A global plastics and chemicals company is beefing up its nascent recycling operations in the United States.
Indorama Ventures Public Co. Ltd.'s purchase of Green Fiber International Inc. of Fontana, Calif., gives the company a recycling presence on the West Coast for the first time.
The move follows the purchase of an Athens, Ala.-based PET recycling facility by Indorama almost a year ago.
Green Fiber adds 44,000 tons of PET recycling capacity per year for Indorama.
Green Fiber, according to its profile on the website for the Association of Plastic Recyclers trade group, operates a 140,000-square-foot plant "specializing in sorting, grinding and washing post-consumer PET bottles into [post-consumer] flakes that's ready to be used in products that may have contact with food."
The firm, according to the APR profile, has more than 100 employees.
News of the Green Fiber purchase follows Indorama's acquisition of a Custom Polymers PET LLC in Alabama early this year. That firm had been an affiliate company of Custom Polymers Inc. of Charlotte, N.C., one of North America's largest plastics recyclers.
Green Fiber has just been making PET bottle flake for the West Coast packaging market since 2018.
"This acquisition extends IVL's recycled flake supply chain to the West Coast, allowing us to further support the efforts of our customers in the water and soft drinks industry to ensure that PET bottles are recycled and put to further use," Indorama said in a statement.
This latest acquisition continues a trend in the plastics industry where large chemical and plastics companies are increasingly showing an interest in recycling.
Investments by these large firms come as consumers and brand owners are seeking more product packaging with recycled content. Adding recycling operations to their portfolios allows these large companies to dip their toes in the recycling waters as the market — and marketing — evolves around plastics.
Indorama said the deal "is strategically in-line" with the company's sustainability objects "and part of the company's stated plan to invest significantly in recycling over the next five years."
"We strongly feel that this acquisition will contribute to profitable future growth in the sustainable recycling business with the potential to expand further," Indorama Chief Recycling Officer Yashovardhan Lohia said in a statement.
Indorama, based in Bangkok, Thailand, has operations around the world. They include other recycling operations in Mexico, Thailand and Europe. The company sees plastics recycling as a platform for growth.
Indorama Ventures makes both feedstocks for PET and PET resin itself. The company also produces fibers as well as packaging that includes preforms, bottles and closures.
This latest recycling deal comes just months after Indorama CEO Aloke Lohia signaled his company's plans to become a much larger player in the recycling arena.
Indorama created what it calls a separate vertical within the multibillion-dollar company to combine all recycling assets.
"We've allocated a budget of $1 billion to recycling so that by 2025, when the brand owners want 25 percent content in packaging, IVL will be able to deliver," he said during a summertime earnings conference call.
Along with the $1 billion total mentioned on the conference call, the CEO told Reuters the company plans an additional $500 million investment to help its customers meet 25 percent recycled content rate.
Indorama indicated, at that time, the company would be concentrating on only recycling assets when it comes to acquisitions for the time being. That's because the firm wanted to concentrate on integrating the recent $2 billion purchase of Huntsman Corp.'s chemical intermediates and surfactants business.
As the world's largest PET company, Indorama wants to ensure that it will be able to meet customers' demands for higher recycled content in the years ahead, the CEO said.
