Innovation/Global Risk 

Innovating With Junk:  

Value From Old Truck Tarpaulins 

By Shlomo Maital

 

   In many businesses, cost of materials is an important part of total cost; sometimes, rising material costs (e.g. when oil prices spike and drag plastic prices up with them) endanger a company’s profit model.   One solution is to use materials that are junk, discarded and available for free.  Here is a good example – the Freitag brothers, in Switzerland, who create high value from old truck tarpaulins.*

 “In a high-ceilinged factory in Zurich, old truck tarpaulins are being spread out to be cut up and stitched into idiosyncratic, colourful bags. Destined for sale across Switzerland, the rest of Europe and more recently Japan and the US, their popularity has spread far beyond the cycle couriers who first appreciated their practical stylishness and ecological appeal.”

 “People like us for various reasons,” says Daniel, at 41 the older brother by a year. “Our buyers tend to be urban types, often working in the creative industries, like advertising or graphics. They like our functional design and appreciate the quality that comes with manufacturing in Switzerland.”

 “The brothers say Freitag’s green credentials are also a crucial factor in its success. As well as the tarpaulins, almost all the materials they use are recycled, while each workspace in the factory has its own bicycle rack. “Customers know we don’t advertise or spend money on celebrity endorsements. They recognise and appreciate the honesty of our range,” Daniel says.”

“Our biggest initial investment was SFr2,300 – our combined savings at the time – for an industrial sewing machine,” says Daniel. Later, the brothers borrowed SFr20,000 from their parents to fund expansion.”  “Only twice have they resorted to a bank loan: first to finance their landmark store in Zurich, which comprises a stacked pile of freight containers, and more recently to help equip their new factory. There are now nine stores, including outlets in New York and Tokyo. Profits are a carefully guarded secret but revenues this year seem likely to approach SFr30m.”

  How in the world did they get the idea?    Here is how:  “Markus was on a course in graphic design. His shared student flat looked over the Zurich flyover that carries much of the transalpine truck traffic. Somehow, seeing all those trucks, and knowing there was a gap in the market, inspiration bloomed.”   

   Innovator!  When you see junk – do you see value and creativity?  Can you too build a powerful business, like the Freitags, out of junk?

  * Bags of cash from cast-offs  By Haig Simonian. Financial Times. January 4/2012

 

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