PlasRecycle, which was set up by former Sterecycle director Duncan Grierson, developed a plant in South East London to process bags and films to produce a plastic granulate that can be used to manufacture new bags and damp proof membranes.
A total of £10.7 million in funding was secured for the plant which opened in 2013, coming from sources including the Waste & Resources Action Programme (WRAP), the Foresight Environmental Fund and LWARB, which provided around £3,455,000 (see letsrecycle.com story).
The 20,000 tonnes-per-year capacity plant, which is located in the Thamesmead area of south London takes bags from waste management firms, local authorities and retailers.
Hunter Kelly and Charles King of financial advisory firm EY have been appointed to oversee the administration of the business.
PlasRecycle announced the news in a statement on its website, which read: “On 15 July 2016 Robert Hunter Kelly and Charles Graham John King were appointed Joint Administrators of Plasrecycle Limited. The affairs, business and property of the company are being managed by the Joint Administrators who contract as agents of the company and without personal liability.”
According to EY PlasRecycle had been seeking additional investment of £6 million to “improve efficiencies and increase capacity” at the Woolwich site.
However, EY claimed that due to the extent of the ongoing losses at the lower levels of production and the level of existing debt used to fund the start-up losses, it was not possible to obtain investment and the company “effectively ran out of cash”.
EY claimed that PlasRecycle will continue to convert existing work in progress into finished product but not take in new raw material due to the level of losses in processing.
The Administrators are seeking expressions of interest in the company and its assets and wish to conclude an early sale before production ceases.
Hunter Kelly, Joint Administrator, said: “The cost and time to get this plant operational was significantly more than originally envisaged, leading to greater levels of debt. However, with its unique process, PlasRecycle has all the fundamentals to be a significantly profitable business. We have had good levels of interest and would encourage interested parties to get in touch as soon as possible.”
Mr Grierson, who was instrumental in overseeing the development of the Woolwich site stepped down as a director of the company last Wednesday (13 July) shortly before administrators were called, documents posted on the Companies House website show.