Plastics Recycling Update Magazine: Trex talks pellet business, hints at new products in the pipeline

Trex talks pellet business, hints at new products in the pipeline

By Editorial Staff, Plastics Recycling Update

August 5, 2015

During a conference call with investors, leaders at Trex touched on the company’s newly launched pellet business and other offerings outside the recycled decking space.

With sales for the second quarter of 2015 reaching $136.8 million and up 13 percent over Q2 2014 sales, Trex’s outgoing CEO Ron Kaplan said on the call the company’s nascent recycled polyethylene pellet business “fully met our expectations.”

“Customers and sales are experiencing robust growth,” Kaplan commented. “This is but the first step in monetizing our recycling and extrusion expertise.”

Kaplan, who has announced he will step down as CEO but remain on as chairman of the board, said the Winchester, Va.-based company now has four production lines producing recycled pellets for the film and bag industry. The venture is a departure for Trex, which had made a name for itself as a consumer-facing recycled decking and railing company.

While Kaplan refrained from attaching a sales figure to the pellet business in Q2, the company said a year ago annual pellet sales could reach $50-80 million in three or four years.

Kaplan also said Trex has “quietly assembled a team of over two dozen engineers whose mission is to advance our technical lead in manufacturing efficiency and product innovations.”

“We’ve got other projects in the pipeline that are equally or more exciting than pellets,” Kaplan stated. “That includes the things we’re doing within decking and railing and things unrelated to deck and railing, and unrelated to pellets.”

Without going into details on the new products, Kaplan said the company will need to make use of additional space to accommodate any potential expansion.

“We’ve bought land, and we’re going to need it,” Kaplan said.

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