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September 30, 1996 02:00 AM

RECYCLERS OPTIMISTIC DESPITE SETBACKS

Sarah S. Smith PLASTICS NEWS STAFF
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    Recycling plastics isn't like recycling aluminum - a variety of resins, melt indexes, colors and densities make plastics more difficult to collect, sort and reprocess. Each market has its own niches and concerns. But for the most part, despite some recent setbacks, recyclers who serve these markets intend to be around for a long time.

    PET

    PET, plastics recycling's long-standing success story, now must deal with an oversupply of virgin PET driving down recycled prices. Shrewsbury, N.J.-based Wellman Inc., the world's largest PET recycler, is concerned about the dropping price.

    ``PET is in a very, very difficult position,'' said Wellman Vice President Dennis Sabourin.

    With sales of more than $1 billion last year, Wellman is profitable. But Sabourin warned that the prices have reached a level where profitability is hard to maintain.

    Despite the roller coaster ride, some major PET recycling companies say they still cannot get enough material.

    ``We're using a record amount of material,'' said Paul Meredith, vice president of fiber operations at Image Industries Inc. in Armuchee, Ga. ``The volumes today are very significant; they're up 15 percent every year.''

    Image recycles more than 100 million pounds annually.

    ``We have plans to ... take on more suppliers and more volume,'' Meredith added.

    According to the National Association for Plastic Container Recovery, a Charlotte, N.C., trade group for PET resin suppliers and bottle makers, 622 million pounds of PET was recycled last year.

    In spite of the cost slump, Sabourin does not believe that PET bottles collected from recycling programs are being landfilled.

    Meredith thinks the future of recycled PET is solid. Already in fiber and textiles, Image is watching for other applications that will have long-term returns, such as food packaging.

    ``A handful of companies grow and grow, and refine recycling. It's a maturing process,'' he said. ``When you have a few companies that pull back from recycling, it gives the industry a bad rap.''

    HDPE

    Recently, the market for high density polyethylene market has taken a high-profile hit. Union Carbide Corp. and Quantum Chemical Co., which opened recycling plants in 1992, have pulled out of the business, blaming thin profit margins.

    KW Plastic Recycling, a major player in the HDPE market, remains unswayed.

    ``We plan to be around for a long, long time,'' said partner Kenneth Campbell. ``Recycling has a very bright future. It's in its infancy, creating jobs and making money. We're only seeing a small scale now compared to the big picture.''

    Founded in 1980, Troy, Ala.-based KW now processes 1 million pounds of HDPE per day. With high production rates and cost-effective processes, Campbell thinks the company is limited by available raw material. KW receives its material from all of North America but has found that not enough is being sorted.

    ``We'd love to double or triple our volume,'' he added. ``Our business is very profitable.''

    Polystyrene

    Polystyrene recyclers have not hit the ambitious goals they set in the early 1990s, when PS packaging lost some important environmental battles, like McDonald's decision to drop the hamburger clamshell.

    But recycled PS has settled into some significant niches, like loose-fill packaging.

    Free-Flow Packaging Corp., for example, makes about 10 million pounds per year in recycled PS packing peanuts, which consist of 35 percent post-consumer material. The company, incorporated in 1967, has seen PS come in and out of the spotlight.

    ``Before the 1990's, people shied away from PS,'' said Virginia Lyle, manager of environmental and public affairs. ``People have now accepted the product which has recycled content. We're working to make our customers expect and demand [recycled content] because we're not goingn to quit using it.''

    After losing money the first two years it recycled loose-fill, Free-Flow now makes a profit, she said.

    The Canadian PS Recycling Association began recycling PS in 1991 and is supported by 27 PS companies. It is working to make recycling loose-fill and food-service waste from curbside programs profitable.

    ``The key is to ... develop technology to utilize incoming feedstocks,'' said spokeswoman Cynthia Ulba.

    Dolco Packaging Corp. in Sherman Oaks, Calif., uses recycled food-service products to make recycled-content products including egg cartons and meat trays.

    ``We might have reached a peak in PS food-service recovery,'' said Norman Patterson, general manager. ``The next step is to find other areas, such as recycling on airlines.''

    The company has recycling programs for food-service items with some grocery stores.

    PE film

    Although lightweight and difficult to collect, recycled film continues to have a strong presence in the recycling industry - primarily T-shirt bags collected from grocery stores, and pallet wrap from commercial customers. Companies' greatest concerns are quality and cost.

    ``Recycled-content bags are not bringing people to stores,'' said Bob Householder, marketing manager for environmental issues at Sonoco Products Co. in Hartsville, S.C., a major T-shirt bag maker. ``If people can bring the bags back to the store, that makes an impact on them.''

    Sonoco, which recycles 300,000-400,000 pounds per month, has found that collection is difficult because the bags are so light. Baling, cleaning and separating need to be economical, Householder said.

    ``[Recycling] is a steady business but not uniform,'' he added. ``It's growing and there's a base out there. Companies are using recycled bags, so there's a market for it.''

    Although Sonoco thinks recycling is economically self-sustaining, the firm is worried about the lack of advances in technology.

    Zeta Consumer Products Corp., part of Sigma Plastics Group, takes dry cleaning and garment bags and recycles them into trash bags. The 100 percent recycled-content trash bags are one of the company's fastest-selling products.

    The amount of material Zeta processes is high, according to President Raj Bal, and the amount has increased each year with more dealer participation. He would not give specific figures.

    ``It makes economic sense to recycle and it's a better utilization of resources,'' Bal said. ``If it didn't then you'd have to question recycling. We strongly believe recycling is a growth industry.''

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