When Peninsula Packaging Co. opened its doors in Exeter, Calif., nearly 10 years ago as a fully integrated manufacturer of PET food packaging that contains recycled content, “green” and “sustainability” were barely part of the industry lexicon.
But Peninsula's commitment to use recycled content in its packaging for produce, baked goods, prepared foods and grab-and-go foods at convenience stores has paid dividends in both sales growth and in recognition for its environmental stewardship.
“We always believed that a closed-loop system was going to be one of the principles that we built the business on,” said Allen Kidd, vice president of new product development for the $75 million company. Kidd was interviewed at the Global Plastics Environmental Conference of the Society of Plastics Engineers, held Feb. 26-27 in Orlando.
“We thought the use of recycled content was going to be the wave of the future,” he said. “We knew recycling of products had to be done and the two just had to collide.”
Peninsula received the Dan Eberhardt Environmental Stewardship award, one of 11 awards handed out by GPEC at the conference, for its commitment to the use of recycled content and for its use of solar energy to provide 50 percent of the power needed to make its packaging products at its plant in Exeter. The solar farm is the largest privately funded solar installation of its type in North America.
Peninsula has the capacity to process more than 100 million pounds of PET annually and uses more than 25 million pounds of recycled PET a year, said Peninsula co-owner and general manager Ed Byrne.
Its products use anywhere from 20 percent to 100 percent recycled PET, and the average recycled content in its 250 products is “about 50 percent,” said Kidd.
Byrne said whether potential customers use recycled PET for food packaging often is “a function of costs.”
“If the cost of recycled resin is lower than virgin, that will drive demand because I don't think there are any players out there willing to pay more for virgin” in the thermoforming market, he said. “Right now the price of virgin PET has put recycled PET at a disadvantage, but we think it is temporary.”
Regardless, Byrne said that “within three years” Peninsula will be making all of its food packaging products with 100 percent recycled content and that its plant in Exeter will be supplied 100 percent by renewable energy. “We think that is attainable.”
While Byrne characterized the pace of growth during the next few years as “modest,” Kidd painted a slightly different picture.
“In three to five years,” said Kidd, “there is no reason we shouldn't be a $150 million to $200 million company,” with growth coming from existing markets as well as products such as fruit tray carriers, shoe boxes and industrial carrier and tote-type trays. “All that is limiting our growth is the ability to expand with new equipment, new products and new facilities.”
Peninsula has plants in Exeter, as well as Wilson, N.C. In addition, Byrne has discussed with Tony Mouchachen of Merlin Plastics Alberta Inc. the feasibility of being individual investors in a sister company that would build a 60 million-pound plant in Modesto, Calif., to make food-grade recycled PET resins and be a supplier to Peninsula.
Peninsula signed a three-year contract to purchase 1.5 million pounds of recycled PET monthly from Eco2 Plastics Inc. But Kidd said that “finding an ongoing supply of clean, ground bottle scrap remains the biggest challenge” because of the lack of bottle-washing systems in the California market.
Other GPEC environmental award winners include:
* Packaging Plus of Fremont, Calif., for developing for Western Digital Technologies Inc. a bulk plastics packaging system for external hard disk drives from recycled high density polyethylene to replace bulky, costly, nonrecyclable carrying trays made from polyethylene foam. The U-Pads are manufactured in China, sent to drive assemblers in Southeast Asia, shipped to retailers and then returned to Southeast Asia for re-use. “There are 25,000 pallets' worth of savings annually,” said Roger Ferreira, an engineer and principal with Western Digital.
* Pace Industries Inc. in Reedsburg, Wis., for its development of an agricultural-based compostable and recyclable sheet product for signs, posters, displays and other forms of graphic arts packaging.
* Cascade Engineering Inc. in Grand Rapids, Mich., for the injection-molded turbine blades it makes for rooftop Swift wind turbines developed by the Scottish firm Renewable Devices. Cascade makes the turbine blades globally and assembles and distributes all Swift rooftop-mounted wind turbines in North America.
* Resin manufacturers Cereplast Inc. and DuPont Co. were honored for making plastics resins from renewable sources, and Brazilian petroleum refiner Braskem SA was honored for its commitment to build a plant to annually produce 400 million pounds of ethanol from sugar cane.
* KW Plastics in Troy, Ala., was honored for its nationwide program with home improvement retailers to recycle used plastic paint can containers.
In addition, carpet manufacturer Mohawk Industries Inc. in Calhoun, Ga., received an award for its 2-year-old GreenWorks Center in nearby Chatsworth that has developed technology to process 100 percent of recycled carpet, with about 90 percent of the recycled material turned into resins to make new products.
GPEC also chose FRX Polymers Inc. and PolyNew Inc. as the companies with the top two new clean technologies.
FRX of Chelmsford, Mass., has developed a family of environmentally friendly, flame-retardant engineering thermoplastics and in February agreed with Uhde Inventa-Fischer to build a plant at UIF's facility in Domat/Ems, Switzerland, to produce 1 million pounds of the resin annually. The site is expected to begin operating early next year.
PolyNew in Golden, Colo., has developed a new type of polylactic acid bioplastic that is a nanocomposite with high-heat resistance and clarity and is made from 100 percent renewable resources. The resin is being used to make solid and foamed trays for microwaveable food and other food packaging.