PreZero US to Shut Down its Failing Plastics Recycling Facility

PreZero US, which has its headquarters in Jurupa Valley, California, and is a subsidiary of the Germany-based PreZero, will refocus on expanding its recycling capabilities in California rather than closing its plastics recycling facility in South Carolina. Mixed rigid plastics like LDPE/LLDPE, HDPE, and PE films from homes and businesses were being recycled in that facility. Additionally, PreZero US stated that it would keep the equipment on-site with the intention of returning to the Southeast.

According to the company, PreZero US began taking steps to close its Westminster, South Carolina facility on September 21. The facility is scheduled to cease all operations completely in November. A spokesperson for PreZero noted that the site was performing poorly, and the company asserts that closure is the most effective strategy for achieving its vision.

Max Bracey, PreZero US's marketing and communications manager told Plastics Recycling Update, "The problem was it was underperforming."

PreZero announced a project less than a year ago to invest millions of dollars to increase the plant's film recycling capacity, which was already recycling mixed rigid. PreZero US's then-former CEO, Hernan de la Vega, stated at the time that the company was "happy to provide stable, long-term employment opportunities for the surrounding community." The South Carolina governor's office also touted the $11.5 million investment and created 32 jobs at the time.

On September 1, Clemens Stockreiter succeeded de la Vega as CEO of PreZero US, taking over for the Schwarz Group, PreZero's parent company.

"After much deliberation, it was determined that the closure is the best way forward for PreZero US to remain sustainable in the pursuit of its vision for a cleaner tomorrow," read the announcement regarding the closure of Westminster. Bracey stated in the interview that he was unable to discuss whether the issues were caused by scrap supply, recycled resin sales contracts, or any other factor.

The Westminster facility's total recycling capacity was expected to increase to approximately 40,000 tons per year because of the completed installation of the film recycling line. However, since July 2021, when PreZero took full control of the previously operated plant in partnership with ACI Plastics, Bracey stated that the plant had recycled only about 14,000 tons of post-consumer plastic.

At present, the market of recycled plastics is not performing well in the US because of various factors like plant closures, higher energy costs, etc. However, this scenario might change as more companies are coming up with announcements like plant acquisitions, extensions, and the setting up of new recycling facilities.