One reclaimer says unless fiber producers are willing to pay more for material, it will go to the bottle market.
While prices for mixed-color and natural high-density polyethylene (HDPE) and polypropylene (PP) bales have contracted, polyethylene terephthalate (PET) bottle bales have maintained their value, Bill Keegan of Dem-Con Cos. says. Dem-Con operates a material recovery facility (MRF) in Shakopee, Minnesota, that serves the Minneapolis-St. Paul area as well as greater Minnesota.
Since October of last year, Keegan says, HDPE bales, particularly mixed color, have decreased considerably in price after gaining substantially from January through July of 2021. As of February, he says natural HDPE bale prices have decreased 45 percent from their highest price last year, while mixed-color HDPE bale prices have fallen 60 percent. PP bales prices as of February were 40 percent lower than their high last year.
Keegan says HDPE and PP scrap is “coming back to more historic prices,” adding that their values are still roughly 30 percent greater than they were in 2019.
Bale prices for these polyolefin scrap grades are responding to lower virgin plastic prices. “Underlying demand for recycled content is buffering that,” Keegan says as brand owners recognize that recycled content is a necessity, even if it’s not mandated by law.
The pressure is especially strong when it comes to PET packaging, which is diverting material away from fiber production. According to the “2020 PET Recycling Report” that the National Association for PET Container Resources (NAPCOR), Charlotte, North Carolina, released in late 2021, the amount of recycled PET (rPET) used by end markets in the U.S. and Canada increased by 10 percent in 2020, signaling strong support of postconsumer content in brand packaging. RPET use by the food/beverage and non-food/beverage bottle categories grew by 32 percent, surpassing fiber for the first time as the primary user of postconsumer PET bottles.
A scrap buyer for a company that primarily serves the fiber market says bottle-to-bottle recycling is the “holy grail” in rPET. Unless fiber producers are willing to pay more for material, it will go to the bottle market, where the mandates are at play and the consumer pressure is more acutely felt, he says.
Bottle-to-bottle demand also is increasing the barrier to entry for reclaimers, which have to invest in more sophisticated technology and processes to produce food-grade rPET, the buyer says. “That is the backside to the forward progress,” he adds.
One PET recycler that is investing in additional bottle-to-bottle recycling capacity is Evergreen, based in Clyde, Ohio. The company began recycling to have recycled content for the strapping its parent company produced. Now, roughly 95 percent of its rPET pellet production is sold for use in food-grade packaging, Evergreen General Manager Greg Johnson says.
Evergreen completed the acquisition of UltrePET and Novapet from wTe Corp., Bedford, Massachusetts, in November 2021. The move helped to increase its annual rPET capacity to more than 147 million pounds from 40 million pounds just one year ago. Additionally, Evergreen is adding a 54,000-square-foot building that will house four high-volume, food-grade rPET manufacturing lines at its Clyde site, taking its overall rPET pellet production to 217 million pounds.
“We’ve gone to the market and said, ‘Here’s our capacity. Once we sell it, we’re done,’” Omar Abuaita, president and CEO of Evergreen’s parent company, Greenbridge, says. “So, we are signing up multiyear contracts with a lot of the major CPGs (consumer packaged goods), and, once we’re committing to them, we’re done with everybody else.”
Abuaita says two major factors were behind the company’s purchase of UltrePET and Novapet. “We’re constantly looking for opportunities to expand our reach to our existing customer base as well as new ones,” he says. “And another big play with the Nova acquisition was the security of supply. That was a pretty big factor in our decision-making.”
Purchasing Novapet allows Evergreen to tap into the supply of PET bottles generated in Nova Scotia and the other Atlantic provinces of Canada.
Funds of up to $500 are available on a competitive basis for AOR members.
Company’s president and CEO uses Sustainability Forum to announce official name change.
Jim Fish, the president and CEO of Houston-based Waste Management Inc., says the company is officially shortening its name to just WM, commenting that the firm’s decades-long approach to sustainability has made it “much more than a waste management company.”
