I’m in Cincinnati next week to help pitch a recycling business concept to investors. It’s an exciting idea — taking waste plastic and transforming it into high value-add products. This not a social innovation business, it’s a for-profit venture that just happens to be clean, green, and job creating. The newco is called Integrated Green Technologies (IGT) and the good news is the business plan couldn’t be more clear or exciting. This business could make a great deal of money and in a fairly predictable, not-so-long time frame.
In theory, it’s an investors dream, relatively low risk, high return, a chance for explosive growth (this is my opinion, investors get in touch with me — firstname.lastname@example.org — to see the plan and make your own judgment). The pitch meeting is Tuesday, April 24th, 8:30 to 11 at the Queen City Club.
So what’s the problem? IGT is having a tough time raising the funds needed to start operations.
The problem breaks down into two things: 1.) transforming plastic to high value new plastic products is an expensive process to start-up. It requires high-tech heavy equipment, and, a large physical plant to put in in. And, 2.) there is a reluctance to invest in new manufacturing in the USA. So, big capital requirements — not so hard to understand the reluctance to invest millions in a newco. However, it’s not easy to understand the reluctance to rebuild the manufacturing base. Manufacturing jobs are a staple of a properly diversified economy. So, why the reluctance?
Many believe that the USA simply can’t compete with offshore countries like China. USA labor is too high etc. Well, that’s a lot of malarkey. But if I’m a VC with funds to invest, would I rather take a shot at the next Facebook, or the next — yawn — waste recycling manufacturing business. VC’s would do well, as would local government officials, to stifle the yawn, and invest, but it’s a tough sell.
That’s why I think the reshoring concept is so brilliant. The Reshore Initiative is spreading the word that if you look at total cost of ownership, on balance, if done properly, USA firms (and are you listening UK) can indeed compete. The visionary behind reshoring is Harry Moser. I don’t know much about Harry, yet, but I applaud and encourage his efforts. For more about how reshoring can work, see this Forbes piece, a good case study type article on Reshoring, Buzzworthy Benefits of ‘Reshoring’.
I’m hoping this concept of reshoring is being picked up in cities like Cincinnati. It could make all the difference for a brighter future.