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The Ultimate Green Stock for 2011 May Not be an Energy Stock?

Recent press releases from a small company in Scottsdale, Arizona have gone largely unnoticed by investors and the media.  Perhaps the company’s product isn’t sexy enough for investors to gain their attention because it is not a drug or medical device to be fan-fared and approved by the FDA.  It is also not a company making outlandish promises of oil reserves in properties they’ve purchased or of types of minerals or precious metals being discovered in their holdings. However, the company is in the infant stages of financing and attempting to start production of a material that could potentially be used in every household in the United States and virtually every household in the world.  How much more perfectly could a company’s product meet the definition of having blockbuster potential?

 

As the United States and the world’s other developed countries advance and grow in population, their landfills are becoming filled well beyond capacity despite the best attempts at recycling and reuse.  Recycling concepts are great and are working to a large degree especially with the non-biodegradable materials such as metals and glass.  Plastics, despite our best efforts, are an area in which most of the world is lacking in the ability, desire and financials to recycle efficiently.  There are hosts of products manufactured from recycled or partially recycled plastics such as clothing, carpeting, automobile parts, containers, building materials and many others.  However, unlike glass and metals, plastics deteriorate somewhat with each recycle breaking the polymer chains into shorter chains which weakens the material structurally, makes it more brittle and affects the cosmetics of the products it composes.  Companies often offset the structurally weaker materials’ effects on their product by blending larger amounts of virgin plastics into their process.  Additionally, mixtures of differing types plastics tend to phase separate when melted and mixed together creating a material that is not as homogenous as their virgin polymer counterparts and therefore yielding an inferior product as opposed to glasses and metals in which similar materials may be mixed together with much less effect on the final product.  Until either a different polymer is developed to be used as a plastic with less costs to recycle and have better recyclability, or until the cost/benefit ratio of using recycled materials changes somewhat, or until the recycling process itself for polymers/plastics advances to give a better final or intermediate product we will still likely recycle much less plastic than the counterpart metal or glass products.

 

The possible answer to the problem of increasing levels of plastics in our landfills and environment is potentially being addressed by Scottsdale, Arizona based Casey Container Corporation (OTCBB: CSEY).  Casey’s approach is neither to reduce plastic consumption nor to increase recyclability.  It is using a much less painful approach, not to mention one that is cheaper for industry.  While other companies have been trying to advance the recycling technology of plastics via several means, which are often time-consuming and expensive, Casey has instead implemented an approach in which the plastics can be rendered biodegradable in the environment.  This would greatly reduce the inert plastic material dumped in landfills, which take up space for years and even centuries before the materials have degraded.  According to a Wikipedia citation on plastics, one billion tons of plastics have been discarded since the 1950’s and much of it may persist for hundreds or even thousands of years depending on the type of plastic.  If that material had been manufactured utilizing Casey Container Corporations innovative product, imagine the reduction in volume of material in our landfills and environment that would have taken place by now.

 

Casey Container Corporation is using a simple additive they’ve licensed termed EcoPure®. According to the EcoPure website, this additive renders plastics one hundred percent biologically degraded in three to five years after it’s discarded into the environment.  The additive can be used with LDPE, HDPE, PP, Polystyrene, PET, HIPS, EVA, ABS, Nylon, Polyester, TPE, TPU, TPR, Polycarbonate and PVC materials.  If the product works nearly as quickly as claimed, then the ramifications on future plastic manufacturing and disposal are substantial.  Is there a trade-off?  According to the company, the additive does not affect the material structurally, does not affect the recyclability of the plastic and does not increase the photo degradation or UV degradation properties of the material.  Finally, and perhaps even most importantly, EcoPure can be utilized in direct contact with foods and beverages, as the material is FDA conformal.  For more information on the EcoPure® additive, please see this link.

 

Casey’s news over the last couple of months has focused on biodegradable PET (polyethylene terephthalate) perform manufacturing and the orders received for the preforms.  Preforms are precursors to bottles that will be used for soft drinks, juices and other products.  The preforms will be injection molded at Casey’s manufacturing facility, which is slated to begin production in 2Q 2011.  In appearance, performs are of differing sizes depending on the final bottle sizes they will be made into.  They look like test tubes with a threaded end onto which the caps will be placed in the future.  The preforms will be sold to bottle manufactures, which will heat and blow-mold them into the final product bottles.  With their initial focus apparently on PET plastic, Casey has jumped head first into what is likely the biggest consumer contributor to plastics in landfills.  Their March 29th PR noted that they have doubled their production capability from 100 to 200 million preforms per year and have already received orders for 38 million preforms.  As their product gets more exposure and lives up to their claims, orders will undoubtedly continue to pour in.  

 

If all goes as planned, one could certainly see potential legislation coming down the line pertaining to the use of Casey Container’s product as well as other similar products for plastics as the track record for the additive and these preforms is proven.  Investors gaining current entry level positions in the common shares of Casey (OTCBB: CSEY) can expect a profitable ride in store if orders for the preforms continue to come in, if the reliability of the product proves itself in terms of functionality and biodegradability and if legislation is enacted with regard to making plastics more environmentally friendly and “green” via products such as the ones manufactured by Casey Container Corporation.  With the initial focus being PET plastics for the company, plans are likely in the works to expand the product line as the company grows to include many other types of plastics.  With a current market cap of roughly $10.5 million, the upside potential for shareholders can be substantial as the company grows and captures the attention of bigger bottling and plastic manufacturing companies looking for acquisitions that might help them become more environmentally friendly not only for the preservation of our environment but also for the obvious marketing exposure.  Even without being acquired, the company should be on firm financial footing soon as its customer base increases and as its products are likely marketed worldwide.