Greenstar announces M&S food-grade plastic deal

The Irish-owned waste management firm is the latest company to secure a deal that will involve it providing recycled content for the production of food packaging at a large retailer, following similar arrangements established by AWS Ecoplastics (see letsrecycle.com story) and Closed Loop (see letsrecycle.com story).

Greenstar said that the approval, which will involve it supply packaging company Nampak Recycling with flake produced at its Redcar-based plastics subsidiary Greenstar Waste Exchange Services (WES), proved the quality of its plastics reprocessing capabilities.

James Donaldson, managing director and founder of Greenstar WES, said: “We are audited almost weekly by existing and prospective national and multi-national customers. They are more than satisfied with our quality standards and the British and European approvals. Now we're ramping up towards full production as new customers approve rHDPE for use and start taking tonnages from us.”

The apparent increase in demand for recycled food-grade plastic in packaging comes as retailers look to improve their environmental credentials in response to growing consumer pressure for increased sustainability in packaging.

Danone Waters – which owns bottled water brands Volvic and Evian – signed a supply deal with waste management company Greenstar UK in February for the delivery of 12,000 tonnes of baled plastic bottles, which the company intends to use in bottled water containers at its reprocessing facility at Dijon, Eastern France.

And, beverage giant Coca-Cola intends to increase its recycled PET use to 25% of its containers across its European operations by 2010 and has also signed supply deals with Closed Loop Recycling for recycled PET (rPET) from the company's Dagenham plant and its forthcoming North Wales facility.

Barriers

However, a lack of quality PET feedstock and the high-cost in making the material to the specification required by the food industry means that there are currently only a handful of companies able to produce the material.

Another barrier currently blocking further development of the material is the cost in making it to the required standard set by the food industry. Although the food-grade material itself costs slightly less than virgin material, the technically intensive process requires a large amount of capital investment.

One plastics recycling reprocessor told letsrecycle.com, “The process isn't labour intensive but it is very capital expensive. The investment that is required to reprocess that material to standard necessary to be used as food grade is more expensive than just reprocessing it.”

Reprocessors also claim that simply building ten plants to meet the growing demand from the retail sector would be counter-productive as good quality PET would have to be imported from somewhere like France because of the levels of contamination in the UK waste stream.

Another plastics recycling reprocessor claimed that at present no company was willing to introduce 100% recycled content in its packaging due to elements of uncertainty surrounding its supply.

He said: “Companies would all rather have more recycled content in their material but it is being shared around without one person taking it all and facing the possibility of them setting their recycled content at 100% and then the market collapsing.”

Capacity

Recent moves have been made to increase the UK capacity; Closed Loop Recycling London opened a £12 million facility in Dagenham in June 2008, which is capable of reprocessing 35,000 tonnes of mixed plastic bottle each year.

And, the company has just begun construction on its second UK site, a 50,000 tonnes-a-year capacity plant at Deeside in North Wales. The Australian-owned firm claims to have pre-sold 65% of the facility's output nine months ahead of becoming operational but is aware that even with a second £12 million plant there is a supply deficit in the recycled food grade plastic market.

Chris Dow, managing director of Closed Loop, said: “If we are talking about plants such as mine in Dagenham processing 35,000 tonnes of bottles then you will need not just five plants from me but plants from our competitors and there are some pretty entrepreneurial companies out there.”

Other plastics recycling companies have also acknowledged the potential for recycled flake and pellets to go into the production of food grade plastic, with firms investing heavily in domestic infrastructure.

Among them, Newcastle-based AWS Ecoplastics has raised £14 million in capital to include the provision of food grade plastics at its Lincolnshire facility and Leicestershire-based plastics recycling firm J&A Young (Jayplas) has also made considerable moves in this area.

AWS has already signed two major supply deals for recycled plastic intended to be used in packaging, including one with Nampak, which is intended to increased the recycled content in the Milton Keynes-based company's HDPE milk bottles to 30% (see letsrecycle.com story).

And, it has also signed an £11 million supply deal with Wrexham-based Artenius PET Packaging Europe (APPE) is set to see AWS supply 13,000 tonnes of recycled plastic pellet annually (see letsrecycle.com story).