The media, pundits and analysts detail every morsel of news that trails in the wake of software and social media titans. However, for industrials, this is not the case. The headlines have recounted a story of industry in decline, completely overlooking a resurgence that’s well underway. This resurgence is driven by companies with a zeal for innovation. We lovingly refer to this collection of high-tech manufacturing firms as the Titanium Economy because their namesake metal shares many characteristics: titanium is extremely durable and corrosion-resistant.
The Titanium Economy is thriving, often brimming with innovators that make our lives easier, more efficient or both, every second of the day. These firms kept production lines humming during the recent historic Covid-related labor disruptions, delivering healthy returns for their shareholders and investors while at the same time bringing prosperity to their employees and communities. They have withstood recessions and remained robust franchises, all without any of the fanfare afforded to their tech counterparts. What’s more, sustainability is set to disrupt virtually every corner of industrial-tech. While this rapid change may seem daunting, the industry is rising to the occasion.
In the past decade, American industrial companies have reduced their carbon footprint by 12 percent, and many are working to accelerate their efforts. For over a decade, many companies in the Titanium Economy have requested that their suppliers reduce their greenhouse gas emissions, with some going so far as to ask suppliers to publicly report their emissions. Additionally, many companies are embracing innovative technologies to upgrade their equipment, increase efficiency and replace fossil fuels with alternative renewable energy sources. These moves are both improving the sustainability of companies and enhancing productivity in a positive feedback loop that will drive the acceleration of efforts.
Trex is a great example of this. You may not know the company, but their innovation directly benefits all of us, across the planet. Trex’s contracts with local big box stores, such as Target and Walmart, and grocery stores like Albertsons, as well as drop-off recycling centers around the region, guarantee that the company will accept any plastic film waste sent its way. This includes all the grocery bags, dry cleaning bags and newspaper sleeves, as well as the plastic wrapping around paper towels and any other plastic wrapping that consumers discard daily. All that would otherwise rot in landfills, becoming brittle, cracking and creating microparticles that seep into waterways.
First of its kind
A first-of-its-kind patent in the late 1990s proved the viability of the material and inspired Roger Wittenberg and three partners to found Trex in 1996. Honed over the years, the process Trex now utilizes for its deckings, railings and benches combine plastic with reclaimed wood to produce planking that looks remarkably like wood but is more resistant to weathering and decay.
This innovation has done so much to cut down on some of the most problematic types of plastic waste. The bags and wrapping materials are generally not accepted by recycling programs because they gunk up sorting machinery and are not made of high-enough-grade plastic to make recycling them economical for most purposes. They make their way not only to landfills but into rivers, lakes and oceans, where they endanger animals that have been found washed ashore with appalling amounts of plastic in their stomachs. What’s more, the microplastics they release into waterways make their way into drinking water.
Every 16-foot plank that comes off a Trex production line contains approximately 2,250 plastic bags and the wood shavings that are used come from the waste product of other manufacturers. This means that Trex hasn’t been responsible for cutting down a single tree to make any of its products. Every year, the company salvages more than 500 million pounds of plastic and wood scrap that would otherwise have gone to landfills. This makes the remarkable ingenuity Trex has brought to the continual innovation of its processes a vital model for the Titanium Economy’s potential to spearhead enormous progress in achieving sustainability goals.
While many may think that these actions are purely for the betterment of our society, these transformations have also created tremendous financial value for the company. Trex increased nearly 5,000 percent between 2010 and 2019 (the period that studied was researched), outperforming all FAANG companies and the S&P during this same period. Trex’s total shareholder returns grew 39 percent compound annual growth rate (CAGR) between 2010 and 2019 compared to the top FAANG performer Netflix’s 36 percent.
Though we as a society face many issues in building a prosperous economy that also prioritizes sustainability, Titanium Economy companies like Trex are working to make this idealization a reality.