Recycler Maine buys Ill. factory for expansion
Recycler Maine Plastics Inc. plans to spend $10 million to move into a new facility to handle increased business and make the company more efficient.
The North Chicago, Ill.-based firm is buying an existing factory 10 miles north in Zion, Ill., and plans to expand it, giving the firm the potential to boost its capacity by 50 percent, said President Robert Render. The company is squeezing close to as much material as it can, about 80 million pounds a year, from its current North Chicago operation, he said.
Maine plans to add an undetermined amount of equipment, including a grinder, shearing equipment and granulators.
The company, which has been recycling post-industrial plastics for about 20 years, is seeing more competition from new entrants, particularly smaller operations that are attracted to the business because of the rising prices for recycled material at the moment, Render said.
``When you're in a market that is very competitive, you have to be as efficient as possible, especially if there's a downturn,'' said Render. ``The most productive thing to do is to take the gains and invest them in being as efficient as possible.''
Maine was founded in the early 1980s, when Render's father Henry, who ran a scrap metal recycling company in Des Plaines, Ill., had a conversation on a golf course with someone who was recycling plastics, and saw some possibilities.
Shortly after, Henry Render and a partner in Maine Scrap Metal Inc., Gene Cohen, along with Robert, started recycling plastic in North Chicago. (David Kaplan, vice president of sales, was made a partner later).
One of the firm's niche markets is finding customers that need both metal and plastics recycling, Render said.
In one sense, he said, the expansion represents a maturation of the plastics side of the business, and the desire for a more modern facility with better internal design and more shipping and receiving docks. And it's also recognition that the business, taking plant scrap and other unwanted industrial material from companies, looks solid.
He also said the new plant would have the best fire suppression system he can afford, because insurance companies are starting to put pressure on plastics firms to reduce their fire risks.
The new plant will be about 220,000 square feet, which includes a 110,000 square foot building they are buying in Zion, along with an addition that will double that. The company hopes to move in by mid-2006.
Sales at the company are growing, which is both a measure of higher prices for plastic and more volume, as people seek out recycled resin as a cheaper alternative to soaring virgin prices, he said. Of course, the company pays much more for its raw materials, Render noted.
Overall, sales jumped from $13 million to $18 million last year, as volumes have been growing five to 10 percent a year, and the company opened a satellite recycling operation in Michigan.
Render said the company keeps its hands in a lot of different resins and end markets, and he said there's really not any one market, like automotive or pipe, that is pushing its growth.
The geographic footprint of company's sales is expanding, though, driven by exports to Canada, China and Mexico, and helped along by the decline in the U.S. dollar, he said.
``If you looked at our mix between export and domestic, it is trending more toward export,'' he said.