“We think there’s a lot of inefficiencies in the market today. We talked a bit about yield today,” Keller said after speaking to hundreds of people in the plastics recycling industry. “There were a lot of people in the room that we do business with today and we anticipate doing business with these same people in the future.”
Vander Ark said that based on discussions he had with plastic recyclers at the conference, Republic Services will be able to continue working with its customers for the long term. “We believe there is a market for us,” the CEO said.
“We’re open and honest. We have long-term agreements for a few years for materials, so we don’t think our current product is going to be broken up until we’re ready,” he said.
The waste hauler’s move changes the dynamics of the plastics recycling industry as it will no longer be viewed simply as a bale supplier for plastics reprocessors who have performed tasks such as cleaning, crushing, separating and creating recycled pellets.
“I think it’s a very interesting concept and could change the way the industry works, but as with all things, it remains to be seen how the company will meet the challenges of turning materials into raw materials. “said Steve Alexander, CEO of the Association of Plastic Recyclers, in an email exchange. “It’s an entirely different segment of the industry.”
Alexander wondered if the two sides of the recycled plastic industry – collecting and sorting, then processing – could successfully merge. “I guess we’ll see,” he said.
Republic Services is the nation’s second-largest solid waste management company and has a network of some 70 Materials Recovery Facilities, or MRFs, that recover recycled materials including paper, metal, plastic and glass. These MRFs are designed to sort materials for sale to companies who then reprocess them.
The outputs of MRFs are bales of separated plastics, ferrous and non-ferrous metals, different grades of paper and glass of different colors. But as the country has continued to migrate to single-stream recycling, where residents put all their material in one collection cart, the quality of finished bales coming out of MRFs has declined over the years. Consumer convenience has increased the volume of recyclables collected, but the mixing creates cross-contamination in finished bales from facilities that are not equipped to completely separate the materials.
This causes plastic ball yields to decrease to the point where perhaps two-thirds of the plastic balls are usable and the rest of the material, including other types of resin, is considered contaminated in some cases. Republic’s new Polymer Center will process both PET and polyolefins, allowing the company to simply divert this so-called plastic contamination to another processing line.
Republic sees a future where additional facilities will be located in different parts of the country.
“Obviously Vegas is meant to support the West. Midwest makes a lot of sense just because of our operational footprint and the density that we have in that part of the country,” Keller said. “We also see the South East as probably a logical No. 3.”
Republic is also targeting the Northeast, where the company has several recycling facilities. “A lot of these states have bottle bills, so you don’t see as much of this material in the blue bin or collection programs, but we also have a lot of volume in this part of the world,” he said. .
Each of these installations could cost between 50 and 60 million dollars. Republic said investing in regional polymer centers makes more sense than trying to retrofit existing MRFs.
“Rather than saying we’re going to recapitalize over 70 centers, which would take us a long time and be a big check, that’s actually, I think, a much more elegant way to get the fix,” said Vander Ark.
“We have a range of centres. Some are incredibly automated. … Others are older facilities that have more labor and less technology. You can come in and install new equipment, more optical sorters in these, but it takes time and a lot of capital. We believe it allows us to seize the opportunity faster with less money,” the CEO said.
Republic’s plan is to grind HDPE and PP into larger fractions and use color sorting to create colored balls, including natural, red and orange, to create added value in the output. The market has already shown interest in paying more for these sorted products, the company said.