Post-industrial plastics recycler Butler-MacDonald Inc. added a new production line earlier this year, as increased demand it first saw in the early phases of the coronavirus pandemic has continued.
The new extrusion system will boost capacity at its Indianapolis headquarters plant by 28 percent, or in excess of 20 million pounds a year, and allow the company to better handle lighter materials like thin sheets, said Sales Manager Grant Gilmore.
The new production, which came onstream in the first quarter, lets Butler-MacDonald profitably reprocess a wider range of materials and cut lead times from five weeks down to one or two weeks, he said.
The company ordered the extrusion line in May 2020 from Austrian supplier Erema Group after it saw demand rise at least 10 percent in the early stages of the COVID-19 pandemic. Gilmore said customers were searching for plastics for personal protective equipment and other recyclers temporarily shut down operations.
But with coronavirus-related shipping and logistics delays, it took nearly a year for the line to be installed and start operating.
The higher demand that prompted the investment has remained, though. Gilmore said it's driven by rising virgin resin prices, continued solid demand for PPE and, to a lesser extent for the firm, interest in recycled content in products, he said.
As plastic prices went up, particularly after the Texas ice storms in the winter knocked virgin resin plant production offline, customers have been looking to cut costs with recycled materials, he said.
"They're able to realize more of a cost savings," he said. "They're able to purchase from us a good, clean reprocess resin at a substantially lower cost to virgin."
Some recycling markets, especially in post-consumer resin, are seeing increased demand as large consumer product brand owners try to meet their targets for using recycled plastic in their packaging.
But the vast majority of Butler-MacDonald's business is recycling post-industrial plastics like factory scrap. While those environmental drivers are there for post-industrial plastics, Gilmore said costs continue to outweigh environmental factors for their customers' purchasing decisions.
"As much as our team looks to sell the environmental benefit, typically the feedback we get is there's an appreciation for that but usually it does take a backseat to economics," Gilmore said.
Less than 10 percent of Butler-MacDonald's business is sourced from post-consumer plastics, down from about 40 percent two years ago, Gilmore said.
In the newest Plastics News ranking, the company ranked as the 75th-largest plastics recycler and broker in North America, with 34.5 million pounds of plastics reprocessed.
Gilmore said the company projects reprocessing more than 44 million pounds of recycled resin in 2021.
"We feel thankful and good that we've been able to survive, better than expectations," he said. "All things considered, we had a very good 2020, and now in 2021, we're off to a great start in the year."
The new production line helps the company keep its own manufacturing costs down, he said.
The firm operates a 128,000-square-foot plant in Indianapolis, with 60 employees, down from 75 before the pandemic started, he said.
About half of its business is toll processing for other companies and half is selling grades of reprocessed resins directly, the company said.