Oil price pressure set to increase costs of collection sacks

The manufacturers are also seeing the cost of recycled material increasing which is feeding through to the plastics recycling sector with slightly higher prices for some collected material.

Andrew Green, director of recycled products for British Polythene Industries, told letsrecycle.com that virgin plastic prices had increased from the 500-600 a tonne level in January to some 800 a tonne at present. Mr Green added that prices for recycled plastic material often lagged behind the virgin market. Typical costs for recycled granulate are put at about 400-450 a tonne now, up from about 300 in July.

Glasgow-based Dickson for Sacks has noted that over the last three months prices have been increased by manufacturers in the Far East on the sacks that it imports into the UK. In contrast, the price increases for sacks manufactured in the UK has not been so steep.

Alan Dickson, marketing director, at Dickson for Sacks explained: “We import most of our sacks and the price we pay has increased by about 18%. In the UK we now pay around 12% more due to various factors, including the increase of the minimum wage.

The company, which supplies about 75 local authorities in the UK with sacks for collection, says it has taken measures so that the councils aren't hit with huge price increases. “With the bags we import we have cut our margins, the prices we charge have increased by about 12% for both imported and home grown sacks,” said Mr Dickson.

Local authorities

So far the change in price does not seem to have filtered through to many local authorities although several are expecting prices to rise. At Shanks East London, which supplies Havering council with orange bags for the collection of recyclables, a spokesman said that as it had a fixed contract for the sacks they had not seen a price increase as yet.

At Staffordshire Moorlands district council the contract the council has with Cromwell Polythene has remained unchanged for two years. A spokeswoman for the council said that in August the council paid 26.50 per 1,000 bags.

For some sack producers, the increase in collection bag prices appears to be not necessarily a bad thing. Shropshire based Ecosac, for example, produces bio-degradable bags for composting using corn starch.

Frazer Walker, director at Eco Sac, said that his company was not effected by the rise in plastic prices. He said: “Oil prices have affected us only through transport costs, because we use corn starch for our bags rather than plastic. I would be happy to see prices increase because the price of normal sacks and eco sacks gets closer.”