In the late 1990s, Steve Morriss sat in his shopfront in Nicholson Street in the Melbourne suburb of Carlton trying to figure out how his humble store – which retailed toner, inkjet and fax cartridges – was going to win customers against his bigger competitors.

Knowing he wasn’t going to be able to compete on price, he formulated a unique selling proposition: that all used cartridges from customers would be recycled. “I ended up with a warehouse full of cartridges because there was no one who would recycle the whole product,” says Morriss, who then tried to figure out how he could do it himself.

“In the early days, I recycled small volumes, manually disassembling the cartridges – putting metals in one bin, toner powder in another, ink in another. I did it all in the back of the shop in Nicholson Street. It’s not something I suggest that other people do!”

Although Morriss was able to find markets for some of the materials to be reused, other materials such as contaminated plastics, toner powder and foam didn’t have ready markets willing to accept them for reuse or recycling.

This resulted in a “growing mountain” of waste that was stockpiling in Morriss’s warehouse. “I kept looking at that pile of cartridge waste – which could have filled an Olympic swimming pool – and thought there had to be a better way,” he says. “We’d often work through weekends and into the night just disassembling toner cartridges. I wondered how we could get a machine to do the process.”

The birth of Close the Loop

In 1999, Morriss was at a conference about business and the environment when he heard the term “close the loop” - referring to the practice of buying products made from recycled materials and thus creating a demand for recycling. “I thought ‘that’s it!’” says Morriss. “I ducked out of the conference and registered the name straight away.”

For the concept to be commercially successful, Morriss knew he had to engage the big guns in the imaging consumables industry, such as Ricoh, Lexmark, Brother and Epson.

Morriss says while the companies were keen on his idea, they wanted him to invest in the research and prove the viability of the concept before they became involved.

To build the company – and to invest in the research and development required – Morriss and his wife, Melinda, knew they were unable to fund the venture on their own. So the company began in 2000 as an unlisted public company with about 50 shareholders investing around A$500,000.

One of the first steps in turning Morriss’s recycling dream into reality was to commission an engineering company to build a machine.Working with a team of engineers in Wollongong, the first incarnation of Close the Loop’s Green Machine was created. “That was made by September 2000 and was bolted down in our factory in Thomastown,” says Morriss. The first Green Machine was about 30 metres long and six metres high.

The last six years has seen Close the Loop undertake more R&D and Morriss has worked closely with recycling expert Dr John Scheirs, a director of ExcelPlas Australia Ltd, resulting in continuous improvement of the machine, which is now in it sixth version.

Since then, Close the Loop has become a partner of Planet Ark’s successful “Cartridges 4 Planet Ark” program, which collects used cartridges from over 9,000 businesses across Australia and sends them to Close the Loop for recycling.

Morriss also cites global legislative trends to cut the volume of imaging consumables going to landfill as further pointers to the need for a service such as Close the Loop.

There are now almost 500 shareholders investing over A$6 million. Morris says the company finally reached break-even point around the beginning of 2006.

Problem-solving innovation

In the early days of Close the Loop, the Green Machine was successful in automating what had been a laborious manual process. It was able to separate outputs such as aluminium, stainless steel, and pure plastics – for which there were markets for reuse or recycling. However, Morriss and Scheirs were still left with mixed and heavily contaminated plastics that no one wanted.

“I tried to find somebody to buy our mixed plastics,” says Morriss. “But after about a year, I realised that no one could use them for anything. So we had to develop our own end-use application.”

Morris and Scheirs experimented for two years.“In the early days, it was just John and I,” says Morriss. “John refers to it as bucket chemistry, chemistry experiments on a small scale and a low budget. We had to characterise the waste stream, analyse the different plastics and work out their compatibility. Then we started extruding, injecting and moulding various grades and mixes of plastics under laboratory conditions in our factory.We also spoke to a lot of people about what we were doing – science and innovation is just as much about networking and research as it is about actually doing things.

“It didn’t take us long to buy a little processing plant and have it custom built. Then we made some tools, bolted it all together, and ran some plastic through it to see what came out the other end.”

After much testing and experimentation, Morriss, Scheirs, and a growing band of enthusiastic Close the Loop employees, felt they finally found a solution, a useful material that could be created from the mixed plastics that were otherwise going to landfill.They called it eWood.

Although essentially a black-coloured plastic, it has the same natural characteristics as wood. The first batch of eWood was sold in 2003. It can be used for garden furniture, fences, retaining walls and more. “We sell every bit of eWood that we make,” says Morriss. “A horse trainer in Tasmania has used it to build a horse-breaking ring. And Lexmark in Sydney’s Frenchs Forest have used it for outdoor furniture.”

Morriss emphasises that although eWood contributes a small amount of revenue to the company, it is “a solution to a problem, not a profit centre.” The innovation has also won a New Inventors Award from ABC TV.

Global expansion

It’s the company’s innovations in recycling and separating a complex and hazardous waste stream where Morriss sees demand. “Our preferred model is to expand our business globally,” says Morriss. “We’ve got two contracts in the UK and will be bolting down our machines there in 2007. In 10 years, we hope to have five factories operating in strategic locations around the world and global contracts with all the photocopier and printer companies to divert their used consumables from landfill.”

According to Morriss, Close the Loop has undertaken detailed research and knows the business model is applicable on a global scale. He says the company has over 90% of the Australian original equipment manufacturers market as clients, including global brands such as Brother, Canon and Epson.

An emotional journey

However, the road has been paved with both triumphs and frustrations. “Our whole team has been challenged,” says Morriss, who now leads 45 staff including two based in the UK and several who travel the world on the Close the Loop crusade.“We’ve gone through the gamut of emotions on this journey. It can be hard to manage shareholder expectations and ensure there is enough cash to grow the business. As the business grows and you have to employ more leaders, it’s natural that you then have to deal with politics and a whole raft of issues that were never there when it was just John and I sitting around doing bucket chemistry.

“I’ve always had the belief that while the solution may not be in front of our nose, we have a business that tries to find those solutions.

“I’m just a simple guy. But I kept learning and my eyes kept getting wider and wider. Now we’re a multimillion dollar organisation that’s gone global.”

www.closetheloop.com.au