A Canadian recycling company that could not climb out of a financial hole will have its assets sold at auction.
Recyc RPM Inc., shuttered since last summer, will have assets at its headquarters in Beauceville, Quebec, and in St. Damien, Quebec, sold in two auctions, scheduled for April 28 and May 5.
Recyc's troubles began in 2010 when it decided it needed a new business model to overcome poor market conditions for recycled plastics, according to public records. Company management decided the firm needed to upgrade operations to become profitable. A shortage of capital prevented Recyc from completing the upgrade. High operating losses in early 2014 swayed the company to shut down in June of that year and to seek protection from creditors while it reorganized.
Quebec's provincial Ministry of Environment issued ordinances against Recyc because of release of contaminants. The company, unable to weather environmental liabilities, filed for bankruptcy on Oct. 6, according to a spokesman for Recyc's receiver, Raymond Chabot Inc. of Quebec City. A first creditors meeting was held Oct. 24 and a call for tenders was published on Nov. 1.
In the midst of its problems last year, Recyc blamed its financial difficulties on expenses to deal with contaminants in collected plastics, inefficiencies in Quebec's recycling system and lack of government support. At the time, Jean Yves Bacle, Recyc's vice president of sales and marketing, claimed post-consumer plastics bales shipped to the company contained as much as 40 percent contaminants and included such materials as glass shards and unacceptable plastics. He estimated the firm was spending about C$100,000 (US$80,000) per month to send the contaminants to landfill. It also incurred high expenses to further clean up its feedstock streams, mainly sourced from municipalities. A Quebec government spokesman said last year that Recyc did receive funds to buy machinery.
Recyc owes about C$8.2 million (US$6.6 million) to secured creditors, mainly financial institutions and a provincial investment agency. Unsecured creditors are owed C$11.2 million (US$9 million).
Recyc had capacity to recycle about 50 million pounds per year of high density polyethylene and polypropylene. It employed about 90 prior to its shutdown. Public documents of unaudited statements show it had a net loss before taxes of C$4.8 million (US$3.8 million) in 2014. The loss in 2013 of C$2.5 million (US$2 million) compared with a net profit of C$155,000 (US$124,000) in 2012. Sales in 2014, at C$11.7 million (US$9.4 million), were 42 percent below 2013 sales, which were 15 percent lower than in 2012.
The company's assets will be sold by auctioneers led by Perfection Industrial Sales. Equipment from both locations will be sold live and through webcast at Beauceville on April 28. A subsequent, online-only auction will be held May 5.
Slated for auction are shredders and granulators, stainless steel wash lines, optical sorters, extruders, pelletizers, dust collectors and bulk material handling equipment. Perfection Industrial will hold the two auctions in conjunction with Infinity Asset Solutions and Federal Equipment.
Recyc was Quebec's pioneer in post-consumer recycling after it was established in 1989. It also was the first in the province to help establish curbside recycling carts in the 1980s and 1990s. It was owned by Louis and Luc Metivier, members of the family that started major molder and extruder IPL Inc. of St Damien.
