Nashville, Tenn. — CarbonLite Industries LLC, one of the largest makers of food-grade post-consumer PET resin, is investing $80 million in a new plant in Florida to meet increasing demand for recycled content plastic from major beverage companies.
The facility near Orlando would be the company's fourth in the United States, joining current factories in Riverside, Calif., and Dallas as well as a third plant near Reading, Pa., that should be fully operational in March, said Chairman Leon Farahnik.
"We are doing this because of our customer base and the need for the post-consumer content in their product line," Farahnik said. "We supply all the major beverage companies across the country with post-consumer content."
The Los Angeles-based company has been expanding to build a national footprint after first opening in California in 2012. Farahnik, though, said that the Florida factory "would pretty much complete [expansion plans] for the next three years."
He spoke during an interview at the Plastics Recycling Conference and Trade Show, held Feb. 17-19 in Nashville.
He said the Florida plant, which is expected to open by the end of 2021, would be the same size and investment as the other three plants, with capacity to make between 70 million and 80 million pounds of PET a year.
Farahnik said the company would have capacity for 220 million pounds of recycled PET resin by the end of the year from its current three plants, and 300 million with the Florida plant. The company ranked 12th in the 2019 Plastics News ranking of all North American plastics recyclers.
Farahnik said some of the company's key customers include Nestle Waters North America, Niagara Bottling LLC, Coca-Cola Co. and Keurig Dr Pepper Inc.
Many of those companies have publicly announced sizable commitments to incorporate recycled content PET into their bottles.
Nestle Waters, for example, has a target of 35 percent recycled PET content globally by 2025 and 50 percent in the U.S. Major brands and plastics users Coca-Cola, PepsiCo. Inc and Keurig Dr Pepper have set targets of between 25-50 percent recycled content in their plastic packaging between 2025 and 2030.
Some trade groups and experts question whether enough recycled PET would be available to meet those goals without substantial increases in collection in the U.S.
While Farahnik said the CarbonLite investment is evidence those corporate commitments are materializing, he also said he believes it's important to continue advocating for government policy changes to support fledging markets for recycled content.
He said those include legislation for mandatory minimum recycled content in PET bottles to solidify demand, similar to a bill that California's Legislature is actively debating.
As well, he said expansion of container deposit laws would help secure a steady stream of good-quality recycled PET.
CarbonLite and another major producer of food-grade recycled PET resin, Verdeco Recycling Inc. in South Gate, Calif., were part of an industry coalition that hired a lobbyist to push for the recycled content bill in California last year. Both companies sat for a joint interview at the recycling conference.
Verdeco President and CEO Alex Delnik said his company has recently invested in upgrades to its manufacturing to meet higher demand, but he declined to provide details.
He agreed with Farahnik that the investments by the two companies are a sign of increased demand in the market for recycled content PET in bottles, but also that legislative changes are crucial.
"We have commitments — that's a great first step — but we also need that comfort that the commitment is long-standing," Delnik said. "I'm old enough to remember previous commitments that didn't hold."