In a 10-minute video presentation prepared for the company’s February Sustainability Forum, Fish says, “Going forward, Waste Management will be known as WM.” Fish points to “the sustainable solutions we offer” and “the future we’re committed to” as reasons for the change.
Much of the video entails Fish describing “massive investments” WM has made to modify the garbage-to-landfill business model on which waste firms had traditionally relied.
“We expect to invest $200 million in recycling infrastructure in 2022,” he says. In 2021, Fish explains, WM recycled more than 15 million tons of materials at its materials recovery facilities (MRFs) and other plants.
“We’ve invested over $700 million since 2018 in new and improved MRFs,” he says. Fish referred to recently built or upgraded MRFs in Chicago, Salt Lake City, North Carolina and Southern California, saying major MRF renovations are underway or coming soon to Houston, Cleveland, Washington and Maryland.
A collection of nearly 30 such projects, Fish says, has contributed to a situation where “we’ve increased plastics capture by 25 percent, just since 2019."
Fish filmed part of the video at a 660-acre landfill site near Dallas he says helps host the company’s “renewable energy revolution.”
“Massive investments,” he says, have resulted in landfill gas being collected, cleaned and distributed as “renewable natural gas (RNG) to power WM trucks and nearby communities.”
Referring to the Dallas landfill gas-to-RNG facility, Fish says, “Today we have 16 [such] plants across North America,” with some being partnerships, he added. WM is “building nine new ones by 2024” and has more “in the pipeline."
WM also is involved in more than 100 landfill gas-to-electricity projects, Fish says. RNG “powers more than 50 percent of our natural gas fleet and, by the way, that goal was for 2025."
He adds that WM has nearly 180 compressed natural gas (CNG) or RNG fueling stations, with 25 being open to the public. The “circular process,” says Fish in the video, is saving 146,000 gallons of diesel fuel “every single day” and yields enough energy to help power 490,000 homes. “I think it’s safe to say, WM is leading the renewable energy revolution,” he says.
The company says it achieved record revenue, earnings per share and cash flow in 2021.
Kadant Inc., an equipment manufacturer in Westford, Massachusetts, has released its financial results for the fourth quarter of 2021 and the fiscal year that ended Jan. 1.
The company’s business units and brands include Germany-based baler producer Paal; Black-Clawson, which makes stock prep systems for recycled-content paper and board mills; and several others that make equipment for the papermaking and forest products sectors.
Revenue increased 30 percent to $218.5 million compared with $168.4 million in Q4 2020. Organic revenue increased 18 percent. The company’s gross margin was 42.4 percent compared with 44.1 percent in 2020.
Generally accepted accounting principles (GAAP) diluted earnings per share (EPS) increased 48 percent to $2.07 compared with $1.40 in 2020. Adjusted diluted EPS increased 50 percent to $2.31 compared with $1.54 in 2020. Net income was $24.2 million compared with $16.2 million in 2020. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased 39 percent to $44.8 million compared with $32.1 million in the prior-year quarter. Operating cash flow increased 51 percent to a record $61 million compared with$40.3 million in 2020.
“Solid execution by our businesses led to an exceptional finish to a record-setting year,” says Jeffrey L. Powell, president and chief executive officer of Kadant. “Improved operating leverage drove our adjusted EBITDA margin to 20.5 percent and generated record operating cash flow of $61 million in the fourth quarter.”
The company says bookings increased 17 percent to a record $230.8 million compared with $196.5 million in 2020. Organic bookings increased 6 percent, which excludes 11 percent from acquisitions.
For the fiscal year 2021, revenue increased 24 percent to $786.6 million compared with $635 million in 2020. Organic revenue increased 15 percent, which excludes 5 percent from acquisitions and 4 percent from the favorable effect of foreign currency translation. The gross margin was 42.9 percent compared with 43.7 percent in 2020.
