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China's 'Green Fence' causes recycler to expand in U.S.

By: Steve Toloken

May 31, 2013

China’s “Green Fence” crackdown on imported plastic scrap is changing the economics of exporting some material to China, according to U.S. recycler Intercontinental Export Import Inc., and pushing the firm to make a $6 million investment in new capacity in the United States.

China’s much tougher policies on importing plastic scrap and other materials, driven by what the government says is a desire to reduce pollution from poorly-run recycling operations, are making it economical to do more processing of materials in the United States before exporting, IEI said.

“With the improvement in process technologies in recycling scrap, it is now possible to add value in [a] cost effective way in the U.S. before exporting the feedstock,” said Saurabh Naik, CEO of Columbia, Md.-based IEI, in a statement.

The company said requests from key customers in China who wanted to reduce their problems with Chinese customs authorities when they import scrap materials prompted the American firm to invest more than $6 million in machinery in the last year.

The equipment includes machinery to process low-end scrap. The company said China’s tougher import policies on scrap would help boost jobs in the United States, although it provided no details for its operations.

IEI is part of the Naik Group of Industries, also based in Columbia. It has a recycling and processing facility in Ravenswood, W. Va., and said last year it was building a research center in Parkersburg, W. Va., but it did not identify where the $6 million in investment was made.