Episode 263: Leading Sustainable Change in Plastics Manufacturing with Dhu Thompson

February 12 , 2024  |  By Brent Williams

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This week on the Be Epic podcast we wrap up the 2024 Arkansas Business Hall of Fame series with inductee Dhu C. Thompson. Dhu is the Owner of US Irrigation and former owner/president of Delta Plastics and Revolution Bag. The episode dives into Dhu's compelling narrative of a career shift from banking to leading a major player in the plastics industry. Dhu recounts his journey from a banker in Monroe, Louisiana, to purchasing Delta Plastics in Arkansas and transforming it into a successful enterprise. He shares insights into the evolution of poly pipe for agricultural use and how Delta Plastics addressed environmental concerns by introducing recycling initiatives. This story is a testament to how entrepreneurial spirit and industry knowledge can combine to create innovative solutions.

Podcast Episode

Episode Transcript

Dhu C. Thompson  0:00  
To me, Arkansas is significant in embracing entrepreneurial people, individuals and the list is you know that list. Yeah. Walton, Tyson. Yeah. Hunt. You know, they all. Yeah, it's pretty special.

Brent Williams  0:14  
Welcome to the Be Epic podcast brought to you by the Sam M. Walton College of Business at the University of Arkansas. I'm your host, Brent Williams. Together, we'll explore the dynamic landscape of business and uncover the strategies, insights and stories that drive business today.

Well, today I have with me Mr. Dhu Thompson, and Dhu is, was the was the Chairman CEO of Delta Plastics, which we'll get into, to in some depth in a little while, but for our purposes, is one of the inductees into the class of the 2024 Arkansas Business Hall of Fame. So first Dhu congratulations.

Dhu C. Thompson  1:05  
Thank you. I appreciate it.

Brent Williams  1:07  
It's quite an honor. And you're quite deserving. And a story that I'm looking forward to telling both at the induction ceremony on February 16. But But throughout the next few minutes, so with you. 

Dhu C. Thompson  1:21  
Well, thank you, thank you for the opportunity.

Brent Williams  1:24  
And, you know, maybe I want to, I want to make sure we kind of get into your personal history a little bit, maybe first start with what, tell us a little bit about Delta Plastics and kind of how you got involved with it, how it evolved over time.

Dhu C. Thompson  1:40  
Yeah, sure. I actually was a banker in my previous life, for about 14 years. So I ended up purchasing Delta Plastics in November of 96. The way I got there was during that time period, in banking, I took a little bit of a sabbatical for about two years, and actually worked for a privately held family owned plastics company

Brent Williams  2:10  

Dhu C. Thompson  2:10  
And then went back into banking for four more years. So it gave me exposure and knowledge of a couple of things, A, the dynamics of the plastics industry, and, B, family owned businesses. So when I decided that I didn't want to finish in banking, I just had a great job and great opportunities. But I wanted to do something on my own, and had a real internal drive for that. I just started looking and looking in the plastics industry. Ironically, this particular opportunity came to me just from a friend, a close friend who said, I know you're trying to exit banking quietly. And I know you're, you know, we've talked that we're looking, you're looking in the plastics industry, and I happen to know a group that have built a plant and has a, and they're in the plastics industry, because there's multiple disciplines in the plastic industry, it's not all the same. And he said, why don't you go talk to him, they're struggling. But I think maybe they have a good idea, and go see what you can do. So with that, I arranged a meeting, I went and met with them, listened to their particular concept. And that particular division of plastics, which is in that particular division is called blown film. And, and they were also into recycling. So I literally did what every banker tells you not to do and that is don't go don't go into business on something you don't know about. But I did. So there was an obvious learning curve. But like all, anybody that succeeds, you surround yourself with people that do know about it. 

Brent Williams  3:59  

Dhu C. Thompson  4:00  
So that started the journey in 96. And I'm from Louisiana. 

Brent Williams  4:05  

Dhu C. Thompson  4:06  
So I moved from Louisiana, up to Arkansas.

Brent Williams  4:09  
Kinda northern Louisiana? 

