Tough recycling markets are forcing Resource Plastics Inc. to restructure for the second time in about two years.
The Brantford, Ontario, firm has shut down its recycling plant while it explores options to restructure. The film and bottle recycler has been losing money because of low prices for recycled plastic, said President Wayne Maddever. It shut down in early February and laid off about 60 workers.
Maddever said the shutdown is temporary, but he could provide no time frame for when it would reopen. The firm is supplying key customers from inventory but is not accepting plastic scrap during the closure, Maddever said. Important customers include garbage bag producers that include recycled polyethylene in bags to comply with California legislation.
Maddever blamed current low prices for virgin PE for recent financial losses. His firm's sales have fallen about 50 percent even though it was shipping a steady amount of product, about 30 million pounds a year.
``[The shutdown] wouldn't have happened a year ago'' when PE prices were higher, he noted.
Resource streamlined and debottlenecked its plant about a year ago. The firm restructured in 1996 to avoid bankruptcy.
Maddever said current options include bringing in a new investor or restructuring debt. He stressed its owners want to restart the operation. Resource handles post-consumer and post-industrial PE.