Electronics plastics recycler MBA Polymers Inc. plans to make China the site of its first commercial-scale plant, a $10 million-plus investment in a joint venture with a Chinese steel manufacturer.
MBA has spent nearly $30 million and a decade developing its process at its Richmond, Calif., headquarters. But the company said it will make its first sizable investment in China because that's where its customers are and because Asian countries aggressively are moving to require recycling of electronic devices.
The venture, slated for Guangzhou, China, will be 55 percent owned by MBA and 45 percent owned by Guangzhou Iron & Steel Enterprises Holdings Ltd., the largest steel manufacturer in southern China. The companies announced the deal Jan. 19.
The plant will have the capacity to recycle 88 million pounds of material a year, and is to start operating in early 2005. The highly automated plant will employ about 50, and will use the same technology that MBA uses at its Richmond pilot plant.
The Richmond plant has a maximum capacity of 33 million pounds, but is operating at much less than that. MBA said that plant, which does research and limited commercial work, will continue operating.
MBA's process takes the complicated alphabet soup of plastics left over when computers and other electronics are shredded, and separates and recovers ABS, high-impact polystyrene, polypropylene and other materials.
Chief Executive Officer Mike Biddle said the company is setting up operations in China because the plastics market is huge, and because electronics, automotive and other durable goods manufacturers increasingly are moving operations there.
``Our customers ... are saying that if you want to do business with us, you have to sell plastics to us in China,'' Biddle said.
Beyond customer needs, Biddle said Asian governments are requiring manufacturers to take back their used electronics from consumers, forming the basis for a steady stream of materials.
South Korea, Japan, and Taiwan all have mandatory take-back laws, and China is expected to adopt some, Biddle said.
MBA also is looking for a location in Europe, a move driven by legislation that will require recycling of most electronic goods there by mid-2005, Biddle said.
The European market will be huge, and governments there are starting to get nervous about how they will handle the flood of materials when their comprehensive legislation takes effect next year, he said.
``We have to get into Europe,'' Biddle said.
Contrast that to the United States, where take-back legislation and large-scale collection programs have not exactly taken off.
MBA developed its technology in California and received some financial support from the Washington-based American Plastics Council, government agencies and other groups, but Biddle said the company is not contemplating a commercial-scale factory in the United States now. The lack of collection infrastructure makes it too hard to get a dependable supply, he said.
``We simply can't get enough material in North America,'' Biddle said. ``I'm very much a free-market guy politically, but I have to admit, so far, only in the places where there has been legislation has there been enough infrastructure to make it economical.''