Dhu C. Thompson  4:10  

Brent Williams  4:11  

Dhu C. Thompson  4:11  
Yeah. And I moved from Monroe, Louisiana, where I was in the banking and moved to actually the first plant was in Stuttgart, Arkansas. 

Brent Williams  4:20  

Dhu C. Thompson  4:21  
And that's where I started just

Brent Williams  4:24  
And an attorney, but by training, I believe is that right?

Dhu C. Thompson  4:27  
No, not for me, okay. Actually, people it's funny people say that. When you walk through a plant, and obviously in any type of manufacturing, it's all engineered based.

Brent Williams  4:38  

Dhu C. Thompson  4:39  
And plastic manufacturing can be relatively complicated, but not, depends on if you can understand the language. So actually, I had a undergraduate degree from University of Louisiana, Monroe in liberal arts.

Brent Williams  4:55  

Dhu C. Thompson  4:55  
In General Studies, and I actually and then I went to obviously, a graduate degree in banking, 

Brent Williams  5:01  

Dhu C. Thompson  5:01  
But yeah, so banking gave me a great financial discipline but 

Brent Williams  5:08  
and you saw a lot of businesses, I'm sure.

Dhu C. Thompson  5:11  
I did actually, at one point in my life, I was doing commercial lending. And I also got exposed to the financially the several plastic companies that were successful. And yeah, gave me a view of opportunities there.

Brent Williams  5:29  
So you're in the plastics business for a couple of years. But then you did go back to banking for a few years?

Dhu C. Thompson  5:34  
I did. Yes. And then I decided this opportunity came up and I thought I wouldn't you literally just jump

Brent Williams  5:42  
Well, let me let I'm gonna do my best to give a description and then you help me with what I did wrong here. But, you know, and I don't know if the original concept was this, but sort of where you all ended up was that that poly pipe was was used to water row crop in probably largely at that time, just eastern Arkansas, maybe a little more broadly. But but it was difficult to dispose of, right?

Dhu C. Thompson  6:10  
Yes. So let's think historically, 25 years ago, poly pipe was not necessarily the predominant way to irrigate. Reason being it was just new, it was a new concept. So it's called gravity furrow irrigation. So what has happened in the ag industry with all throughout Delta's whether it's Arkansas, Louisiana, Mississippi, Missouri, is farmers bring their farmland to grade. And once they bring bring their farmland to grade, which the purpose of is even application of chemicals, and water control, which increases crop productivity. So once they bring those farms to grade or those fields, then you can use poly pipe.

Brent Williams  6:59  
You don't have to use the winding levees throughout the field anymore.

Dhu C. Thompson  7:02  
No, or center pivot our wheel guns, and it's actually cheaper than any other type of irrigation. And also academically, it's been proven very productive.

Brent Williams  7:14  
Okay. But I guess so the poly pipe is laid kind of at an edge of the field and waters but but then after a year, I think it's useful again.

Dhu C. Thompson  7:26  
Yeah, that's right. It's a it's a, you lay poly pipe out from the well, it'll be transverse to where the furrows are. And water runs down the rows. And that's how, and at the end of the year, it's a commodity the farmer only uses once a year, because it doesn't have a shelf life any farther than that. So what was happening in the industry was, it was becoming a huge debris issue. In other words, every roll is usually historically was a quarter mile long. Now some of it's a half mile long, and in pipe, and they would roll it back up. And when they rolled it back up, it was fraught with organic matter, and dirt. 

Brent Williams  8:07

Dhu C. Thompson  8:07  
So it was very contaminated, so you couldn't recycle it. So it became just big, large piles of it around the Delta. I didn't originate the concept, but that was part of the concept of this particular group is if we can make the pipe and we can sell it. But if we can reclamate it pick it back up at the end of the season. And we can build a what we call wash system and wash all that dirt and organic matter out of the pipe, cut it all up granulate it, remelt it, re extrude it, and make a postconsumer resin out of it. And then we can use that postconsumer resin to make more pipe or other products. 

