The news comes almost 12 months after Closed Loop – which was the biggest UK supplier of rHDPE for use in the manufacture of milk bottles – was acquired by the Dubai-based investment firm Euro-Capital in a pre-pack administration agreement.
And, administrators are expected to seek to dismantle and sell the millions of pounds-worth of machinery used in the plant to sort, granulate and wash plastic milk bottles, much of which was secured through public grants.
Closed Loop Recycling opened its 35,000 tonnes per year capacity milk bottle recycling plant in 2008, which was seen as one of the flagship recycling facilities for the plastics sector since its opening. Works to expand the capacity of the plant to handle 55,000 tonnes of plastic bottles were undertaken in 2013.
The company was then bought after having posted losses due to challenging trading conditions in early 2015. The takeover saw the company’s founder, Chris Dow, leave the business.
Takeover
Shortly after having bought the company, which then began trading under the name Euro Closed Loop Recycling, the new owners scaled back operations at the Dagenham bottle recycling facility claiming that the plant was losing around £300,000 per month.
The owners had claimed that they had been unable to find a price for the rHDPE product at a level that it can compete with virgin plastics, which it is claimed has become significantly cheaper to produce.
A potential new buyer for the plant had been sought, with one Irish firm having rumoured to have shown a strong interest in taking over the facility, but sources claim that ultimately fell through as buyers were unable to reach an agreement with the owners over the value of the plant. With no deal for the facility materialising, the plant was shut down and staff were laid off.
As of last month (29 April) Jason Elliott and Craig Johns of Manchester-based insolvency firm Cowgill Holloway Business Recovery LLP have been appointed as administrators and are likely to continue to seek a buyer for the optical sorting, granulation and washing machinery used in the plant.
Dismantling of the plant would represent a further blow to the UK’s reprocessing sector, with millions of pounds invested to establish the facility in East London. This included £4.7 million in private equity from Sevenoaks-based investment firm Foresight Group as well as grants from WRAP and the London Development Agency.
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