“We had always looked for the opportunity to backwards integrate. We had looked at doing it ourselves. But then when the opportunity came out to basically buy that facility and that business there, we jumped on it and provide a step backwards in the chain,” he said.
PQ Recycling's location on Long Island means the facility can take advantage of New York's bottle bill as well as those in nearby states including Connecticut and Massachusetts. That means supply is good.
PolyQuest makes recycled PET pellets from the Farmingdale flake at its facility in Darlington, S.C. The company also sells clean flake.
“It took us one step closer to the source of the material, the feedstock, and in this case, the bales,” Durst said about the decision to buy the Farmingdale site. “Secondly, it gave us greater control over the quality of the product that we were buying.
“There's some cost advantages that can be gained by backward integrating that further step. That was really our motivation,” he said. “We liked the deposit business, quite honestly. We liked the cleanliness of the stream. We liked how more controlled it is coming from a single-stream source.”
George Smilow is chief operating officer at PQ Recycling and has worked at the facility for more than 20 years under several owners.
“We have succeeded in improving, enhancing the throughput and the quality as well. We were able to prove that with several customers that acknowledged they had seen an improvement in the flake quality,” he said.
About 35 people now work at the plant, an increase of about 15 to 20 percent since improvements were made under PolyQuest's ownership, said Smilow, who has worked at the plant since 1994.
The site now measures about 72,000 square feet, an increase of about 10,000 square feet since the ownership change a couple of years ago. Smilow sees the opportunity to expand even more as time goes on.
“I think if we look back at the history of that facility, it's always been known as a provider of high-quality, clean flake to the industry for a very long time. We've been able to not only maintain the quality of that flake, but also improve it while simultaneously increasing the capacity of that, which is a difficult thing to do,” Durst said.
Smilow also said having PolyQuest as PQ Recycling's owner means past concerns from local suppliers about the viability of the operation have been alleviated.
The Farmingdale facility dates back to 1992 but had shut down under Pure Tech in 2012 after being sued by Coca-Cola Co. for breach of contract for allegedly failing to pay the principal on a loan. PolyQuest then stepped in to buy the closed site from Pure Tech in 2013.
“When you marry PQ Recycling with PolyQuest's capabilities, you certainly have a broad portfolio of products and businesses in which we operate,” said Durst, also an executive vice president with PolyQuest. “I think that was probably one of the reasons we've been successful.”