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July 28, 2015 02:00 AM

Industry veteran explores new future for recycling

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    Parc Corp.
    Kathy Xuan is the founder and principal of Romeoville, Ill.-based Parc Corp.

    The old game is over. But the story doesn't end here.

    Kathy Xuan started her plastics recycling career in 1996 when she sent a first batch of 18 containers of plastics scrap from Chicago to Shanghai. Now she sees a new era for plastics recycling — both in China and North America.

    As one of the first players in the field, Xuan said she has witnessed all the ups and downs over the decades in the U.S.-China plastics recycling business.

    “The old era has come to an end,” she said in a firm voice during a phone interview, referring to the model of U.S. exporting plastics scrap to China for reprocessing.

    Xuan is the founder and principal of Romeoville, Ill.-based Parc Corp., with additional operations in Oshkosh, Wis., and Qingdao, China. She also serves as the chair of the recycling subcommittee on emerging trends of Washington-based Society of The Plastics Industry Inc. as well as vice chair of the recycling committee of Beijing-based China Plastics Processing Industry Association.

    As if putting a closure to the last two decades, she vividly described her first trade and said it was a highly profitable business.

    “Back then, small Chinese molders desperately needed raw materials. They were too small to buy resin from global material suppliers. They didn't have the resources of China's state-owned processors either. Also, bear in mind that, back then, China's domestically produced virgin grades didn't even stand up to the reprocessed resins from imported scraps.”

    For more than a decade, American scrap fed hungry Chinese manufacturers, but the turning point came in 2008, according to Xuan.

    “The global recession triggered China to shift its growth paradigm from the world's factory to a more inward-focused model. But it was the green fence regulations in 2013 that officially closed China's doors to foreign post-consumer scraps.”

    China's scrap imports showed a slight rebound in 2014, but Xuan called it “a lightening before death.”

    Even though many blame the recent plummeting oil price as the last straw that crashed the industry, Xuan said the true underlying reason is China's industrial upgrade.

    “China is no longer willing to sacrifice its environment for cheap materials. The government shut down the mom-and-pop recycling factories. The demand is gone too, as molders need higher volume and steadier supply of good materials.”

    Putting the past behind, Xuan sees a new era for the recycling industry.

    “There are lots of opportunities, but only for the prepared minds,” she said.

    Xuan believes the American recycling industry is just starting to enter a real development stage, as the world map of recycling has refocused on local recycling — scrap gets recycled where it's generated.

    “Before 2013, the U.S. recycling industry was mostly baling up scraps to ship to China. We have seen some catch-up since 2013 in terms of reprocessing.”

    Parc, for example, has turned itself into a “recycling service provider” for large manufacturers in the United States to achieve closed-loop recycling.

    The interesting part, Xuan noted, is that in order to improve local recycling, global collaboration is required.

    She believes the U.S. lacks recycling know-how due to decades of export-focused practices, while China has a lot of know-how that it can share with the United States.

    “[China has] 20 years of accumulated know-how, not necessarily patented or costly, but effective.”

    She plans to build an Internet-based platform to help recyclers upgrade their technology. “The U.S. and China both have a lot to offer, so let's tap the full potential for mutual benefits.”

    She also aims to establish more reprocessing capacity in the United States for what she calls “reshoring,” and she is currently seeking investment.

    It's not an easy task to build recycling systems, Xuan acknowledges.

    “We need to integrate resources, talent and capital on a global level,” she said.

    Parc is teaming up with state-owned China Recycling Development Corp. Ltd., which, just on the plastics-related side, operates eight appliances disassembly facilities and four plastics reprocessing plants across China. Details are in the works, but the goal is to help both countries better recycle plastics and improve public perception.

    “Unlike other industries, recycling requires collaboration from all stakeholders — and that's everyone on the planet,” she said.

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