Polyethylene terephthalate (PET) recycling company Petco describes 2017 as one of the most challenging years for the company, with a 13% year-on-year consumption decline in the local PET market.
However, despite the fall in the total PET market, PET recycling tonnages grew by 3%.
Petco CEO Cheri Scholtz noted during Petco’s annual general meeting, on Thursday, that market conditions put severe pressure on the PET industry, owing to the recession in the economy during the second quarter of 2017.
“PET consumption was flat in 2017 because the economy was performing below its potential; political instability continued; the exchange rate fluctuated; the downgrade of the country’s sovereign debt ratings reduced economic growth forecasts for the year; and strike action at some of the major players in the industry also contributed to the local supply disruption,” Scholtz explained.
Despite the tough conditions, Petco managed to collect over 93 000 t of PET, compared with 90 000 t in 2016 - equating to 2.15-billion bottles being recycled (5.9-million every day) - out of a market consumption that reached 211 000 t for the year.
“That is a record 65% of post-consumer bottles being recycled.”
On the upside, in November 2017, for the first time, Petco broke its record of total tonnage collected in a month, exceeding 8 900 t.
“Thankfully, we have seen a return to normal market dynamics this year,” Scholtz emphasised.
Since 2004, Petco has collected more than seven-billion recyclable bottles, which has saved 3.7-million cubic meters of landfill space and 913 000 t of carbon emissions.
Scholtz states that 96% of bottles collected were reprocessed into new end-use products in 2017, while 4% were exported. Of the 96%, 38% of all bottles collected went into food-grade packaging and 58% went into bottle-to-fibre products, including geotextiles.
In July 2017, to help solve the challenge of marine waste, Petco helped to organise the first African Marine Network conference – a significant step in solving the challenges of marine pollution. Petco also co-sponsors the communications hub for the network.
Petco chairperson Dr Casper Durandt commented that the recycling market in 2017 faced mixed fortunes.
“In the wake of China’s ban on a number of waste streams, countries across the globe scrambled to deal with their waste as the traditional waste offtaker ceased to take any more waste.
The effect on the South African market is yet to be fully realised. Our unique model where we recycle almost all the bottles we collect locally has shielded us from the devastating effect this ban has had in many markets around the world,” he elaborated.
Durandt added that what is bearing fruit is that Petco’s focus since its establishment has been on supporting and growing local beneficiation of post-consumer PET, which means that the country’s PET recycling rate has been remarkably resilient.
“While the world is still recovering from an economic recession, PET recycling figures in South Africa continued to grow despite tough trading conditions in 2017.”
In 2018, based on figures received from Petco’s shareholders and partners in the PET value chain, Petco anticipates the total market consumption to remain between 220 000 t and 230 000 t.
Market growth will be close to 0% (compared with 15% PET consumption market growth in 2016) from what it would have been, had no resin shortfall occurred in 2017.
Nonetheless, Durandt said Petco is well positioned to facilitate the collection and recycling of over 100 000 t of post-consumer PET bottles in 2018.
Meanwhile, Petco welcomes the legislation that provides for industry waste management plans. A call for industry waste management plans was announced by the Department of Environmental Affairs in December 2016.
“We are required to submit our plan by September 2018. We believe that statutory extended producer responsibility will enable us to specify enforcement mechanisms, such as penalty procedures and provisions for noncompliance, to create a level playing field among PET users.”
“We require converters to work with brand owners, retailers, municipalities and other stakeholders, as appropriate, to develop and implement plans to advance the circular economy approach to waste management,” said Durandt.
The plan will also discuss creating better products, reducing reliance on the extraction of virgin materials and supporting efforts to fight climate change.
“The plan will contain both challenges and opportunities with respect to the recycling industry in South Africa. Some of the challenges include measures regarding financing of industry plans through the National Treasury and the collection of tax,” he pointed out.
The opportunities, however, are more exciting. If implemented properly, industry waste management plans have the potential to significantly improve the recycling economy and result in well-run, cost-effective programmes, increased recycling and environmental benefits, coupled with skills development and job creation, noted Durandt.
Petco will continue to consult with stakeholders as it develops its plan for the PET industry.
Further, the outlook for 2018 is positive. Durandt believes the Chinese ban will stimulate the creation of local solutions.