PETOSKEY, MICH. — Layer upon layer of used plastic trash bags, most soiled and crumpled, are piled high at Petoskey Plastics Inc.'s factory in northern Michigan.
As much as 700,000 pounds a month of the bags pass through the firm's plant in Petoskey, where they get a second life in an automotive seat cover or multilayer trash bag. Petoskey Plastics President Paul Keiswetter calls his products recycled sandwiches: The reprocessed bags are surrounded by layers of virgin plastic.
Today, Keiswetter shakes his head in disbelief as he picks up a snowflake-sized plastic pellet.
``All I've heard is the negative about recycling falling on hard times,'' he said. ``Many companies have fought recycling and say it can't be done, that it's impossible, that it's not cost-effective. I'd like to tell people that it can be done and done successfully.''
As proof, Keiswetter said that Petoskey Plastics just completed a 20,000-square-foot expansion that has cost $7 million in 36 months—$4 million of that to upgrade the firm's recycling operation.
Yet, others have not spoken with the same authority about recycling, especially in the auto industry, said William Windscheif, senior marketing manager with Montell Polyolefins in Troy, Mich.
``Our observation is that many [original equipment manufacturers] say this is what they want and put forth a good story about recycling,'' said Windscheif, who also serves as chairman of the American Plastics Council's Durables Automotive Committee. ``But unless it is lower in cost than virgin materials, they've been unwilling to step up to the plate and actually do it.''
Recycled plastic accounts for less than 1 percent of a vehicle's content and packaging, Windscheif said. But some companies have had success in supplying recycled-content products to automakers.
Start-up injection molder AGS Technology Inc. of Schaumburg, Ill., for example, is building a new automotive business around recycled products.
AGS processes raw material from plastic scrap to make a variety of small parts. The company, which started in October 1995, will ship products to General Motors Corp. assembly plants for model-year 1999 vehicles.
AGS molds reground waste directly into new parts, skipping the usual step of reprocessing the waste into extruded pellets, said President A. George Staniulis. The company compounds the recycled materials — using additives, lubricants and stabilizers — in the barrel of its injection presses to create the right mix. That has GM's attention.
``By streamlining the operation, we drive out a lot of the cost,'' Staniulis said. ``The whole trick is that we don't sacrifice anything in materials or parts performance.''
AGS also keeps a lid on costs by buying a limited amount of virgin plastic, said Staniulis, a former vice president of compounder MRC Polymers Inc. of Chicago. Staniulis said that about 60 percent of an auto part's cost comes from raw materials.
AGS uses recycled materials such as ABS and polyester/polycarbonate alloys to make ``black plastic parts,'' or those that are not visible on a vehicle. They include brackets to hold radio antennae, splash shields and small under-the-hood parts.
AGS' process is both a novel way to make parts and a bit of a risk, said Staniulis, whose company expects to record about $750,000 in sales this year.
``We put this whole plant together without an order in hand, based upon what we saw as a better way to do things,'' Staniulis said. ``People told us we were nuts. But we went with our gut, and it will pay off.''
The company's 25,000-square-foot plant won its first contract a year ago for a new GM vehicle coming out in 1999. For the future, the facility has the capability to process 5 million to 6 million pounds annually of raw material from both post-consumer and post-industrial sources.
Its recycling equipment includes metal separators, a cleaning station, double-combed blenders that can hold 3,000-5,000 pounds and a material test laboratory.
AGS' four injection presses, which have clamping forces of 200-1,200 tons, include special Spirex screws for customized mixing.
Cost still drives competition. Just ask Andrew Acho, director of environmental outreach and strategy at Ford Motor Co. and chairman of the Great Lakes Recycle Board. The board, formed last year, includes governors of Great Lakes states who meet to consider both new uses and state incentives for businesses to recycle.
Ford, based in Dearborn, Mich., dictates that to be considered recycled, a product must have a minimum of 25 percent recycled content. The automaker recycles 24 million plastic parts a year at a plant in Plymouth, Mich. The company now recycles plastic telephone housings, bottle caps and cotton bale wrap, among other materials.
Acho, who heads Ford's recycling effort, has two rules: A recycled product must perform as well as the virgin part it is replacing, and the cost of producing the part cannot be higher than that of virgin-material parts.
``The reason for these rules is to make recycling sustainable,'' Acho said. ``If it makes economic and technical sense to recycle, then recycled parts won't just be the flavor of the month. Every automaker will be interested, and that will help us create demand for the market.''
Acho said Ford's efforts have helped foster that demand in the supply community. Keiswetter said Petoskey Plastics would not be creating its blown-film contoured seat covers if not for Ford's push. The covers, made from bags returned by customers and other companies, are used to protect automotive seats during shipping.
Petoskey Plastics opened its $3 million recycling operation in 1991, with the state of Michigan contributing $1.2 million to the program. Since then, Petoskey has invested close to $2 million a year in the facility.
The 100,000-square-foot plant, which includes statistical process controls, recently expanded its recycling area to include a new repelletizing line and an automotive converting department to make the seat covers, known by the name Slip-N-Grip.
The supplier, which expects to record about $25 million in 1997 sales, recently installed its first five-layer extruder to bring the plant total to nine extrusion lines. The company also operates six three-layer extruders and two two-layer lines.
``With recycling, we have an advantage over companies that only make single-layer bags,'' Keiswetter said. ``We can vary the recipe, and the amount of our recycled content, depending on the stiffness, flexibility, thickness and other factors wanted by our customers.''
With these successes, some obstacles remain. Competitors in the steel industry have been recycling for a much longer time and have done a better job at perfecting systems to keep costs down, said Al Maten, director of durables for Washington-based APC.
To catch up, APC is spending thousands of dollars on recycling research, Maten said, without disclosing specific figures. The association also is banking on the opening of a new, 55,000-square-foot research facility in Richmond, Calif., to help drive the search for low-cost recycling techniques.
The facility, a joint project between APC and Richmond-based MBA Polymers, can process as much as 10,000 pounds of material an hour.
``It's a technology showplace that we hope will help catapult some commercial recycling programs,'' Maten said. ``The hurdle is to get costs down. All automakers have asked us jointly to help find ways to do that.''
That will continue to challenge processors such as Staniulis.
``The only way to compete in the auto industry is on an economic level,'' Staniulis said. ``If we can't keep our costs below that for [virgin] products, we might as well change our business to a curbside recycling program.''