High Cost of Raw Materials Makes Re-Use Attractive : Demand for Recycled Plastic Exceeding Supply

Du Pont Co. has announced plans to build the largest plastics recycling and processing plant in the United States, adding the Wilmington, Del.-based chemical giant to a growing list of plastics manufacturers that are looking for ways to melt down plastic milk jugs and juice bottles and use them to make new products.

Plastics makers are moving toward recycling at a time many environmental groups and community leaders are expressing increasing concern about the large amounts of plastic packaging products that are filling the nation’s solid waste dumps.

But the companies’ interest in recycling also reflects improvements in the technology of processing waste plastics and steep escalation of raw material costs during the past two years--which have, for the first time, made recycling an economically attractive option for the plastics industry.

“The bottom line is that it looks like a very large amount of a wide range of plastics are going to be recoverable for re-use at very attractive economics,” said Wayne Pearson, executive director of the New Jersey-based Plastics Recycling Foundation.

Action by Others

In addition to Du Pont’s announcement last week, Continental Can Inc. has begun using recycled plastic to make detergent bottles, Dow Chemical Co. and Canadian paper maker Domtar Inc. have joined forces to set up a recycling operation, and many other companies--from Goodyear Tire & Rubber Co. to Mobil Corp. to Eastman Kodak Co.--have set up plastics-recycling research programs and pilot plants in recent months.

So many companies have jumped into the recycling game, in fact, that--in a reversal of the typical scenario for recycled products--the industry’s demand for old soda and milk bottles is outstripping the ability of local communities and recycling groups to provide them.

Procter & Gamble Co., for example, developed a bottle for its Spic and Span cleanser last fall that is made of 100% recycled plastic, but it wasn’t able to test-market a production version of the new bottle until just recently because it couldn’t find a reliable supply of recycled plastic resin.

“The problem is not one of end use. There are plenty of end uses for recycled plastic,” said Dennis Sabourin, vice president of Wellman Inc., a Shrewsbury, N.J.-based maker of polyester fibers that is the nation’s largest user of recycled plastic. “The problem is one of collection and sorting. There just isn’t a collection infrastructure in place or a sorting infrastructure in place to generate the plastic.”

Sabourin estimates that his company could use twice as many plastic bottles as it is now able to buy from recyclers.

Companies such as Wellman buy used plastic containers from collection centers, clean them, grind them up, melt them down and use the result to substitute for other forms of raw plastic resin, or to mix with other plastics.

Price Increases

The economic impetus for recycling stems from recent sharp increases in the price of ethylene--the principal ingredient in virgin plastic. Those cost increases have in many instances been passed by ethylene producers directly to companies that manufacture plastic products, with the result that many plastics users have turned to recycling out of economic necessity.

Midwest Plastics Materials Inc., a Wisconsin-based maker of plastic pipe, began using small amounts of recycled plastic four years ago, when it found that it could turn old milk jugs and bottles into plastic resin for 25 cents a pound--about a nickel less than the cost of virgin polyethylene (processed ethylene) at the time. Today, with polyethylene at more than 40 cents a pound, the company has moved almost entirely to recycled plastic.

In light of rising oil prices and heightened demand for plastic resin, these same economics apply to almost every form of recyclable plastic, according to industry experts.

“It appears that you can collect plastic, sort it, reprocess it and still be able to sell a pure high-density plastic at two-thirds to one-half the cost of virgin resin,” said John McDonald, director of environmental affairs for Continental Can. “If you’re a user of virgin resin, you almost have to use (recycled plastic), because of the economic incentive.”

New Technologies

The move toward recycling has been spurred, as well, by the development of new technologies that have erased many of the initial concerns that plastics users had about the quality of recycled plastic.

While the early markets for recycled plastic were confined to areas where the purity of the resin was not an issue--building materials, carpets or insulation, for example--a number of plastics companies have developed methods of cleaning and reprocessing old bottles to levels of purity and strength comparable with virgin plastic.

Goodyear, for instance, says it will soon become the first company to apply for federal permission to use recycled plastic in food containers. And Procter & Gamble, which buys plastic bottles from other companies, recently announced plans to expand its test of recycled-plastic Spic and Span bottles and sell Tide, Cheer and Downy detergents in bottles made in part of recycled plastic.

“We’re closing the loop,” said Ed Sisson, coordinator of polyester recycling at Procter & Gamble, the Cincinnati-based consumer products giant. “If you can have an alternative to buying ethylene for all your needs, suppliers are going to be less likely to try and pass through price increases.”

Defusing Criticism

In addition to reducing materials costs, makers and users of plastic products see the trend toward recycling as a way to defuse the increasing criticism that nonrecyclable, non-biodegradable plastic containers and other products are putting a strain on the nation’s solid-waste dumps.

Although plastics make up only 7% of the solid waste that Americans throw away every year, they have been the target of efforts to reduce solid waste, and several municipal governments around the nation, most recently Minneapolis and St. Paul, Minn., have banned the sale of non-recyclable plastics within their borders.

“The plastics industry is waking up to the fact that consumers are very frustrated with packaging that goes straight from the grocery bag to their trash can,” said John Ruston, an analyst with the Environmental Defense Fund.

Many observers interpret Du Pont’s foray into recycling--which is being done in a joint venture with Illinois-based garbage collection giant Waste Management Inc.--as a move dictated more by concern over the outcry against plastic waste and competitive pressures from paper, glass and aluminum packaging than by the economics of plastic production, because Du Pont owns its own oil company and isn’t dependent on other producers for ethylene.

“They’re doing this because the world is demanding a better use for plastics packaging material,” McDonald said. “It’s to keep the legislative guys from getting on their backs. There have already been bans of the foam styrene cup, and no one in our industry wants more of that.”