In Haiti, Pittsburgh-based companies turning trash into cash
Two companies hope to do more than make money in island country
July 15, 2012 4:00 AM
Ian Rosenberger, founder and CEO of Thread LLC, and Frank Macinsky, marketing director, stand in front of plastic waste in Haiti. Thread LLC is transporting 50,000 pounds of plastic flakes from Port au Prince's streets to the United States, where it eventually will be extruded into fiber.
By Molly Hensley-Clancy Pittsburgh Post-Gazette
The first time he visited Haiti, shortly after the devastating earthquake in 2010, Ian Rosenberger scrawled in his journal: "If Haiti could figure out how to turn trash into money = good."
There is so much trash in Port au Prince that it can be a literal roadblock, filling the streets and slowing traffic. It gathers in canals and ravines, blocking water and drainage, getting swept out to sea during storms. Children play atop mountains of it.
Two years after that first visit, Mr. Rosenberger's company, Thread LLC, is transporting 50,000 pounds of plastic flakes from Port au Prince's streets to the United States, where it eventually will be extruded into fiber. Thread is one of two new Pittsburgh businesses hoping to turn the tons of waste and recyclables that go uncollected in Haiti into money -- and, they hope, into good.
The missions of Thread LLC and the other business, International Electric Power, which has plans to convert Haiti's trash into electricity, are familiar. As many charities have done in Haiti, they promise to help: by ridding the country of the trash that plagues its infrastructure, creating jobs and, in the case of International Electric Power, providing electricity to about 280,000 of its households.
But Thread and International Electric also have set out to make a profit, and that fact, they say, positions them to help in ways that nonprofits cannot.
It also means both businesses are treading on relatively new territory: how to be a company in a developing nation that works for, rather than takes advantage of, the country's citizens.
Mr. Rosenberger, 30, of Shadyside, originally came to Haiti simply to observe, taking pictures of the earthquake's wreckage for a marketing company.
In the back of a truck in Port au Prince, he met Tassy Fils-aime, a young man who, at 17, had resigned himself to die. Haitian hospitals could not treat the softball-sized tumor in Mr. Fils-aime's jaw.
"Meeting Tassy was one of those moments that I call crossroads moments," said Mr. Rosenberger during an interview via the online application FaceTime while he was in Cange, a remote village on the Haitian plateau. "Where if you take one direction, your life will be completely different."
The nearly $100,000 that Mr. Rosenberger raised to send Mr. Fils-aime to Pittsburgh for a lifesaving operation was the genesis of a nonprofit called Team Tassy, which helps Haitians find medical treatment and, after their recovery, jobs and education.
On Saturday, Team Tassy is hosting a fundraising event in Point State Park, called the Great American Water Balloon Fight, that the organizers expect will draw 3,000 people and 100,000 water balloons.
It's about jobs
But after a year of running Team Tassy, Mr. Rosenberger recognized a need for something more than the charity could provide.
"We tend to treat places that are poor with one approach: We're going to send clothes, build houses and churches, provide relief," Mr. Rosenberger said.
"The fact is, when we look at the recession in places like the U.S., we don't look at the number of houses or schools or the number of shoes we send. We look at the number of jobs we create. And we need to start doing that in poor countries, too."
So Mr. Rosenberger founded Thread LLC in 2011 with the idea of making products from Haitian recyclables that can be sold to consumers in the United States. Although Mr. Rosenberger declined to disclose the exact nature of the products because they are still in development, he said they would be wearable or used in the home, and he emphasized that they will be recognizable -- branded as being made, fairly and sustainably, in Haiti.
"People care about where their stuff comes from in a way they never have before," Mr. Rosenberger said, citing successful companies such as shoe company Tom's and outdoor gear maker Patagonia. "The market for these goods is enormous."
Thread plans to have prototypes of its first products by the end of this year. The company is currently seeking first-round investors to help it raise $600,000; so far, Mr. Rosenberger said, all of the investors are based in Pittsburgh, including business incubator Idea Foundry, which provided $50,000 in initial funding.
Eventually, Thread wants to raise $5 million to $6 million to build a facility in Port au Prince that the organizers call a "manufacturing campus," which will include a facility for processing recyclables, design studios and a community amphitheater.
"We tell people, 'You've been giving your money in the form of aid, and that's great. People need aid, especially after disasters," Mr. Rosenberger said. "Why not invest in a company that can provide jobs and can also provide for itself?"
Trash to energy
International Electric Power, you might say, began not in Haiti but at the side of Peter Dailey's pool. In 2007, Mr. Dailey was in the process of selling his independent power company. He was sitting by the pool at his vacation home in Hilton Head with his daughter when she turned to him and said, "Dad, when you die, people will remember you as a good moneygrubber."
