local solutions for a pet global recycling challenge

Local Solutions for a PET

Global Recycling Challenge

Jamie Camara

Vice Presidente Comercial PetStar

Avangard

69

7th China International Recycled Polyester Forum

Local solutions for a PET Local solutions for a PET global recycling challengeglobal recycling challenge

September, 2011

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Why PCR?Why PCR?

Why Create a PCR Plant in Mexico?Why Create a PCR Plant in Mexico?

Mexico is second largest PET market in the world

High pressure of Government and Environmental organizations

High resin and oil prices in the long run

Environmental friendly image

Reliable high-end customers

Early stage of market for recycled content in food applications

Largest bottlers in the world have made commitment to utilize PCR

Profitable opportunity

Bridge to Latin America for future expansions of this concept

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COLLECTION OF MATERIALSCOLLECTION OF MATERIALS

Virtual Circle of RecyclingVirtual Circle of Recycling

In the Recycling process there are two basic ingredients:

COLLECTIONRecuperate the recylable stream of materials from the waste handling infrastructure, clasify and prepare them in conditions to be recyled. In Mexico this process is Labor Intensive with a very high Social component.

RECYCLINGGive value with technology to the flow of Collected material streams so that they can be incorporated in the productive chains. This process is Capital and Technolgy Intensive.

These components are very different but indispensable to be able to Close the Virtual Circle of Recycling.

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There are groups of handpickers and strong unions.These groups are part of a large and vulnerable sector.They are an indispensible link to recuperate the recyclables.The solid residues are still comingled.Very low education and consumer awareness.Environmental liability generated by insensibility “Nothing Happens” and lack of good waste infrastructure.Nobody watches nor punishes the “litterers”.The MSW have low priority at the municipalities.There is no legal structure to promote certainty.High volatility of the international prices.Ther is no long term vision in the handling of solid waste.In most cases there is little involvement of the responsible sectors:

Authorities, Society, Industry

REALITY IN MEXICOREALITY IN MEXICO

REALITY IN MEXICOREALITY IN MEXICO

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REALITY EN MEXICOREALITY EN MEXICO

Shared ResponsabilityShared Responsability

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BACKGROUND OF AVANGARDBACKGROUND OF AVANGARD

Largest collector of post-consumer plastics materials in Latin America and one of the largest in the world (60k PET tons per year).

It has or had commercial relationships with about all the recycling PET industry in Mexico, USA and the Far East.

Extensive knowledge of the Recycled PET global market.

Due to its accomplishments, it has a very good image within the Plastics Industry and with the Bottling Industry.

8 plants, 40 trucks and approximately 400 employees.

Key management with 16 years of experience and recognition in the plastics recycling field in Mexico.

It has the Administrative, Operative and Tax related structure to purchase and process materials from the landfills.

AvangardAvangard Mexico ProfileMexico Profile

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1.1. PPREP EcatepecPPREP EcatepecPPREP Planta GDF AragPPREP Planta GDF AragóónnPPREP Planta GDF BordoPPREP Planta GDF Bordo

2.2. PPREP GuadalajaraPPREP Guadalajara3.3. PPREP San Luis PotosPPREP San Luis Potosíí4.4. PPREP QueretaroPPREP Queretaro5.5. PPREP AltamiraPPREP Altamira6.6. PPREP MPPREP Mééridarida7.7. PPREP VeracruzPPREP Veracruz8.8. PPREP AcapulcoPPREP Acapulco

MICHOACANCOLIMA

VERACRUZ

CAMPECHE

QUINTANA ROO

COAHUILA

BAJA CALIFORNIA

PUEBLA

HIDALGO

QUERETARO

CHIAPAS

JALISCO

NAYARIT

SONORA

TABASCO

AGUASCALIENTES

SINALOA

TLAXCALA

CHIHUAHUA

SAN LUIS POTOSI

GUERRERO

DURANGO

ZACATECAS

MORELOS

TAMAULIPAS

OAXACA

1

2

5

7

4

3

8

6YUCATAN

MEXICO

NUEVOLEON

GUANAJUATO

Facilities LocationFacilities Location

ECOCE TerritoriesECOCE TerritoriesAvanga rdAvanga rdOthersOthers

Ecatepec FacilityEcatepec Facility

13

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Aragon FacilityAragon Facility

14

Queretaro FacilityQueretaro Facility

15

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Altamira FacilityAltamira Facility

16

Collection InfrastructureCollection Infrastructure

17

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ALIANCE FOR THE CHILDREN INTEGRATIONIN CHIMALHUACAN

Promote a ChangePromote a Change

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Lower the children participation in the handpicking by supporting their formal roll in education.

Improve the labor and life of the handpickers across the country.

Promote a ChangePromote a Change

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PETSTAR PROJECTPETSTAR PROJECT

What we analizedWhat we analized

We evaluated the mechanical recycling technologies apporved by FDA.

Washing Technologies:Sorema (Italy)Amut (Italy)

FDA approved Technologies:Buhler (Switzerland) SSP Pellet (continuous)Ohl (Germany) SSP Pellet (batch)Erema (Austria) Amorphus Pellet (batch)Visy (Australian) Amorphous Pellet (batch)

We used representative Mexican material that could be developed at high volumes.

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What we looked forWhat we looked for

A recycled material with conditions as similar as virigin in:CostViscosity (IV)Pellet Shape ColorAcetaldehide (AA)Uniform QualityPellet Density

All that to simplify to the maximum extent the incorporation andprocessability of the recycled resin at the instalation of the bottle converters, minimizing the market and technical risks and maintening competitiveness against virgin resin.

