Rogers-based Pioneer Products recently took bold steps to create a closed-loop business
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The Supply Side Trash can supplier to Walmart U.S. works to vertically inte... PowerPoint PPT Presentation


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.

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The supply side trash can supplier to walmart u s works to vertically integrate business mode

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

undisclosed sum.

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.


The supply side trash can supplier to walmart u s works to vertically integrate business mode

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.


The supply side trash can supplier to walmart u s works to vertically integrate business mode

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.

EcoArk

Address: 3333 South Pinnacle Hills Parkway

City: Rogers

State: AR

EcoArk: USA

EcoArk: 72758

Phone: 4792592977

Email ID: [email protected]

2nd Address: 401 Park Avenue

City: new York

State: NY

Country: USA

Zip code: 10016

Phone: 9178067404

Website: http://www.ecoarkusa.com

Linkedin.com: https://www.linkedin.com/company/ecoark-inc


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