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Zac Ziegler: I'm Zac Ziegler, and you're listening to Oregon Rainmakers from KLCC. On this edition, I talk with Brandon Rogers, the CEO of PakTech in Eugene.
Ziegler: In the 1967 film "The Graduate," there's a scene where recent college graduate Benjamin Braddock, played by Dustin Hoffman, is talking to various family and friends at a party when one adult says he has one word for the young man.
Film clip: "Just one word." "Yes, sir." "Are you listening?" "Yes, I am." "Plastics."
Ziegler: Plastic was considered the future for decades. Light, durable, versatile and cheap to make, the material became ubiquitous in our lives. But then we started to notice the damage it was doing to the environment: wildlife stuck in six-pack holders, bags blowing in the wind in scenic places and the Great Pacific Garbage Patch. Plastic production continues to increase, now topping 6 million tons a year in the U.S. alone. Talk of recycling plastics has largely been wishful thinking. Pre-pandemic, plastic was placed in empty cargo containers returning to China, where whether it was recycled or not was somewhat unclear. Much of that shipping ended at the start of this decade, and plastic we place in our recycling bins is often placed in the category of "wish-cycled," items we think or maybe hope can end up somewhere other than the landfill. There is one place where that is not the case, however. The next time you buy a multipack of items, from pasta jars to beer cans, take a look at the plastic holding it together. If you see the name PakTech, you're holding 100% recycled plastic, and it was given that second life in a nondescript factory in west Eugene. I recently headed to PakTech to learn how it turns out 100% recycled plastic multipack containers. I caught up with company CEO Brandon Rogers.
Brandon Rogers: We've always prided ourselves on being a responsible plastics manufacturer by using No. 2 HDPE. This is your rigid plastic. Most examples are milk containers, vitamin bottles or your typical items that you see in HDPE. From our standpoint, we've chosen that material because it works for what we're doing. The responsible side of it came into play in the early 2010s. In 2012, we went live with using recycled materials exclusively, 100% recycled. That was the part where we're taking what's already out there in the world and giving it another life, another generation, recycling it and showing that recycling works. It took a lot of work in the development process, working through the materials so that we can use the right setup for injection molding, that's our conversion process, but also finding the sources. As you're well aware, there's been no shortage of challenges with the different headwinds on recycling. But we were looking at how we create an outlet for this material that already exists, that we can reuse and repurpose again and again. We're running through 10 million milk containers a month that we repurpose into a next generation product. Taking existing materials that are already out in the world and giving them a place, rather than a landfill, to be reused and repurposed.
Ziegler: You're newer to this company, but walk me through how it got to where it is.
Rogers: The company was founded by Jim Borg, and he basically started in the early '80s as a precision tool shop. He started the process of creating precision dies and molds and did that for many years. Then in the early '90s, a local dairy came to him and said they had this idea where they wanted to take two gallons of milk, put them together and sell them through retail chains. They needed help coming up with this multipack, the handle that holds the two together, getting them not only to the retailer but across the scanner and then home for the consumer. Jim worked hard, developed that handle and then the method to manufacture it as well. So not only designing the handle, but how to manufacture it, and brought it to that dairy. The dairy was appreciative of it and pitched it to retailers, but the retailers didn't quite pick up on it. In that process, the dairy kept going to other channels, and specifically, club stores were coming online in the early '90s, including Costco, just up the road from us. And ultimately that retailer said, that's a great idea. We can actually start to use it on a multitude of products. And that's where we started to see traction picking up.
Ziegler: Walk me through when going from virgin plastic to recycled plastic came into the process. When was it, what was the moment of, let's see if we can give this stuff another life?
Rogers: As they were building up and scaling, and the demand was growing, we're really a packaging solutions company that deals in multipack handles. As we were scaling and bringing more and more products to market to help our customers get their products to market, we started to see an opportunity. We were really starting to consume a lot of material. How do we do this differently? How do we be a responsible plastics company? What does that look like? How do we create an identity out of that? About that time, we started to hear questions from a number of customers, businesses that were asking about recycled content. There were some options out there, but they looked like 15% recycled material or 25% recycled material, which are great starting points. But we kept asking, how do we go all the way there? That drove us through a process of innovation. Not only the use and design of the handles themselves, but the method of manufacture was really the linchpin, the thing we had to solve for. Jim and the team worked really hard to figure out how to take this on. Virgin plastics are very easy to mold. They're softer. They have lower melt flows and different characteristics that make them easier to design, work with and get into finished products that are very user friendly. Post-consumer recycled plastics have a little different characteristic. They're a little rougher, a little more challenging to work with, but workable. We developed that process to injection-mold these. We're still an industry leader in the use of 100% recycled material where others are arriving at 15 or 25% but not hitting 100%. For us, it was the point where we were able to create a very unique niche that was brand-centric and, again, the right thing to do.
Ziegler: Over time, I have heard a lot of people who make products out of recycled goods refer to what's called a "green tax." It can be a little more expensive. Has that been the experience? Are you having to sell this as, "Hey, this is recycled plastic, you're doing good by going through us to get this product"?