High-end Clients

Control of Supply

Reliable Technology

These are the Key Ingredients for a successful venture

Key IngredientsKey Ingredients Client, Supply, TechnologyClient, Supply, Technology

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Largest bottle manufacturers for the CSD and bottled water markets.

Will include thermo-formers for any food grade applications.

And any other converter that will require a FDA resin or high quality clean flake.

Enough domestic market in Mexico to avoid freight cost penalties. “Mexican consumed bottles for Mexican bottles”.

HighHigh--end Clientsend Clients

FDA No Objection Letter for Recycled Plastics, June 2001

COFEPRIS Approval (Mexican authority)

COCA-COLA Approval

PEPSICO Approval

DANONE Approval

NESTLE Approval

FDA

letter of

no-objection

Approved TechnologyApproved Technology

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The success of PETSTAR relies on having control of a constant supply of high quality clear PET baled bottles at the right cost.

PETSTAR will require:Phase 1: 30,000 Total tons of clear PET baled bottlesPhase 2: 60,000 Total tons of clear PET baled bottles

How will PETSTAR achieve control of 60,000 tons of high quality clear PET baled bottles feedstock?

Avangard Mexico make up 60% of the total tons collected in the country and is Mexico’s largest recycler.

75% of the recycled stream recovered is clear PET, the remaining is green, blue and others.

An 20% over supply of feedstock is necessary to secure volume and meet the high quality specification required by PETSTAR.

SupplySupply

AMUT

An Italian company leader in the manufacturing of high end PET recycling lines.All equipments have a 12 month guaranty after startup.Plant capacity has a guaranty of 3,000 kg/hr +/- 10% with the Mexican material input.Contract will guaranty a flake spec required by Buhler, based on input of Mexican bale specContract will guaranty the expected consumptions to achieve projected cost.Exclusivity right for use of this technology in Mexico.

BUHLER

A Swiss company who is the largest manufacturer of PET virgin resin post-condensation plants in the world, with US$1.8 billion revenue.All equipments have a 12 month guaranty after startup.Plant capacity has a guaranty of 2,500 kg/hr minimum.Contract will guaranty a pellet spec required by the users, based on the input flake spec.Contract will guaranty the expected consumptions to achieve projected cost.Exclusivity right for use of this technology in Mexico.

Reliable Technological PartnersReliable Technological Partners

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Washing & GrindingWashing & Grinding

Storage of clean flakeStorage of clean flake

Feeding of BalesFeeding of Bales PrePre--washing of bottleswashing of bottles Segregations & grinding Segregations & grinding of bottlesof bottles

Washing of flakeWashing of flake Drying of flakeDrying of flake

Washing & Grinding ProcessWashing & Grinding Process

Pelletizing & PurificationPelletizing & Purification

Storage of food Storage of food grade pelletsgrade pellets

Feeding clean flakeFeeding clean flake Extrusion & PelletizationExtrusion & Pelletization Drying & CrystallizationDrying & Crystallization

Solid state purificationSolid state purification CoolingCooling

Pelletizing & Purification ProcessPelletizing & Purification Process

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PET WASHED FLAKE

1WASHING AND GRINDING

AMUT

2EXTRUSION AND SSP

BUHLERFOOD GRADE RESIN

POST-CONSUMER BOTTLES(SORTED BALE)AVANGARD

SPECS:*% PVC*% colored PET*Waste content

SPECS:*Black Specs*Color*IV*Acetaldehide*Pellet shape

SPEC:*ppm PVC*Color*Fines*Particle Size*ppm Polyolephins*ppm metal

Battery LimitsBattery Limits

Volume and InvestmentVolume and Investment

The project has 2 PhasesThe project has 2 Phases::

PHASE(ACUM.

INVESTMENT)

BALESINPUT

FLAKEOUTPUT

PCROUTPUT

1(USd$37MM)

29 k Ton 22 k Ton 22 k Ton

2(USd$60MM)

58 k Ton 44 k Ton 44 k Ton

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The final product is a post- consumer food gradepellet with the following specification:

Intrinsic Viscosity: 0.80 +/- 0.02 dl/gAcetaldehide Content: 1 ppmDust Content: 100 ppmCristalinity: 40 %Humidity 2000 ppmPellet Weight: 18 (+/- 10%) mg/pelletPellet Size: 3.0x2.3 (+/- 0.3) mmPellet Shape: Cylindrical

Final ProductFinal Product

Energy ConsumptionEnergy Consumption

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IsomIsoméétricotrico

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AuditoriumAuditorium


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CONCLUSIONSCONCLUSIONS

Lack of supportive policies by the Government.Informality of the suply.Cancelation of the Auto-Invoice to deduct the purhcases.Introdution of non-recyclable bottles in the market.

It applies to the bottle and it’s components.Chinese attack in the purchasing of bales:

They encurage informality.High volatility.They can take very low quality.Very cheap freights going back to China.They have supportive policies that make them very competitive.

RisksRisks

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Incorporation of biodegradable and oxo-degradable additives:

No validation by the APR which group 90% of the plastics recyclers in North America.

Could promote Littering.

Simple Solution for the legislators (desapear the solid waste problem by magic).

Plastics with this additives should have to be manualy removed from the recycling streams to avoid contamination.

Recycling plastics with this additives will drasticaly affect the quality.

RisksRisks

local solutions for a pet global recycling challenge

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