Increasing pressure on prices in the plastics sector and overseas competition are thought to be behind the move, which has been confirmed to letsrecycle.com by the company’s chief executive Javed Mawji this afternoon (31 May).
Ecotech has the capacity to process about 18,500 tonnes of clear PET and mixed plastic bottles at the site in Rainham, which used to be owned by Regain Polymers. The facility produces a clear PET plastic flake, which can be extruded for use in the production of food-grade plastic packaging.
Speaking to letsrecycle.com Mr Mawji said: “We have decided to pause production at the moment to restructure and refinance. That is what is going on at the moment and we are aiming to restart our production fairly soon. In the next few weeks we expect to be back up and running.”
Commenting on the reasons behind the restructuring, Mr Mawji said: “The market has been difficult and the PRN system continues to place massive burdens on domestic industry. It is much easier to export than it is to process here.”
Prices
Sources within the plastics industry have also claimed that a significant fall in the price of virgin polymers since the start of 2015 has put major pressure on plastics recycling businesses, which have had to cut costs to survive.
Although Mr Mawji could not confirm the number of staff that had been made redundant, which is thought to number more than 20, he claimed that some may return to work once the plant has resumed operations.
The company is one of the newest on the block in the UK plastics reprocessing sector, having developed a 17,500 tonnes per-annum bottle sorting and reprocessing facility at Rainham, in the London borough of Havering, in late 2014 (see letsrecycle.com story).
Investment
The £6.5 million plant was set up with £2.2 million in financial backing from the London Waste and Recycling Board (LWARB), as well as support from German PET recycling plant designer STF Group, which provided the sorting, washing and granulation kit for the operation.
Private investors have also provided finance to the company. Former Shanks director Ian Goodfellow also sits on the board of directors.
Bottle processing carried out at the facility involves taking PET and mixed plastic bottle bales through a series of decontamination and washing steps, which is then used to produce high-purity hot-washed PET flakes.
The news of the “pause” in production will come as a further concern to the UK’s plastics processing sector, particularly in London, which has seen the Dagenham bottle recycler Closed Loop Recycling, which recycled HDPE milk bottles, close its doors within the last 12 months.
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