Recycling capacity grows amid recession.

Some recyclers question where all the pounds are going to go. Markets for some recycled resins are as weak as ever, they say. Recycled end products aren't moving off shelves as expected. And some recycling ventures, from small entrepreneurial shops to large well-funded projects, are closing, caught between higher processing costs of today's dirtier feedstocks and competition from today's low-priced virgin resins.

The latest and biggest casualty is Du Pont Co.'s Plastics Recycling Alliance with big plants in Philadelphia and Chicago, which has been for sale for about six months. ITW Signode Corp. in Glenview, Ill., has bought the Chicago plant and the equipment from the Philadelphia plant, which has closed. The Philadelphia curbside-collection material is now going to Wheaton Plastic Recycling in Millville, N.J.

Surprisingly, at the same time, many recyclers are adding capacity, and new recyclers are starting up. Since it takes several years to develop a new plant, much of the new capacity was presumably planned in better economic times. Also some of the "new" capacity may really be conversion of HDPE recycling equipment to PET. Recycled PET has maintained a price edge on virgin PET--clean recycled flake sells for about 40|cents~/lb and pelletized recycle in the 50|cents~/lb range vs. the high 60|cents~/lb range for virgin. Wte Recycling/Star in Albany, N.Y., for example, is converting a portion of its HDPE equipment to PET. Wellman Inc., Shrewsbury, N.J., says its recent announcement that it will add 90 million lb to its present 110 million lb/yr PET capacity is not through conversion of its existing HDPE line--even though Wellman announced in a 1991 financial filing that it would stop processing HDPE in 1992. "The company will effect this expansion in phases, through addition of new equipment, debottlenecking of present equipment, and addition of a new building," Wellman says.

TABLE 1--1991 CAPACITY UTILIZATION
            Capacity,   Reclaim,
            million     million     Utiliza-
Resin       lb/yr       lb/yr       tion, %
PET         490         353         72
HDPE        480         299         62
LDPE        105         56          53
PP          278         150         53
PVC         18.7        7.5         40
PS          102         24.5        24
Source: Partnership for Plastics Progress, R.W. Beck & Assoc.

TABULAR DATA OMITTED

R.W. Beck and Associates, a recycling and environmental consulting firm in Orlando, Fla., in a draft study of recycling capacity for the Partnership for Plastics Progress (formerly SPI's Council for Solid Waste Solutions), surveyed 112 recyclers and found an astonishing amount of new activity. Beck's draft study finds total plastics recycling capacity growth during 1991 of 389 million lb/yr. Fully half, or 55 out of the 112 firms surveyed, said they planned expansions:

* Eight will take in additional types of plastics.

* 32 will add a processing line.

* 18 will add a new plant.

* 11 will add automation, including automatic sorting and other enhancements.

At the same time, seven recyclers said they were cutting back "either by shutting down a line, placing a moratorium on procurement or tightening specifications on material they would accept," according to the draft study.

CAPACITY UTILIZATION LOW

More critical, Beck's preliminary data show little correlation between recycling capacity and actual recycling of most resins. Susan Moore, director of communications at the Plastics Partnership, says preliminary data show 1991 plastic recycling capacity (based on 24-hr, 7-day operation) substantially exceeds what was actually recycled in all resins except PET. A utilization rate around 70%--achieved only for PET--works out to an 18-hr/6-day work week, or three shifts, five days a week. But most resins are being recycled at much below that rate. "There's an inconsistency between capacity growth at the supply end and limits on the market side," agrees Pete Dinger, technical director for the Plastics Partnership.

MORE POST-INDUSTRIAL WASTE

Since the numbers above are all for post-consumer recycling, one possible explanation is that recyclers may be increasing their processing of post-industrial waste, which is cleaner, easier to process and may have higher resin properties. One post-consumer recycler planning an expansion of post-industrial processing is KW Plastics with plants in Troy, Ala., and Bakersfield, Calif. KW is the country's biggest recycler of post-consumer PP (from car battery cases), at roughly 120 million lb/yr. KW is expanding into post-industrial LDPE, LLDPE and PP film, with a new 63,000-sq/ft plant opening this month.

