China's largest compounder shaking up the recycling industry

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Nina Ying Sun Ning Hongtao, head of Kingfa Sci & tech Co. Ltd.'s recycling unit in Guangdong,
SHANGHAI — If the Green Fence campaign has put China’s highly fragmented plastics recycling industry at crossroads, Kingfa Sci. & Tech. Co. Ltd. hopes to take it to a new direction.

The Guangzhou-based firm, by far the largest domestic compounder, has set an aggressive goal for its newly formed recycling business — 30 billion yuan ($4.8 billion) in sales by 2018 or nearly a third of Kingfa’s overall sales, said Ning Hongtao, head of Kingfa’s new recycling unit.

In a strategic move to enter the recycling business, Kingfa established a subsidiary — Guangdong Kingfa Sci. & Tech. Co. Ltd. — in Qingyuan, Guangdong province, at the end of last year to build a greenfield, massive, 455-acre recycling industrial park.

Phase one — 30 acres — which expected to start production on May 18, with 50,000 metric tons annual capacity, said Ning, general manager of Guangdong Kingfa. The recycled plastics will primarily consist of polystyrene, polypropylene and polyethylene.

“PET is not our focus, because the PET virgin resin market is very volatile,” he added. “The price can take a huge fall while the shipment is still on the way.”

About 60 percent of the plastic waste going into the Qingyuan facility will be sourced from overseas.

Kingfa will finalize its long-term planning of the Qingyuan project by the end of next month, Ning said during an interview with Plastics News at Chinaplas. Previous reports said the recycling park will draw 3.8 billion yuan ($610 million) of investments and will eventually be able to process 1 million tons of plastics waste and yield 1 million tons of compounds per annum.

Ning described the current state of China’s plastics recycling industry as “low-tech, small-scale, fragmented and disorderly.” Thousands of small mom and pop shops engage in basic sorting and washing without proper environmental protection measures, he said, causing pollution and public health hazards.

“That’s why the government is pushing for zone management. These new recycling parks will ensure the recyclers are equipped with technology, management skills, and environmental protection,” he said.

China’s Green Fence campaign in 2013 has triggered the recycling industry’s re-regulation and reshuffling, Ning noted. He believes Kingfa’s leading position in resin technology and business scale makes it a perfect candidate for taking a significant role in the industry’s transformation.

Kingfa also has 300,000 tons of compounding capacity for recycled plastics in Guangzhou, Shanghai and Tianjin, supplying major brand owners in the electronics and auto industries, among others.

Ning also serves as president of the plastics recycling committee of China Plastics Processing Industry Association.