InterGroup International Ltd. will install new, larger extruders and repelletizers at all three of its plastic scrap recycling locations in 2015.
“We can increase our throughput by using a few larger machines instead of several smaller ones,” general manager Neil Gloger said in a recent interview in Cleveland.
InterGroup will spend between $2.5 million and $3 million on the new machines, which will be installed at its headquarters site in Euclid, Ohio, as well as at the firm's plants in Springfield, Mo., and Jackson, Ga.
Gloger added that the new machinery will lower his firm's labor cost per pound by a third and lower its electricity costs by 15-20 percent.
“There's better technology on the newer equipment,” he said. The new machines are expected to be in place during the second half of 2015.
InterGroup also recently added an additional repelletizer in Jackson and in November began using its first West Coast warehouse in Long Beach, Calif.
The Jackson site opened in July and is off to a good start, according to Gloger, accessing rolled film scrap from local flexible packaging firms and selling recycled resin to compounders, as well as to companies in the lawn and garden and building and construction markets.
InterGroup's sales for 2014 are expected to be flat at $17.5 million, partly from the firm exiting some lower-profit margin accounts.
“It takes courage to walk away from business,” Gloger said, “but we weren't content to wait for happier days.”
Demand for recycled plastics remains strong in North America and has improved globally as markets in China and India have stabilized, Gloger added. InterGroup generates about 20 percent of its sales from export markets.
InterGroup does most of its business in polypropylene, sourcing scrap from industrial packaging, automotive and housewares. It also recycles polyethylene, polystyrene, PVC and PET.
InterGroup also ranked fifth in the Crain's Cleveland Business Fast 50, a ranking of Northeast Ohio's fastest-growing businesses that was released in November. InterGroup's sales are up more than 400 percent in the last five years. CCB is a sister publication of Plastics News.