Great expectations: companies that process and consume recycled resins hope for more promising days to come. (Commodity Focus).

Everybody knows that recycled commodities haven't enjoyed the best of times lately. It should come as no surprise that markets for plastics haven't escaped untouched.

Judith Dunbar, technical assistance program manager for the American Plastics Council (APC), Washington, says that at 74.6 billion pounds, domestic virgin resin sales for 2001 were 3.3 percent lower than in 2000. At 69.4 billion pounds, production of virgin plastic resin in 2001 decreased 5.5 percent. However, Dunbar adds, December sales showed an increase of 2.3 percent when compared to the 2000 figure. Recycled resin figures for 2001 will not be available until mid-2002, and it is uncertain to what extent they will mirror the downward trend in virgin resin production.

A STUMBLING ECONOMY

"Production has definitely slowed," Robert Render, president of Maine Plastics Inc., North Chicago, Ill., remarks. Maine Plastics processes and markets scrap plastic from the manufacturing sector. "The availability of scrap regrind ... relates to the vibe of business," he says. "The more molding and thermoforming going on, the more scrap, the more material [generated and consumed]."

Render says the demand for recycled plastics is reasonable, but less material is available because overall production of plastic goods has decreased.

He adds that as manufacturing moves offshore, so do the sources of scrap. "From what I read in the trade magazines, there are a lot of molders closing, and there's a lot of consolidation in the industry," Render says.

SelecTech Inc. uses post-consumer and post-industrial feedstock to manufacture planters, landscape timbers, flooring and traffic control products. The company recycled roughly four million pounds of plastic into new product in 2001.

"Our product sales have dropped off in the past nine months, mostly because of the economy," SelecTech's Thomas Ricciardelli says. SelecTech has experienced consistent growth since it began in 1994, he says. "This is the first time we've ever slowed down."

Some resins are faring better than others. "From my perspective, growth has slowed somewhat, but still remains `above average' in the area of PET packaging," Jean Bina, manager of commercial operations for Phoenix Technologies, Bowling Green, Ohio, says. Phoenix Technologies pelletizes and crystallizes post-consumer PET for reuse in consumer packaging applications.

Pricing, however, remains an issue. Mike Biddle, president and CEO of engineering plastics recycler MBA Polymers Inc., Richmond, Calif., says that prices for virgin resins have decreased dramatically in the last two years, to the detriment of plastics recyclers.

"There's so much oversupply of virgin and what's called off-grade or off-spec, it's hard to sell recycled," Biddle says.

Bina agrees. "Virgin manufacturers routinely dump `pencil prime' or wide-spec, which continue to be a threat to recycled resins."

"Virgin resin prices fluctuate with the level of demand. A lot of it is impacted by Asia," the APC's Dunbar says. "When Asia experiences an economic downturn, it negatively impacts markets because Asian companies export more virgin resin, which adds to the overcapacity in the U.S. During these periods of lower demand, there's pressure on virgin resin pricing, and that in turn puts downward pressure on pricing of post-consumer resin."

Ricciardelli says, "When virgin pricing is cheap, you can't compete period. You have nowhere to go." He adds that escalating virgin prices don't put recyclers at an advantage either, as the price of the source tends to increase.

An adaptive approach got Denton Plastics Inc., Portland, Ore., through a difficult time. Dennis Denton explains, "I was selling two truckloads [of PET] a week for 14 years into the nursery pot business. We got booted out ... by virgin for six months."

Denton's search for new markets uncovered an opportunity in rotational-mold grade resins, which are pulverized instead of pelletized. "That's what you have to do--find new and better ways to compete," he says.

Render says that commodity resins--such as propylene, high density and styrenics--are difficult for recyclers to compete with economically. However, he says recycled engineering resins compete "head to head" with their virgin counterparts.

Improved sorting and processing technologies have increased the quality of recycled resins. Dunbar says these technologies also have helped recyclers to weather pricing fluctuations. Cost-savings innovations in processing technology, such as optical sorting, have improved the quality of recycled resins and enabled broader market acceptance, she says.

QUALITY ASSURANCE

"Plastics recycling, the processing technology, has evolved to the point that most reclaimers can produce PCR (post-consumer resin) that can compete easily with the performance of virgin in many applications," Dunbar says. "As evidence, there are some companies that have received letters of non-objection for PET from the FDA that allows the PCR that they produce to be used in food-contact packaging."

Phoenix Technologies is one such company. In April of 2001 the Food and Drug Administration (FDA) granted the company a letter of non-objection, permitting the company to use recycled PET in hot-fill containers. Phoenix Technologies received two non- objection letters in 1999, making it the first company to receive FDA approval to directly blend up to 100 percent recycled PET into containers for water and soft drinks.

Bina says that when processed using advanced technology, quality is not an issue. "Many of our customers have said that our material is more consistent than virgin," she says.

In Ricciardelli's opinion, companies that concentrate on recycling plastics into product rather than into pellet can better dictate quality and manage economics. "We don't clean plastic. We design products with the material in mind so that our products have some kind of functional advantage over the competition, and we're able to make those products at a lower cost," Ricciardelli says. "To me, that's the only way to do it."