Rogers: Absolutely, that's a great question. From our standpoint, doing the right thing usually is not the lowest-cost option. Virgin materials have always been available, and cost is usually cheaper on that front compared to recycled. There are some steps involved in recycling, but it's reusing what's there. Our market will compensate, to some extent, for the benefit of using recycled and recyclable plastics as opposed to virgin. So we're always working a fine line between how we bring value to it. A lot of it comes in the value engineering, the innovation side of it, looking at how we're not only 100% recycled and recyclable, but what do we bring to our customers and to consumers on top of that, with the ease of use, the application, the ability to innovate and scale with them. Those are ways we can help them in addition to being sustainable.
Ziegler: Shall we go see this process in a little more depth so we can see what it actually looks like?
Ziegler: I'm Zac Ziegler, and this is Oregon Rainmakers from KLCC. My conversation with PakTech's Brandon Rogers continues now with a tour.
Ziegler: I'm curious: when you're at the store, do you look at the six-pack holder or anything that's holding products together to see if it's your company? And does that make you think a little harder about buying the product?
Rogers: You have to, and when you're proud of what you do, you have to. Walking through retail is forever changed for me. I hope the audience will see that, too. When you start to see those products around town, even in club stores, and you look at them and think, these were designed and manufactured right here in Eugene. And then where they go from there is around the globe. We're proud of what we do. We're proud of how we take care of our customers and the business that we earn. One of the things that is at the heart of the organization is its culture, and that starts with the people. The people make it work. We have roughly 300 people on our team. That starts with the design team, the precision tooling shop, the production team, logistics, accounting, sales and marketing. We have a robotics team that designs and manufactures robots for our use and for the application of our products at our customers' facilities. That team is what makes this work. I really appreciate the Borg family for this philosophy: we don't pay minimum wage. We pay significantly more for entry-level positions. We give employees a great healthcare package that we benchmark to high tech, something that actually takes care of our people and invests in their well-being and their family's well-being. We give them a clean, light work environment and share the vision of why we're here and what we're looking to achieve. We're working to create excitement. We have well over 1,000 pallets of product in inventory now. Most of those are destined for a customer that has already ordered. The other portion are the ones we carry to best support customers that have short lead times, more of those in the craft beer world, for example, where they're saying, "Hey, do you have these in gold? Do you have these in white?" And we have those. We can drop-ship them quickly. We're moving more to that model of how do we best serve those customers by having the products they need on hand sooner rather than later.
Ziegler: That can always be the tricky thing: you may be a pretty good-size operation, but when your customer on the other end is a smaller operation, you have to try to be as nimble as they are.
Rogers: And we have to earn that business every time, to the point where they can actually count on us. They know their packaging solutions are all covered here and we'll meet them where they need to be met. Going through here, put on the earplugs as we head into the manufacturing area. Just a lay of the land before we get in there: we have our production spaces laid out in a temperature-controlled space, which helps make it consistent and a more desirable workplace for our teams. We have 400-ton presses going all the way up to 650 on one side, followed by 800 tons on the following side. The smaller 400-ton machines are the smaller, higher-turn machines. If somebody has an order of a pallet, they need 30,000, 50,000, 80,000 parts. We'll put it on the small machine, it'll run, it's a quick turnover for the next project. When we move up to larger orders in the hundreds of thousands of parts, we'll put those on the larger machines in the 600-ton range. Once we get them set up, they run for longer periods. Once they're done with that run, it's a little longer changeover time before we get them back online to make the next product. And then the largest machines are for the long-run projects where we set them up, run them for days on end and then take them down for preventive maintenance along the way.
Rogers: What we have going on here: you'll hear the robots zipping in and out of the machines. They're the only items going in and out of those work centers, to keep people safe. The employees and team members are actually taking the finished product and boxing it into a configuration that's optimized for packing out on the pallet, but also so that boxes aren't excessively heavy or unwieldy for customers on the receiving end. Then those go on the pallets, get wrapped up and head for the loading dock. We talked about the innovation. This one right here is one of our newest work cells. It landed last Friday, it's already up and running. It's a 140,000-pound machine, 650 tons of production force. But it's a joint collaboration we made with the equipment manufacturer to get more energy efficient, to use less electricity. That machine right now is clocking somewhere in the neighborhood of 30 to 40% more efficient than its sister machine right next to it, which is a great workhorse for us. The newer technology has some efficiencies that we're fortunate to gain.
Ziegler: You never know what's going on when you see a new machine roll out. It might be way more efficient just because of how things have progressed over time.
Rogers: Absolutely. So much of this is built around uptime and the durability of these machines and equipment. Our customers don't account for downtime on our end. So we take care of the equipment, we do a very good job of making sure that when we get orders, we see those through. That requires innovating and investing in new technologies to make sure we're leading the way. This is actually the part where it gets back to the beginning of the story. This is the recycled material, the pellets that we talked about, in the form they come in. It's a closed loop system for most of the manufacturing facility. The material comes in, goes through the piping that we have throughout the plant that moves the product to and from, and then goes into the manufacturing process where it hits the colorant, the recipe, so to speak, and then goes through the injection molding.
