British PET formulator B&H Polymers Ltd. has purchased the former Nationwide Recyclers LLC plant in Polkton, N.C., saying it needed to acquire recycled resin production to compete in the North American beverage market.
The Nov. 11 deal gives Manchester, England-based B&H its first recycling plant, which company officials said is becoming a must in the PET beverage market, after the public pledges in recent years from Coca-Cola Co. and PepsiCo Inc. to use recycled content in their bottles.
``You cannot sell into these guys without some commitment to have recycled resin,'' said Mark Royall, plant manager.
The company plans to invest $4 million in the plant to upgrade its capacity to 60 million pounds of recycled PET pellets annually, from about 40 million now, he said.
While B&H said it is making a long-term investment, the plant has gone through a corporate version of musical chairs lately. This latest deal is the second change in ownership in six months.
In May, a group of investors led by Charlotte, N.C., banking firm McColl Partners and former bottling industry executive Tom Hiles bought the plant from Crown Cork & Seal Co. Inc., saying that they, too, saw a rapidly growing market.
But Hiles said Nov. 12 that they sold the plant because demand was not increasing as quickly as they had expected.
He and other owners were looking at it as an investment and wanted to take advantage of the B&H offer.
``Demand didn't come on stream as fast as we thought,'' he said. ``We're investment bankers. We're not strategic players.''
Terms of the deal were not disclosed.
When they bought the operation, Hiles said he thought private-label soft drink and beverage makers would start to use recycled PET.
But other industry officials were less certain of that bet.
Both Royall and Hiles said the McColl-led group made investments during their brief ownership that boosted capacity to 40 million pounds.
B&H plans to increase employment from 25 to about 70, which will get the company about $75,000 in government incentives. B&H has changed the name of the plant to B&H Recyclers LLC.
The company had been looking at recycling operations in the United States for the past year, and ultimately decided it needed to purchase one, rather than partner with an existing recycler, Royall said.
B&H sells PET solely to the bottle market, but does not have any PET manufacturing plants. Instead, it owns various formulas and relies on third-party manufacturers, he said.