Flooring manufacturer Mohawk Industries, Summerville, Ga., recycled 200 million post-consumer bottles into polyester fiber in 2001. Procurement Director Phil Cavin says, "Across the board, the quality is pretty good." Mohawk uses curbside and deposit-state materials.

Arthur Ferguson of KW Plastics, Troy, Ala., says neither quality nor quantity is good enough. "We take what we get. We eliminate the bad, keep the good and try to clean it up as best as we can." The company makes a hybrid plastic and metal paint can.

STRENGTH OF SUPPLY

"We only hope that there is more collection," Ferguson says. "That has got to be key. Without that first, nothing follows."

Dunbar says, "To increase supply, you have to make it easier for the consumer. Programs such as `All Plastic Bottles' and single stream collection make it easier for the consumer and increase supply. Proper education is also important."

"One thing about our business is that supply is clearly the key, and consistent supply is a difficult thing to predict," Render says. Maine Plastics relies on manufacturer errors and waste, he says. "If their volume goes down, your supply goes down."

Render adds that companies relying on secondary regrind are well aware of supply-related issues and multi-source to protect themselves to a degree.

Trex Company, Winchester, Va., manufacturer of wood-polymer decking, consumes LDPE, LLDPE and HDPE films. Mike Vatuna, director of materials, says Trex consumed more than 100 million pounds of these films in 2001.

"We prefer to use as much recycled film as possible," Vatuna says, "but have to use some post-industrial film and even some wide-spec or off-grade resin." Trex sources material from recyclers, collectors, municipalities and directly from end users across the U.S. and Canada.

"We very firmly believe both the quality and quantity of recycled plastic exists in the U.S. The key to the availability is to develop public participation, public awareness and an economical infrastructure for collecting and transporting the material for recycling," Vatuna says.

Cavin says that procurement is an ongoing concern for Mohawk. "At this time, we're the world's largest PET recycler. Growing is great, but the bigger you get, the more you need, and the more vulnerable you are to a certain extent."

Despite the current kinks in the supply chain, processors and manufacturers anticipate a bright future for recycled plastics.

FORECASTING THE FUTURE

Render says that he expects packaging applications using recycled resin to increase, as does Dunbar. Indeed, the recent agreement between Waste Management's wholly owned subsidiary Recycle America and Southeastern Container Inc., a manufacturing cooperative owned by a group of Coca-Cola bottling franchises, seems promising. Recycle America will supply PET flake to Southeastern Container in an attempt to increase the company's use of recycled content.

Alliances such as this will be key to plastics recycling, Render says. For political and public relations reasons, large generators will work with processors to convert their own waste streams or to incorporate recycled materials into their products from the beginning of the design process. Render stresses that economics will determine whether these changes are sustainable.

Manufacturers may work more closely with plastic recyclers and reclaimers to identify ways to reduce processing costs and to ensure that plastic packaging can be accomodated cost effectively by the current recycling infrastucture through such programs as the APR's (Association of Postconsumer Plastic Recyclers) Champions for Change, Dunbar says.

Various industries may also accept recycled resins increasingly. "Automotive has always been one of the leading edges and continues to be that way; the same with construction materials," Render says. "I think that's an area where you'll see more penetration."

Dunbar also finds recycled resin use increasing in garden and landscaping applications, plastic lumber applications and building and construction. In fact, she points out, applications such as plastic lumber were developed expressly to use recycled resins. The use of grocery bags, or polyethylene film, is growing steadily in wood polymer composite processes and plastic packaging applications.

Biddle anticipates that durable goods recycling will increase. "It's the one material that lags most other materials as far as recycling rates. That can't continue. That will change." Biddle sees legislation and economics prompting this change.

Dunbar is confident that the recycling of plastics from obsolete electronics will become a major industry.

Challenges will continue to present themselves to recyclers, however. Render says that the presence of composite materials in recycling bins will increase. In addition, the expanding color pallet will challenge recyclers.

"Continuous technological improvements in sorting and processing will allow recycling of plastic packaging applications to grow, and also enhance cost competitiveness of PCR with virgin resin," Dunbar says. "With the ongoing research and development of the post-consumer market, there will be other accommodations for recycling of large supplies of colored bottles and bottles with barrier layers."

Dunbar is optimistic about the future of plastic recycling. "Plastics recycling has made great strides in the past decade; it's really come of age. It has increased four-fold," she says. "Even though the rate may have dropped slightly, there's a lot more plastic being recycled, and there's a lot of ongoing research. In the next decade, plastic recycling will increase."

Ventura is also hopeful. "Perhaps the biggest change to come is the public's attitude about recycling. Ten years ago, people perceived products made from recycled materials as being inferior to products from virgin sources," Ventura says. "This perception has changed dramatically in just the last few years. People are becoming more aware of the environmental impact of all we discard. Couple that with the support of some of the governmental groups developing legislation to support recycling, and the future looks very promising."

The author is assistant editor 0f Recycling Today and can be reached at [e-mail].