There are reasons to be optimistic about the UK plastic recycling sector, despite recent setbacks.
In the last few months, we have seen a small number of companies involved in recycling plastics in the UK go into administration or suffer financial difficulties.
But it would be wrong to assume that these failures, some of which have been high profile, have been symptomatic of a failing industry.
Is oil to blame?
So, what’s going on? Oil prices are often blamed, but that’s too simple an analysis.
In November 2014 we saw a sharp dip in oil pricing and that led to a severe but short decline in virgin polymer prices. However, PE virgin prices have largely recovered to 2014 levels. PET virgin, on the other hand, has declined in the period, but this is part of a longer-term decline that started in 2011 which has seen a 40% reduction in price in that five-year period (Source: Plastics Information Europe).
If recent failures are not exclusively linked to reducing polymer prices, what’s causing them?
Looking closely at some of the companies that have struggled, they had one thing in common – they did not have a diversity of market to back them up, but focused instead on one particular grade or location.
Could you imagine if a successful UK manufacturing company such as Jaguar Land Rover decided that it would only sell one car and only into the UK market? It is highly likely that it wouldn’t survive in today’s globally diverse market, and that is the approach we have to take with plastics recycling.
Just as major manufacturers identify the best places in the world to sell their products, we have to do the same with plastics. That can be in the UK, in Europe or Asia.
There remain a number of successful and solid plastics companies based in the UK that take this approach. These are robust companies with financial stability because they operate in diverse markets in terms of the materials they deal with or the locations they send material to or both.
It’s this diversity of supply and market that gives strength.
At Vanden, the business model is based on only purchasing quality material from a wide range of suppliers. Using our global strength and intelligence, we are not reliant on a single market and can identify where we are able to get the best value for the best material.
Our rigorous approach also includes having local employees to check all material reaches its end destination, ensuring we have comprehensive traceability. We leave nothing to chance, regardless of whether we are supplying to the UK, European or Asian organisations.
Increasing UK focus
It is interesting to note that we are seeing increasing amounts of material used here in the UK or in Europe, probably reflecting a growing engagement with circular design solutions.
On that basis, Vanden is continuing to invest in the UK as we see huge potential here. The UK is a key growth market for us and we are optimistic about the potential here.
There are other companies in this country that are successful in plastics recycling too, and as a whole we are part of a still-growing plastics recycling sector.
So let’s not see some recent bad news as representing a whole industry. Let’s continue to be confident about UK plastic recycling, as long as it is done in the right way.
Sometimes there is a lot of emphasis on post-consumer plastics, in particular bottles. There is nothing wrong with trying to recycle these materials, of course, but there are large supplies of post-industrial and post-commercial plastics out there that don’t always get the same attention.
Many of the UK plastics recycling companies that are thriving are specialising in this type of plastics, rather than trying to break new ground with food-grade consumer packaging recycling.
Manufacturers increasingly want to use recycled plastic because it is sustainable, it can often be sourced locally, and there is often a regular supply.
As mentioned above, by having a diversity of supply, this also gives us a diversity of manufacturing markets to sell our product into rather than focusing just on sourcing milk bottles and selling product to only dairies.
That’s not to say that UK plastic bottle recycling will never be economically viable on a larger scale, but we shouldn’t forget there is a thriving plastic recycling industry here already and let’s do more to promote it.