Upcycling Becomes a Treasure Trove for Green Business IdeasForget recycling. Reusing materials discarded in the manufacturing process is a growing force behind a fresh new industry.

Like everything aboutLooptworks, the signature on CEO and co-founder Scott Hamlin's e-mail is a call to action: "Did you know that it requires more than 400 gallons of water to make one organic cotton T-shirt? Upcycle."

If you're not up on the green lingo, the best way to think of upcycling is that it's like a sexier, even greener version of recycling. When something is recycled (or "downcycled"), it's broken down into something of lesser quality--a process that consumes energy. Upcycling adds value by transforming or reinventing an otherwise-disposable item into something of higher quality. It's the ultimate in reuse--and a whole new industry sector is shaping up around it.

Looptworks personifies the upcycling trend. Hamlin launched the Portland, Ore.-based company with partners Gary Peck and Jim Stutts in September 2009. The three apparel industry veterans were inspired by the sustainable manufacturing methods of outdoor gear companies like Royal Robbins and Patagonia, but they wanted to take it even further--all the way to what Hamlin calls "closed loop manufacturing." Looptworks was one of the first players to truly close that manufacturing loop and make a business of upcycling--but it certainly is not alone.