There has been a flurry of recycled PET expansions announced in the past 15 months, as firms build capacity to chase the red-hot market demand materializing for recycled content, particularly in food packaging.
Many of those plans are still moving forward, though some are advancing slower than anticipated or with mixed success.
Phoenix Technologies International LLC, which opened a 10 million-pound-capacity plant in Bowling Green, Ohio, last May, for making its LNO-brand compacted, food-grade pellet (called LNOc) isn't having any problems selling that output.
We are running that plant at a highly efficient rate and it is sold out, said Jim Sheely, vice president and general manager of subsidiary PTI Recycling Systems LLC in Holland, Ohio. We are planning on expanding that facility incrementally, depending on demand.
Still, that's a far cry from where Holland-based Phoenix had hoped to be today. Just one year ago at NPE2009, President F. Robert Deardurff boldly predicted the firm would have another 14 modular plants, each with 10 million pounds of capacity, in place by year-end 2011. He had slated two for last year, four this year and eight in 2011. None are on the drawing board as of yet.
Neither has the firm made any sales. Last June at NPE, however, Phoenix expected to persuade others to license the modular concept and build an additional eight to 18 modular plants in South America, Mexico, and Canada, all within 24 months.
It has been interesting, said Sheely, who is also vice president and general manager of business development for Phoenix's and PTI's parent Plastic Technologies Inc. and president of its injection molding company, Preform Technologies LLC. A year ago, there was excitement for the technology, he said particularly from converters that thought the modular concept would let them recycle material on-site for their own use. But those opportunities seemed to have dried up, he said.
PTI estimates the cost of the modular plant at 40 percent less than for a traditional PET plant. Even so, Sheely said market conditions and concerns that there is no cost advantage of using recycled resin vs. virgin have kept companies at bay.
When companies added up their capital costs, they didn't see the margins they felt they needed, he said.
But Phoenix and PTI don't plan to abandon the modular concept.
Now PTI is targeting the concept at brand owners, rather than just municipalities, and has redesigned it to allow greater flexibility in plant size, and incremental capacity expansions of 2 million pounds. The modular units initially were designed for expansions of 10 million pounds.
We still have great interest in the technology, said Sheely. But in response to what the market is telling us, we have reengineered and redesigned our model to take out both capital and operating expenses.
Hopefully by the third quarter, we can get moving on getting some systems sold and out the door, he said.
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