Materials

Supply of and demand for food-grade recycled PET in the UK is being transformed thanks to major investment in reprocessing facilities and growing interest from brand owners, notably GlaxoSmithKline (GSK) and Innocent.

Closed Loop London (CLL) now expects to begin reprocessing operations at its site in Dagenham by March, while Intercontinental Recycling in Skelmersdale (Packaging News, October 2007) should be in production from early this month (December).

JFC Group’s St Helens plant (previously Delleve) should also come on-stream this month with washed flake. Others are said to be looking into setting up their own operations.

JFC operations manager Andy Bagnall predicts that overall annual UK production of premium and food-grade rPET will be between 30,000 and 35,000 tonnes by summer 2008. However, CLL managing director Chris Dow says he would be surprised if the total is this high. In the case of JFC, although it may process up to 25,000 tonnes of mixed PET and HDPE bottles, this will translate as only 8,000 to 8,500 tonnes of high-quality rPET.

CLL contrasts its own flake output from the Dagenham plant’s URRC kiln with standard ‘bottle-grade’ washed flake. It has also boosted quality with the inclusion of an extrusion line to produce food-grade rPET pellet.

Neither JFC nor Intercontinental is stressing this food-grade extruded option for now. JFC’s flake is the product of a hot chemical wash. Bagnall explains: “If we had gone to extrusion, we might have added cost without adding value.” And Intercontinental is keen to first establish itself in the market for flake, but intends to install extrusion capacity at some point.

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Paul Davidson, plastics technology manager at the Waste & Resources Action Programme (Wrap), points out that several thermoformers supplying the food industry are investing in their own extrusion equipment. This will enable them to buy flake and yet still produce food-grade packaging.

According to Wrap, overall UK demand for premium grades of rPET was around 60,000 tonnes in 2006, with imported supply totalling just 12,000 tonnes. Its projections for mixed bottle collections are around 160,000 tonnes for 2008.

Recyclers would love to be able to predict how much of that tonnage is likely to stay in the UK, and how much will be of a sufficiently high standard to reprocess cost-effectively. But Lee Clayton, general manager at Intercontinental, says: “We can compete – and are competing – with export prices for raw material, and have also designed our facility to accept lower quality material.”

CLL had sufficient concerns at one point about the quality of the UK’s mixed-bottle waste (and the amounts staying in the UK) to float the notion of sourcing raw material from overseas. But now Dow asserts that all feedstock will come from the UK.

The other ‘foreign’ question puzzling recyclers and converters is the future relative position of home-produced rPET and the longer-established continental alternative. Amcor PET has until now sourced all its rPET from the group’s own high-volume Beaune recycling plant in France. But demand for recycled content is growing throughout Europe, and the division’s new owner, La Seda, will have to think fast if it wants to maximise opportunities. As marketing manager for research Doris Schneider puts it: “We desperately need new sources of rPET, whether external or internal.”

While brands and retailers would like to be able to source their rPET from the UK (see box), and no doubt tell consumers all about it, converters are more likely to be swayed by price.

According to Clayton, the higher quality and lower residues in feedstock sourced from Europe will probably be balanced out by the additional transport costs. But Dow at CLL adds: “We need to take into account the UK’s significantly higher feedstock costs as a major variable.”

The other big question is how prices for virgin PET and UK-recycled rPET will compare. Strong demand is likely to drive rPET prices up, but Wrap’s Davidson believes that any significant premium may be unsustainable.

Pricing is likely to differ for washed flake and extruded pellet. Bagnall at JFC says: “As a recycler, we don’t necessarily expect to get the price of virgin, but then it can’t be far off it either.”

For food-grade material, demand is likely to stay on the recycler’s side. Dow says: “I can see that if the price of the inputs can stabilise, we will have a period of price stability very close to parity with virgin PET.”

That is a state of affairs that might suit both recyclers and their clients.

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RPET DEMAND
¦    GSK’s Ribena and Innocent Drinks have led the way in adopting 100% rPET bottles. Wrap claims there are other brands keen to move in the same direction
¦    But both GSK and Innocent currently use material sourced from overseas, and are wary about switching to domestic product
¦    Keith Marriage, director of ­packaging development in GSK’s Nutritional Healthcare division, says: “If you want a genuine closed loop, then you need more local sourcing”
¦    A spokeswoman for Innocent says the company will source its rPET from the UK “once it becomes available”. Innocent pays a premium of up to 10% for other ingredients such as fruit that are sourced from the UK