Exiting for Millions vs. Long-Term Hold

The.

The bullet points you were about to share earlier of the plastics recycling business all the way up to the. To the exit.

And I got into this business with the same idea that I, I needed to find customers to grow the business. And I thought I had, you know, a really important new customer for the business when I closed. As I got into it, you know, A, that customer, that whole arrangement fell apart and B, I learned that what's really important here is sources of supply.

The customers are basically buying a commodity from you and the commodity gets priced against other commodities. On the feed chain of polyethylene or polypropylene, it's starting with sort of virgin grade and working its way down through off spec and then working all the way to, you know, regrind, which is what we produced, which is sort of the lower end of the spectrum of all the plastic inputs…

Don, sorry to interject. Hold, please hold the thought. But to be clear, what the business did is take essentially produced plastic, recycled plastic, plastic, scrap plastic.

Yeah, and clean wash, process it into plastic that can then be used as an input by plastic molders. So you were an intermediate step of sort of processing scrap plastic into something that could be used by plastic molders, right?

Exactly, exactly. So you, you, you put your jug of Tide in, in the recycling bin and it goes to a center and there that jug of Tide gets bailed up with all the other number twos. And then that recycling center sells off those bales to somebody that then takes those bales and makes a product that a manufacturer then can use that, that plastic to make. And that's what we did.

We would buy those bales from, from recycling facilities as well as post industrial scrap, dirty scrap from manufacturing operations. And we would grind it up and then we would wash it and produce a clean flake and then we would sell that clean flake to often manufacturers of sort of lower end products. I say low end, not really low end, but think of like drainage pipe or packaging.

Yeah, stuff like that. Usually it's thick walled, usually it's black. And so what those guys are looking for is the least expensive feedstocks that they can still run.

Now they need something clean, dry and flowable because they run extruders and if they put a bunch of junk in there, it's going to screw up their machines. So they need something that's been refined but they don't need to buy virgin engineering grade resins to make their products. So they would, they would buy it from us.

And what I learned was that the trick to this whole business was figuring out where to source scrap and how to buy it cheap. Because if you could make it, you could sell it, if that makes any sense.