Euro Closed Loop Recycling may close
Afzal Majid, Director of plastic bottle recycling company Euro Closed Loop Recycling, has warned that the company is ‘on the brink of closure’, just weeks after it was bought.
The Dagenham-based reprocessing company called in administrators earlier this year after warning that it was having financial difficulties following ‘unprecedented challenges’ due to competition from overseas buyers, and the drop in the price of oil making virgin plastics cheaper than recycled plastics (which has led manufacturers to switch back to using virgin plastics in their packaging, despite it being just 0.1p less expensive per bottle).
Although Dubai-based investment company Euro Capital (Euro Cap) bought the company in a pre-pack arrangement eight weeks ago, owner Afzal Majid sent a letter to UK recycling industry stakeholders yesterday (6 July) stating that the company is “facing considerable difficulties regarding the continuing viability of the business”, and is losing at least £300,000 a month.
As such, he warned that the company will likely close on Wednesday (8 July), with 60 staff being laid off “unless a solution can be found”. More than 30 people were laid off last week, while others had working hours reduced. The plant has also already reduced operations to four days a week.
However, Chris Dow, Chief Executive of Euro Closed Loop Recycling (pictured), stated that the company is curently in discussions with “all parts of the supply chain” to boost support for recycled plastic packaging in the aim of preventing closure.
It is seeking:
- parity between recycled plastic and virgin resin pricing (to agreed indexes);
- a ‘supportive supplier base’ with pricing in line with the Dairy Roadmap; and
- support from all stakeholders to implement a sustainable model.
He stated: “Veolia, Viridor, Nampak, Dairy UK, Tesco, Sainsbury’s and M&S are all backing the bid, which is an urgent attempt to save the last 10 years of crucial investment and secure the future of Britain’s recycling”.
Dow added that he is working with the current owners to ensure that there is a “smooth transition”, and will work with “key stakeholders and government to secure a new deal for our industry”.