Recycling firm InterGroup International Ltd. has closed its doors after 11 years in business.
Euclid, Ohio-based InterGroup may operate on a reduced basis through the end of the month, owner Neil Gloger said in a Feb. 14 interview with Plastics News. The firm “had too high of a debt load,” he added, and was closed by its lender, Fifth Third Bank of Cincinnati.
“Several of our customers have gone bankrupt, leaving us with $1.2 million in uncollectable receivables,” Gloger explained. “We never missed a payment to our bank, but they have regulations that they have to follow.”
Five InterGroup customers in total have filed for bankruptcy, including one that owed the firm almost $600,000. The customers included a mix of compounders and processors.
“We were proud to have served the industry as long as we did,” said Gloger, who founded the firm in 2006 in Warren, Ohio. “We conducted our business in a respectable way.”
The closing affects InterGroup's locations in Euclid and Cleveland, as well as a former company site in Jackson, Ga. Gloger expects the firm's unprocessed scrap and some machinery will be sold by the lender.
At its peak, InterGroup had annual sales of $20 million, but that dropped to $11 million by full-year 2016. Many recyclers have been affected by lower selling prices for recycled material.
“In 2012, we were getting 22 cents per pound for material that we're now getting only 5 cents for,” Gloger said. “That's part of the problem.”
InterGroup survived a late 2007 fire that destroyed its original site in Warren and almost all of the firm's inventory, including millions of pounds of plastic scrap. InterGroup rebuilt its business and moved to the Euclid site in 2010.
As the business grew, InterGroup added the Jackson site near Atlanta and a site in Springfield, Mo., as well. InterGroup did most of its business in polypropylene, sourcing scrap from industrial packaging, automotive and housewares. The firm also recycled polyethylene, polystyrene, PVC and PET.
Gloger said he remains committed to the recycling market as he looks for his next stop. “Whether I start something new or work for someone else, I still love this industry,” he added.