Brent Williams  8:54  

Dhu C. Thompson  8:55  
That was their idea, not mine, but I thought it was a pretty phenomenal idea.

Brent Williams  9:00  
What was the struggle at that point before or as you were stepping into the business?

Dhu C. Thompson  9:06  
One I could make the pipe but nobody could recycle it. Nobody in the United States. And actually they weren't very successful in Europe with it either. So we actually over the years and literally millions of dollars. We we kept working at it and we built a system that would do that. That system was a very when I say that particular system was very intense. It was almost like oil field work, because we had large trommels basically let me put it this way we built the system based on we went to different industries to find the pieces of equipment or equipment we needed. That would get us further down the road. So we had large trommels trombels out of the the timber industry that are used for de barking, we use those as a big washing machine, we used mud shakers out of the oil field industry. We used built the largest granulators in the United States, had them built for us. And then we went, went to Europe, and they were much more advanced in other types of recycling. So we ended up marrying a say marrying, working with a company over there in Heidelberg, Germany, that would build specialized equipment for us,

Brent Williams  10:27  

Dhu C. Thompson  10:28  
That we could put in that system that helped clean all that pipe up and get it and then it once at one point, once it's completely washed and dried, and cut in small pieces, we would melt it and make a postconsumer resin out of it, which was actually in a bead form. 

Brent Williams  10:48  

Dhu C. Thompson  10:49  

Brent Williams  10:50  
All this is happening in Stuttgart

Dhu C. Thompson  10:52  
It's all happening in Stuttgart. And, to be honest with you, it took years, because what you're trying to do is, in the plastics industry, poly polyethylene or plastic is produced by natural gas as the base. So it goes from natural gas to ethylene to polyethylene, which is actually plastic, there's as many different types of polyethylene as there are colors in the world, because they all have different properties. So what my challenge was, and it's produced from people like Exxon Mobil, for most of the large people, you know, in those industries, and they're produced out of large plants, a lot of it and all along the Gulf Coast, that's where those plants are. So the challenge was, can I produce resin, like they produce resin, but they're producing virgin resin from natural gas, I'm reclame, making it out of the environment and producing a resin and cannot produce it at a lower cost of production, than they can produce virgin polyethylene. And that was the big challenge, because it's by the time you reclamate it out of the environment, and you wash it, and you re extrude it, and you get it to the form you want. It's significant expense. And it's how you control those spent expenses. And in manufacturing, it's like anything else. The larger the volume that you can produce, the lower you can, you can lower your cost of production.

Brent Williams  12:29  
And so you would, I guess, what is the pickup process look like? And I guess I assume you're having to that's part of the sales process with 

Dhu C. Thompson  12:39  

Brent Williams  12:39  
With the producer. 

Dhu C. Thompson  12:40  
Yes, actually, you know, in business school, it's called a closed loop business model. So in a minute to answer your question about the pickup. So you produce a product, ie poly pipe out of virgin polyethylene, you sell it, and it ends up at two distributors, the distributor sells it to the end user, the farmer, 

Brent Williams  13:00  

Dhu C. Thompson  13:02  
Once the farmer gets it, he uses it. And in this case, it was pipe, he would roll it back up, very dirty. And then he would just pile it on his farm. Well, what our sales position was, if you buy our pipe, we will come clean up your farm, and nobody else in the industry could offer that. Because nobody was capable of making that commitment or was willing to spend that time. Still not spend that kind of money and that type of development, to create that process to make it a closed loop system. You asked about the pickup at one time we had 82 18 wheelers, they were 42 foot long dump trucks with these clamshells on top of the 18 wheeler. And those 18 wheelers would circumnavigate Arkansas, Louisiana, Mississippi, Mississippi, and Missouri and would pick that pipe up so as we we actually GPSed farms in and at one time, we had over 5000 farms GPS in in the south. And we ran a trucking business that circumnavigate circumnavigated those four states and then we included Texas and Colorado, and that we would bring it all back. Keep in mind in any type of costs, cost of production, logistics or any typ of business, logistics is a huge cost, trucking. So we did it as efficiently as anybody else could in the reclamation of it of farms.

