National Polystyrene Recycling Co. will close one of its three plants later this year, and will make changes to improve the others or they too could shut down.
NPRC's Bridgeport, N.J., plant will close in the last three months of 1997, but President Joe Granda expects the other two plants — in Chicago and Corona, Calif. — to become profitable and stay open.
NPRC and its five owners — virgin PS suppliers Chevron Chemical Co., Dow Chemical Co., Fina Oil and Chemical Co., Huntsman Chemical Corp. and Novacor Chemicals Inc. — have spent about $70 million trying to develop the recycling infrastructure, including at least $2.5 million since 1993 to modernize the Illinois and California plants, he said.
But questions remain about the long-term viability of the company.
``If we do not become profitable, we will not continue to operate,'' Granda said. ``If we continue to get worse and improvements do not materialize, somewhere along the line we will stop doing it. But I don't visualize that happening.''
NPRC Chairman James Stopperd said the five owners ``don't have a date at which we've got to turn it around or else.''
NPRC is suffering from the same cyclical market downturn in PS prices and is likely to be profitable in a few years, ``and that, more than anything else, will give us relief,'' said Stopperd, who is global director of issues and development for polystyrene at Midland, Mich.-based Dow.
NPRC's owners want to continue reducing the operating subsidy, which is 15-20 percent of what it was in 1992, he said. He declined to quantify the subsidy.
To help make the remaining facilities profitable, on Aug. 15 the Chicago plant will start charging 15 cents per pound for recycling food-service PS and the Corona operation will stop paying for food-service materials delivered from the 10 Western states it serves, Granda said.
That will reduce materials coming in, but some organizations, such as school districts and private cafeterias, find that even paying to recycle PS is cheaper than using other materials, he said.
Some community recyclers have questioned the PS industry's commitment to building and retaining a recycling infrastructure, but Granda insisted the company remains dedicated.
``The reason we are shutting down Bridgeport is to continue operating the other two,'' he said. ``In order to preserve the long-term viability, we need to get rid of assets that were not producing.''
The two remaining plants have been losing money on food-service processing, he said. The only time NPRC has made money was in 1995 and part of 1996, he said.
The Chicago plant will be able to handle all the work from the Bridgeport facility, which had been operating at 70 percent of capacity, Granda said. About 30 employees will be laid off at Bridgeport, although the company's headquarters will remain there, he said. The equipment at Bridgeport will be sold, he said.
Granda blamed the lack of consumer demand for products made with recycled PS and the decline in prices for plastic generally.
``First and foremost is the fact that people do not want and need post-consumer resin anymore,'' he said. ``The public does not want to buy recycled products.''
Because the demand in California is higher for recycled products, that facility will not charge to take PS to recycle, Granda said.
The company started charging 10 cents a pound to recycle flame-retardant materials a year ago, the only other product it has charged to process, he said.
NPRC was established in 1989, when it purchased the Plastics Again recycling plant in Leominster, Mass., which was later closed.
The company initially planned to have six large-scale PS recycling centers nationwide, and its goal was to recycle 25 percent of PS used in food-service and packaging markets by 1995.
NPRC closed a plant in Hayward, Calif., in 1992, consolidating those operations into the Corona facility.
Plastics News staff reporter Sarah S. Smith contributed to this story.