PreZero born out of willingness to make an environmental difference

PreZero Stiftung & Co. KG has grown into a massive environmental services company, including significant plastic recycling operations, through a feeling of obligation and a realization of opportunity.

As part of the Schwarz Group of companies, which includes large retailers Lidl and Kaufland, PreZero is working to close the materials loop from waste creation by consumers to recycling to the production of goods and packaging for customers to consume and use again.

And this is all by design.

When Schwarz Group is described as a large company, it really is an exceptionally large company, with more than 13,300 stores and 550,000 employees in 32 countries. Based in Neckarsulm, Germany, the firm's operations include food and beverage production, including bottling lines.

Through a series of acquisitions in recent years, the company now operates three plastics recycling plants in Europe and one in the United States, in Jurupa Valley, Calif.

Because of the company's massive retail footprint, Schwarz Group wants to take action to counteract the large amount of packaging purchased and used by customers. And that is being done through PreZero.

"We looked for a solution how to be more responsible for not getting rid of the waste but how to handle the waste as a good response to handle the environmental issues. That was the reason," Lukas Mikolajczyk, head of corporate communications for PreZero, said at K 2022.

"Inventing a new brand [PreZero] was for us to take a chance at the time, and the time was very good to expand, not only for our customers but also to show society there is a company which really thinks how to solve one problem. … How can we get rid of the waste," he said.

PreZero has grown to include environmental services operations in 11 countries and 485 locations, including the U.S. plastics operations. Employment stands at 30,000, and the company operates 12,000 trucks that collect waste and recyclables in Germany, the Netherlands, Sweden, Poland, Spain, Portugal, Luxembourg, Belgium, Italy and Austria.

PreZero as a brand is only about five years old, as the company had just 100 employees and revenue of €18 million in 2018. The company expects sales of nearly €4 billion in 2022.

In 2021, the company was able to collect and recycle 82,000 tons of plastics as part of its own larger waste and recycling service offerings to 25 million people in Europe, the company said. The company operates 30 sorting plants in Europe, known as material recovery facilities in the United States, which help separate plastics from other recyclables and waste to be diverted to the company's plastics recycling locations. That includes seven sorting plants for lightweight packaging.

PreZero's growth has vaulted the company into the one of the 10 largest plastic recyclers in Europe, and the company calls itself a "leader in the recycling of post-consumer plastics."

The output from PreZero's plastic recycling facilities include polypropylene, low and high density polyethylene, mineral-filled polypropylene, and medium- and high-impact polystyrene, all designed for injection molding and extrusion.

Plastics recycling operations in Europe include a 75,000-square-meter facility in Haimburg, Austria, which has five washing lines and six extruders and an annual capacity to produce 55,000 metric tons per year.

Another site is in Fonte, Italy, with 14,500 square meters of space, three washing lines and three extruders capable of reprocessing 40,000 tonnes per year. The third European site is in Grünstadt, Germany, with 32,000 square meters of space and 30,000 tonnes of annual capacity.

The California location currently has one washing line and one extrusion line for LDPE film in 7,500 square meters of space with a capacity to manage 40,000 tonnes annually, the company said. The company also is in the midst of closing a plastics recycling facility in Westminster, S.C., which has a capacity of 40,000 tonnes in 8,000 square meters with two washing lines and two extruders for rigid plastics.

A company spokesman for PreZero US recently said the South Carolina facility was not performing as expected. But despite the decision, PreZero said the company still aspires to eventually expand plastics recycling operations throughout the United States.

Recycled resins produced by PreZero go into a wide variety of applications, including building and construction, industry, garden, furniture, household and automotive. PreZero also is developing a market for packaging.

The firm sees its entry into the larger overall environmental services sector as a way to penetrate the recycling market more deeply over time as the company now has access to a large waste stream.

"On the one end, it is good to have the possibility to collect the waste," Mikolajczyk explained. "Now the future focus will be on how to recycle all the things we collect.

"We want to get better and better at what we are doing, and therefore, whenever you see a chance to recycle a new waste stream or when we have enough recyclables collected and sorted and see the potential for us to recycle, we want to do this," Mikolajczyk said.

As part of this overall push to capture more materials from the waste stream, the company wants to continue expanding its plastics recycling businesses over time.

"Our philosophy is to help the country, to help our customers and therefore society, to get step by step to create less waste and have recyclables in a closed loop," he said.

While Schwarz Group is working through PreZero to capture and reuse plastics, the company also seeks to cut down on its own plastic use in general for the Lidl and Kaufland private-label packaging.

The company has established what is called the Reset Plastic target of reducing plastic by 20 percent by 2025. German operations for both retail outlets have already surpassed that goal, with Kaufland stores in Germany cutting plastic by 26 percent and Lidl in Germany cutting by 22 percent.

The company also wants to use an average of 25 percent recycled content in private-label plastic packaging by 2025 and currently stands at an average of 14 percent across the retail chains.

Kaufland is using 29 percent recycled resin and Lidl in Germany is using 23 percent, thanks to the use of 100 percent recycled content in disposable PET bottles made by the company's food and beverage arm, Schwarz Produktion. That figure does not include bottles and labels, Schwarz said.

"Our vision is to give a new life to more than 500,000 tonnes of plastic waste worldwide by 2030," PreZero CEO Thomas Kyriakis said in a statement. "This can only be achieved if more and more companies realize that plastic recyclates are better raw materials — better for the environment and the climate, and therefore better for the company's own success."