Brent Williams  14:34  
And so you're you are solving a big problem for the farmer, I suspect right because this is just not only an eyesore, but taking a much needed space.

Dhu C. Thompson  14:42  
Yeah, actually, you know, thing it's not to go against the EPA, but it was against the law to bury it or burn it. So what you did is, even though somewhat that was somewhat done, because you're in such rural areas, But is take it to landfills and pay tipping fees. So again, think of it like this. We've made the pipe, sold the pipe. And then when it came to end, the farmer used it. But then when it came time to pick it up, we were like, waste management. We cleaned up their farm. Because, you know, you say one man's trash is another man's treasure. Nobody wanted that pipe but we did. 

Brent Williams  15:25  

Dhu C. Thompson  15:26  
And so what that did was, it created a huge wedge in the industry where once the farmer saw we were cleaning up every farm that we could get our hands on, they would come in and they'd come to their distributor and they'd go I want Delta Plastics. And they said, well, why don't you want this other brand? Because because they're going to clean up my farm. So we even used it as leverage that if the other product was purchased, not delta, we'd say, well, you need to call them and see that you need to call that manufacturer and see if they'll clean up your farm, which we knew the answer to that was no.

Brent Williams  16:02  

Dhu C. Thompson  16:03  
Yeah. So it created a significant value.

Brent Williams  16:05  
So you pick it up, you clean it, you convert it to postconsumer resin? 

Dhu C. Thompson  16:09  
That's correct. 

Brent Williams  16:10  
And and then I think the business evolved a little further in that you created industrial products from that resin, right?

Dhu C. Thompson  16:17  
Yes, we actually would take that product. And we looked up. And this was all mathematically proven. We were able to make garbage bags that were made out of 100%, post consumer resin. So what the fact that those garbage bags were made out of 100%, post consumer resin plastic taken out of the environment, we had the lowest lowest carbon footprint of any garbage bag on the market. So I knew I couldn't compete necessarily on the retail basis against and I just use this for the big Glad or Clorox or whoever made garbage bags on a retail space.

Brent Williams  16:56  
Yeah, walking in me walking in and buying it off shelf. You're not gonna compete with that.

Dhu C. Thompson  17:01  
Yeah, they were too well branded, and had too large of a footprint. But so what we did was we sought groups out businesses of all types who are looking for LEED tax credits.

Brent Williams  17:16  

Dhu C. Thompson  17:16  
So, for example, we went to New York City schools, we went to NFL stadiums, we went to Ford Motor Company, we went to government agencies like Library of Congress, and we'd say we can sell you this product. And not only is have the lowest carbon footprint for a garbage bag, but you will also you by buying it will acquire LEED tax credits. So the way we distributed that is, and then what you do is the way garbage bags are sold, they're sold in the janitorial sanitation industry. Okay, so what we did was we would go to the distributors for that. And we would go to that janitorial sanitation distributor, say in a big Metroplex environment like Washington, DC. And we would say you want you want Library of Congress as a customer? And they'd go, yeah, and we'd say, well, if you work with me and work with me on splitting percentages, margins, I'll bring you Library of Congress, and in turn, you'll be a hero, and Library of Congress will get LEED tax credit.

Brent Williams  18:26  
Well, and you had a similar experience in selling the poly pipe. Right? I mean, at least in working with distributors, I guess and offering a unique value proposition.

Dhu C. Thompson  18:36  
Yeah, well, that's exactly right. Because we would say to them, you buy our product, we're going to clean up your customers farms. And so they endorsed it because they knew it was a good thing environmentally. So it got to where we were collecting not just millions but we would gotten into the billions of pounds collected out of the environment and convert converted to postconsumer resin. 

Brent Williams  19:02  
And you started producing those garbage bags at least first or maybe exclusively. I'm not sure in Little Rock is that right?

Dhu C. Thompson  19:08  
We we did we the first plant was in Stuttgart. 

