Polymers As A Service: More Profits, More Planet?

Plastics are a victim of their success. Easy and inexpensive to make, they have become ubiquitous. Facile to turn into new compounds, to extend through additives or blends, they are optimized for almost every application. Now the Great Pacific Garbage Patch and worry about the environment have put plastics into the firing line. It’s a bit unfair, really – like blaming ecological problems on cars or oil companies. We, as human beings, are responsible for taking care of our planet. We are the stewards of this beautiful blue ball. If we don’t correctly incentivize, tax, stimulate, or punish companies and individuals for doing what’s best for this planet, excesses and destruction will always occur. There is no one problem affecting our environment; all are the same integrated system, all under threat from the same plague: humankind. We are what is destroying the forests, and we are the ones throwing away Styrofoam cups. We are over-consuming our resources, and we are the ones that don’t care. Whatever the cause celebre, whether they be CFKs, lead, oil, cars, energy, etc., they are all just symptoms caused by this uniquely destructive creature: the human.

A few times we’ve seen lucky scrapes with disaster avoided through political will and people coming together as a movement. Think of the banning of DDT, the relatively swift response to the hole in the ozone layer, reduction of lead in fuels. These responses were global and rapid. If we look at today’s fragmented world, however, we seem unable to agree on anything. With science and the idea of the truth under continuous assault, it’s extremely unlikely we can do anything worthwhile globally for any time to come. So what solutions are there to a world under assault from the suicidal doomsday termites homo sapiens? Greed. Gordon Gecko didn’t invent greed as a motivator – it has powered most all of our non-sex based decision making since time immemorial.

So how do we save the planet through greed? Simple, we make it pay to save the world. In the case of polymers, we should motivate the firms who make them to enter into much more lucrative businesses. Making polymers themselves is a relatively bulk low-value business for the most part. There are some islands of supreme profitability and some excellent high volume businesses, but margins suck and frankly, where is growth and the future? Who wants to work at a tobacco business with shinier looking larger plants? What investor is going to get excited about an unpopular business with a single-digit multiple that has people protesting against it?

Enter Materials As A Service. The path to a much more lucrative business could be had through looking at the entire life cycle of polymers through the higher multiples and tech love of service businesses. Polymer companies could agree to contracts with manufacturers which will take into account all of the CO2 and other materials consumed through the creation of the part. When the part is end of life, the polymer company collects it and repurposes as another part. This part is also rented to the new client and end of life it is collected and recycled again by the polymer company.

So a virgin ABS part is created as a seat belt component for a car. Ten years later, this part is ground up and together with some virgin ABS turned into a car mirror component. Ten years later, when this is end of life, it is returned as a dashboard component. Ten years after this it is recycled once again to a B side interior component. Ten years later it gets mixed with some fiber and becomes a behind the dashboard component. Ten years after that more filler is mixed in and it becomes a nonstructural filler part behind the dash. Ten years after this it becomes filler for the dash. Then it is recycled for one more time and becomes a seat component inside a Leolux couch to live on for a few more decades. The polymer company has managed this part through its different forms plus all pollutants, created CO2 and waste now for 100 years.

By making this process transparent manufacturers can compensate and reduce material usage as well as indeed be accountable for pollution and usage. The polymer and the recycling process is more valuable as a service business, and environmental outcomes are better. Meanwhile, the polymer business has a competitive advantage, higher margins, higher valuations, and revenues.

By becoming custodians of materials in service businesses, polymer companies can become the solution and not the problem. More profits, more planet?

Creative Commons: Tony Webster, BiblioArchives, Biblio Archives, Joanne Clifford.