Past Winner Stories
Butler MacDonald
www.butlermacdonald.com
When business plans were made for the start of Indianapolis-based corporation Butler-MacDonald, Inc. nearly 25 years ago, the idea of separating plastics wasn’t even a remote consideration.
The company had started building a successful business by recovering precious and other metals from obsolete telecommunications equipment, and returning the metals to the owners for sale into various markets. By charging a per-pound fee for its recovery services, Butler-MacDonald enjoyed significant growth and financial success throughout the ’90s.
However, significant changes in technology forced a change in the way that Butler-MacDonald operated. Husband-and-wife team J. Scott Johnson and Susan B. Johnson realized that their business faced certain death as the telecommunications industry shifted away from large central office switching equipment to hand and desk sets, decreasing the demand to recover metals.
The company also had several other factors working against it, including heavy reliance on one single large client and a lack of technology equipped to handle other processes.
Today, Butler-MacDonald is a leader in plastics separation technology—a testimony to the company’s ability to quickly and effectively adapt to the radical changes overtaking the telecommunications industry. Butler-MacDonald, which generates $3.5 million to $5 million in sales and employs 35 to 50 employees, now touts itself as an industry leader in “recovering value from unusable plastic.” It counts Hewlett-Packard and Canon among its top clients.
“It was thoughtful analysis, paying attention and then making assumptions,” vice president Terrence Bradshaw says of the company’s decision to move forward with the processing of plastics, using technology invented by the owner.
The decision to pursue ways of recycling plastics gave Butler-MacDonald a competitive advantage, Bradshaw points out. However, as the principals started considering ways of recovering value from plastic components typically destined for a landfill, they had to face significant challenges in recycling them. These obstacles included:
* Recycled plastic containing mixed polymers are essentially useless.
* Plastic components often contained metal parts (screws, bolts, etc.) or other contaminants (dirt, wood, etc.) and recycled plastic containing these contaminants was considered without value.
* Manual removal of polymer contaminants was possible, but typically not economically feasible.
While the technical and economic hurdles to recycling post-industrial plastics with mixed or contaminated polymers were significant, the company’s principals reasoned overcoming them would put the company in a position to provide plastic separation services and meet future demand for relatively low-cost recycled plastics, which they further reasoned would be significant for two major reasons:
The company had started building a successful business by recovering precious and other metals from obsolete telecommunications equipment, and returning the metals to the owners for sale into various markets. By charging a per-pound fee for its recovery services, Butler-MacDonald enjoyed significant growth and financial success throughout the ’90s.
However, significant changes in technology forced a change in the way that Butler-MacDonald operated. Husband-and-wife team J. Scott Johnson and Susan B. Johnson realized that their business faced certain death as the telecommunications industry shifted away from large central office switching equipment to hand and desk sets, decreasing the demand to recover metals.
The company also had several other factors working against it, including heavy reliance on one single large client and a lack of technology equipped to handle other processes.
Today, Butler-MacDonald is a leader in plastics separation technology—a testimony to the company’s ability to quickly and effectively adapt to the radical changes overtaking the telecommunications industry. Butler-MacDonald, which generates $3.5 million to $5 million in sales and employs 35 to 50 employees, now touts itself as an industry leader in “recovering value from unusable plastic.” It counts Hewlett-Packard and Canon among its top clients.
“It was thoughtful analysis, paying attention and then making assumptions,” vice president Terrence Bradshaw says of the company’s decision to move forward with the processing of plastics, using technology invented by the owner.
The decision to pursue ways of recycling plastics gave Butler-MacDonald a competitive advantage, Bradshaw points out. However, as the principals started considering ways of recovering value from plastic components typically destined for a landfill, they had to face significant challenges in recycling them. These obstacles included:
* Recycled plastic containing mixed polymers are essentially useless.
* Plastic components often contained metal parts (screws, bolts, etc.) or other contaminants (dirt, wood, etc.) and recycled plastic containing these contaminants was considered without value.
* Manual removal of polymer contaminants was possible, but typically not economically feasible.
While the technical and economic hurdles to recycling post-industrial plastics with mixed or contaminated polymers were significant, the company’s principals reasoned overcoming them would put the company in a position to provide plastic separation services and meet future demand for relatively low-cost recycled plastics, which they further reasoned would be significant for two major reasons:
- Plastic raw material (virgin resin) is closely tied to petroleum prices. If the demand curve for oil continued at then present rates, virgin resin prices would rise in step with higher oil and natural gas prices. Recycled resins tend to follow virgin resin prices so the opportunity to invest in post-industrial recycling R&D and technologies would be supported by rising prices, while also leaving room for attractive margins.
- Environmental concerns would continue to build as non-biodegradable plastics filled landfills.
Butler-MacDonald’s success in switching its focus as a result of changing technology proves that companies don’t have to close their doors if their services are no longer in demand, Bradshaw notes.
“Be unafraid to analyze every day to make sure that the market you’re in is alive and has a future. You have to do that constant analysis,” Bradshaw says. “If you see a big change coming, be bold and try to thoughtfully understand what’s happening and place yourself in a position to take advantage of it.”
“Be unafraid to analyze every day to make sure that the market you’re in is alive and has a future. You have to do that constant analysis,” Bradshaw says. “If you see a big change coming, be bold and try to thoughtfully understand what’s happening and place yourself in a position to take advantage of it.”