Brent Williams  19:12  

Dhu C. Thompson  19:13  
The next plant when we needed to expand. So this next plant was in, in the industrial park in Little Rock. 

Brent Williams  19:21  

Dhu C. Thompson  19:21  
That worked well. And then from there, we ended up going to a plant in Texas and from there, Los Angeles. And so we built plants based on or acquired plants that were in certain industries, certain geographical areas that we needed.

Brent Williams  19:37  
Okay. And so largely throughout the south, but you mentioned some in the West I think Wisconsin was another area that you succeed in?

Dhu C. Thompson  19:45  
We did, in that part of the world. It's Wisconsin and Minnesota are huge dairy industries. And they use what they call their will significantly large plastic silage backs, and they put all their silage there. And that's how they store it in place of a silo. And once they fed their dairy cows and emptied those silage bags, it was kind of the same issue, they couldn't get rid of them other than take them to landfills. So we worked with the states, Wisconsin and Minnesota and put together a collection plans up there to add government agencies to clean up those dairy farms.

Brent Williams  20:25  
Well, you put together, no one accomplishes that alone. Right, you know, so clearly, you put together a team over time that could support you in was successful? And then how did how'd you build that team? How do you construct it?

Dhu C. Thompson  20:43  
That's a great question. So seven or eight years into it. You know, the first year I lost over seven figures, it was significant, I didn't have seven figures to lose. And we kept making our losses smaller and smaller. Until about year four, we broke even about seven or eight years into it, having been a banker, I called an investment group. And I said, you know, there's business analysts, in my opinion on every corner with all levels of aptitude and experience. I want to know, who, in your opinion, through this investment banker, who dealt with entrepreneurial families, who, in your opinion, is the best business analysts, you know? So he came to me, and he said, I know a group, and this is said group and they're up on the East Coast. Why don't you go interview with them? So I did, and I brought them in. And they were there for almost nine months, paid them significantly to analyze who I was, what I was, what the industry was, from the janitor, janitorial from the janitor, all the way to, to me, and how we were structured. And I said, the key thing is, I want you to hurt my feelings. I want you to challenge me and tell me everything that you see different than I do. And so it was through much enlightenment and discussion, them coming in and saying, Well, I think you need to do so. And so. And I would say, no, I don't. And they said, well, let me tell you why. And then I would tell them why I didn't think so. But we would come to usually a really good answer. And with that, the other thing is, you have, you know, building your team, the way I function is, I embrace every employee always have, because nobody knows the job better than the person that does it themselves. And I don't care if it's digging the ditch, or doing financial analysis, nobody knows it better than that guy that does it every day. So I never embarrassed anybody. But I strove for in my department heads, and with my employees, diversity of opinion, I wanted them to tell me, oh, this, this is not a good idea. And we would discuss it intensely. And they knew I was on their side, even though I may not agree with them. And I think with that management style, it brings to life, the gift or freedom as an employee, to if you know, you're safe. And if you know you're in your thoughts, and you embrace your work, because you you're a contributor. And if you're a contributor, as an employee you feel valued. And that's important, you need to feel valued as an employee. And, you know, as special, like, I'll make a difference. And that's how I managed. And I was able to build a really good team from at that time, even though I was owner and chairman, from a really good, smart CEO to other people that were over department heads, either in engineering or sales or wherever they came in. And then after interviewing with us, they'd go oh, I like the culture. That's the other thing I can't stress enough is culture is everything. And you have to work at it and be careful. Because the larger you get, the harder it is to maintain that culture. Because you get more fragmented. But if you can stay the course and create a productive culture for your employees. It's the game changer. You truly are a family. 

Brent Williams  24:47  

Dhu C. Thompson  24:47  
And that gets lost in a lot of larger companies.

Brent Williams  24:51  
Yeah, you know, well, and I was about to ask and you almost sort of answered it. Culture can kind of be ambiguous. You know, at times I tend to think about it as this, I guess it kind of starts with values you know, and but it includes norms and traditions, it's, it's this thing that's a little bit ambiguous, but it is remarkably important.

