PRe PLastics Inc., an Auburn, Calif., maker of ski racks, freeway lane markers and other products out of recycled plastic, has won a five-year contract that could double its annual revenue to $6 million.
Pre Plastics has signed a five-year manufacturing contract with Meadow Burke of Tampa, Fla., a division of MMI Products Inc. of Houston. Meadow Burke, which has annual sales of $100 million, makes accessories for building concrete structures, like wire girders for insulated wall panels and hardware for forming bridges.
Neither Pre Plastics nor Meadow Burke would disclose what product Pre Plastics will make under the new contract, preferring to wait until they bring it to market. But Pre Plastics owner Richard Miller said it will be similar to a product his company has been making for two years, a plastic mold that creates recesses in precast concrete walls so the walls can be picked up with hooks.
Engineering work on the new product has begun, and production should start this summer, Miller said. Pre Plastics tentatively plans to add five or six new employees to its staff of about 25 to meet the new demand.
The company operates a 20,000-square-foot plant it built two years ago on Industrial Drive in Auburn. Financing for the plant came from a $1.2 million low-interest loan half-financed by the California Integrated Waste Management Board.
The company qualified because it's in Placer County, which is designated by the waste board as a Recycling Market Development Zone. Before building the plant, the company had leased a building in Auburn.
The key selling point for using recycled plastic is its price. Pellets of recycled polypropylene, the material Pre Plastics uses most, cost about 50 cents per pound, compared to 90 cents for new plastic, Miller said.
"The first goal was to look for a cost-effective product," he said. "The competition was making some ski racks that I thought were far too expensive," Miller said.
Back then, finding reliable, clean sources of recycled plastic was more difficult, Miller said. He couldn't use it to make any products that would require guaranteed performance or a uniform appearance.
Now there's more high-quality recycled material available. But using recycled plastic still poses some technical challenges because plastic gets weaker every time it's melted and reformed. Pre Plastics has developed a proprietary process of using additives to make recycled plastic stronger and more uniform, Miller said.
About 15 percent of the plastic used in the industry comes from recycled sources. Demand for recycled plastic has been flat over the past few years, Sloan said, because manufacturers are afraid they could compromise their products by using more reprocessed material. Sacramento Business Journal