Closed Loop to build new UK plastics recycling plant in Deeside

28 July 2010 15:31  [Source: ICIS news]

LONDON (ICIS)--Closed Loop Recycling will start building a food grade recycled polyethylene terephthalate (R-PET) and recycled high density polyethylene (R-HDPE) plant at Deesidein the UK in January 2011, a company source said on Wednesday.

The new plant will consume 50,000 tonnes/year of post-consumer bottles and produce 11,000 tonnes/year of food grade R-PET pellets. It will also wash 12,000 tonnes/year of R-HDPE, but a decision was yet to be taken on whether this would be reprocessed into food-grade material, the source added.

It was scheduled to come on-stream during the first quarter of 2012, and would lead to the creation of 110 jobs.

Closed Loop Recycling has an existing R-PET and R-HDPE food grade processing plant in Dagenham, UK, which consumes 35,000 tonnes/year of post-consumer bottles, and produces 11,000 tonnes/year of food grade R-PET and 12,000 tonnes/year of food grade R-HDPE.

The European R-PET market is structurally short, and has been in tight supply since the fourth quarter of 2009.

“There are a huge number of machines that can use flakes. But collection rates don’t cover it [demand] as they can’t get enough bottles [the feedstock for flakes],” a major R-PET producer said.

This has been attributed to several factors including: a rise in underlying demand fuelled by social responsibility objectives at large corporates; a colder-than-expected winter leading to a reduction in the purchase of bottled drinks; the economic downturn in 2009; environmental concerns leading to lower demand for water bottles; and a reduction of around 25% in the polyethylene terephthalate (PET) content of virgin bottles in 2009, meaning more needed to be collected per kilogramme of R-PET produced.

Because of the availability issues, R-PET prices across all grades of material are currently at record highs.

This year saw food grade pellet prices climb above virgin PET prices for the first time, trading at up to €210/tonne ($272/tonne) above virgin PET prices at €1,200-1,300/tonne FD NWE.

Tightness in the market and corporate social responsibility commitments among end-users meant that buyers had little choice but to accept high prices, sources said.

($1 = €0.77)

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By: Mark Victory
+44 208 652 3214

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