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August 08, 2001
Turning Waste Streams into Products
by Trevor Snorek-Yates
The largest manufacturer of recycled plastic lumber in the U.S. is looking to position itself for a
more profitable 2001.
U.S. Plastic Lumber Corp. (ticker: USPL)
is rapidly becoming a leader in the recycled building materials industry. Now in its fifth year of
production, USPL is transforming milk jugs, garbage bags and industrial plastic waste into a wide
variety of products.
Aiming to develop technologies in an environmentally
responsible manner, USPL comprises two distinct product lines: an alternative materials lumber
division, USPL, Ltd., and an environmental recycling division, Clean Earth, Inc.
Commenting on its rapid growth, John Poling, Chief Financial Officer said, "USPL was started in
1996 through a reverse merger into a public company shell. Clean Earth Inc. was merged into the
new company and USPL completed over 23 acquisitions from 1997 to 1999, resulting in the company
structure, business and products that you see today."
With a market capitalization of $34
million, USPL is still relatively small. Its stock has been volatile over the last year,
fluctuating between $5.00 and 59 cents per share. It is currently trading at approximately $1 per
The plastic lumber division, USPL Ltd., manufactures high-density polyethylene
(HDPE) building products for use in outdoor decking, boardwalks and site amenities such as benches,
picnic tables and waste cans. A second tier of USPL Ltd. provides OEMs (original equipment
manufacturers) with alternative products in the packaging and transportation industries.
Clean Earth, Inc. focuses on three principal businesses: accepting and cleaning contaminated
soil; performing landfill-related services; and accepting and providing beneficial reuse of dredge
materials. Currently, Clean Earth is in the process of restoring abandoned strip mines in
Pennsylvania with stabilized dredge materials from the New York harbor region.
endured a difficult year in 2000. Mark Alsentzer, USPL's President and CEO, attributes some of
these financial setbacks to cost increases in raw materials. "Since we were unable to reflect
these cost increases in the pricing of our finished goods, they directly affected our bottom line,"
USPL's investment in production expansion also brought about a slow fiscal
year. "We invested $30 million to increase plant capacity, giving us the largest production
capacity in the plastic lumber industry," said Alsentzer. "[USPL' s sales] were outpaced by the
increase in our fixed costs, and this affected our profitability in 2000."
grew 38% for USPL Ltd., its margin deteriorated substantially in 2000. Clean Earth Inc., however,
showed only an 18% increase in sales while still managing good year-end profitability.
USPL's environmentally responsible building materials are competing strongly with the pressure
treated lumber industry, and its environmental division is continuing to perform well. Given last
year's capital investments, the company seems to have positioned itself for better financial
results in 2001.
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