Dhu C. Thompson  25:12  
Yeah. And let me I'll give you an example. You need everybody, when meets a path, but you need the rules of how to follow the path. So we were almost like, in hiring people like Boy Scouts, when you came to work for us, as a film line operator, or whatever you did, you would come in, and we actually had all the employees put together their definition of culture. And, and so when you came to work, you were you were given a profile of, I'm starting here at $18 an hour. But if I do this, and this and this, in six months, I will be at $19 an hour. And if I do this, this this in the next three months, I'll be $20 an hour. And it gave them a path to follow, to show learn just like you would in a Boy Scout, you go from tenderfoot to second class to first class to whatever, they wanted to be a manager. And so with that, and they created that path, it was built by employees.

Brent Williams  26:18  
Well, you so you built a team, you grew the business, and you sold it not too long ago. And I'm sure I know you were passionate about it. So I know you feel like it's something that can continue to succeed after you.

Dhu C. Thompson  26:32  
Absolutely, yeah, it's a great business great company sold it to a private equity group, and out of New York, and they continue to grow it.

Brent Williams  26:40  
Awesome. Well, I know that Mary Ellen is a pretty big part of this story is well, at least that's what I hear. And so, you know, tell us a little bit about not only her, but maybe your family.

Dhu C. Thompson  26:53  
She, she and I met, actually, we got married, I was 40 and she was 30. And so, and she graduated in journalism from LSU. But she immediately jumped into the middle of it, helping me with books and finances. And actually, she lived in Monroe, Louisiana, we had one young son at the time, I now have three. And a second one was just born, and I was in Stuttgart. Keep in mind that plant, the plants run 24 hours a day, seven days a week. And I would leave on a Friday and drive to Monroe and turn around, leave on Sunday and come back to Stuttgart. So, you know, that's hard on a marriage, when you're raising a family and you're the year the husband's gone. And she did nothing but embrace it. And then at finally after two years, we said, You know what? That's enough, we're gonna move to Little Rock. And it all worked out really well. But she's an integral part of it. And I think she's a lot smarter than

Brent Williams  28:00  
Well, you mentioned Little Rock. And so kind of as we, as we start to wrap up, you know, you've been a part of the Arkansas community now for for some time, 

Dhu C. Thompson  28:12  
25 years

Brent Williams  28:12  
And an important part of it, you've contributed in many ways to this community. What's what has it meant to you to have built this business and built life? You know, I would say in this state,

Dhu C. Thompson  28:27  
Arkansas embraced what I did. And they were, it was a wonderful state to do business. And haven't experienced financial, the financial industry in Louisiana and being exposed other. It was just a great state. Everything from meeting with the governors and then helping me out economic development. It was all they embraced everything I did. And I can't thank that enough. And I don't know if it's, you know, there used to me Arkansas, significant embracing entrepreneurial, people, individuals and the list is you know, that list. 

Brent Williams  29:12  

Dhu C. Thompson  29:13  
Walton Tyson. 

Brent Williams  29:14  

Dhu C. Thompson  29:14  
Hunt. You know, they all Yeah, it's pretty special.

Brent Williams  29:18  
Yeah, that list, you know, many of them what make up the Arkansas Business Hall of Fame, you know, it is truly a collection of special people, you know, that have through business have built their businesses and built our state, you know, over time, and it's, it's truly an amazing group to be a part of.

Dhu C. Thompson  29:39  
Well, it shows 

Brent Williams  29:40  
Well, well, I can't tell you how much I'm looking forward to February the 16th that we're gonna have a lot of fun that night. And I just wanted to once again say congratulations on, I know it was a lot of hard work. I'm sure there was lots of trials and tribulations but you certainly built a wonderful business and I'm certainly glad you're part of the Arkansas community and the Arkansas Business Hall of Fame.

Dhu C. Thompson  30:07  
Well, thank you. 

Brent Williams  30:09  
On behalf of the Walton College thank you for joining us for this captivating conversation. To stay connected and never miss an episode, simply search for Be Epic on your preferred podcast service.