A buyer is being sought for plastic film reprocessing company PlasRecycle Ltd after it entered administration.
Hunter Kelly and Charles King from Ernst & Young’s (EY) Restructuring team have been appointed as joint administrators to the company, which operates a specialised facility in Woolwich, South East London.
PlasRecycle was founded in 2010 and its plastic recycling plant, which it said was the UK’s first facility for processing post-consumer polythene bags and packaging films, became operational in October 2013 after three years of developing a ‘high-tech’ proprietary process.
The plant, which received £10.7 million of finance from investors such as the Foresight Environmental Fund, London Waste and Recycling Board (LWARB) and the Waste & Resources Action Programme (WRAP), has a processing capacity of 20,000 tonnes a year, the equivalent to 2.5 billion high-density polyethylene (HDPE) shopping bags sourced from waste companies and retailers. The material is then used to create a ‘clean’ plastic granulate for manufacturing new black sacks and carrier bags. Through the process’s development, PlasRecycle stated that the aim was to turn ‘what has historically been regarded as a waste material into a useful product’.
Administrators keen on early sale
The company had been seeking additional investment of £6 million to improve efficiencies and increase capacity, but due to ongoing losses at the lower levels of production and the amount of existing debt that had been used to fund the start-up losses, EY says that it was no longer possible for the company to obtain this investment and that it ‘effectively ran out of cash’.
Because of its entry into administration, the company has had to make 20 of its 36 staff redundant, with the remaining staff continuing to process material already in progress at the plant into the finished product, but new raw material will not be accepted due to the levels of losses in processing.
The administrators are seeking expressions of interest in the company and its assets and say they wish to conclude an early sale to ensure that operations can continue.
Hunter Kelly, Joint Administrator, said: “The cost and time to get this plant operational was significantly more than originally envisaged, leading to greater levels of debt. However, with its unique process, PlasRecycle has all the fundamentals to be a significantly profitable business. We have had good levels of interest and would encourage interested parties to get in touch as soon as possible.”
Get our weekly digest
resource.co article ai
How will the government and DMOs address the challenges of including glass in DRS while ensuring a level playing field across the UK?
There's no easy solution to include glass in the DRS while maintaining a level playing field. Potential approaches include a phased introduction of glass, potentially with higher deposits to reflect its logistical challenges. The government and DMOs could incentivise innovation in glass packaging design and subsidise dedicated return points for glass-handling. Exemptions for smaller businesses unable to handle glass might also be necessary. Any successful solution will likely blend several approaches. It must address the differing priorities of devolved administrations, balance environmental benefits with logistical and cost implications, and be supported by robust consumer education campaigns emphasizing the importance of glass recycling.