Poor Industry Performance Milks Recycling Plastic Firm Dry

Closed Loop Recycling, Britain’s biggest recycler of plastic milk bottles is under pressure and facing possible administration due to the fall in global oil prices and a supermarket price war.

The Dagenham-based business, which produces more than 80% of the UK’s recycled plastic milk bottles, has always been competitively priced, matching prices close to virgin plastic which has helped them to attract and retain custom.

However, due to a 40% price fall for recycled material over the last nine months due to the slump in oil prices, Closed Loop is the third recycling firm to succumb to pressure this year, as the price of reprocessed plastic in the open market has become between £300 and £500 per tonne more expensive than virgin plastic.

Chief executive of Closed Loop, Chris Dow, said recently: “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. We are the collateral damage from the drop in the oil price”

Closed Loop is part of the ‘circular economy’ (companies which reuse resources, rather than creating waste) so if they were to close, it would be a major blow to the government-backed scheme.

Nearly 30% of plastic used in British milk bottles now comes from recycled plastic, largely thanks to the Dairy Roadmap scheme.

Resource minister Dan Rogerson has held repeated emergency meetings with retailers, dairies and packaging firms to try and muster industry backing for Closed Loop, which has yet to make a profit. Closed Loop says it would cost just 0.1p per two-pint plastic milk bottle to secure the future of the company.

However, Dow admits he has struggled to gain industry support due to the keen pricing war taking place between the big supermarkets. Every single penny counts which is why support so far has been lacking.

Waste Resources Action Programme’s Marcus Goversays that the industry needs to agree on a new way to price recycled plastic. “If we can agree something then maybe we can save this company.”

“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.”

Here at TH Plastics, we are constantly looking for ways to help you work more efficiently and reduce wastage. If you would like to talk to TH Plastics about recycled plastics, please get in touch with us on 01457 855514.