The biggest threat to plastics converters in Europe is the gap between recycling mandates and the public's acceptance of recycled products. Joachim Eckstein, incoming president of the European Plastics Converters Association, the nonprofit umbrella trade organization of the European plastics industry, said the markets for recycled and recycled-content products have not kept pace with recycling requirements on the continent.
``The largest threat to converters is the call to create a closed circle for products. This creates the need for more activity and cost, while the prices we get for recycled products are not contributing to our ability to pay those costs,'' Eckstein said in a telephone interview from his office at Hoechst AG's Kalle Rigid Films business in Weisbaden, Germany. ``We question whether recyclates and recycled products are not accepted in the marketplace, even though the public and politicians have created the call for them.''
He noted that European converters, like their colleagues in North America, are comfortable using their own post-industrial scrap in their products, but are less able to handle the increased cost of processing and converting post-consumer materials.
Although he said Europe's plastics industry is healthy, with processors able to run at or near capacity, extraordinary escalation in the costs of virgin resins in the past year also have cut margins in Europe, with many of Eckstein's constituents unable to pass through doubled raw material prices.
``Our members have seen prices for the three main materials, polypropylene, polyethylene and PVC, increase 100 percent or more in the past year,'' he said. ``In the last few weeks that picture has stabilized and prices have dropped a few pennies for PP and PE. PVC has also been more stable.''
But even with the increases, production has grown. He estimated that European converters will manufacture about 72 billion to 75 billion tons of product this year, and that growth in various markets is spurring production that could exceed 88 billion tons by 2000.
``The growth has been about 7 percent per year in the automotive segment,'' he said. ``Electrical and electronics has grown 6-7 percent, and machinery and construction is also at about 6-7 percent per year.''
Intense growth in PET use - primarily in packaging applications to replace PVC, which was seen in 1991 and 1992 in Europe - has slowed recently, he said. PVC has been under attack by environmental groups that claim its chlorine content is harmful, and that PVC incineration is linked to creation of the carcinogen dioxin.
``There has been a new market for PET, especially amorphous PET film in Europe, which accompanied the discussion over PVC,'' Eckstein said. ``But that growth has stagnated a bit because of the relatively high price of PET. In some cases, our converters were paying 1.8 deutsche marks [$1.52] per pound for PVC and DM 3.6 [$3.04] per pound for PET.''
He said the price pressure has sent some processors back to PVC, and although his own company, Kalle Rigid Films Business, has developed production of PP and APET, it remains committed to production of about 198 million pounds of PVC this year.
``We are glad to have the diversified development,'' he said, ``but our market is still rigid PVC, and the pressure to discontinue its use has lessened somewhat.''
Eckstein said that, as the leader of the Brussels, Belgium-based EuPC, he will continue the organization's lobbying efforts in the European Union, targeting all rules and regulatory initiatives affecting plastics, recycling and converting.
``The European Community has already set some directives, especially in the area of packaging,'' he said.
``And the individual member-states have 18 months to develop their own regulations internally. I don't expect any delays in those developments, and we will do all we can to make the results reflect the priorities of our members.''
