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November 19, 2012 01:00 AM

China getting tough on recycling imports

Steve Toloken
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    Plastics recycler Shenzhen New Rainbow Recycled Materials Technology Co. Ltd. has seen its imports of waste high density polyethylene bottles drop at least 20 percent this year as China's government has cracked down on bringing waste plastic into the country.

    New Rainbow is not alone. Hong Kong-based Lung Shing International Group Ltd. has had imports of recycled plastic drop by one-third through the port of Guangzhou, but Alex Xie, general manager of its Guangzhou factory, said Lung Shing considers itself lucky because that's well below the 50 percent overall drop in that port.

    “Costs have increased a lot,” said Xie. “It takes more time to clear customs.”

    Governments throughout China have been getting tougher with the country's plastics recyclers, as they try to cut back on what they say is pollution from an industry that sometimes operates without proper waste-water treatment and other environmental controls.

    It was topic No. 1 for speakers and attendees at the ChinaReplas 2012 conference and trade show, held Nov. 6-7 in Beijing. Industry representatives gathered to hear government officials discuss their latest plans, which include stricter rules on importing scrap plastic and closing unlicensed companies.

    Guan Aiguo, chairman and managing director of Tangshan China Recycling Development Co. Ltd., said the industry will undergo dramatic restructuring in the next three to five years as costs rise and government regulations cut down on pollution.

    In a speech to the conference, he said “99 percent” of China's scrap plastics firms do not have equipment to properly clean the water they use in their factories.

    “They do not process or clean the water,” said Guan, whose Tangshan-based company owns plastics recycling factories and invests in industrial parks for recyclers. “They emit it directly. It is a very serious problem.”

    Many of the recycling plants are operated by farmers, using simple technology, and are not safe places to work, he said.

    Guan said he finds it difficult to visit such factories for more than 10 minutes because of their environmental conditions, but people spend hours a day in them and become ill after years of work.

    “They sacrifice their health for money,” he said.

    His company is opening industrial parks for recyclers, with water-treatment and other environmental facilities and 24-hour fire brigades.

    Such parks are also part of the Chinese government's strategy.

    Wu Gen Ping, an official from China's General Administration of Customs, said instituting such parks in Guangdong is part of the reason imports went down there.

    Those zones have achieved “obvious results” in better waste management, he said, and he encourages firms to look at them.

    He also said customs inspectors and China's Ministry of Environmental Protection are working closely together.

    For example, Wu said the Guangzhou customs office in the middle of the year gave environmental regulators a list of local companies importing waste without proper licenses, and environmental officials shut those factories down.

    Guangzhou and other ports in Guangdong province began a pilot program last year that has customs officials closely scrutinizing imports of waste plastic, and government officials plan to expand the program to other parts of the country, Wu said.

    It's had a big impact in Guangdong, home to more than half of China's plastics recycling companies. According to customs figures, through the first half of the year, recycled plastic imports through Guangzhou's port dropped 52 percent and through Shenzhen, 13 percent.

    But it's not clear if taking the program across China will cut imports in other places in the same way.

    Jason Wang, secretary general of the Beijing-based China Scrap Plastics Association, said ports in Guangdong province have historically been much looser than in other parts of China, so the rules are bringing Guangdong more in line with the rest of the country.

    He said he does not expect a dramatic impact when the program is broadened, a point echoed by other recycling companies at the event, which was sponsored by CSPA.

    Customs figures showed imports through other ports actually increased in the first six months.

    Shanghai was up 40 percent to become the largest port for waste plastic imports, and Tianjin was up 53 percent, becoming No. 4. Shenzhen and Guangzhou were still the second- and third-biggest ports, respectively, even with their sizable drops.

    Among Chinese companies at the event, some saw opportunities in the tightening.

    The new rules do make it tougher for companies, but better environmental protection will in the long run help industry, said Xue Bao Shan, president of Shanghai Changling Import and Export Trading Co. Ltd., which has two factories in Shanghai.

    The company buys plastics from Japan and Korea and reprocesses it for sale in the domestic market. Xue said that only higher-quality companies will survive, and midsize firms like his need to seize opportunities to expand.

    It was a point echoed by Amy Wen, sales manager with Qingzhou Hua Lu and Renewable Resources Co. Ltd. in Qingzhou.

    Her company has invested in a new HDPE flake line and is looking at a PET flake line, because it sees government closing factories with serious environmental problems and being stricter about imports. It needs to invest and upgrade, she said.

    Tangshan's Guan said in his speech that he used to believe China did not need technology to recycle plastics, but he said seeing companies in other countries has convinced him that investing in better equipment is crucial to reducing pollution.

    “If we don't use technology, we can't achieve this,” he said.

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