The waste company said that the closure follows “a detailed strategic review” of the site, which opened in March 2022. A separate review of its facility at Rochester is currently underway.
A statement from the company read: “Viridor’s UK mechanical recycling operations have been negatively impacted by persistently and increasingly challenging market conditions, and the absence of planned legislation to increase rates of plastic recycling in the UK.”
Viridor has put consistent investment into increasing its mechanical recycling capability, however recycling rates are below where they were projected to be in 2020.
The waste company has blamed delays to the policies outlined in the 2018 Resources and Waste Strategy as part of the closure.
The statement continued: “The significant delay in implementing [the policies in the Resources and Waste Strategy], combined with reduced demand for recycled plastic and packaging products from the consumer goods sector, have had a material impact on the financial viability of Viridor’s UK mechanical recycling operations.
“This has been exacerbated by broader market conditions; the global virgin polymer market is suffering from overcapacity due to significant growth in production in lower-cost markets outside Europe, leading to significantly reduced demand and prices for recycled plastics.
“At the same time, imported recycled plastics from low-cost countries has increasingly flowed into Europe displacing domestic supply. The combination of these pressures has resulted in today’s decision.”
Last week (31 October 2024), president of Plastics Recyclers Europe (PRE), Ton Emans, covered the crisis facing the plastics industry and called for an EU-led incentive scheme to boost investment into the industry.
Viridor posted a loss of £29.3 million in the 2022/23 financial year for its plastics recycling division, Viridor Polymers.
What will happen to the Avonmouth site?
Viridor said that the closure will be subject to a consultation process and that it is currently exploring redeployment opportunities within the wider Viridor business for employees impacted by the decision.
The waste company added that it will continue to make “major investments” in the UK’s waste and decarbonisation infrastructure, including through its carbon capture and storage ambitions.
Viridor is still operating in the UK polymer recycling sector through its Quantafuel subsidiary – which it procured in a deal worth approximately £100 million in 2023. It purchased the remaining shares earlier this year.
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