By: Mike Verespej
October 24, 2012
ZANESVILLE, OHIO (Oct. 24, 4 p.m. ET) — Recycler Coll Materials Exchange LLC is closing its Allentown, Pa., facility and consolidating those operations into its Zanesville headquarters plant.
“We’re doing that because we’re getting into another venture in the Southeast — in North Carolina — by the end of the year,” said President and CEO Brian Coll in an Oct. 24 phone interview. “We are buying a company in North Carolina that does plastics recycling.
“It doesn’t make sense to have plants in Pennsylvania, Ohio and North Carolina,” he said. “So we are slowing that plant down and are going to consolidate it into the Ohio facility” sometime in the next 3-6 months.
Brian Coll denied a rumor that the company’s $6 million Waco, Texas, plant — which opened about one year ago — was closing.
“We have no intention of closing that factory,” said Coll, who was on his way back from Allentown after telling the employees Oct. 23 of the impending plant closing.
However, he did tell Plastics News that the Waco plant stopped making composite railroad ties from recycled plastics for Axion International Holdings Inc. six weeks ago. But Coll said the Waco plant, which has 25 workers, continues to make post-consumer pellets, roughly 500,000 pounds per week — the majority of it high density polyethylene.
An executive at Providence, N.J.-based Axion confirmed that the Waco extrusion line for making railroad ties was shut down at the current time. But he added that “we have no permanent plan to keep it shut down.”
At the present time, “we do buy some material from them,” he said. “But we manufacture out of a number of places” and it makes more sense right now for those ties to be manufactured elsewhere.
Just as it does with its other contract manufacturers, he said Axion is “looking at Waco constantly and looking at the type of relationship” Axion should have with that plant.
Coll Materials had hoped to add a second extrusion line this year for railroad ties at Waco, but that has not occurred. Brian Coll declined to comment on the three-year contract between Axion and Coll, which the two firms inked 16 months ago.
The Waco plant has the capacity to produce 122 million pounds of recycled materials annually and has two wash lines, a dry line, three eight-inch extruders to make pellets, four granulators and fiber separation operations. But based on its current output, the plant is producing, on a projected annual basis, 26 million pounds per year.
Coll said the company’s Zanesville plant is reprocessing 55 million pounds annually.
He said $7 million worth of equipment — wash lines, grinders, extruders, pelletizers and metal separation equipment — from the Allentown plant would move into the Zanesville plant.
The plant in Allentown opened late last year after a fire in August destroyed the Nicos Polymer plant in Nazareth, Pa., that Coll had acquired in February 2011 after Nicos went into bankruptcy.
Coll said that workforce — once as high as 65 — now is down to what he called “a skeleton crew” of 15 people as the plant is currently only doing tolling.
In an interview at its headquarters in Zanesville in February, Coll Materials said it had invested $12 million to $13 million in equipment for its Allentown, Pa., plant.
Coll Materials has grown from a $4 million company in 2009 to what Brian Coll says is a $55 million to $60 million company — which he believes will continue to grow, even though it is shuttering the Allentown plant and putting on hold its plan to expand into the Pacific Northwest.
“We are in the middle of refinancing our debt to bring more liquidity into this business,” Coll said. “That should be completed by the end of next month and free up cash and credit — which will help us continue to grow.”