A Very Green, Ethical Investment – Solegear Bioplastics (SGB.V)

Take a look at the space which surrounds you. It’s safe to assume your room or office contains many different things made of plastic. There’s no getting away from plastics. There’s also no getting away from the growing movement of becoming more environmentally responsible.
Today’s cultures and large corporations are constantly looking to reduce their impact on the environment. Of all the plastics out there today, about 12% will make it to the recycling depot. I’m sure you can see the issue with this.

To meet the changing demands of the consumer as well decrease their own corporate carbon emissions, massive corporations like “Coca Cola” have started to aggressively make use of plant based plastics, known as bioplastics, which are made from a minimum of 20% plant-based materials like corn and sugarcane. Since 2009, Coca Cola has produced more than 35 billion bottles made with 30% plant based materials and have been working towards a bottle made from 100% plant based material which was revealed to consumers last month. Research and expertise required for these advances in next generation plastics are major investments and are the result of innovative companies that focus on developing the technology. I’m talking about companies like Vancouver’s Solegear Bioplastic Technologies Inc.

Solegear Bioplastic Technologies Inc., publicly traded on the TSX Venture Exchange as SGB.V, is an innovator in the field of bioplastics that boasts some of the highest uses of plant-based materials in their proprietary formulas. The company engineers, produces and distributes high-performance bioplastics in resin, sheets, finish packaging, and finish durable products that are used by consumers everyday. Solegear’s mission is to play an integral role in changing, the way we make and dispose of plastic products, allowing our communities to be healthier, safer and stronger.

Green Chemistry at the SoleGear Lab

Green Chemistry at the Solegear Lab

Solegear (SGB.V) provides investors with an opportunity to join the booming environmentally friendly trend that’s being fueled not only by the responsible consumer, but also by changing government regulations and corporate financial motivators. Recently, Home Depot introduced an “Eco-Fee” on certain products. Their website explains it as “Eco-fees are used to support provincial recycling and disposal programs to keep end-of-life products out of our landfills and waterways. These diversion programs help protect our environment and our communities.” This eco-fee puts pressure directly on the consumer to shop more responsibly, and pressure on the manufacturer to produce responsibly.

CEO of Solegear, Mr. Paul Antoniadis was delighted to work with me and also agreed to an exclusive Interview. Paul provided me with insight on how the company came about, what they’ve been through, and where they’re headed.

Solegear announced Paul Antoniadis as CEO in June. Paul is very well known for his roles with “Best Buy: where he served as Vice President of US Sales, International Senior Vice President and CEO & Executive Director of Best Buy Europe. Paul is also CEO for “Scenario”.

Here’s the Interview with CEO Paul Antoniadis:

Joe: What attracted you to work with Solegear?

Paul: There are some fascinating trends evolving that relate directly to how companies and their consumers are making choices related to the legacy they want to leave – what they believe constitutes good business. We are seeing a strong movement among the 28 and younger demographic that are putting trust and loyalty in brands that are environmentally-aware and make a difference, as well as action by Fortune 1000 companies, who are creating “sustainability committees” to align their practices with environmental values. Regulators are also taking a more active role, passing laws to reduce CO2 emissions and energy consumption, to remove toxicity in materials and products, and reduce the amount of material used to produce packaging and products. Solegear’s goal of changing the way we make and dispose of products made of plastic with our portfolio of bio-based resins lines up with all of these societal changes, positioning the company well to capture a raw materials plastics market that will see a value of over $500 billion this year alone, eclipsing traditional market drivers like steel and paper. Solegear also has a very attractive structure as it relates to a capital efficient business model. We use a 100% outsourced supply chain process that leverages existing manufacturing in North America and Asia, keeping costs down while allowing flexibility to scale production up as we grow. I was also drawn to the fact we have extraordinary talent amongst the staff and the board who keep the company on the right path and challenge the way things have traditionally been done.

Joe: Where did the name Solegear come from?

Paul: “Solegear’s” name is based on the theory that it takes many inspired and motivated people, organizations and innovators – gears as it were – working together to reach shared goals of reducing CO2 emissions, decreasing energy use and removing toxicity from materials & products. It is our belief that our company is just one sole gear in that process, a part of a larger machine moving towards a sustainable future.

Joe: Can you explain the relationship between Scenario and Solegear and any synergies that may exist?

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CEO Paul Antoniadis

Paul: Prior to taking on the CEO role at Solegear, I led the team at Scenario, a BC investment and advisory firm that I co-founded, that drives sustainability and innovation in the retail space. Early in Solegear’s development, Scenario was inspired by the trail the company was blazing and made an early stage investment because we believed strongly in the goal of transforming the plastics market. I became an active board member and began to support the shaping of Solegear’s go-to-market strategy, business model, strategic partnerships and supply chain.

