Phoenix Technologies International LLC's new 10 million-pound modular LNO-brand food-grade, compacted pellet plant has been in full-scale production for just over a month in Bowling Green, Ohio. But, the PET recycler is planning to build at least 14 plants in North America by the end of 2011, including two this year.
That would be in addition to the eight to 18 plants that sister company, PTI Recycling Systems LLC of Holland, Ohio, expects to build outside North America in the next two years. Both companies are part of Plastic Technologies Inc., also in Holland.
In an interview at NPE2009 June 23, President and CEO F. Robert Deardurff said Phoenix would first add a second 10 million-pound line at Bowling Green and shortly after that have an expansion, potentially in the Southwest. I expect that we will add at least two plants by the end of the year, at least four in 2010 and at least eight in 2011.
One reason the plants can be built so quickly is that the modular design and prefabricated units mean a 10 million pound-per-year plant can be installed in three weeks.
He said the capacity of the plants would depend on where the plant is built and the requirements of the customer, but that they would be in increments of 10 million pounds. You only need 2,500 square feet whether you are adding 10 million or 20 million pounds. The difference is one module within that same footprint.
We have the technology to grow and there is a lot of interest from water and beverage companies and sheet extruders for thermoformed packaging applications, from cups to clamshells, said Deardurff. We are pleased with the reception to the technology. We are getting a very strong interest.
Phoenix's annual capacity is 80 million pounds, equally split today between food-grade and nonfood-grade resins, but food-grade is the growing portion of the business, he said.
We expect nonfood-grade organic growth of 6-10 percent per year, said Deardurff. But there is potential for explosive growth in food-grade. We could double the amount of food-grade within Phoenix within two years.
That growth, he said, is independent of the growth that PTI Recycling Systems expects.
Deardurff was quick to point out, however, that the real opportunity for growth lies not in building plants in its headquarters city of Bowling Green, but in adding additional plants across the U.S., Mexico and Canada.
The real growth is in building additional facilities to reduce the transportation of raw materials, to eliminate a transportation step and to get closer to the customers that want the supply of recycled food-grade PET resins, Deardurff said. We want to collect, convert and consume on a local basis to reduce the conversion costs.
We can build a plant at the end of a wash line or inside a customer's plant, he said. A company with 4-5 high-cavity injection molds would have a demand that would be equal to that of our 10 million pound modular plants.
In addition to its modular design that can be built where customers need supply, he said Phoenix has several other marketplace advantages.
Its LNOc process has yields of 98 percent, compared with 94-96 at its previous generation of LNO pellets.
It can use both deposit and curbside material, which doubles the available supply, and offers potential for lower raw-material costs because of the lower price of baled curbside PET compared to the price of PET deposit material, said Deardurff. That is a big difference because of the impact of flake cost and the total cost of resin.
In addition, he said, we are running a recycling business as well as providing equipment. That sets us apart from other companies that are mostly just providing equipment. We understand what is needed to run a recycling business.
Copyright 2009 Crain Communications Inc. All Rights Reserved.