GAAP diluted EPS increased 51 percent to $7.21 compared with $4.77 in 2020. Adjusted diluted EPS increased 57 percent to $7.83 compared with $5 in 2020.
The company says net income was $84 million compared with $55.2 million in 2020. Adjusted EBITDA increased 38 percent to $159.4 million and 20.3 percent of revenue compared with $115.9 million and 18.3 percent of revenue in 2020. Operating cash flow increased 75 percent to $162.4 million compared with $92.9 million in 2020.
Bookings increased 38 percent to $893.2 million compared with $648.5 million in 2020. Organic bookings increased 28 percent, which excludes 6 percent from acquisitions and 4 percent from the favorable effect of foreign currency translation.
“For the full-year 2021, our diluted EPS and adjusted diluted EPS increased more than 50 percent to $7.21 and $7.83, respectively,” Powell says. “While supply chain issues, labor shortages and raw materials inflation remain a challenge, our strong focus on operational excellence and our decentralized business structure has proven valuable in offsetting these headwinds.”
The company says it expects to deliver strong financial performance in the coming year with full-year GAAP diluted EPS of $8.50 to $8.70 on revenue of $870 to $890 million in 2022.
Adjusted diluted EPS is expected to be $8.55 to $8.75 in 2022, excluding pretax amortization expense associated with an acquisition-related backlog of $700,000.
The 2022 guidance includes a negative effect from foreign currency translation, which is lowering revenue by $12 million and adjusted diluted EPS by 15 cents. For the first quarter of 2022, the company expects revenue of $212 to $217 million.
The three companies are working on a pilot program expected to divert 72 tons of plastic scrap from a county landfill in Boise, Idaho.
Reynolds Consumer Products, Lake Forrest, Illinois, and Dow, Midland, Michigan, have announced the Hefty Energy Bag program is collaborating with ByFusion, a plastics recycling manufacturer in Gardena, California. The three will work on a pilot project to create new uses for hard-to-recycle plastic scrap collected by local participants in Ada County, Idaho.
According to a joint news release, the ByFusion pilot project will convert plastic scrap into material that supports the community. The companies say the project leverages public-private partnerships and will divert up to 72 tons of hard-to-recycle plastics from the Ada County Hidden Hollow Landfill.
The ByFusion pilot project will convert the hard-to-recycle plastics collected by the Hefty Energy Bag program into ByBlocks, a construction-grade block made from collected, previously unrecycled plastics.
ByFusion's proprietary, no-emissions process creates ByBlocks made entirely from plastic scrap, without the addition of chemicals, additives or fillers. The company says its fusion process does not require sorting, cleaning or preprocessing as in traditional mechanical recycling. The ByBlocks can build various structures, including benches, bus shelters and more.
"We are confident that the area's implementation of ByBlocks will show other cities how they can repurpose their plastic scrap and transform it into an alternative building material that helps support their infrastructure needs, instead of being an ongoing burden," says Heidi Kujawa, CEO of ByFusion.
The first ByBlock application planned for the Greater Boise area is a large bench in Manitou Park, which was installed Feb. 15. Additional projects are planned over the next few months, including a park bench in Garden City and other structures in the area.
The companies also are taking the opportunity to determine the environmental impact of the ByFusion pilot project from beginning to end through a life cycle assessment. Having a better understanding of the full environmental impact of material used in ByBlocks in comparison with other usages of the collected materials will inform how the Hefty Energy Bag program and ByFusion may work together in the future.
"We are always exploring new end-usage opportunities for the hard-to-recycle plastic collected by the Hefty Energy Bag program, including the potential to expand beyond plastic as an energy source, which is why participating in the ByFusion pilot project is such an exciting moment for the Hefty Energy Bag program," says Lisa Burns, senior vice president of sustainability for Reynolds consumer products. "Seeing the transformation of these challenging plastics into this impressive park bench is a testament to what is possible and what the future could hold for the Hefty Energy Bag program."
The ByFusion pilot project was developed in collaboration with Dow's Business Impact Fund, which is a competitive grant program.