Tuesday, July 01, 2008
Turning Trash Into Gold
Garbage is good for business. That's Tom Szaky's mantra. He took his start-up company from $70,000 in sales to more than $8 million in four years, all because of garbage.
Garbage, says Szaky, chief executive officer of TerraCycle Inc. in Trenton, is the perfect raw material for the 21st century. "Garbage has really cool economics," says the 26-year-old Princeton-dropout-turned-entrepreneur, "because you can get paid to collect it, or get it very cheap. You're eliminating a big problem, and then you can make a consumer product out of it on the other end."
TerraCycle sells organic fertilizer and plant food made from worm excrement produced by composting food garbage; office supplies made from recycled cardboard and plastics; and pencil cases, purses and tote bags made from used drink pouches and energy bar wrappers.
New Jersey has long been a stronghold for scavenger businesses, with a high number of companies that take scrap metal, construction debris, and even cooking grease and turn them into products that can be resold.
The state has roughly 27,000 people employed in recycling, said Guy Watson, chief of the bureau of recycling and planning for the New Jersey Department of Environmental Protection. Most of those workers "are in the private sector," Watson said, "involved in either collection, or processing, or end-use manufacturing of products."
A "recycling eco-park" with a facility that will recycle food waste into fertilizer, and an asphalt and recycling plant, are set to open in Woodbridge.
Demand for raw materials, mostly driven by China, Watson said, has resulted in "historic high prices for most paper grades, for plastics, for aluminum."
Glenn Prickett, executive director of Conservation International's Center for Environmental Leadership in Business, based in Arlington, Va., said TerraCycle seems to be doing something unique in the recycling industry by turning previously non-recyclable items, such as aluminum drink pouches, into consumer products. "In terms of the consumer product market, it sounds pretty innovative," he said.
In 2006, Inc. magazine named TerraCycle "The Coolest Little Start-up in America" and featured Szaky in a cover story.
The company's best-selling product so far is the one that launched TerraCycle - a liquid plant fertilizer "brewed" from worm poop - castings produced by worms as they munch on compost.
Szaky, who was born in Hungary and grew up in Toronto, introduced TerraCycle in 2001 with a fellow Princeton student after visiting Canadian friends in Montreal.
He was impressed by the size of the marijuana plants they were growing. He learned that the secret was a fertilizer made by soaking worm castings, or excrement, from the compost pile in warm water. Back at Princeton, he convinced the university to give him space for composting and food scraps from the dining halls and he began experimenting with fertilizer formulas.