A startup recycling company with strong ties to the steel industry plans to build a $100 million plastics waste sorting plant in Erie, Pa., with investment from injection molder Plastek Group.
For Plastek, which is also based in Erie, it's a way to secure supply of the recycled plastics its consumer product customers are demanding.
But the startup, International Recycling Group, has a bigger vision.
It hopes to demonstrate that the highly automated sorting plant it wants to build can be a model for handling plastic waste on a larger scale.
The former steel industry executives starting IRG are also claiming a commercial advantage over other plastic recycling firms — a proprietary technology to use waste plastic as the raw material to make a processing agent for steel manufacturing.
They see it as providing a solid end market as they build out the plastics side of the business.
"It is the bridge that carries us, makes us economically viable," said Doug Schrader, co-founder and vice chairman of IRG. He's a former president of the U.S. Iron Mining Association.
In an Aug. 17 news release, IRG announced investments by Plastek and another local firm, Erie Insurance.
Plastek CEO Dennis Prischak did not disclose the details of his company's investment but said IRG will help the firm, a large manufacturer of packaging for consumer products, meet a push from its customers for recycled content plastic.
"It will significantly help satisfy the increasing demand for [post-consumer recycled plastic] being driven today by content targets set by our customers," Prischak said in an email. "At the moment, demand exceeds supply based upon content targets set by our customers."
Prischak said Plastek would be able to "dramatically" increase the post-consumer plastic content in the packaging it makes.
According to the IRG release, Plastek and Erie Insurance made separate investments totaling $9 million. Plastek made an equity investment in IRG's parent company, GreenSteel LLC, IRG said.
Prischak said the investment will be good for the environment and the Erie region.
"Plastek is making this investment for our industry, our customers and our community," he said. "When this plant is up and running, it will create good jobs with the hopes of growing over time."