Have you ever wondered where light bulbs, beer and wine bottles and the display screens of your old smartphones actually end up after you have disposed of them?
The answer is most likely to be Taiwan’s largest glass recycling company: Spring Pool Glass Industrial Co. Behind the success of this family operated small-medium enterprise is a story of a father and son who have promoted the upgrading of a traditional industry beyond its original mission.
Handling 70 percent of the market by insisting on “doing just one thing”
Spring Pool Glass Industrial Co. (hereafter Spring Pool) is located in Hsinchu City’s Xiangshan District, a region that once dominated Taiwan’s world leading export glassware industry. Company CEO Wu Chun-chih who has worked in the industry since he was 16 initially as an apprentice, has been recycling glass for more than 50 years. Spring Pool now holds approximately 70 percent of total market share for the recycling of glass in Taiwan.
“After work, I would usually go house to house to pick up discarded glass bottles. Spending about half an hour each day, I could increase our monthly income by NT$60,” says Wu, his family’s middle child who also helped to make ends meet. Starting from humble origins to operating a business that most would not care to touch, Spring Pool now posts NT$500 million in annual revenue.
Wu founded Spring Pool in 1970 and made the act of recycling into a business. Though the company already has 40 years of history, Spring Pool’s activities are closely linked to the Circular Economy - promoting greater resource productivity to reduce waste - that has taken the globe by storm.
Taiwan recycles approximately 150,000 tons of glass annually, equivalent to approximately 300 million 600 ml beer bottles. Of the 100,000 tons processed by Spring Pool, the glass is first sorted, cleansed of impurities, crushed and ground up among other steps. Virtually all of the glass materials can be reused. The materials melted from furnaces have industrial applications, or they can be resold to glass factories, remade into new glassware, or be utilized for construction, engineering and artwork.
“This company has devoted itself to one task only and takes that task to heart,” says Professor Chang Tien-ching of National Taipei University of Technology’s Institute of Environmental Management and Engineering, who notes that unlike Spring Pool, most recycling companies devote their attention to a range of materials. Times have changed since the late 1990s when Taiwan’s glass recycling rate was less than 10 percent. Today, the rate is 95 percent, the second highest in the world (behind only Sweden), highlighting the company’s importance.
While the task of recycling glass seems quite straightforward and a low gross margin industry, how then has Spring Pool achieved a competitive edge that has allowed it to become number one in Taiwan?
Placing customers ahead of costs
Service vehicles operate 365 days a year
The act of collecting is the first challenge to overcome.
Setting itself from other enterprises that focus primarily on cost reduction, Spring Pool’s operating philosophy is centered around customer service. It operates 30 vehicles that collect materials 24 hours a day, 365 days a year. For example, if a furnace shows problems and continues to seep liquid glass, the company will send its vehicles on site immediately to recycle the materials. Fuel costs alone can cost the company NT$2 million a month. The commitment to service has allowed the company to form close relations with large glass manufacturers such as Taiwan Glass and Corning, accounting for a large share in the recycling business.
“In order to reduce customer complaints, we devote one service vehicle to two to three large clients,” Wu said.
Upon securing the materials, sorting is the next step in the process.
In the past, recycling companies depended on the human eye alone to determine the quality of the glass to be recycled, a difficult feat considering the sheer tonnage of material to sift through. Adding to the challenge, broken glass is even harder to sort, let alone reuse and painstakingly difficult to restore to its original value. Spring Pool therefore has made the automation of sorting glass a priority to deal with these issues.
Upgrading 》Assembly line automation
Development of sorting system increases efficiency by a factor of 10
“I grew up picking up glass bottles!” says Wu’s son and the likely second-generation successor of the firm, Wu Ting-an says with a smile. The younger Wu helped out at his father’s firm as a youngster and joined him in scouring for glass bottles as well. At university, he majored in Resource Engineering and also studied Industrial Management at Cambridge University. There he honed the skills to become an important person in helping older firms transform themselves.
