By: Jim Johnson
February 28, 2014
Octal Petrochemicals LLC FCZ is spending millions now and plans to spend millions more later as the PET sheet and resin maker plants its first manufacturing flag in the United States.
The company's freshly minted decision to create a new facility in West Chester, Ohio, will cost $18 million and provide 50 jobs, Chief Operating Officer Joe Barenberg said.
The plant will take skeletal waste from Octal's PET thermoforming customers and extrude it into new food-grade sheet.
Octal has been producing PET sheet since 2006 in Salalah, Oman, with a good portion of that production finding its way to North America. This new facility will allow the company to close the loop on manufacturing waste produced by those customers.
Initial plans are to operate two extrusion lines. Octal plans to spend another $10 million within a year to add additional lines, Barenberg said. Another 30 jobs could be added through that growth.
"This has been in our master plan since the beginning," he said, to create facilities like this in different parts of the world. "This has been part of the plan and for us a natural closing of the loop for our customers to enable even more rapid growth on their part."
Barenberg added: "Our goal is to help them achieve or realize the economic value from that flake and stay focused on thermoforming," he said.
The amount of scrap that's created in the manufacture of PET thermoformed packaging varies by the shape of the container. A rectangular shape can create maybe 13 to 20 percent waste while a round shape like a bowl or cake dome can see scrap levels from 40 to 55 percent, Barenberg said.
Muscat, Oman-based Octal already has firmed up enough PET flake to supply 90 to 100 percent of the new facility's capacity.
The leased 130,000-square-foot West Chester location, which is about 20 miles north of Cincinnati, includes both warehouse and office space.
Location, Barenberg said, was important in selecting the new site, which is centrally located in the eastern part of the United States. The new facility also is just a couple of minutes away from an intermodal facility to allow the shipment of material from Oman if necessary.
PET sheet produced by the new location will be used to make containers for the agricultural market, including items such as berries, lettuce, cherry tomatoes and apples.
Octal produces sheet directly from molten PET in Salalah. This method cuts out several steps from the conventional manufacturing process, including pelletizing and drying.
This so-called direct PET approach, along with providing energy savings on the front end, also creates material that's great for recycling, Barenberg said.
"The flake that our customers generate using dPET is a very high-quality material. In fact, it's seen fewer heat histories than crystallized resin that you would buy as virgin resin. So it's an extremely valuable feedstock. We want to collect it, process it into very high quality sheet and send it back to them," he said.
While the site selection is now complete in Ohio, Barenberg sees the probability of locating similar sites elsewhere, including west of the Rocky Mountains and Eastern Europe.
"As these opportunities come up and the timing is right and our thermoforming partners are well positioned, we will continue to invest right behind them as they push their way into these markets," he said.
Octal expects demand for thermoformed PET packaging will continue to grow.
"Our mission is to expand the entire universe of opportunities for PET thermoformed products," the COO said. That includes a push into consumer products packaging.