Coca-Cola Co.'s joint venture PET recycling plant in Spartanburg, S.C. — which has been closed since March — now is for sale.
More than a half-dozen sources told Plastics News that Coke has given Carlos Gutierrez, president and CEO of Coca-Cola's joint venture partner United Resource Recovery LLC, the OK to shop the plant to interested buyers.
“My understanding is that Coke wants out and has given Carlos the freedom to shop the plant,” one source said. “They have had people [potential buyers] in the plant over the past two months.”
Another source said the Spartanburg plant could have some potential use for a fiber company that needs post-consumer polyester, and that Coke is “shopping the plant very selectively.”
But that same source said that the asking price could be too high, since the estimated cost to build a new PET recycling plant for fiber consumption is between $12 million and $15 million. The Spartanburg plant represents roughly a $50 million investment.
“Coca-Cola could end up taking a [financial] hosing and one-half on this,” one source said.
Gutierrez neither confirmed nor denied the plant was for sale.
“At present, the company is not at liberty to discuss publicly current plans for the future of the facility,” Gutierrez said in an email response to questions. “As soon as we have something concrete to report, we will.”
Coke officials did not have an immediate response to questions about whether the joint venture company, NURRC LLC, was looking for a buyer for the plant.
Previously, Coke has said that it is an investor in the joint venture and cannot comment on NURRC's business dealings. On April 22, four days after Plastics News broke the story that the plant was closing, Coke executive Scott Vitters told PN in a phone interview that Coca-Cola hoped to resume food-grade PET production at the plant “sometime this summer.”
When the Spartanbug plant opened 21/2 years ago, Coke officials said that when its second full line was operational, it would be the largest bottle-to-bottle PET recycling plant worldwide. Instead, the plant has been plagued with problems achieving the quality necessary to make food-grade PET. Sources said the plant's technology is not suited to recycling newer lightweight beverage and water bottles. As a result, yield losses have been high.
Some sources have said NURCC and Gutierrez were developing new technology to address that problem, so the plant can be restarted. However, others have told PN that delabeling equipment officials hoped would resolve the problem is off-the-shelf equipment and has failed to do that.
One potential buyer, Sonoco Recycling Inc., declined to buy the plant, another source said. “People are extremely leery.”
The Spartanburg plant had been ballyhooed as the shining star that would enable Coke to achieve its goal of incorporating 10 percent recycled content in its PET bottles by last year and 25 percent by 2015.
But Coke did not meet that 10 percent goal in 2010, and sources said only about 1 million pounds of recycled PET from the NURRC plant — which is only a fraction of the plant's nameplate capacity of 56 million pounds — actually wound up back in PET bottles.
Coke said that despite problems in Spartanburg, it remains committed to its goal of sourcing 25 percent of its PET from recycled and/or renewable material by 2015, and to recover 50 percent of the equivalent bottles and cans used by 2015.
The “recycled and/or renewable materials” goal is significant, because Coke has been making a big push in recent months in renewable materials. The company has said it expects to convert all of its plastics packaging to PlantBottle materials — PET made from sugar-cane ethanol — by 2020.
Coke still has PET recycling plants in Mexico, France, Austria, Switzerland and the Philippines.