Elm Packaging Co. has bought National Polystyrene Recycling Co. for an undisclosed sum, marking the end of the virgin PS resin industry's expensive foray into recycling.
Elm, a Memphis, Tenn.-based thermoformer, said it will maintain NPRC and could use recycled PS from NPRC's two plants. But Elm President Donald McCann said he intends to run NPRC as a standalone business, and did not buy it primarily as a source of raw material.
NPRC's owners have spent $85 million on the money-losing venture since it started 10 years ago with the goal of jump-starting PS recycling. By selling the operation now, NPRC's owners have an opportunity to recoup some of their investment and still protect PS recycling, said Scot Mitchell, general manager of styrenics for Dallas-based Fina Oil and Chemical Co. and an NPRC board member.
``Instead of being an industry-subsidized operation, it will stand on its own,'' he said. ``Our understanding is that [Elm] will continue to operate both plants. We don't anticipate any changes except name and ownership.''
McCann said NPRC has been operating at less than 50 percent capacity.
``We expect to boost its capacity. We think there is a lot of opportunity for recycled material,'' he said.
NPRC has plants in Corona, Calif., and Chicago. At its peak, NPRC had four plants spread across the United States and was owned by eight major North American PS resin suppliers. More recently the list of owners was down to four - Chevron Chemical Co., Dow Chemical Co., Fina, and Nova Chemicals Ltd. Mitchell said the owners have subsidized the recycler.
The shareholders also were looking to sell because NPRC President Joe Granda wants to retire, said Joe Howlett, business manager for polystyrene for Chevron in Houston.
Elm said in a July 1 announcement that it will change NPRC's name to Polystyrene Recycling Co. of America and will continue to recycle food-service products.
``We intend to continue servicing all customers currently serviced by NPRC and have plans to expand our customer base significantly,'' McCann said in a statement.
Elm has plants in Memphis, Fullerton, Calif., and Troy Ohio. It was 23rd in Plastics News' 1999 ranking of North American thermoformers, with $45 million in sales, all from PS.
Mitchell said NPRC had approached several potential buyers. The PS recycling infrastructure is much more developed than when NPRC started, he said, noting that more than 100 companies in the last Plastics News recyclers ranking handle PS.
But the industry long ago abandoned its goal of recycling 25 percent of PS used in food service and packaging. For example, a recent survey found that 0.1 percent of PS bottles were recycled in 1998. And some communities, such as Lake County, Ill., are asking residents not to recycle PS.
Mitchell said demand for recyled PS never materialized the way NPRC thought it would.
``The NPRC was formed because there as an unmet need to establish the viability of post-consumer polystyrene recycling. We believe we met that goal,'' he said. ``We don't see it at all as an abandonment of a cause.''