, as the PET recycling rate has plummeted.
URRC first got into PET recycling in the mid-1990s, when it developed the cleaning technology and searched for what it thought was the best application. That turned out to be food-grade, bottle-to-bottle PET recycling. Its main business at the time was extracting silver from photography film.
URRC approached Coca Cola Co. headquarters in Atlanta and signed a development agreement with the soft drink company in 1996, and got a nonobjection letter from the Food and Drug Administration in 2001, giving it the OK to make material that goes back into food packaging.
The partial depolymerization technology works by removing the outside surface of the dirty PET - similar to peeling an onion, Fishbeck said - and then ``deep cleaning'' the polymer. More than 90 percent of the PET is retained.
``When we found we could preserve 90-95 percent of the polymer, that was the `aha' moment,'' Gutierrez said.
Initially the company pursued a full depolymerization technology, but abandoned that because it proved too expensive.
The partial depolymerization technology still lets the company use 100 percent curbside material, rather than the cleaner, but more expensive, supply collected from bottle bills. Since it provides more flexibility in raw material sourcing, the company can use dirtier streams that others might reject, Fishbeck said.
Fishbeck believes that will be an advantage because he sees growth in recycling coming from curbside.
Getting the beverage industry to be comfortable, however, has taken time.
Two years ago, Fishbeck said, URRC could not point to companies using its curbside recycled PET in bottles. Now, with Coke and PepsiCo Inc. using more recycled PET as both move toward stated goals of 10 percent recycled content by next year, that has changed.
``We have achieved that [using their recycled PET in soft drink bottles],'' Gutierrez said. ``It's in significant volumes.''
The company's PET recycling business is improving, Gutierrez said. The company no longer has to use profit from the silver recovery unit to subsidize research and development on the plastic side, and the PET business is now larger than the silver side, he said.
Still, Gutierrez said, as PET recycling becomes a larger part of URRC's business, it's not clear if the demand for the firm's technology will continue to be stronger in other parts of the world.
In the United States, Gutierrez said, there's just not as much public and government interest in recycling right now.
``People are interested in recycling but that's if somebody else does it,'' he said.