Waste management firm Viridor has signed a 12-month multi million pound deal to supply plastics recycler ECO Plastics with up to 10,000 tonnes of plastic bottles throughout 2014.
ECO Plastics will process the material at its Hemswell bottle recycling facility in Lincolnshire, which has been partially funded by Coca Cola Enterprises, and currently has the capacity to process 150,000 tonnes of plastics per year.
The company says that the deal, announced today (January 9) means that around 35% of its feedstock is now sourced through longer term partnerships, and it is keen to purchase less material from the spot market in future.
ECO Plastics plans to source as much as 70% of its feedstock through long term agreements by the end of 2014.
Jonathan Short, deputy chairman of ECO Plastics, said: Obviously a contract of this size is important for us, and were delighted to be partnering with one of the UKs leading waste management companies in Viridor.
But todays announcement is also strategically significant for ECO Plastics, marking the latest phase in our plan to offer more strategic, long term partnerships to our key suppliers.
Certainty
Mr Short added that securing more material through long term arrangements would provide greater certainty of supply for the company, and said that similar agreements elsewhere could help to channel investment into the sector.
He said: Buying material on the spot market can at times deliver robust prices, but it provides very little certainty over future revenue levels. Crucially that makes it difficult to raise the finance necessary to invest in new technology, which in turn means that there are still valuable resources which cant currently be recycled domestically.
As it becomes more and more difficult to export our waste material overseas, were left with a choice between building new infrastructure and going back to landfill. We see an industry wide move to longer agreements as the fundamental to resolving that dilemma.
Material will come from Viridors UK-wide network of collection and sorting facilities.
Herman van der Meij, director of Viridor, said: Viridor has led the way in UK recycling through the development and operation of advanced technology recovery facilities. Practical partnerships and cross sector collaborations are essential if we are to move towards a real circular economy.
This deal shows leading business working together across the value chain, from goods manufacturing, retail, collection and sorting to reprocessing and remanufacture. Were proud to be working with CCE and ECO Plastics.
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