The PET bottle industry's leading trade group is cutting itself to the bone, laying off its president and several top executives who deal with recycling issues, even as recycling companies warn publicly that their industry is stagnating and soft drink makers try to figure out what to do.
The National Association for PET Container Resources announced May 12 that it was laying off its longtime president, Luke Schmidt, and two senior executives, citing financial problems and the loss of some of its larger member companies. The move reduced the Charlotte, N.C., trade group to a skeleton staff of two.
The announcement capped an active couple of days in the PET sector. The soft drink industry, led by Coca-Cola Co. and PepsiCo Inc., brought its PET suppliers to a very unusual meeting May 11 in Chicago to address falling recycling rates.
The Association of Postconsumer Plastic Recyclers, for its part, issued a statement May 10 saying that the recycling infrastructure is close to collapse, amplifying earlier warnings.
NAPCOR's decision leaves the group with two staffers, including Mike Schedler, vice president of technology. Chairman Gerald Claes said the group would like to rebuild in time.
``There's no question it hurts,'' said Claes, director of environmental programs at Graham Packaging Co. in York, Pa. ``This was purely a financial decision.''
NAPCOR lost several members in the past year, including some major PET bottle makers, and ``it was clear there was a possibility we could lose more unless we addressed the dues structure,'' Claes said. NAPCOR will close its two remaining regional offices, in Seattle and Asheville, N.C., and lay off Don Kneass, vice president of regional affairs, and Sandi Childs, eastern region director, who staffed those two locations.
Claes said Schedler will continue to work on NAPCOR's technical projects, like recycling efficiency and rate-calculation programs. The group's Charlotte headquarters will remain open. NAPCOR laid off two other staffers earlier this year.
The downsizing of most of the staff members, who spent a lot of time supporting recycling programs like NAPCOR's work at sports stadiums, is certain to be a blow to the troubled PET recycling sector. It also will mean a diminished presence in government activities, where NAPCOR has joined with its customer groups, including the soft drink industry, in opposing environmental legislation like bottle bills.
Claes said that for the moment he does not see a lot of legislative threats for the PET bottle industry, but, given falling recycling rates, ``we're lucky we haven't seen some external pressure.''
PET recycling rates dropped from 40 percent in 1995 to 20 percent in 2002, and the amount of PET collected for recycling has stagnated at about 800 million pounds a year for several years.
Those changes, coupled with Chinese exporters now buying 35 percent of the recycled PET in the United States, have squeezed North American PET recyclers, and led them to begin a vocal campaign to bring more attention to the issue.
APR said in its May 10 statement that the industry is in crisis, and that the amount of PET and high density polyethylene bottles recycled needs to double in the next two years.
``We are dangerously close to irreversibly losing significant amounts of recycling capacity,'' said Robin Cotchan, APR executive director.
Arlington, Va.-based APR does not recommend a specific solution. But it does call for examining what it calls ``progressive and creative'' government programs in Canada, Australia and Europe that recycle much higher levels of bottles.
Cotchan said APR would like to find a solution that gets beyond the polarized debates between environmentalists, who like bottle bills, and industry, which finds them burdensome.
APR's statement is a more strident version of comments the group previously has made, and came one day before the Chicago meeting.
Coke and Pepsi did not comment, but their trade group, the National Soft Drink Association, said about 40 people attended the May 11 meeting. The meeting also was called by Cadbury Schweppes plc.
``There was a frank and productive discussion of PET recycling rates and how they might be raised,'' said Preston Read, director of environmental affairs with Washington-based NSDA. ``There was agreement that the group would continue [the] discussions.
``The soft drink industry is aware that NAPCOR's budget has been substantially reduced and is mindful of the need for an effective industry presence to promote beverage container recycling,'' Read said. He declined to elaborate.