A California-based startup company revealed late last week it will establish a first-of-its-kind vehicle recycling operation in Sheboygan, bringing more than 100 jobs and a burst of innovative energy to a city long identified with traditional, blue-collar manufacturing.
The finer points have yet to be settled — the building purchase and company financing still are pending — but officials with Green Envirotech Corp. say they have no doubt the company will operate in Sheboygan by next summer. The company expects to generate a minimum of $60 million in revenue its first year after spending $21 million to get the plant running.
"It's coming together very nicely — perfectly, actually," said CEO Gary Delaurentiis, who has built a variety of plastic recycling plants in five countries over the last 25 years. "We've signed a letter of intent with the city that we're coming here, so we're coming here."
The company will be processing the remnants of shredded vehicles to remove contaminants and produce recycled plastic and crude oil, said Delaurentiis, who orchestrated the technological breakthrough that made the process possible.
And in a twist worthy of a screenplay, the company plans to operate at 2821 Muth Court, providing jobs in the 288,000 square foot building that International Automotive Components is vacating by the end of the year. IAC manufactures plastic parts for automotive interiors and will be among Green Envirotech's customers.
"They're talking about new drivers in the economy and how the old model isn't working — this is a new driver in the economy and Sheboygan is going to be in the ground floor of it," Ryan said. "If we're going to survive as a city, this is the type of thing that we need to bring to this city."
Green Envirotech officials say the company has solved a problem that vexed researchers for years and led to 920,000 tons of plastic and other material being unnecessarily dumped into landfills annually. That material — called "shredder fluff" — is what's left over when 11 million vehicles each year are shredded and the metal extracted for recycling.
Twenty-five percent (of the weight) of those cars are considered unrecoverable," company President Jeff Chartier said in an interview last week with The Sheboygan Press.
"They were considered unrecoverable."
Green Envirotech will be using a product nobody wants — the shredders must pay to send the shredder fluff to a landfill — so they get their raw material for free. And the company already has customers lined up to purchase all the recycled plastic it can produce, since it can be sold at 10 percent less than the virgin plastic.
The result is a financial slam-dunk, said Chartier, who comes from a Wall Street background.
Green Envirotech, a publicly traded company, will start out processing about 100,000 tons of shredder fluff annually, though that could grow three-fold within the first year, Chartier said. Green Envirotech will generate $60 million in revenue for every 100,000 tons it processes.
And though Green Envirotech is headquartered in Riverbank, Calif., Delaurentiis said the Sheboygan plant will be at the center of its future growth.
"We're going to use this as a training center for other plants we're going to build, so we'll be bringing people here right after we get this plant going to train them how to operate the equipment for the following plants," he said. "It's going to be like a showplace.
"All those other metal recyclers around the United States said, 'Build that first plant and we're going to come and build a lot more with you,' so there'll be a lot of traffic coming in and out of here of people looking at the plant."
Others have tried to recycle the material used by Green Envirotech — including a government-funded research group involving the Big Three automakers — but all failed to stop the steady flow into landfills. Contamination was always the bedeviling detail, as the shredder fluff had unsafe levels of polychlorinated biphenyls, or PCBs.
Delaurentiis' breakthrough came in combining technology already proven and patented by several different companies, allowing Green Envirotech to separate the shredder fluff by type, remove the contaminants and create either new plastic or crude oil.
Chartier said the process is environmentally perfect, as it keeps material out of landfills and generates no byproduct aside from heat — which will be used to heat the Sheboygan plant.
"Lots of companies say they are green, but we are truly green," Chartier said. "Nothing goes in the air, nothing goes in the ground."
The process begins with Miller Compressing Co. in Milwaukee, which crushes the vehicles and will send the remnants by truck to the Sheboygan plant.
The material is separated using a process created by German company SiCon GmbH. About 23 percent of the material is plastic, 10 percent is non-tire rubber and 8 percent is various fibers. The rest cannot be used by Green Envirotech and goes to a landfill. The plastics are then decontaminated using technology from Pennsylvania-based Thar Process Inc. The U.S. Environmental Protection Agency requires less than two parts per million of PCBs, and the Thar technology cleans the plastic to one-eighth of that limit.
About 60 percent of the plastic is polypropylene, which is mixed with an equal measure of virgin plastic and required additives before being sent to carmakers. This compounding process is done by a Belgian company called Ravago, which will install $7 million worth of equipment at the Sheboygan plant to be run by Green Envirotech's employees.
The remaining 40 percent of the plastic is mixed with the rubber and fiber into high-quality crude oil. That process was developed by Oregon-based Agilyx Corp.
The company founded by a West Coast entrepreneur and an East Coast financier is building its flagship plant here due to a chain of events started by two Sheboygan businessmen reading about Green Envirotech in a trade magazine and making a phone call.
Jim Theodoroff and Pete Phillips were talking about creating a company to recycle boat wraps and the agricultural film that covers hay bails. They thought Green Envirotech's process could do the trick.
"We said all we can do is ask," Theodoroff said of the first call, which happened in the early months of this year.
A relationship began to develop, and when Green Envirotech's proposed plant in Fond du Lac fell through, Theodoroff suggested the company check out Sheboygan's abandoned manufacturing sites.
Company officials then met Mike Leibham, who helped introduce them to key business and government contacts in the area. Delaurentiis said he fell in love with the city from the first visit in July.
"We looked at buildings in Milwaukee … but it just feels like a family around here," he said. "Sheboygan just is a nice town and it's got a great work force and it needs jobs."
Said Leibham: "It's a great example of a joint effort, private-public effort, to create jobs in this community."
The firm is in talks with IAC about its Muth Court facility, Delaurentiis said. IAC has 130 employees at its two Sheboygan locations but will be shuttering both by year-end, said IAC spokesman David Ladd.
Once that purchase is finalized, Delaurentiis said Green Envirotech will spend about $1 million to tweak the plant and another $20 million to bring in the needed equipment. That's in addition to the $7 million in equipment from Ravago.
The plant will run 24/7 and create 88 production jobs — ranging from $12 to $20 per hour — and another 14 office jobs. Green Envirotech will be using only about 110,000 square feet of the building's 288,000 at the outset, Delaurentiis said.
The shredder fluff will be the plant's primary material source, but it will have others as well. Among those is Zues Recycling Solutions, the company ultimately founded by Theodoroff and Phillip.
Green Envirotech — formed when the technological pieces fell into place in 2008 — currently has nine employees, though that will grow early next year when it opens a 50,000-square-foot plant in Riverbank, Calif. The plant will convert agricultural film to crude oil, but it will not handle shredder fluff since it would take too long to get the needed state approvals.
Chartier said Green Envirotech was offered a lot of money to build its first fully functional plant in Germany, but it turned that down and chose Sheboygan over several other potential U.S. locations. He said the chance to help replace departing jobs like IAC's was too perfect to pass up.
"It really irked me a lot, all the jobs disappearing out of the United States for the last two decades," he said. "I wanted to be a part of bringing jobs back to the United States … and the only way to do that is by starting new industries." (Sheboygan Press)