Ziegler: It's amazing. These things weigh almost nothing. You can feel that there's something in your hand, but there's no weight to it.
Rogers: And again, that density gives them the ability to move through the pipes via vacuum. The other part I want to mention: as we're looking at a small batch of resin here, these are like marbles. They'd hit the floor and go everywhere, and yet you don't see them anywhere on the floor. That's something I'm super proud of our team for, the level at which they run this manufacturing facility. The cleanliness matters because we service the food and beverage industry, which is held to high standards. We basically built this plant around the same standards as the food and beverage industry our customers are held to, so we can mirror their expectations.
Ziegler: Yeah, spilling these would be like walking into your hotel room from the beach with sand on your feet. That level of nightmare, I can imagine.
Rogers: I can't stress that enough. You look at this and they're not on the floor. They don't happen outside. It's a closed loop system. We're capturing everything. I'm going to slide next to you here. We do have some of the virgin material, just to look at it. We're always testing materials, and this is the benchmark: it's virgin, and this is what we want to get the recycled material to operate as close to as possible. You can see the contrast. The recycled material has gone through a generation or two or five already. It has a little different history to it than the virgin material does.
Ziegler: You just mentioned that even after it goes through this process, your product might come back to you again someday.
Rogers: It very well could, and honestly, that would be the greatest compliment we could have. It needs to be recycled, needs to be recaptured. Our whole business is built around recyclability. If we can't recycle or recapture it, our feedstock disappears. We need that. We're looking to keep capturing this and reprocessing it again and again. That's the beauty of the material. Love it or hate it, if we do our part, recapture and recycle it, it can be used over and over again. I've had the opportunity to see many different manufacturers in prior roles, but this one stands out. I have never seen a CNC precision tool shop where you could virtually eat off the floor. It's beautiful, it's pristine, and it's a compliment to the team here.
Ziegler: There is some material right around the machines, but once it gets out, as you said, you can really see that cleanliness level. And you have to maintain it when you're making food-grade product.
Rogers: The fun part with this team here is we have this bank of offices on the right, and this is our design team. When we go back to that earlier part of the story where a customer comes in and says, "We want to do this," this team goes through the measurements and the exact precision of what it needs to perform. It needs to be able to do this and get around a certain cap or bottle design. So they'll go through that design process and then hand it over to the team on the left. That bank of offices is going to figure out how to manufacture it. We're designing a product and a method of manufacture with every one of these. That's where this precision tool shop comes in, with the precision cutting of what we call inserts, the parts that actually tell the machine what part to make with that injection process. So they'll go through a series of steps: take the materials, cut them into inserts that are both an A and a B side, concave and convex. Get those ready to go out on the production floor to work the magic out there.
Ziegler: So basically just a clean slate of aluminum here that will eventually have something etched into it, then it goes back over into the room we were just in, gets placed in the machine and plastic is pressed into it. Bingo, that's what we're doing.
Rogers: That's it exactly, and I'm going to use the term precision over and over again, because we're working with microns. We're working with measurements and precision that bring two pieces of machinery together, an A side and a B side, every 10 seconds or so, to create something that is only a couple of microns thick. Doing that with the precision to make millions a day is not easy. It's very delicate. When we have those inserts made, they come out here to this team, and this is our area where we have the tools ready to go. We have the mold bases ready to receive, so that when a customer calls and says, "I need product in the next week or next month," our team can schedule it and pull the right tools together with that level of precision to make sure we're manufacturing at a zero-defect rate.
Ziegler: A little while ago, I was in a screen-printing shop and they held on to the screens for their most popular customers. Exact same idea.
Rogers: Yeah, being ready to service the customer when they're ready. These are the ones where we need to be ready to get product manufactured and out the door when they need it. Their success is our success, and we cherish every one of those customers that we've earned. Over here, we have a number of different products. The resins are going to be the common theme in the story. We continue to innovate and trial different resin sources, from different geographic markets, wherever we can find the right resins with the right characteristics for our manufacturing process. We try different ones, whether it be ocean plastics that are recovered, biodegradable options or bio-based plastics. We've trialed those made from corn or sugar over the years. It's all great product, but the economies and the scale aren't yet there to make those efficient. The market compensates for what the price or value of plastics is, and in some of these cases, when the comparable product is two or three times the cost, the market's not going to go there. So it's early in that journey, but there's still possibility there, and we continue to explore it because it's the right thing to do.
Ziegler: Yeah, awesome. Well, thanks for showing me around today.
Rogers: Appreciate the time. Thank you for reaching out, and we appreciate the opportunity to visit.
Ziegler: That was Brandon Rogers, the CEO of Eugene recycled plastics manufacturer PakTech. This has been Oregon Rainmakers from KLCC. I'm Zac Ziegler, thanks for listening.
