Danny Mohs is well-aware that there isn't enough recycled PET that stays in the U.S. to meet the needs of all the companies that want to make recycled PET flake or pellets.
Current industry capacity is nearly 1.5 billion pounds and another 200 million pounds is scheduled to come online this year. The amount of recycled PET that is left for U.S. producers after subtracting the amount usually exported to China is about half the industry capacity.
But that didn't deter Mohs, CEO of thermoformer and plastic sheet extruder Placon Corp., from opening a $14 million PET recycling plant in Fitchburg, Wis., last month with the capacity to reprocess 36 million pounds annually.
Supply is everything, said Mohs. All you have to do is look at the numbers and you can see that there is two times as much reclamation capacity as there is supply.
It's a huge risk. It concerns us, Mohs said. We are trying to create a sufficient supply chain to control our own quality and destiny.
Placon isn't the only company jumping on the PET recycling-plant bandwagon. The industry is clearly not deterred by tight supply or the troubles that forced Coca-Cola Co. to shut down its bottle-to-bottle recycling plant in Spartanburg, S.C. Other expanding companies include Custom Polymers PET LLC, CarbonLite Industries LLC and Orpet, a joint venture of Denton Plastics Inc. and five other partners.
Coke has a process that is not economically viable, said John Calhoun II, a co-founder and partner in parent company Custom Polymers Inc., based in Charlotte, N.C. A lot of people have tried [that system] and not been successful.
We have some proprietary cleaning technology and we've already built one plant from the ground up, said Calhoun. This is our second go-around starting a facility.
Custom Polymers PET is adding a 100 million-pound wash line in a new plant in Athens, Ala., that will increase the wash capacity for PET flake at its plants in that city to 165 million pounds annually. It also has 50 million pounds of wash capacity in Athens to produce 30 million pounds annually of recycled food-grade PET pellets.
We expect to be putting material through in the next few weeks and operating by June 1, and to reach full capacity in three to six months, said President Byron Geiger in a May 12 telephone interview.
He said a good portion of the new plant's 55 workers have already started and all of them will be in place in the next couple of months, boosting employment in Athens to 120.
Calhoun said the new wash line is in a new 50,000-square-foot building and will produce 70 million pounds of recycled flake annually, bringing its total to 120 million pounds.
It will be much more efficient than the wash lines currently in operation, said Calhoun. It is state-of-the-art and 10 times better than the equipment we are using now.
The new plant will be the company's fourth building in Athens. It also has a 70,000-square-foot warehouse, an 80,000-square-foot facility with two wash and sort lines, and a 50,000-square-foot food-grade PET pellet plant.
Custom Polymers doesn't have any concerns with its technology, but like many in the industry, it is keeping an eye on supply.
We are one of the very few companies that make food-grade pellets from curbside materials, Calhoun said.
The biggest wild card is securing the bottles.
Placon's 70,000-square-foot, closed-loop PET recycling plant opened in mid-April and began operating 24/7 on April 28. It includes washing equipment, extruders, technology to remove adhesives, a near-infrared sorting system, batch processes and what Mohs called a super cleaner that will remove volatiles and enhance the properties so the plant can make some food-grade flake for packaging applications.
We are already producing quality flake above our standards, said Mohs. We are pretty confident that we are headed in the right direction, and that the yields will only improve from here. Output is not our concern. It's the yield rate as a function of the cost of buying the PET.
The plant, which employs 44, does washing on one side and extrusion on the other. It makes the company's EcoStar-brand sheet for food and consumer-product markets, regular flake and food-grade pellets for the produce, bakery and deli packaging.
Ours is Sorema [washing] equipment that's been proven and what I view as the market leading wash technology, Mohs said. Coke [officials] created something for themselves that hasn't worked effectively.
Each of the plant's two extrusion lines can process 18 million pounds annually, he said. There is also room for us to expand to four lines. We'd like to add a line a year.
Mohs said he expects to sell half of the plant's output into the open market and use the other half internally to make EcoStar sheet products, which use anywhere from 25-100 percent recycled resins.
But we'll respond to whatever the market needs. We'll sell anything we don't need.
Placon, based in Madison, Wis., ranked No. 22 among North American thermoformers in Plastics News' 2011 survey. Mohs said the company's 2010 sales were $95 million. It employs 335. Placon has been using recycled content in its consumer-goods packaging for nearly 20 years.
We are trying to demonstrate to our customers and the industry that you can do things in a closed loop and that you can reuse a piece of plastic for the same use, he said. The vertical integration of [plastics recycling] into our factory makes sense. It reduces our carbon footprint by bringing the material supply chain closer to sheet production. We intend to displace the flake we currently purchase outside.
He said Placon also intends to resell bales of the non-clear PET the caps, banding, baling wire and green PET. Most, if not everything, has a secondary use, said Mohs. We will be selling everything that isn't PET, except for paper labels.
It was a struggle to hammer out legal details so demolition work and construction could begin at the site of Orpet's 20 million- to 25 million-pound PET recycling plant.
But after several delays, the $10 million plant is now on schedule to start operating in November, said project manager Bruce Sone.
The scope of the project is slightly different than originally announced in October 2009. Initial plans called for the plant to open in the second quarter of 2010, processing 15 million pounds of PET flake, with a second phase later on that would boost annual capacity to 30 million pounds.
Long-term, Orpet still expects to add equipment to produce pellets. It also plans to form joint ventures and build recycling plants with companies that need recycled PET, such as clamshell thermoformers.
We started construction and demolition two weeks ago, Sone said May 13. The metal building for the plant is on order and will be coming in sometime in the next three weeks.
The legal documents took a long time to finish because you had six partners involved and five sets of attorneys.
Sone said the plant will initially produce 10 million to 12 million pounds of PET a year. It will have four optical sorters, two grinders, a wash line, bale breakers and some manual sorting, It initially will employ 25.
We are using a B+B washing system out of Germany, said Sone. We are not going to use the [Coke] process.
Sone said the sorting and grinding equipment should be arriving in October and the wash line near the beginning of November. We expect to be producing dirty flake in November and clear flake in mid-January.
Unlike at Custom Polymers PET and Placon, supply isn't likely to be a big issue for Orpet, as it will be the exclusive recipient of deposit soft drink and water bottles collected by the Oregon Beverage Recycling Cooperative, one of the Orpet joint venture partners. OBRC manages 95 percent of the recyclable bottles collected as part of the state's bottle bill.
In addition, Oregon appears poised to pass legislation that will expand its 40-year-old bottle-deposit law to include beer, teas, juices and sports drinks, most likely starting in 2018. Bottled water and flavored-water bottles were added to the deposit program in 2009, thanks to legislation passed in 2007.
That bill is very, very good for us, said Sone.
Initial capacity of the CarbonLite plant in Riverside, Calif., will be 100 million pounds, with phase two of the project boosting capacity to 200 million pounds sometime in 2012 or 2013. About 85 percent of the plant's production is expected to be clear flake and pellets, and about 15 percent green flakes and pellets.
The plant represents a return to recycling for industry veteran Leon Farahnik, chairman of CarbonLite's parent, HPC Industries LLC. HPC sold the company's then-1-year-old, $21 million PET recycling plant in Davisville, W.Va., to Pactiv Corp. in April 2010.
The Riverside plant will use the Vacurema system from Erema GmbH, based in Linz, Austria, for decontamination and pelletizing. Sorema slr in Como, Italy, will supply the washing and grinding equipment.