In a time when we can all use some good news, PETCO’s PET bottle-to-bottle recycling partner, Extrupet, reported purchasing a whopping 3,000 tonnes of post-consumer PET bottles in May and June this year.
This is significant because cold beverage consumption usually drops during the winter months and, according to Extrupet, a good figure under normal circumstances would be 2,500 tonnes at this time of year. It is particularly important in light of the economic impact of Covid-19 and the resulting national lockdown.
As the producer responsibility organisation for the sector, PETCO believes these volumes are a clear reflection of the PET industry’s commitment to:
- Supporting the government’s objectives and proposed sector targets (as per the recently gazetted Section 18 notices) for eliminating waste to landfill.
- Keeping the recycling value chain moving through PETCO’s members and demonstrating the resilience of the PETCO model. This is in spite of tough global economic conditions, which see recycled PET struggling to compete against low prices for virgin polymer.
Extrupet joint managing director Chandru Wadhwani said the arrival of Covid-19 on South African shores had initially caused a dramatic decline in the tonnages purchased, as collectors and smaller buy-back centres were forced to stop operating under Level 5 lockdown restrictions.
“But it has now increased significantly, most likely as a result of a growing dependency on PET versus other collectables like glass, which are very quiet at the moment,” said Wadhwani.
3,000 tonnes of post-consumer PET purchased
He said PETCO had helped greatly in achieving the recent purchase of 3,000 tonnes of post-consumer PET, as the recycling value chain re-opened for business.
“We opened our doors, took on some extra space and let the flood in. PETCO assisted with getting the message out to the collectors that we were once again open for business and were keen to make up for lost volumes during the Level 5 lockdown.”
As a registered essential services supplier to the food and beverage industry, Wadhwani said Extrupet felt a strong sense of responsibility to keep the PET value chain moving during the Covid-19 crisis.
“It really was a case of a duty for PETCO and us to resuscitate collections and ensure cash and value flowed down to the reclaimers during this unprecedented time.
“It certainly has motivated us to try and achieve more going forward to assist the pickers (informal reclaimers) in recovering lost income.”
Several successes point the way forward
In addition to PETCO’s 2019 collection result, of 62% of beverage bottles collected, it is also worth noting several successes, particularly those that will influence the way forward.
Despite the closure of Mpact Polymers, the tonnage of rPET sold in South Africa – over 21 564 tonnes – was very similar to 2018. This reflects improving output at our remaining rPET partners as well as the increasing acceptance of and demand for rPET. Since its introduction in 2012, demand for rPET has grown relatively slowly, with many seeing rPET as a cheaper alternative to virgin resin.
Understanding that virgin pricing has decreased significantly over the last few years, this expectation has made the economics of producing rPET even more difficult. Increasingly, we are now seeing brands committing to using rPET because of its ‘green’ credentials and contribution to the circular economy. The closure of Mpact Polymers at this point is, therefore, doubly disappointing and has essentially created a shortage of rPET.
Bottle-to-Bottle operation primed for expansion
In addition to Extrupet purchasing extra volumes earlier this year, they have also started the expansion of their Bottle-to-Bottle operation in September, which is intended for completion in 2020. This expansion will increase the current processing capacity from 20 000 to over 30 000 tonnes of rPET per annum. However, owing to the current global COVID-19 pandemic, the date of completion will be confirmed at a later stage.
Globally, we see rPET prices edging closer to virgin PET and even trading at a premium in places, particularly as virgin PET prices continue to contract on the back of falling oil prices. Although, as PETCO we continue to believe that growth in rPET production and consumption is ultimately key to ensuring the sustainability of both the PET and recycling industry, rPET is not the only end-use product we support.
In 2019, most of the bottles collected still went into the production of Polyester Staple Fibre, which is exported and used locally by the textile and clothing industry. We have also supported the establishment of two PET strapping plants, which provide an essential end-use for coloured PET bottles. Unfortunately, South Africa still imports much of the strapping used locally and we would encourage our members to support circular initiatives like local PET strapping producers.
The recyclers are constantly looking for new applications for recycled PET that either diversify their market or increase demand.