Joe: It’s rare to see such an extremely qualified and experienced management team in a Microcap company. Can you comment on the team’s history and past success?

Paul: The experience, credibility and operational knowledge that our board and management team brings to Solegear is unsurpassed for a company of this size and it makes navigating this adventure we are on so much more enjoyable knowing that we have extraordinary depth of experience at such an early stage. From backgrounds in operating large public companies, board governance and professional accreditations in law, finance, and accounting, the team is well rounded, but more importantly they are committed to the goal. They live and breathe the principles that guide our company daily and want to be a part of what they see as an unprecedented market transformation when it comes to plastics development and use. What we are doing is starting to be noticed more broadly, allowing us to court and secure some impressive additions to our team. In June we were thrilled to add Dr. Sadaf Shafiei Sabet our engineering team. Dr. Shafiei Sabet holds a PhD in Chemical and Biological Engineering from the University of British Columbia and also holds a BSc. and MSc. in Polymer Engineering and Nanotechnology, and has completed extensive practical research using nanotechnology to improve the performance of bioplastics. This source of talent and fresh creativity is an important asset in Solegear’s continued growth as a leading innovator in the industry.

Joe: What percentage of SGB.V is owned by Insiders?

Paul: Currently 60% of the company is owned by insiders and these shares have been placed into escrow for 3 years. This action demonstrates our belief, confidence, and commitment in making Solegear a long-
term success.

Joe: Paul, Can you share any product “success stories” where the environmental impact has been reduced?

Paul: Solegear developed an innovative industrial package made from our Polysole® thermoformable material for a company called NEOPERL®, the largest provider of faucet aerators, laminar devices, check valves and flow regulators for plumbing applications in USA, Canada, and Mexico. NEOPERL® was motivated to reduce waste by moving to a plant-based plastic aerator tray package without sacrificing any packaging performance standards. We put our heads together with our strategic manufacturing partners ExTech & TEQ and developed and delivered an aerator tray made from our proprietary Polysole® thermoforming material that not only met their rigorous performance standards, but it also reduced the CO2 emissions by an estimated 65% and cut the amount of material needed to produce each package by 10%. These are results we are extremely proud of and also resulted in a customer so satisfied, they have increased their business with us.

Joe: You must know your competition well. Who are they? And what sets Solegear ahead?

Paul: Today the global bioplastics market is estimated to be 4 billion dollars and is growing rapidly. However, the $4 billion dollar global bioplastics market only represents just under 1% of the estimated 500 billion dollar plastic industry. North America represents an estimated 20% or $800 million USD of the global bioplastics market, so we are focusing our energies here. It’s important to note though, that the industry is very young and emerging, creating a very fragmented market as companies are taking notice of bioplastics growth and demand for bioplastics. Our model is very distinct so it’s difficult to single out a competitor, so I’d prefer to reinforce the value we bring to the table as an investment.

We stay the course with our capital & cost efficient business model – Solegear’s approach is capital and expense efficient, utilizing existing manufacturing capacity in Asia and North America to deliver our products. In other words, we aren’t interested in building our own facilities, which helps us scale on demand and focus our capital on ensuring we have the very best products in the marketplace.

We know what we are, and we do it well when it comes to technology – Solegear has a very talented team of biopolymer engineers that continues to create stronger intellectual property. Our Polysole® and Traverse® product lines are built around formulas specifically designed to improve the performance characteristics of plant-based plastic. Whether it is resisting high heat conditions or conforming to international shipping standards, our bioplastics continually deliver more plant-based content, which helps our customers achieve their environmental goals.

We offer a broad range of products to our partners and customers – Solegear knows that to transform the market, we have to provide options for every stage in the plastics development process and do it well.  We are proud to provide our customers with resins, finished sheets, finished packaging and products all made from our proprietary plant-based materials.

We know that to grow, we need to be flexible – Solegear’s development strategy focuses on both organic and inorganic opportunities for growth. Whether it be directly, through working with major brands, partnering with global packing distributors or building strategic partnerships with industry leading plastic converters, or inorganically through new joint ventures or acquisitions, we are keeping our eyes and our options open, and are welcoming conversations with those who share our goal.

We hire the best people who are committed to changing the way we think about plastics – The depth of talent and expertise at our Board and Management levels is truly what separates us from our competitors.

Joe: Thank you for your time Paul.

 

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Joe

Joe Bleackley
TradersBoardroom.com

Disclaimer: At the time of publishing this article, I am a shareholder of Solegear Bioplastics.