Jokingly referring to himself as “the boy who plays with garbage,” to an observer, wouldn’t Wu Ting-an be at least a bit squeamish about giving up a prestigious title in a large corporation having graduating from a prestigious foreign institution and having worked at Taiwan Semiconductor Manufacturing Co.?
“I actually find it exciting to do something no one has done before – thinking of ways for an older industry to function anew,” he believes. Beyond the responsibilities of the company’s eventual successor, he wants to try new approaches to doing things, building on the more than 50 years of company operations under his father.
Therefore under his leadership, Spring Pool has expended nearly a billion dollars in researching an automated sorting system, assembling parts and equipment that can detect and differentiate and categorize glass shards according to color, materials, and other different types. This technology allows ten tons of glass to be sorted within an hour – increasing efficiency by more then a factor of ten. Recent plans include cooperation with National Tsinghua University to incorporate the concepts of “Industry 4.0” – increasing the role of data management to make “intelligent factories.”
Spring Pool’s incremental moves to increase transport, processing and production technology thresholds that have moved it from its more humble origins of recycling glass wine bottles toward forays to new technology and change was actually in response to crisis.
Diversification (1) Creating works of art
Selling new sources of income to Taiwan Taoyuan International Airport
Four years ago, Spring Pool recycled a large stockpile of flat panel displays. But due to the aluminum contained in the panel making it hard to melt back into glass for resale, these materials could only be used to pave roads.
The stockpiles of 40,000 tons of flat panel glass soon became mountains of their own, hard to convert into cash. With turnover barely making ends meet, the company had to borrow NT$50 million just to maintain its operations. “Things were really tough back then,” Wu Chun-chih says with a sigh.
This was not the first crisis faced by Spring Pool. In the late 1990s, mainland China’s glass manufacturers lumbered onto the world stage using cost cutting measures to increase competitiveness. The results were devastating, causing the closure of half of all glass factories in the Hsinchu area. The development demonstrated that the company’s future was in doubt if it failed to move beyond the confines of a recycling business generating profits of 10 percent toward developing value-added products.
Therefore, Wu began to invest in the research and development of art, taking the raw materials from melted-down discarded glass and relying on the creative ingenuity of masters in the factory to shape them into artwork. These works have fetched profits ten times higher than previous efforts and have adorned the walls of Taipei 101 and Taiwan Taoyuan International Airport, becoming another source of income for Spring Pool.
After encountering the most recent crisis four years ago, Wu Ting-an decided to take the reigns at his father’s behest in order to help the company begin yet another transformation.
During his university studies, the younger Wu discovered that through two cycles of grinding, the heat resistant properties of glass converted into granules as fine as grain could be added to cement and be made into eco bricks.
After entering the company, Wu took what he learned at university and put them into practice in order to produce these specialized bricks. In the effort to accelerate their appearance onto market, he literally burned the midnight oil with the factory operator in added shifts. “We got burned really quickly (by the raw materials) and needed to be sent to the emergency room,” he recalls.
Spring Pool spent hundreds of millions in order to develop this new product, with eight months of trial production using more than ten combinations of raw material proportions and subjecting the bricks to different temperatures over and over looking for bubbles in the heating. After multiple tests and eliminating a series of environmental obstacles, the product was finally made available in 2013.
Diversification (2) Producing Eco-bricks
Product accounts for a quarter of all current revenue
Construction materials now account for 25 percent of Spring Pool’s total annual revenue, with large hotel operators like The Landis using ecobricks for their buildings. Taiwan Material Development’s Chairman Su Jung-fa says however that Spring Pool is a newcomer to the field and needs to change relations among architects who are customarily dealing with preexisting contractors. This will Spring Pool’s next most pressing challenge he believes.
The saying “poor kids will never starve to death” is exemplified by the seven decades Wu Chun-chih has dedicated toward the glass industry and convincingly shows that those who encounter despair will be more dedicated in finding ways to continue forward.
The two generations of this family firm have trodden down a road of unending change, shaping the inconspicuous fate of discarded glass and giving them new forms of life. At the same time their experience evidences that even the most unpopular of industries can continue forward with resolve and ingenuity.
[By Yu-ping Kang / tr. by Russ Chiao]