Also, most recycling growth appears to be at companies that weren't even in existence in 1989, and growth from new companies continues. "Growth in |recycling~ rates did not come from old-timers, but from new companies," says Caroline Mixon, R.W. Beck's solid-waste reduction specialist. An average of the capacity of the top five recyclers of both PET and HDPE shows no growth.

VERTICAL INTEGRATION GROWS

PET recyclers are nervous about two big new recycling projects by companies that previously bought large amounts of commercial recycled PET. The biggest project is at Image Carpet in Summerville, Ga., which is setting up a plant to reprocess 50 million lb/yr of PET. Image was previously Wellman's largest customer for recycled polyester fiber. And the purchase by Signode Corp. of PET equipment gives it a captive capacity of 40 million lb/yr of PET for polyester strapping.

Vertically integrated recycling is also growing at packaging firms. Graham Recycling in York, Pa., which supplies parent Graham Packaging's recycled-content bottles, started up a second recycling line May 1, doubling HDPE output to 25 million lb/yr. Graham Engineering v.p. of sales and marketing Sandy White says Graham Packaging Co.'s recycle usage is expected to go from 20 million lb/yr last year to 30 million lb next year.

Clean Tech Inc. in Dundee, Mich., which supplies post-consumer HDPE for parent Plastipak's bottles, also started a second line this year. And Johnson Controls Inc. in Novi, Mich., plans a second PET processing line for in-house bottle making sometime next year.

RESIN COMPANIES ADOPT RECYCLERS

Several private recyclers are expanding with funding from resin companies who plan to buy the output. Clearvue Resource Management Ltd. in Amsterdam, N.Y., is adding a new processing line that will be the first in the country dedicated to post-consumer PVC bottles. Clearvue has funding from the Vinyl Institute to purchase an x-ray PVC detection apparatus from National Recovery Technologies Inc. of Nashville, Tenn. Clearvue's primary customers for recycled PVC will be Occidental Chemical Corp., BFGoodrich Co. and Georgia Gulf Corp., which will supply post-consumer bottles for processing and buy back the reclaimed output. And Polysource Midatlantic in Baltimore, a small (3-million-lb/yr) regional recycler of PET and HDPE bottles, plans to raise capacity to 20 million lb/yr with a new plant for PP, with investment from Himont USA Inc.

NEWCOMERS BIG AND SMALL...

Turnkey recycling systems are getting bigger. The largest system to date from Sorema SRL of Como, Italy, started processing bottles at Union Carbide early this year. One HDPE line has 35 million lb/yr capacity, while a second line processes 15 million lb/yr of PET. But that HDPE system is expected to be topped in capacity by one on order by CR&R Recycling in Stanton, Calif. That plant, due on-stream next January, will process 40 million lb/yr of HDPE bottles with a single, 6000-lb/yr Sorema line, reportedly the largest yet built by that or any other company. Dow Plastics has contracted to buy the full output of the plant for its new "Retain" recycled resin line. (Incidentally, as testimony to the popularity of Sorema recycling equipment, new lines are also going into Webster Industries in Montgomery, Ala., and Mobil Chemical Co. at Jacksonville, Ill., to reprocess film.)

Some new custom plants are quite small, like Plasti-Kleen Ltd., in McPherson, Kans., which started up in January. It runs "a beefed-up R&D line" that does 1.4 million lb/yr using a proprietary cleaning system that "cleans better than any on the market," boasts general manager John Dahlsten. The cleaning system, which doesn't use water or cryogenics, is "something nobody thought of," he says, and the company plans to market it to other firms. Plasti-Kleen plans a second line of the same size later this year.

And Consort Plastics in Tampa, Fla., which plans to start up this month, may be the only small recycler in the country initiating a program for all seven plastics designated by SPI recycling code numbers. The processing equipment is said to come largely from the Plastics Recycling Systems Div. of John Brown Inc. in Providence, R.I., together with a European washing unit. Sortation will be manual.