Business

Closed Loop will go into administration without support

24-hours to save Closed Loop

Chris Dow, Chief Executive of plastics reprocessing company Closed Loop Recycling (pictured right), has told the Guardian newspaper that the company will “inevitably go into administration” without government or industry support.

Speaking to the newspaper, the head of the UK’s biggest producer of recycled plastic for milk bottles said: “Our customers want to buy recycled plastic but they don’t want to pay more [than virgin plastic]. Without the support of the industry or the government it is inevitable we will go into administration.”

Recycled plastics market facing ‘unprecedented challenges’

The statement comes amidst news that the recycled plastics market is currently experiencing ‘unprecedented challenges’ due to the drop in the price of oil making virgin plastics cheaper, and manufacturers switching from recycled to virgin plastics in their packaging, despite it being just 0.1p less expensive per bottle (based on calculations from plastics reprocessing company Closed Loop Recycling).

As a result of this, and ‘operational challenges and unfavourable market conditions’, one plastic reprocessor, ECO Plastics – now known as ECOPlastics Recycling – sought acquisition last year following financial difficulties.

As such, members of the waste and resources industry have been issuing urgent calls for retailers and manufacturers to ‘switch back’ to using recycled plastic to help protect the ‘vital UK recycling infrastructure’.

Indeed, Closed Loop says it that if businesses would pay 0.1p more for a two-pint plastic milk bottle, it would secure the future of the company. The marginal increase in the price of milk has already been supported by the public, with a YouGov poll released on Wednesday (25 March) finding that 68 per cent of people would pay more for milk in recycled packaging.

‘24 hours to reach a solution’

Marcus Gover, Director at the Waste & Resources Action Programme (WRAP), commented: “If we can agree something then maybe we can save this company.”

He added: “Commodity prices go up and down. Recycled food-grade [plastic] will be a good buy again. But if we don’t stick with it now, there won’t be any to buy in the UK and that would be a real loss for us all.”

His comments have been welcomed by Dow, who said: “We welcome Marcus Gover’s comments in the Guardian today about ‘agree[ing] quickly on a new way to price recycled plastic’, but the reality is we have 24 hours to reach a solution for the whole industry because Parliament dissolves on Monday.

“We understand that there are high-level discussions between the minister, WRAP, Defra and top-level representatives of the supply chain, and we know that there is a solution on the table that will stabilise the market and long-term sustainability of recycled HDPE and the Dairy Roadmap.”

He added: “We are the most vulnerable part of the supply chain, yet are shouldering all of the risk. Surely a 10th of a penny is small price for the retailers and dairies to pay to show commitment to their own environmental policy and save thousands of green jobs and the future of the circular economy."

Resource Association Chief Executive Ray Georgeson also commented today (27 March), saying: “We are encouraged by the comments from Marcus Gover of WRAP, reported in the national press today…

“We are delighted to see that ministers and WRAP are actively pursuing a solution – they have a solution available to them that was proposed by Closed Loop Recycling over a week ago that will provide market stability and ensure the survival of this critical UK infrastructure for plastic milk bottle recycling, which is so popular with the British public. 

“We wish them well in their urgent endeavours, but stress again that the clock is ticking and action this day from the key influencers in this process – the retail and dairy signatories to the Dairy Roadmap – will still have the potential to salvage a critical situation.”

Closed Loop Recycling background

Closed Loop Recycling produces food-grade recycled polyethylene terephthalate (PET) and high-density polyethylene (HDPE) from plastic bottle waste.

Its plant in Dagenham reprocesses 65,000 tonnes per year of mixed plastic bottle waste that would otherwise be exported for recycling, or sent to landfill.

Find out more about Closed Loop Recycling.

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