NPE ’09: Recycled PET demand climbs despite economy

24 June 2009 18:58  [Source: ICIS news]

CHICAGO (ICIS news)--Retailer and consumer demand for environmentally-friendly products is boosting sales and consumption of recycled polyethylene terephthalate (PET) in the US despite the recession, a leading producer said on Wednesday.

Byron Geiger, president of Custom Polymers PET, said that demand growth for recycled PET is so strong that he expects the company’s new 11,340 tonnes/year pelleting facility in Athens, Alabama, to reach full capacity in 90 days.

The plant was opened in January this year and is operating at about half-capacity now, he said.

Parent company Custom Polymers was rated as the fourth-largest North American plastics recycler in 2008 and reported sales of $256m (€184m) for that year, according to Amy Morgan-Felix, marketing manager for the parent firm.

She said the company’s recycled PET pellets recently have been certified by the Pepsi Cola Company for use in the soft-drink giant’s bottling operations.

That recognition gives sales opportunities not only with Pepsi but with many other consumables packaging firms that see Pepsi certification as a high quality standard, she said.

Morgan-Felix said Custom Polymers’ PET business has grown despite the economic downturn and in part because of the recession.  As smaller PET recyclers were forced to shut down, Custom Polymers was able to pick up some of their customers and market share.

“It’s an unfortunate situation for those smaller firms,” she said, “but we were able to adjust our inventory to demand.”

Geiger said that Custom Polymers PET already is looking at possible expansion of its new Athens facility, noting that the site has a lot of additional space and that demand is increasing fast.

“A lot of people are looking for recycled PET because of the ‘green is good’ sentiment,” Geiger said.

He said big-box retailers such as Target and Wal-Mart are demanding more and more environmentally-friendly products and packaging in response to public sentiment and legislative initiatives at the national and local levels.

“The public mindset about the environment has changed significantly in just a few years,” Geiger said, adding that that is helping to drive demand growth for recycled PET.

It also helps that recycled PET sells at a substantial discount to virgin PET, Geiger noted, although he declined to quantify a percentage difference between the two.

While business has continued strong and has even expanded during the recession, Geiger said he expects it will improve further when the US economy recovers.

He said he shares conventional wisdom that the economy will pull out of the recession by the end of this year and begin to climb toward more normal growth rates in 2010.

Geiger and Morgan-Felix spoke on the sidelines of the 2009 National Plastics Exhibition (NPE).  Sponsored by the Society of the Plastics Industry (SPI), the conference runs through Friday this week.

($1 = €0.72)

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