That year, Mr. Dailey founded Downtown-based International Electric Power with the hope, he said, of "doing more than just making a profit." He is now the CEO of the company, which he owns with partners Steven Adelkoff and Enzo Zoratto.
The company is promising to use the natural resources of developing countries to create independent, and often renewable, energy. Although they currently are also working on ventures in Pakistan and India, Haiti is the site of their first venture: Project Phoenix.
In Haiti, trash was the most obvious resource. The 2.9 million people in the area where International Electric will operate generate some 2,000 tons of trash a day, of which less than 800 tons are collected by the government and private sectors.
That leaves more than 12,000 tons of trash accumulating daily. "It's unimaginable," Mr. Dailey said.
International Electric and a Spanish equipment company, Ros Roca, developed a waste collection system for Haiti's capital. The hope is to convert that trash into enough power to serve about 280,000 Haitian households.
International Electric is in the final stages of finding investors for the 30-megawatt plant, the construction of which will take two years and cost $250 million. The company already has signed a public-private agreement with the Haitian government and hopes to begin construction by the first quarter of 2013.
The need for energy independence in Haiti, Mr. Dailey said, is great. The vast majority of its power is imported in the form of costly diesel fuels and petroleum, and less than 30 percent of citizens have access to electricity. Over 30 years of operation, International Electric estimates the power plant will save the Haitian government $4 billion, in addition to the tons of waste it will keep off of Port au Prince's streets.
Originally, the company had plans to couple its trash collection services with the construction of a lignite mine. Haiti has troves of lignite, or brown coal, which could produce energy more cheaply and efficiently than trash alone.
They quickly abandoned the plan because lignite was a dirty fuel. The decision, said International Electric's vice president of development, Edward Rawson, was two-pronged: financial, because investors were reluctant to put money into its use, but also environmental. "Quite simply, it's better for the planet," he said.
Thread, too, is considering the environmental impact of its business. Many recycled products available in the U.S., Mr. Rosenberger said, are flown to and from China, some 20,000 miles round trip. Products transported to and from Haiti cut that distance by 70 percent, making them more environmentally friendly -- and cheaper to produce.
'A bunch of white people'
No matter how deeply he feels connected to Haiti, through Team Tassy and the time he has spent there since 2010, Mr. Rosenberger knows his Thread team is not rooted in that country. "We're still a bunch of white people."
And that can be a problem. Neither Thread nor International Electric employs any Haitians at the top levels. It is a fact that both businesses struggle with; they say it can cause both mistrust and cultural misunderstandings. It also means they have to work to set themselves apart from charities and businesses that come into Haiti hoping to impose American values and solutions onto its citizens.
International Electric is developing Phoenix University, which will educate Haitians in electrical engineering and other skills that the plant requires. The education will allow them to fill skilled engineering roles that many other foreign companies would give to American managers.
"Too many people simply push solutions onto the Haitian people," Mr. Rosenberger said. "We decided very early on that we needed to spend a lot of time here. It's a novel concept, surprisingly. Very often, people don't ask the poor what they need."
Some well-meaning social-entrepreneurship initiatives that Americans bring to developing countries can do more harm than good -- by out-competing local producers, for example, or providing services that are unnecessary or unrealistic.
Said Mr. Rosenberger, "We're never going to be Haitian. Change has to come from a grassroots level in Haiti itself."
In addition to spending as much time as possible there -- Mr. Rosenberger said he has visited more than 50 times since 2010 -- Thread is working to solve the problem in part by partnering with Partners in Health, a hospital in Cange that was founded by American doctor Paul Farmer.
Partners in Health is Haiti's third-largest employer, with a 5,500 employee workforce that is 95 percent Haitian. Mr. Rosenberger sees the organization as an inspiration: "Their philosophy aligns with what we're trying to do -- to restore dignity rather than just giving handouts."
Another challenge that both Pittsburgh companies face is reconciling American labor values and standards, and their own commitments to fair labor practices, with the Haitian reality. Haiti's minimum wage is less than $2 a day.
"It would be fantastic if we could pay $45 a day," Mr. Rawson said, "but in terms of business sense, that's unrealistic. It would drive up cost dramatically. We have to stay in the parameters of the country."
International Electric has, however, promised to pay a wage that is relatively high in Haiti and to provide working conditions that meet not just Haitian standards but American ones.
Mr. Rawson, who grew up in Pittsburgh, has roots in Haiti; his family is tied to Hôpital Albert Schweitzer in Deschapelles, Haiti, and the reality of their charity work and fundraising efforts there fueled his faith in the for-profit work of International Electric Power.
"You could be providing everything that Haiti needed, but when the money ended, the project stopped. With a business that's making money, that's not a problem."
"We believe in the power of business to change peoples' lives," Mr. Rosenberger said. "Business can be more than just 'not bad' -- it can be really good."