WM Closes United States' Largest Plastic Film Recycling Plant

On October 24, it was learned from Zhuanshu Shijie that WM is closing its plastic film recycling plant near Houston. The company describes this move as a temporary measure, but also indicates that the future of the plant is uncertain.

The largest solid waste management and recycling company in the United States stated in an email on October 22 that its Natura PCR recycling facility in Waller, Texas, is affected by insufficient product demand— the facility produces post-consumer recycled pellets made from low-density polyethylene (LDPE) and linear low-density polyethylene (LLDPE).

"The plant has been temporarily closed due to adverse market conditions and a decline in customer demand for Natura PCR plant processed LDPE and LLDPE post-consumer recycled pellets," the company stated.

Despite the company describing the closure as temporary, the company previously known by the market name "Waste Management" did not commit in its statement that the plant would eventually restart and also set conditions for any potential restart.

"If the market environment and demand for recycled pellets improve, WM may consider the possibility of restarting the plant," the company stated.

WM's decision to close the recycling plant comes after the company invested millions of dollars to bet on the future of film recycling.

WM, headquartered in Houston, eagerly acquired the film recycling business of the former Avangard Innovative located in the Houston area in 2022. With its extensive waste and recyclables collection system, including plastics, WM has a sufficient supply of recyclable films.

However, as indicated in the statement on October 22, the relevant market for the company has not developed in the three years since the acquisition of the recycling business.

"WM holds a controlling interest in Natura PCR, allowing us to rapidly develop and scale in the emerging post-consumer recycling sector," WM CEO Jim Fish said when initially investing in the project. "WM's core material supply capabilities, combined with the first-mover advantage and technical expertise brought by Avangard's U.S. operations, will help Natura PCR quickly provide circular solutions for WM's customers, which is also an important part of our strategy for sustained growth in the recycling business."

However, the recent situation for plastic recycling companies is not optimistic: a large amount of cheaper virgin resins flood the supply market, while lower-priced imported recycled resins also pose challenges to the economic model of local recycling enterprises.

WM was very optimistic about the development of the film recycling market, to the extent that after the acquisition, it expanded its operations in Texas and announced plans to build another recycling facility in the Midwest. However, since WM has not provided more information, the future of these plans remains unclear.

WM stated during the acquisition: "As consumer packaged goods companies commit to using recycled materials and face pressure from consumers and regulatory agencies to increase the proportion of post-consumer recycled content in their packaging materials, demand for post-consumer recycled materials is expected to grow."

However, this is not the case. On the contrary, brands have abandoned their previously stated goals of using recycled materials and achieving sustainability—goals that sounded good but proved difficult to realize, at least in the short term. Public opinion in the mid to late 2010s pushed brands to announce these goals, but as deadlines like 2025 (a common implementation deadline) approach, these brands often quietly abandon their goals.

WM stated during the acquisition: "Today, there is tremendous untapped potential in film reuse - a field that impacts many of our commercial customers. We can help our customers achieve a closed-loop cycle, allowing more products made from recycled materials to reach store shelves."

According to WM, the Natura recycling plant has now been closed, and its future is uncertain.

Although the Houston-based waste management company issued a statement regarding the decision, it did not immediately respond to follow-up requests for specific questions and did not arrange for company employees to be interviewed about the decision.

WM's move into the film recycling sector is somewhat similar to the efforts of Republic Services, the second-largest solid waste management company in the United States. The difference is that Republic Services is heavily investing in rigid container recycling rather than film recycling.

Republic Services used to only collect plastic and package it for other companies to ultimately process into plastic flakes and pellets; now the company has partnered with Ravago in the United States to plan the establishment of a network of sorting and processing facilities across the country.

WM's difficulties in film recycling should not come as a surprise, as film recycling is particularly prominent in the plastic recycling field—facing more challenges than rigid plastic recycling, where the recycling rates for PET bottles and HDPE bottles are much higher than for film.

In the United States, the collection systems and technologies needed for effective film recycling have largely not been developed, with some organizations estimating the film recycling rate to be about 2%. In contrast, the recycling rates for PET bottles and HDPE bottles are approximately 15 times higher.