Dive Brief:
- Although Trex, touted as the world’s largest recycled materials manufacturer, had a monopoly on the market years ago, it was inches away from bankruptcy.
- Ron Kaplan entered into the picture as CEO in January of 2008, and turned the company around by viewing it as a startup and using its product, synthetic decking, and culture, to its benefit.
- The main component used to create the decking is plastic waste. In 2003, in an attempt to reduce costs, Trex started purchasing lower grades of plastic, which quickly led to its demise.
Dive Insight:
As a result of using inferior grades of plastic, the product stopped performing as expected, leading to lawsuits filed by consumers. Competitors began emerging with better products.
Kaplan changed the product to help the company regain its footing, and Trex released a new line using an innovative process. The company had a surplus of plastics, prompting Kaplan to develop new products, the first of which was a polyethylene pellet. Trex now views itself as a recycling and extrusion company.
Since Kaplan took over as CEO, the company's stock has risen 900%.