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May 03, 2017 02:00 AM

Plastic Resources finds success in tough recycling market

Jim Johnson
Staff Writer
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    Jim Johnson
    Clay Frazier, left, and Laine Frazier think their Stay-Rite shipping box guard is poised to greatly increase sales this year.

    Clay Frazier says he's had his ups and downs in the plastics recycling business over the years, especially early on when he did not have enough experience to quickly recognize market trends.

    But those early days in the mid-1990s helped prepare the president of Plastic Resources Inc. of Cartersville, Ga., to not only survive, but also succeed in today's rather challenging business climate for plastic recyclers.

    Plastic Resources is a relatively small operation, with 11 employees recycling about 10 million pounds per year.

    But the company has been profitable and growing at a time when others are closing shop due to low prices for recycled plastics.

    When Frazier founded the company back in 1994, it only handled PVC. That was until he realized the company had to expand beyond just that one material because of its cyclical nature due to heavy use during the construction season.

    Expanding the types of resin being processed led to steady business growth over the years as the company focused on the domestic market and built long-term relationships with both suppliers and customers.

    Frazier recognized there was a strong export market along the way, but instead decided to keep closer to home.

    "There's not a lot of distance between us and our customers. We don't have a lot of cooks in the kitchen between us and them," he said. "For the most part, we like to address our end users."

    Plastic Resources, Frazier said, has built a reputation by delivering on its promises.

    "We do like to have control of the materials in our operation because we can control the quality then because it's such an important aspect of our business," he said.

    Frazier, in later 2014, looked at the recycled resin market and he didn't like what he saw. Oil prices, which impact virgin resin prices, which impact recycled resin prices, were on their way down. And he figured they were only heading lower.

    "I expected to see the prices drop," he said, and "sure as heck, that market shot past us like a falling knife. It really took a concerted effort to address it the following two years up until this point."

    Plastic Resources decided to narrow its product mix.

    "We looked at the materials we had out there that had begun to lose their value," Frazier said. "We either fire sold them or in some cases threw them away because they just could not be sold. What was important to us was create the floor space for the products out there now that there was some velocity on."

    The company also sharpened its pencils and worked with suppliers to explain that buying prices had to fall.

    "We really couldn't get down low enough on a lot of stuff. But it was materials that were still moving out there," said.

    Relationships forged when times were better have helped Plastic Resources continue to attract and move materials.

    "Our long-term relationships really came to benefit us. It was a really strategic approach," he said.

    The company also examined every single expense to cut costs.

    "We're going to attack every expense, no matter how menial," he said. "And it took a great deal of discipline."

    But the approach kept the company in the black, despite seeing business decrease from about 12 million to 10 million pounds annually.

    "What we found is when we contracted our business from 2015 to 2016 deliberately, we contracted our top line and increased our bottom line," said Frazier, who works with his three sons in the business. "We grew through not growing. Does that make sense? It did for us."

    Plastic Resources is now on what Frazier calls a springboard for growth after repositioning.

    "Now we find ourselves coming through a very difficult time and I kind of crack up. Our business wasn't doing badly. Our business has been profitable for years. We saw early warning signs of this market. We started preparing for it appropriately. Those early warning signs quickly became real, engulfed a large part of our industry and had a very destructive effect and we were able to stand firm in the storm," Frazier said.

    "As the winds have died down a little bit, we're getting an understanding of our market. The market is moving forward. It's getting upbeat. It's getting more positive. Here we are, we're expanding," he said.

    Plastic Resources has been working out of about 60,000 square feet of leased space, but recently purchased a 115,000-square-foot location on 5 acres, also in Cartersville. The new location has a better layout for the plastics recycler as well as a rail spur that Frazier figures will help expand the business.

    "We think we're in a really good spot," he said about staying in Cartersville along the I-75 corridor north of Atlanta. That helps the company serve customers throughout the Southeast and Midwest.

    The president expects processing to increase this year by about 1.5 million pounds through the $1.5 million expansion project that includes installation of a third line.

    But that's not the only growth Frazier expects at his family business this year, thanks to the development of a recycled-plastic-based product called Stay-Rite that helps his company and others in storage and floor space.

    "I always had this dream of coming up with a product out of recycled material that would add value to the company," Frazier said. As a younger man, he came up with ideas, but they were either too goofy or complicated, he said.

    Then it hit him, like a bolt of lightning, about 18 months ago.

    Stay-Rite is what Frazier calls a universal stacking platform device made from glass-filled ​ polypropylene designed to go on the corners of those large corrugated shipping boxes commonly called gaylords.

    Gaylords are used throughout industry to hold and ship materials and are often stacked on pallets one on top of another. But the tops of these containers can fail over time due to continued use.

    Stay-Rite helps solve that problem by acting as a buffer and anchor along the four corners of the box. It not only provides stability for the container, but also serves as a barrier between the top of one box and the wooden pallet used for the box above.

    "I was out in the plant one day and I was fighting a box that fell into another box. And we were losing material all over the floor. So we had product loss, we had an unsafe hazard. We had packaging loss. And it's just a loss all round when you have your boxes falling over and falling into one another," Frazier said. "I walked away and the thought came into my head about this product. It really was out of our own necessity."

    Laine Frazier is one of Clay's sons and works at Plastic Resources. "Anyone who uses gaylords has that issue," he said. "During shipments, it helps stabilize loads."

    "It allows you to stack your gaylords safely. And it slows down the deterioration of the Gaylord tops," Clay Frazier said.

    Stay-Rite, with an overall investment of about $50,000, is now in production and already is in the black. Frazier is armed with patents to protect his new product.

    Production is taking place on a two-cavity tool right now, but the company is looking for a second geographic location to run a second operation. Ultimately, the Fraziers would like to bring production in-house.

    "I say it's so confoundingly simple that I couldn't have come up with it. It had to be divine intervention because it's that simple," Clay Frazier said.

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