Rogers-based Pioneer Products recently took bold steps to create a closed-loop business model which included more control of its plastics resin business from start to finish.
Rogers-based Pioneer Products recently took bold steps to create a closed-loop business
model which included more control of its plastics resin business from start to finish.
Pioneer, which sells a 45-gallon wheeled plastic trash can in more than 3,800 stores,
purchased resin maker Sable Polymer in Flowery Branch, Ga., earlier this summer for an
For at least five years Pioneer has been supplying this sustainable trash can to Walmart,
contracting out several pieces through the supply chain. But with its recent acquisition of
Sable Polymer, Pioneer can control more of the business as well as expand with new products
and applications. The sustainable focus of Pioneer is also in line with Walmart’s efforts to
sell more earth-friendly products and require sustainable manufacturing processes.
Pioneer is one of four sustainable businesses owned by parent Ecoark Holdings (OTC:
EARK) which raised $17.4 million with a public offering in July after its acquisition of
Magnolia Solar, another one of its portfolio businesses. Former Wal-Mart executive Randy
May is the CEO of Ecoark which continues to invest and grow its portfolio of companies.
Roshan Weerasinghe, chief operating officer for Pioneer, told Talk Business & Politics
Pioneer sought to grow its share of an $8 billion plastics polymer business and the best way
to do that as product supplier was to own more of the manufacturing process while working
to create a closed loop from source to retail shelf with Pioneer having more touch points
along the way.
Weerasinghe has a retail background and has been with Pioneer for about two years, prior to
that he worked in operations, global sourcing and logistics for Wal-Mart. He said he loved
retail but after 18 years he needed change.
THE RECYCLING PROCESS:
Pioneer sources plastic bakery icing buckets and other waste/returns at Walmart U.S. return
centers, which is then sent to the Sable Polymer facility and put through a proprietary process
to produce resin pellets. Pioneer then contracts with a plastic fabricator who makes the trash
cans which Pioneer then sells back to Walmart. Weerasinghe said the fabricator does not
wish to be named, but is a Wal-Mart approved U.S. manufacturing site.
Weerasinghe said the sorting and culling of source material is a difficult process because not
all plastic is the same. He said some includes chemicals that render it unusable for some
applications and creates another market of plastic wastes which are sold off. He said plastic
water bottles and shopping bags are not the right kind of plastic and not used by Pioneer
which focuses on hard plastic resin waste products as its source for making recycled pellets.
As Pioneer sells the trash cans back to Walmart U.S. the loop is then closed. Weerasinghe
said having just one product at Walmart or in retail is not cost effective so the company
expanded the R&D team in the Sable facility to look for niche products that could be made
from the resin it creates and then sold back into retail. Weerasinghe said much of retail is
moving online with Walmart and its other retail customers. That has left Pioneer looking for
ways to expand its overall business beyond just the retail application. The acquisition of
Sable Polymer has made that possible, he added.
BEYOND RETAIL SUPPLIER:
He said acquiring Sable allows the company to be aggressive with costs. Weerasinghe said
recycled resin has virtually the same prices as virgin resin, even though it’s a sustainable
product. So the company is exploring ways to improve margins and offer a non-
commoditized resin product.
He said a new process and material source has allowed the company to develop a milky white
resin pellet, in contrast to the black pellets that are most common. He refers to this market as
the “natural” pellets and said because it’s white there are more color control possibilities for
the end products than with the blackish pellets.
Pioneer is sourcing the natural pellet material from a contact lens case manufacturer in Puerto
Rico. He said the plastic used has been densified and has very few chemicals – aka, sterile
grade. Weerasinghe said Pioneer plans to shift about 1 million pounds of production per
month into this natural grade. He said another 2 million pounds a month are made into the
traditional black resin pellets.
“We want to be a leader who is pushing for this use of natural polymer because there are
more applications for the white pellets,” he said.
The company is working with the automotive industry that is using the natural pellet in its
industrial applications that require light testing. He said the move into natural pellets will also
help the company diversify its business away from largely retail applications.
The Sable operation also can use a densification process that takes the hard plastic wastes and
turns it into a popcorn-like substance that can be made into a plastic-like fabric widely used
in the medical field. He said disposable medical gowns are made out of this type of material
that has a plastic component.
Pioneer Products also has a brokerage arm that helps to rep other suppliers into Walmart and
Sam’s Club. Weerasinghe said the company represented three new products for clients at
Wal-Mart’s Open Call in July. He said two of the products were accepted in and are now
going through the process of getting on the shelf which can take nearly a year. He declined to
share the product names but did say they are in paint and food categories. The other product
was not accepted in store, but was given the online option which the retailer made to nearly
all of the Open Call products this year.
Weerasinghe said because Pioneer is a supplier the company knows its way around Wal-Mart
from the supplier’s view and that’s been advantageous for its clients. He said the brokerage
business is just another way Pioneer is diversifying its business, given that trash cans aren’t
items people need to buy every week or month.
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