RIVERSIDE, CALIF. (Feb. 2, 2:30 p.m. ET) — About six months later than anticipated, CarbonLite Industries LLC has opened its $58 million bottle-to-bottle PET recycling plant in Riverside, Calif.
The plant will initially produce 75 million pounds of food-grade recycled PET annually.
“We have been operating 24/7 for about a month,” said CEO Neville Browne, in a Feb. 1 phone interview. “Right now, we are running at about 65 percent of capacity.”
The shift to 24/7 operations at the plant came after about 12 weeks of on-and-off operations that he says is typical of plastics recycling plant start ups.
“It's a like a car,” Browne said. “You have to make sure you know how to drive it before you ramp it up to full speed.”
The plant—which employs 100 —has a single sort and wash line to produce the washed flake, and two solid-static polycondensation pelletizers/extruders from Erema GmbH, based in Linz, Austria, to produce the pellets, he said.
The wash line and grinding equipment are from the Italian firm Sorema srl in Como, Italy, and the bale-breaking and sorting equipment are from Bezner Anlagen-und Maschinenbau GmbH in Ravensburg, Germany.
“I expect that we will be operating at full capacity sometime in the next two to three months,” said Browne, pointing out that on an annual basis, the plant will recycle more than 2 billion plastic bottles from curbside and deposit materials.
He said that about 85-95 percent of the recycled PET made at the Riverside plant will be clear resin and about 5-15 percent green, depending on the season.
“We are bringing 100 jobs back to America, and returning the carbon footprint advantage from PET recycling back to this county,” Browne said. “One pound of recycled resin has a carbon footprint that is nine times less than a pound of virgin PET.”
He said the 220,000 square foot plant—in size, the largest PET recycling plant in the United States—“has the ability to be expanded, and potentially double the output of the plant.
“Our plans for phase two of the plant are probably targeted for the end of 2013 right now,” Browne said.
Whether that materializes depends on the available supply of bottles 12-15 months from now, he said.
“Right now there are 500 million to 600 million pounds of PET passing through California on the way to China,” Browne said. “So, for us to put our hands up right now and ask for 100 million pounds of that, we feel comfortable doing that, and that we can get that.”
Based on what Browne expects to see in terms of additional PET recycling plants in California between now and then, he said he fully expects CarbonLite to expand.
“We think that there will still be enough material in the pipeline,” said Browne. “But our concern would be that other people will be attracted to do what we are doing, and that there may be others in the market” consuming all the available bottles.
“We are not constrained by market demand. We are not constrained by a propensity to invest. We are not constrained by bale supply right now,” he said. “But if there were existing installed capacity using all that supply, and we see that all the supply of bottles was accounted and spoken for, we are not going to expand.
“That would stop us dead in our tracks,” Browne said. “I don't believe we would get into [an expansion] just because we believe we can do it better than Joe Blow. It's too incestuous of a market.”
Browne said the market conditions have not changed appreciably since the decision to build the plant was first announced in October 2010. If anything, he said, there is greater awareness of the need to recycle and to incorporate recycled content into packaging.
“The need for reprocessed material has continued to increase because the people in plastic packaging are looking at the necessity of having a cradle-to-cradle solution,” Browne said. “That is encouraging to us because our whole business model is based on cradle-to-cradle.”
He also said the rising number of plastic bag bans in the U.S. has been one of the factors that have helped to increase that awareness.
“Anyone in plastics who has seen what is happening with bag bans,” said Browne, “sees the need to get their act together unless they want to go the way of the plastic bag,” which has been banned in 51 cities and 12 counties in the United States, many of them in California.
“You had better have a strong sense of sustainability, assume the responsibility of recycling, and put recycled content back into your product or you run the risk of going down the same path as plastic bags,” he said.
Browne added that he wished more states would adopt deposit laws similar to the one in California.
“We are fortunate that in California we have a fairly good system of enhancing the value of the deposit. It creates a very good collection infrastructure and a scavenging scheme” whether people collect bottles that others discard, he said.
“If everyone would copy California, we'd have plants in six or seven states,” Browne said. “We'd be very happy investors in other markets.”
But he said that in most other states, beverage companies retain ownership of the deposit funds, making the market less attractive. “I don't think we are going to have more states like California unless there is a national bottle deposit bill.”
CarbonLite is part of Los Angeles-based HPC Industries LLC, whose chairman is plastics industry veteran Leon Farahnik.
Two years ago Farahnik sold the company's thermoforming business, PWP Industries — which included a year-old, $21 million PET recycling facility in Davisville, W.Va. — to Pactiv Corp. of Lake Forest, Ill.