The largest commodity exporter in the Midwest, based on number of containers, is a plastics recycler. Parc Corp. of North Aurora founded and owned by Chinese-born Kathy Xuan, has established a pipeline of plastics between the States and China.
With a 50,000-square-foot warehouse in the suburb of Chicago, Parc ships more than 80 million pounds of plastics scrap to mainland China and Hong Kong annually. About half goes directly to end users, and the other half is reprocessed in Parc's subsidiary in the port city of Qingdao.
On a 16-acre site, the Qingdao facility currently operates a 100,000-square-foot reprocessing area and warehouse and a 20,000-square-foot dormitory. The $3 million plant started production in June 2005.
Every month, the facility sorts, cleans and repelletizes 100 standard containers of high and low density polyethylene scrap for film and bag manufacturers. The daily output of 20,000 pounds is far from appeasing Chinese processors' hunger for recycled materials.
In a nation that produces 17.6 billion pounds of ethylene annually and keeps lowering tariffs for imported virgin resin, price is not the sole reason for the craving for imported scrap. ``The attraction also comes from quality,'' Xuan said, ``although price is the key for most general materials.''
``You might find it surprising, but in cases like polycarbonate, acrylic and polyphenylene oxide, the quality of recycled resin using imported scrap is even better than the domestically made virgin resin,'' she said.
Although 80 percent of plastics processors in China have annual sales of less than $600,000, half of Parc's clients are at the $100 million level.
Those export-oriented processors prefer imported recycled resin, because their products need to meet Western standards. ``At least according to them, imported scrap can produce better products than domestic virgin resin,'' Xuan said.
Starting in the first quarter of next year, Parc China will expand its product portfolio to include injection-grade reprocessed pellets and composite pellets containing wood fiber.
Parc also is negotiating with appliance giant Haier Group about reprocessing styrenic material. With investment from the Chinese government, Haier is setting up a plant to handle electronics waste across the street from Parc's Qingdao facility.
``We may do the cleaning and shredding of plastic panels and parts of appliances,'' eventually sending reground ABS, polycarbonate/ABS blends and polystyrene to Haier's compounding plants for further processing, Xuan said.
As thriving as the scrap-trading business can get, the Chinese government is tightening regulations on imports. The customs department has been strict about granting licenses that entitle firms to receive such shipments.
``It is getting more and more difficult, from whole bottles to shredded materials,'' she said.
A member of the Women Presidents' Organization, Xuan is planning to expand Parc's U.S. operation. ``It will make sense to process scrap here before exporting to China.''
Parc buys in North America from companies such as Waste Management Inc., Wellman Inc., Bemis Co. Inc. and PolyOne Corp. As American processors adopt outsourcing and offshore production strategies, ``the recycled resin market has relatively more supply.''
Xuan has been in the recycling business in the States for more than 10 years.
``I understand many U.S.-based companies are interested in manufacturing in China. I hope to partner with them or simply help them set up factories in the Plastics Industrial Zone, where my own facility is located.''