The heart of Princeton resident Tom Szaky’s $20-million-a-year business empire is an old printing plant at 121 New York Ave. in Trenton, where most of the company’s 75 employees work, at desks made of old doors, with a computer network cobbled together from other companies’ obsolete hardware, with dividers made of old vinyl hip-hop records and empty soda bottles, and in some cases walking on floor tiles made of processed plastic and aluminum juice pouches.
It’s an office that embodies the ethos of the nine-year-old company, founded by then-Princeton University freshman Tom Szaky: waste nothing, use everything, and make a profit while doing so.
Terracycle is a manufacturing company that takes waste material, mostly packaging, and turns it into useful products. Companies like the makers of M&Ms, Capri Sun and Lays send rolls of plastic or plastic/aluminum packaging that cannot be used for one reason or another. Terracycle also pays schools, companies and nonprofits to collect wrappers, yogurt containers and various other materials that are normally considered non-recyclable.
With those raw materials, Terracycle makes tote bags, hats, fence posts, toys and hundreds of other products. The manufacturing is licensed under the Terracycle brand to factories around the world. They still sell their original product, which is fertilizer made of worm poop.
It’s a thriving, growing business with global ambitions and offices in 11 countries. Terracycle is one of the 500 fastest growing companies in America.
It’s hard to believe that at least twice, the company was on the brink of disaster. It had just $500 in its bank account at its low point in 2003, Szaky said. The idea of using used soda bottles for packaging was what saved the company. It cut down on packaging costs and opened up a whole new world of products.
The company encountered its next crisis in 2007, when it was almost crushed under the weight of its own success with the Bottle Brigade program that was collecting Coke and Pepsi bottles used for the fertilizer packaging. Terracycle was spending $500,000 a month on the program, and in return getting more bottles than it could use.
Terracycle spokesman Albe Zakes, one of the first employees of the company, recalls how Szaky took the potential disaster and used it as an opportunity to expand the business. Szaky had the idea of getting companies to sponsor their own collection programs as a way of improving their images. Soon, Capri Sun, Clif Bar and Stony Field were sponsoring the collection of their waste products. With these new raw materials, Terracycle could begin to make new products like backpacks.
Zakes credited Szaky’s leadership for saving the company.
“It’s Tom’s fearlessness,” Zakes said. “It’s the same reason that Tom dropped out of Princeton to sell worm [excrement] in a used soda bottle with no investors and no money. A person would have to be borderline insane to do something like that, but Tom did it. That’s the same type of fearlessness, or courage, or intuition about opportunity, the same personality trait that he applied to all those things.”
The next crisis came in 2008, when Terracycle was struggling to make its new line of products at its Trenton headquarters and manufacturing plant.
In 2008, the cavernous room that is now the main office was full of laborers manufacturing fertilizer and other Terracycle products. There were 120 workers at the Trenton plant, processing, sewing and doing other low-skill jobs that most companies long ago outsourced to foreign factories. That year, the company lost $5 million.
“The bottom line of all of this was that we couldn’t get a high quality product out the door at a good price,” Szaky said.
Szaky has been a high-profile booster of cities like Trenton, that had fallen on hard times in a postindustrial society. While he received a fair amount of media attention for establishing Terracycle in the city, ultimately he blames the local workforce for some of the company’s darkest days, saying the workers were expensive to employ relative to the quality of work done.
Not everyone agrees with that assessment of the Trenton workforce. Kevin Smith, spokesman for the New Jersey Department of Labor said there grants available for companies to train workers, and that good workers could be found in the area.
“In an economy like this, where unemployment is high, I think there are probably qualified workers out there,” he said. “It’s a matter of hooking up with them through the labor exchange.”
Whether or not the labor environment was at fault, if Terracycle had failed, it would not have been the first time one of Szaky’s enterprises had gone under. Even at 19, he had six startups under his belt.
“The first one was the only successful one,” Szaky said. “It was a Web design company I started when I was 14. We did $20,000 a year in revenue. Then I had five dotcoms that I tried. They all failed. But failing is actually one of the best lessons ever. I kept trying things and they kept not working out. One of them was an online grading system with realtime grade-tracking software. Another was a home improvement website. At the end of the day none of them worked, but they were all great working and learning experiences.”
Szaky turned Terracycle’s fortunes around by licensing manufacturing to factories elsewhere in the United States, Mexico, El Salvador and China.
He still employs 30 local Trenton workers at a warehouse, but many of the employees at the headquarters are not from Trenton. Rather than manufacturing, the employees at the headquarters administrate Terracycle and research new products. In an outbuilding, workers test the properties of plastic packaging material and build prototype products out of CDs, sunglasses, hi-lighters, shipping crates and anything else imaginable.
Szaky’s goal is to use everything that is currently considered not recyclable. Soon, Terracycle will begin collecting used diapers and tampons. These will be shredded and rinsed to separate the biological waste from the material, melted, and turned into a useful product, most likely some kind of plastic lumber.
“There is nothing that cannot be recycled,” he said. “Everything can be recycled somehow. Everything.”
Another new arena for Terracycle is acting as a middleman for big companies to take garbage and integrate it into existing products. Terracycle collects empty potato chip bags, which another company uses as insulation to make coolers.
“Our goal is do what recycling has done for soda cans, we want to do that around the world for everything that is not recyclable,” Szaky said. “And we’ll do it from right here in Trenton. Even though I have discouraging thoughts about some parts of Trenton, I love Trenton … Trenton is the embodiment of opportunity.”
Old vinyl records from a hip-hop radio station form dividers at Terracycle headqarters. (Staff photo by Diccon Hyatt.),
