Hangzhou, China — China's plastics recyclers, no longer able to depend on foreign materials after their country banned the import of plastics waste in 2018, have turned to domestic sources. It's fueled investment, but the switch has not been without its challenges.
Gary Lau, president of Guangdong Intop Industrial Investment Co. Ltd., said that when his company used to import waste plastics, the quality level was "purer."
But since focusing on domestic waste, Intop has had to put a lot more energy into sorting. As a result, it has invested in mechanical sorters to lighten the load on workers.
In an interview at the Replas conference in China, Lau said that in 2019, his company invested in five sorters for its six facilities in Dongguan.
Intop plans on adding another half-dozen facilities in other cities, so it will have to invest in more sorting equipment, he said at the conference, which was sponsored by the China Plastics Reuse and Recycling Association and held Oct. 19-21 in Hangzhou.
So far, Intop has invested about $450,000 (3 million Chinese yuan) in each plant, with plans for another $3 million (20 million yuan) for the new factories.
Guangdong Intop reprocesses about 80,000 tons of plastic waste per year as raw material for its chemical fiber production business. Lau said it exports most of that fiber to companies wanting recycled content for clothing production, but in 2020 his sales have suffered because the pandemic hurt business for his foreign clients.
Lau hasn't made back his investment yet but sees opportunities.
"I think there's a future in this business, so I'm willing to front the investment in a sustainable industry," he said.
So far, China's state and provincial governments don't provide subsidies or support for businesses recycling plastics, but Lau hopes that will change.
"I think this is a trend," he said. "I hope that the government will see the work we are doing for the environment and provide some support. We're hoping that this kind of support will come in the next year."
The switch from relying on imported plastic waste to local Chinese sources required some rethinking of business models.
"We weren't supportive of the policies on plastic waste at first," he said. "At first, we were so focused on imported plastic waste that we neglected building our own system for recycling plastics.
"Now, instead of helping other countries recycle their plastics, we can focus on building our own plastics recycling framework," he said. "We're facing two parts of the same problem. Now the U.S. needs to deal with their own plastic scrap and Chinese scrap recyclers need to find new sources."
A Chinese executive for Norwegian recycling equipment maker Tomra Systems ASA said the change in China's industry is leading to domestic investment.
"Our business is growing very fast in China, with double-digit growth each year," said Kelly Xie, head of the Shanghai-based Tomra Sorting Recycling China, which is part of Tomra Sorting GmbH in Mülheim-Kärlich, Germany.
Xie said her clients are for the most part Chinese companies.
Change is coming, although slowly, to recycling collection in Chinese cities. The launch of a zero-waste pilot project in 2019 in some cities has enforced the sorting of wet and dry waste, although recycling has not yet been taken on by the government, Xie said.
"There are too many people in China making a living off of collecting scrap, and so the government can't totally ban individual scavenging," she said. "It's difficult to implement a recycling system with a deposit in China like they do in Europe and the U.S."
Xie said companies like Lau's have a challenge, though, which is that without more government involvement, they are competing against individual scrap collectors.
The effect of 2019's waste sorting schemes will have a longer-term impact, Xie said, but it's hard to see that impact reflected in the short term.
The price of PET bottles is getting lower, she said, because crude oil prices are now low, so while in the past bottles could command a good price, in the future they may earn less, she said.
But she said she sees no end of business for her company's European-made sorting machines, as Chinese companies look to source raw material in their domestic market.
