Unwanted paint is their raw material

  • Article by: TODD NELSON , Special to the Star Tribune
  • Updated: May 24, 2009 - 11:31 PM

Recycling paint from hazardous-waste dropoff sites is a thriving business for a Fridley company that also recycles the cans and pails.

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Thae Thao and Ye Yang open one-gallon cans of used paint for recycling at Amazon Environmental. The company uses leftover latex to make recycled paint which sells in 12 colors.

Photo: Glen Stubbe, Star Tribune

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From jazzy blue to sunflower yellow, Fridley-based Amazon Environmental makes 12 colors of interior/exterior latex paint. Just one shade, though, likely would sum up the company these days: green.

Green as in environmentally friendly, because the company recycles paint leftovers -- all those half-empty cans in our basements, collected in community cleanup drives and county household hazardous waste sites -- to make its Amazon Select Paint.

That's also green -- as in cash. Despite the lackluster economy, Amazon's sales, which were up 8 percent last year to $4 million, are expected to keep growing this year. The company is benefiting from rising demand for green building products, said John Segala, company president and co-owner. Amazon gets its raw material nearly for free, keeps the unwanted paint out of landfills and saves resources that would go to make new paint.

Stepped-up sales and marketing efforts featuring a new logo, branding and website, also are helping the company. But Amazon might have seen a big boost from a bill that would make Minnesota a pilot project in what could have become a nationwide paint recycling program, Segala said.

Legislators approved the plan, but it was vetoed last week by Gov. Tim Pawlenty.

Segala's co-owner is his sister, Lorraine Segala, who founded the company in 1995 in California. He left a marketing job here to open Amazon's Minnesota production facility in 1999.

The company has been self-financed and avoided taking on debt until it bought its 24,000-square-foot headquarters building last year, moving from a building half the size in Roseville, Segala said.

Money-back guarantee

Amazon Select Paint is comparable in quality to new paint sold by national manufacturers, Segala said. At $12 for a 1-gallon and $40 for a 5-gallon pail, it's also cheaper than most brands, he said, and comes with a money-back guarantee.

The company's paint has been certified by the independent Master Painters Institute for meeting specifications for color, gloss, coverage and other standards, Segala said. It also has received certification from Green Seal, a nonprofit that has developed environmental standards for recycled-content latex paint.

Amazon can make custom colors for larger orders, Segala said.

The paint is available at Amazon's facility and at Paint Liquidators in Minneapolis. Les Kasten, who owns Paint Liquidators with business partner Jim Eddy, said he'd had only one return in four years of selling Amazon Select -- and that was after the buyer had forgotten the paint in a garage, where it froze on a cold night.

"Contractors, people with rentals, they like the consistency of getting a good product, getting a really good price and getting that same color six months from now," Kasten said. "This is where Amazon has really come through for us. I'm a real fan of their product."

Amazon's Whipped White color is popular as ceiling paint because it's washable, while most others are not, Kasten said. Leslie Wilson, an environmentalist in the Carver County Department of Environmental Services, said the county used Amazon paint on the interior of its environmental center in Chaska, which is a household hazardous waste collection site.

"It's great because this is where the paint comes in and then we get it back from recycling and it looks really good," said Wilson, who also coordinates the Minnesota paint stewardship demonstration project.

If it had been approved, the state's pilot project would have imposed an assessment of up to 35 cents on each container of paint sold in the state, Wilson said.

The money collected would help offset the cost taxpayers now bear for recycling or disposing of paint, including Amazon's fee for taking in paint from household hazardous waste dropoff sites, Wilson said.

'Product stewardship'

It's an example of what is known as "product stewardship,'' a movement that seeks to have producers and consumers take responsibility for how products are designed and purchased and, when there are leftovers, how those products are disposed of, Wilson said.

If the pilot project ever gets going here and eventually takes hold nationwide, Segala said that Amazon likely would look at opening locations in other states. The company, Segala said, recycled about 2 million gallons of paint last year in Minnesota and at its other location in Riverside, Calif. The Minnesota facility received about 575,000 1-gallon cans of paint in 2008, Segala said. That's enough, by his calculation, to fill about 120 semitrailers.

Besides paint, Amazon at its Fridley plant recycled about 200 tons of metal from 1-gallon cans, 70,000 1-gallon plastic cans and 16,000 5-gallon pails.

Using what can't be recycled

Amazon cannot recycle about half the paint it receives, Segala said. That's often because it has been "prebulked," with all colors mixed together into 55-gallon drums instead of left in its original containers.

In that case, the company employs a patented process that turns that paint into what it calls processed latex pigment, or PLP, which is produced at an Amazon facility in Oklahoma and sold as an ingredient used in place of other raw materials in making cement. The company has three PLP-related patents, Segala said.

Segala said his sister and brother-in-law, Dave Long, began working on a way to reuse leftover paint and commercialize the product in the early 1990s. She was a salesperson for a waste-collection company, while Long worked in the cement industry, had a background in chemistry and was a self-made inventor and entrepreneur.

"You've got a salesperson and an inventor and boom, there you go," Segala said. "I said, 'I'll sell my car and trade down, sell my motorcycle and cash in my 401(k), and I'm going to start this out here in Minnesota.'"

The experts say:

Dileep Rao, who teaches entrepreneurship and venture financing at the University of Minnesota's Carlson School of Business, said Amazon seems to be in the right place at the right time with the right products.

"Now the issue is whether they can exploit the opportunity, retain their lead and dominate this industry that they have identified," he said.

Should they grow faster?

Amazon should evaluate its growth strategy, Rao said.

"Given that it took them 14 years to reach $4 million in sales, should they seek to grow faster before someone else muscles in on the market?" he asked. "Are the co-owners capable of taking it to the next level? Do they need to get more training, build a team or sell when they can get a good price?"

Alec Johnson, assistant professor of entrepreneurship at the University of St. Thomas Opus College of Business, said Amazon has been smart to focus on contractors in establishing a market for its recycled paint.

He wondered how profitable the paint is at $12 a gallon and recommended caution in moving into the consumer market, which is more expensive to pursue.

"I hope that at $12 a gallon they're making a ton of money," Johnson said. "Then they're truly into high-value recycling. They may need to raise their price."

Todd Nelson is a freelance writer in Woodbury. His e-mail address is todd_nelson@mac.com.

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