Plastics recyclers in the UK are struggling to stay afloat as cheap oil prices allow virgin plastics manufacturers to produce new product at a lower cost.
Whilst prices were high, recyclers were able to undercut manufacturers of virgin polymers and market their product effectively based on their green credentials. Unfortunately, in business, often the most important factor in sourcing a raw material is cost. Now that virgin polymers are cheaper than reprocessed polymers, customers are switching.
More than 7,000 people are employed in the plastics recycling industry.
Closed Loop Recycling, a plant in Dagenham, closed its doors in June last year, leading to a loss of 120 full-time jobs.
James Samworth, a former director, told Sky News: “Oil had a big impact.
“Oil makes up about 30% of the cost of ethylene, which is the raw material for a lot of plastic.
“When the oil price went from $110 to $50 that basically reduced the gross margins on this plant by about 40% in a matter of weeks, so it was an enormous shock to absorb.”
Gary Claypole, a manager at MBA Polymers, said the low oil price was one of a number of factors affecting the industry.
“We’re not feeling the direct effect of oil prices right now, but the pressure is building,” he said.
Mr Claypole added that the Government was “lagging behind” other countries in supporting the industry.
A spokesperson for the Department for Environment, Food and Rural Affairs told Sky News the Government was “aware of the challenges faced by the plastic reprocessing industry when there are significant falls in the oil price”.
“While government cannot control global oil prices we continue to work with industry and WRAP (an influential recycling organisation) to build on progress in this area, developing and securing new markets for this valuable resource.”
Source : http://www.lbc.co.uk/oil-price-slump-threatens-uk-recycling-jobs-124039