Janet Moore, Star Tribune
“There’s a lot of cardboard here,” he said.
That’s good news for Cremer’s Harmony Enterprises Inc. Based in the little town of Harmony, Minn., the family-owned company manufactures and distributes compactors and balers for the recycling industry. The idea behind his products is simple: Compressing trash saves precious space in landfills. As president of Harmony Enterprises, Cremer traveled about China last week with the environmental delegation of Gov. Tim Pawlenty’s trade mission.On that trip, his goal was to sell his SmartPack trash compactors — otherwise known as the Talking Trash Can — for use during the 2008 Beijing Olympics.
But he was also looking for other opportunities.
Like in many booming economies, the unfortunate byproduct of China’s growth is trash — mountains of it. As its population migrates from rural to urban areas, China recently surpassed the United States as the world’s largest municipal solid waste generator, according to the World Bank. In 2004, China’s burgeoning urban areas generated about 190 million tons of municipal solid waste, and by 2030, that amount is projected to surge to at least 480 million tons. China’s trash is a big problem that requires innovative solutions.
“No country has ever experienced as large, or as rapid, an increase in waste generation,” a World Bank report says. “Management of this waste has enormous domestic and international implications.”
That means the country could spend about eight times more to manage China’s trash between now and 2020, from about $3.7 billion now to $28 billion. It would be easy to characterize Cremer as a hard-charging entrepreneur eager to capitalize on what is clearly an attractive market opportunity. But that wouldn’t be the whole picture because, in truth, Cremer’s story is quintessentially Minnesotan — intensely local, but increasingly global.
A surprise query from Taiwan
In 1989, Harmony Enterprises received a document from Taiwan that curled over the lip of the fax machine. It was an order for a baler, a piece of equipment that compresses waste such as cardboard.
“I had no idea what to do,” Cremer said.
It was a lucrative order, but he wondered whether he would be paid. He called the Minnesota Trade Office for advice, ultimately visited Taiwan to make sure the ordering business was legitimate and negotiated his way to his company’s first international business deal.
“I still sell to that guy,” Cremer said.
Today about 40 percent of the company’s annual revenue of $10 million to $15 million comes from 57 countries. Just last month, Cremer sold a vertical baler in Surinam. “I had to look at a map,” he admits.
Harmony Enterprises didn’t start out as an environmental company. In 1962 a group of business leaders, including Cremer’s grandfather, decided the southern Minnesota town needed to diversify from its traditional agricultural base. Many of the town’s residents pitched in $10 to $100 to become shareholders in the new entity. “It was the guy who owned the grain elevator, the banker, the local doctor and my grandfather,” Cremer said.
They decided to manufacture canvas enclosure products for campers and ice fishing shelters. It made sense back then, because Minnesotans sure like to camp and ice fish.
‘Now they’re ready’
In 1971, amid Earth Day fever, Iowa banned the incineration of cardboard, which typically would occur in back of supermarkets. About that time, someone asked Cremer’s father whether Harmony Enterprises, which did some metal fabrication work, could make a baler for cardboard. And that was the beginning of the company’s environmental business, which now comprises 98 percent of its annual revenue. (The company sold its sewing business in 1995.)
Harmony Enterprises is now the town’s largest full-time private employer, with about 70 employees. But you’d never know it if you drove by its low-slung manufacturing operations just north of “downtown,” which serves Harmony’s population of roughly 1,100 people. Nor would you guess the international flavor of the company’s balance sheet.
Cremer accompanied Gov. Arne Carlson on a trade mission to China in 1997, but the trip didn’t result in any business. “China at that time was interested in seeing the [wastewater] guys,” he said. In a developing country’s environmental pecking order, recycling often comes last. “First it’s water, then it’s air, then it’s solid waste and recycling. Now they’re ready,” he added.
Talking trash can: ‘Kids love it’
The company’s SmartPack trash compactor is now found in fast food restaurants, airports and schools all over the United States. The marketing pitch behind the product is that loose, non-compacted trash can occupy up to 25 times more space than compacted trash. Employees empty the trash less, and the receptacle doesn’t overflow or leak, saving labor and waste hauling expense. And every time trash is deposited, the compactor “talks” to the customer, usually saying “Hello,” or delivering an advertising message. “The kids love it,” Cremer said.
He’s hoping the Chinese will love it, too. By the end of Gov. Pawlenty’s trade mission, Cremer had met with a Hong Kong-based distributor and was optimistic that he was close to an agreement to have his SmartPack receptacles at the Beijing Olympics.
Cremer has hosted delegations of Chinese business people in Harmony on several occasions. What do they think of the tiny town, just shy of the Iowa border?
“They love the clean, fresh air,” he said. Cremer hopes that they also love Harmony’s solutions for the problems associated with China’s trash.
Janet Moore • 612-673-775