National Harbor, Md. — Crackdowns on plastic recycling imports in China and Southeast Asia over pollution worries are prompting some Chinese companies to actively look at Mexico, Central America and the Caribbean for new factory locations.
In what could become the latest migration for Chinese recycling companies after their government's National Sword and Green Fence policies, industry officials said at a recent conference that they see factories in the Americas helping maintain access to recycled plastic scrap collected in the United States.
They say they're searching for low-cost locations for processing that scrap into pellets or other usable raw materials, as they did in China before Beijing shut the door on scrap imports last year.
Steve Wong, the executive president of the China Scrap Plastics Association, said in a speech at the Plastics Recycling Conference and Trade Show that Chinese companies have been casting a wider net in the Americas, after Malaysia, Vietnam, India and other Asian nations followed China's lead and cracked down on imports.
He told the audience that governments are interested, too. Wong said he met with Haitian Prime Minister Jean-Henry Céant on a trip there earlier this year, after Haiti's government contacted him to talk about how China used plastics recycling as an economic development tool starting in the 1980s.
Another factor, he said, is that operations in Latin America look more attractive as the industry talks about processing scrap closer to the source of the materials, rather than shipping them around the world.
"What I would see is there would be recycling at source, and in the [United] States, the nearest place you can recycle is probably Mexico, Central America, South America and Caribbean island countries," Wong said. "Those countries have less labor costs and also those countries can develop downstream industries."
In an interview after his speech, Wong said his Hong Kong-based plastic recycling and injection molding company, Fukutomi Co. Ltd., recently began operating a recycling plant in Monterrey, Mexico, for other Chinese investors.
Wong, who is managing director of Fukutomi, said the firm is also scouting locations in the Southeastern United States for its own recycling plant.
Recycling that can be done with more automation and fewer workers could be handled in the United States, while more labor intensive work could go to nearby nations, Wong said.
"Since America has a lot of neighboring countries with cheap labor, a lot of low end materials will be recycled in those countries," Wong said.
Wong said his industry understands the environmental concerns around plastic waste and is searching for business models to meet what's expected to be rising demand for recycled content from consumer product companies.
"All these challenges we face every day, especially regulatory changes and environmental controls as well as customs control for importation, makes it very difficult for our industry to focus on what we're going to do for the future," he told the conference.
Other industry officials at the conference said they see interest from Chinese companies to invest in recycling operations in Mexico and Central America.