Advice to entrepreneurs who want to sell abroad: Don’t

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This is the last in a series of five interviews with entrepreneurs who attended the third annual Global Summit of Leaders in August, 2013, at Royal Roads University in Victoria. Mike Biddle joined leading CEOs and business owners from eight countries, moderated by school alumnus Dean Lindal.

Mr. Biddle is president and founder of MBA Polymers, which he started out of his garage in 1992. The company takes plastics from complex waste streams and recycles them into high-quality raw materials. Dr. Biddle is known worldwide through talks and videos, and one of his goals is to inspire other entrepreneurs to develop innovative solutions in the waste sector.

The headquarters and research facility for MBA Polymers are in Richmond, Calif., but the company's production facilities have expanded internationally. Dr. Biddle participated in this Q&A by e-mail.

Question: You were working for a chemical manufacturer when you first decided to launch a business. What was your 'a-ha' moment that spurred you to go out on your own?

Answer: It wasn't a single moment, it was a four-step evolution:

1. Decide plastics recycling was important

I've always been someone that cares about my "footprint" – riding my bike to school and to work ever since I can remember (which I continue to do), taking mass transit whenever possible, hanging clothes outside instead of using a dryer, keeping the house colder than most people in the winter and almost never using air conditioning in the summer – even here in California.

So, combining my inherent concern for our environment and living as much as I can in a sustainable way, it was natural for me to take my professional training – a bachelor of science in chemical engineering and a PhD in polymer science and engineering – and apply it to my passion.

The highly publicized "garbage barge" from 1987, and the ban of polystyrene foam cups in Suffolk Co., N.Y., and Berkeley, Calif., made it seem like the time to bring it to the attention of Dow Chemical, my employer at the time, as it was one of the largest polystyrene producers in the world. My R&D director told me: "we didn't hire a PhD in plastics to work on garbage." Fortunately it only took me about six months to change his mind and start a modest plastics recycling research group.

2. Decide to take it on more personally

I was "thrust" into entrepreneurship when Dow shut down its Walnut Creek R&D lab where I was working. Everyone in our group was offered a job in either Texas or Michigan, two large locations for Dow, and I think only one person did. Many of us were young and single and wanted to stay in California.

So I wrote a R&D proposal to the plastics industry trade organization, I won a project and I hung out a consulting shingle. That business took off throughout 1993 and 1994, and I started hiring back, as contractors, many of the folks that had worked with me at Dow.

3. Decide to operate on a larger scale

By 1994, it was clear that we should build a pilot line to prove our ideas rather than just running small trials all over the world as consultants. So we took a deep breath, rented about 1,0000 square metres in Berkeley, and built and operated a pilot line. To hire employees, we incorporated and MB&A (Michael Biddle & Associates) became MBA Polymers Inc.

4. Decide to raise funds for further expansion

In a few more years we wanted to build a bigger line that could "go commercial" so we moved to another location in Richmond, Calif., took a $1-million (U.S.) loan from the state of California, and soon thereafter took our first money from outside investors. MBA was on its way to growing from a small idea to the largest global plastics recycler handling complex plastics-rich waste streams from recyclers of end-of-life computers, electronics, appliances and automobiles and now even rigid plastics from household solid waste.

Question: Where do you source the bulk of your raw material, and where do you send it to be processed?

Answer: We have world-scale plastics recycling plants in China, Austria and Britain, and we source material from Europe, Asia and a bit from North America.

Question: How receptive is the market to your end products? How hard is it to convince your customers to buy recycled plastic instead of virgin plastic?

Answer: There has historically been resistance by manufacturers to use any recycled materials due to concerns about quality, consistency and supply. Plastics is no different.

Most plastics recyclers have been "mono-stream," meaning that they lightly process plastic waste and remelt and recompound it to meet specific market targets. Examples include clean waste from manufacturing processes (post-industrial) and PET and HDPE bottles, which primarily come from households (post-consumer) and that have been sorted from other recyclables such as metal, glass and paper at material recovery facilities (MRFs).

MBA's business model and technology solve all three concerns – quality, consistency and supply – because we are able to process some of the largest and most complex plastics-rich waste streams in the world and convert them to plastics than can replace virgin plastics on a one-to-one basis in many applications.

Question: In what areas of the world are your main sales channels? Are there any hot markets that surprised you?

Answer: We source globally, but mostly sell where the plants are located. We are in China not because of low costs, which don't really exist much any more, but because our IT and electronics customers are there – or at least their contract manufacturers such as Foxconn and Flextronics are located very near our plant. We are in the heart of the global IT and electronics manufacturing in Guangzhou, China.

We sell much of our plastics back into the same applications from which they came – IT, electronics, appliances and automobiles – because this is both where it came from (the plastics were designed for those applications), and many of these manufacturers want to "close the loop" for green marketing, supply chain securitization and/or standards reasons. Global electronics procurement standards, such as EPEAT, have started to require manufacturers to use recycled materials, particularly plastics, to try to get the industry to "prime its own pump."

Question: What crucial piece of advice would you give to North American entrepreneurs who want to sell their products or services abroad?

• Don’t.
• Okay, if you insist, be sure you understand why you want to or feel that you need to do this.
• If you decide you still must go overseas after answering point two, then decide where (and why again).
• If it’s an area with substantially different cultures (such as Japan and China for us), then I strongly suggest finding local partners that you completely trust. We also have partners in Europe, but less so from a “doing business” standpoint and more from a supply chain perspective.

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