WM will acquire a majority stake in the plastic film recycling business Natura PCR from Avangard

Dive Summary:

  • WM has agreed to buy a controlling stake in the US business of plastics recycler Avangard Innovative, according to an announcement on Tuesday. The transaction is expected to close in “late 2022”, pending regulatory approval, and the business will operate as an independent entity called Natura PCR.
  • Natura PCR will focus primarily on processing commercial plastic film and shrink wrap, with the goal of producing 400 million pounds per year of post-consumer resin “in five years.” This will begin at an existing Avangard facility in Waller, Texas, with new processing planned capacity in the Midwest.
  • “WM’s controlling interest in Natura PCR positions us to grow and scale rapidly in the emerging PCR space,” WM CEO Jim Fish said in a statement. “WM’s key material supply capabilities, with the head start and knowledge provided by Avangard’s US business, will help Natura PCR quickly deliver circular options to WM customers as an important component of our continued growth strategy in recycling.”

Dive Insight:

This transaction marks the latest move by a major hauler and MRF operator to become more directly involved in the plastics recycling system beyond collection and sorting. In the release, WM said it “expects to receive investment returns comparable to its previously announced automation investments in single-stream recycling.”

North America’s largest waste and recycling company has long spoken about wanting to have a bigger stake in reducing plastic pollution, talking about a possible role in addressing ocean plastic at a 2019 event – is. But until recently, it was not entirely clear what this would require at scale beyond WM investing in its existing network of single-stream MRFs, setting targets to recycle higher volumes of plastics or making smaller moves, such as investing in uniforms or collecting strollers made from post-consumer recycled plastic.

Then earlier this year, WM announced a joint venture with Tailwater Capital to expand its stake in Continuus Materials. That company uses blended plastic and blended paper to create a decking material called Everboard. After a pilot location in Iowa, Continuus is now working to scale up production with new facility infrastructure in other states.

WM’s latest venture with Avangard is expected to focus on materials that include “clear plastic films and wraps used in the market, such as plastic wrap for pallets, furniture film, grocery bags and potentially shrink wrap around food and beverage containers “. Recycling rates for these categories remain quite low, especially for materials such as grocery bags and packaging films that rely on retail systems.

WM processed 516,717 tons of plastic during 2021, but this data is not broken down by type of material. A 2020 report, produced after engagement with shareholder advocacy group As You Sow, said at the time “the only plastic WM exports is high-quality commercial film, separated from the source to end markets with a reputation for quality high”.

Natura PCR, an existing entity within Avangard, describes itself as the largest producer of post-consumer LDPE film in America. Dow is among the main customers for Avangard’s PCR material, and the announcement noted that the chemical company had also been working closely with WM on plastics issues. While the Natura PCR process is described as “mechanical recycling of flexible film and plastic,” the Avangard facility in Waller also has a chemical recycling component. According to Plastics Recycling Update, the company previously intended to “co-exist” a chemical recycling system in that country through another joint venture with Honeywell.

“This transaction helps the business quickly scale operations, maximize raw material resources and meet the continued growth in demand for environmental additives, such as recycled plastic resin,” Avangard CEO Rick Perez said in a statement.

This news is among the latest examples of US MRF operators engaging more directly in plastics secondary processing. Earlier this year, Republic Services announced plans to begin building its own “polymer centers” to process PET. The first facility is expected to open in Las Vegas next year.

Leave a Comment