Six years ago, I would have predicted that Phillips Petroleum Co. would be the first major resin supplier to abandon its high-profile experiment in plastics recycling.
Instead, it was the last.
Last month, Phillips announced it would shut down its Phillips Plastics Recycling Co. plant in Tulsa, Okla. The company opened the high density polyethylene recycling plant in 1992 — originally as part of a partnership with recycler Partek Corp. of Vancouver, Wash.
1992 was a very different time in the plastics industry, and a very different time for Phillips Petroleum.
The firm was nearing the end of a massive effort to rebuild its position in virgin PE resins, following the tragic 1989 explosion at its Pasadena, Texas, complex.
Not only was Phillips faced with a $215 million investment in PE production, but the company also was dealing with explosion-related fines from the Occupational Safety and Health Administration, plus lawsuits from families of workers killed in the accident.
And as if that weren't enough, Phillips was recovering from nasty hostile takeover efforts by T. Boone Pickens Jr. and Carl C. Icahn, which had left the company with an $8.9 billion pile of debt.
I visited the Phillips Plastics Recycling plant in February 1992, shortly before it officially opened. I thought it ironic at the time that, the very week that I visited the operation, Phillips announced plans to lay off 1,100 workers companywide — the result of the greenmail greedfest.
So who could blame me for doubting that Phillips would hang on to plastics recycling for very long.
But the Bartlesville, Okla.-based company hung on for a bit longer than its virgin PE cohorts who tried their hand at in-house recycling: Union Carbide Corp. and Quantum Chemical Corp., now part of Millennium Chemical Corp.
These companies had several goals in mind when they hung out their recycling shingles. A key was the industry effort to raise the U.S. plastics bottle and container recycling rate to 25 percent by 1995. PET already had a well-established recycling infrastructure, thanks to state bottle-deposit laws. But PE needed a jump-start.
In a sense, the virgin resin companies did help accomplish that jump-start — although they still haven't achieved the 25 percent goal.
HDPE recycling isn't dead. It's just in the hands of companies that have proven more adept at the business.
Virgin PE suppliers were never the largest players in plastics recycling, and they certainly never were the low-cost producers. In the end, they dropped out for the same reason that many small, entrepreneurial recyclers went out of business: The market never took off the way they expected, because government recycling mandates did not materialize.
Loepp is managing editor of Plastics News.