Euro Closed Loop ‘on brink of closure’

The news comes just two months after it appeared that the plant and its operations had been saved from closure.

Thirty-two staff were laid off from the Dagenham bottle recycling facility last Monday (June 29) and a further 12 had working hours cut – with the plant now operating on a four day working week as it struggles to remain afloat, currently losing around £300,000 per month.

However, according to Euro Closed Loop director Afzal Majid in an open letter to stakeholders today (July 6), current operating conditions are not sustainable and the company is likely to cease production and lay off the remaining 60 staff at the site on Wednesday (July 8).

Mr Majid was among the investors to pursue a deal to rescue Closed Loop Recycling after it was placed into administration in May. The company was bought in a pre-pack arrangement by Euro Capital after having posted losses in recent months due to challenging trading conditions.

rHDPE

Closed Loop – which was the biggest UK supplier of rHDPE for use in the manufacture of milk bottles – had been locked in talks with dairies and retailers seeking assurances that they would not turn away from commitments to source recycled polymers, with the price of virgin polymer becoming more competitive.

The company’s owners have now claimed that, since the deal was struck in May, the company has been unable to find a price for its rHDPE product at a level that it can compete with virgin resin, which it is claimed has become significantly cheaper in recent months.

Euro Closed Loop has also claimed that it has struggled to compete with demand for waste plastics milk bottles- the feedstock that it uses to manufacture its recycled plastic product – from overseas buyers.

The company is again calling for assurances from the dairy industry that they will continue to support the Dagenham plant by committing to source rHDPE from the plant.

In a statement, Euro Closed Loop chief executive Chris Dow, who has remained at the company since the purchase from Closed Loop, said: “We’re in discussions with all parts of the supply chain and we are looking forward to bringing all customers and suppliers on board. Veolia, Viridor, Nampak, Dairy UK, Tesco, Sainsbury’s and M&S are all backing the bid, which is an urgent attempt to save the last 10 years investment and secure the future of Britain’s recycling.

“I am working with the current owners of Euro Closed Loop to ensure a smooth transition and jobs are secured. We will then will be working with the key stakeholders and government to secure a new deal.”

Closed Loop opened its 35,000 tonnes per year capacity milk bottle recycling plant in 2008, and it has been 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.