Two longtime competitors with different business approaches in plastics recycling have joined forces to form a company that expects to generate $100 million in annual sales.
The merger of Avangard Industries Ltd. and Innovative Commodities Group, both of Houston, creates Avangard Innovative, said Rick Perez, Innovative's chief executive officer and CEO of the new company.
The merged, Houston-based business will provide recycling services, commodities trading, plastic material reprocessing, environmental impact studies and education to customers in North and South America, China and India. The deal becomes official Jan. 1, the firms said in a news release.
The factors that distinguished the firms from each other were the catalysts behind the agreement, Perez said.
``Avangard's always had the more brick-and-mortar type of approach, more of the sourcing and trading side of the business, while Innovative has focused on implementation, education and environmental issues,'' he said.
With combined offices in Mexico, Central and Latin America as well as several U.S. sites in Florida, New York and Texas, ``we will have a lot more horsepower,'' Perez added.
Last year the firms worked together successfully at a bottle-to-bottle joint venture plant in Mexico, according to Perez.
The actual merger has been in the works for three years, he said.
In the short term, Perez and Avangard CEO Arturo Creixell, who will become chief operating officer, will focus on expanding business and serving existing clients. Down the road, the emphasis will shift to developing closed-loop recycling programs, or ``going from the raw materials all the way to the final product,'' Perez said.
``Making recyclable product is a key for us; we're not here just to try and sell a product. We're trying to take the process from landfills, to manufacturing, back to the consumer and recycling in partnership with our clients.''
As often is the case with mergers, a primary challenge was meshing business strategies and cultures, Perez said.
``We wanted to make sure the personnel cultures meshed together well and correctly. Through time and three years of experience we kind of learned the styles of one another. I think we now have a good balance and understand each other.
``We've learned from each other's models.''
The new firm will have 19 recycling plants and 20 offices, and will employ 1,200.
Avangard ranked No. 3 on Plastics News' survey of North American recyclers, with $74 million in relevant 2005 sales. Innovative was No. 23, with $28 million.