Nestlé Waters North America Inc. plans to build a $30 million bottle-to-bottle PET recycling plant that will produce 40 million pounds of recycled PET annually.
I'm hoping that within a year that we've got a plant built, said Kim Jeffery, CEO and president of the Stamford, Conn., water-bottle firm. I want to be up and running a year from now.
Jeffery said the company isn't prepared to make an official announcement yet; Nestlé and its planned joint venture partner are reviewing details, and both firms must approved the agreement. But he said the plant will probably be located in the East Coast and he hopes an announcement will come relatively soon.
Once built and operating at full capacity, the plant would supply about 10 percent of the Nestlé's current total PET resin needs about 440 million pounds a year.
Despite the troubles that caused Coca-Cola Co. in March to shutter its 2-year-old joint-venture bottle-to-bottle PET recycling plant in Spartanburg, S.C., Jeffery said he's not worried about a similar scenario down the road for Nestlé.
They used a different process than we will use, he said in a May 13 phone interview. Our joint venture company has a proven track record in manufacturing food-grade PET.
For a PET recycling plant to work, the technology has to be right, the logistics have to be right and you need to be within a reasonable proximity of where your raw materials are, Jeffery said. And when New York and Connecticut expanded their container bills to include water, we ended up with 40 million pounds of material that we actually own.
Jeffery a staunch proponent of extended producer responsibility laws to improve the collection of all materials, not just bottles said Nestlé is building the plant because: I think there is a real business opportunity in the long-term and I want to understand the value stream.
He added: The price of [recycled] PET today is 20 percent more than virgin and there's something wrong with that. If you've already expended the energy to make the bottle once, why would it be 20 percent more?
It's Jeffery's view that some of that discrepancy is because PET collection in the U.S. has focused mostly on soft drink bottles, and recently, water bottles, rather than all forms of PET containers and packaging.
There is more demand than supply because we're only recycling 30 percent of PET bottles, said Jeffery. If we are going to be successful in making recycled PET plastic a viable business, we need to be getting back as much material as possible. It is not going to be a viable business long-term if recycled PET is priced 20 percent higher than virgin.
We're investing so we can look at the economics, he said. We want to understand how we make this competitive. ... We need better recycling rates not just for beverages, but across the board for all PET containers.
The Nestlé CEO said he's not sure if this would be the firm's only, or just its first, foray into producing recycled PET resin.
Long-term, I'm not sure it's a business we want to be in, he said. But we want to be in it for now. The question of whether we build more recycling plants has to do with how far back we want to be vertically integrated. We already blow mold our own bottles and make our own preforms.
Jeffery insists Nestlé is not trying to make a statement by building a closed-loop bottle-to-bottle recycling plant.
Nestlé's bottling plant in Breinigsville, Pa., however, which manufactures the firm's Deer Park-brand water bottles from 50 percent recycled PET, is making a kind of statement one that the company sees as important, according to Jeffery.
Recycling works, he said.