PET Shortage Spurs Facility Closure

BEDFORD, Mass. - wTe Corp., Bedford, Ma., has closed the doors of its Hayward, Calif., PET bottle recycling facility just 14 months after its opening in August 1995. The facility was a stand-alone project financed, owned and operated by Certified Polymer Processors Inc. (CPP), a Californian subsidiary of wTe.

The facility, with installed processing capacity of more than 40 million pounds per year, was developed and constructed at a cost of approximately $3.5 million. It de-baled, sorted, granulated and removed labels from baled post-consumer beverage and custom PET bottles, selling the flake to wTe's Albany, N.Y., PET recycling facility for further processing and/or re-marketing.

The project relied upon an 11-year, 30 million pound per year PET supply agreement with the Plastics Re-cycling Corporation of California (PRCC), a non-profit corporation.

"During the critical 1995 PET shortage, when CPP needed the PET to fulfill its contracts for finished products with its customers, PRCC failed to supply the PET in accordance with its agreement with CPP," said Leigh Alan Peritz, wTe's Plastic Division president. "After a seven-year effort to develop a PET bottle recycling facility in California, it is very disappointing to have to shut the plant down."

Just three months into the facility's operation, PRCC filed for arbitration action to terminate its supply agreement based on its assertion that the facility was not a "PET Bottle Recycling Facility," and that CPP did not have the right to sell the excess bales that it was unable to process due to the poor, non-specification quality of the PET provided by PRCC.

Although wTe's Albany facility will be unaffected by the CPP closure, the company is disappointed since it was de-pending upon the CPP facility and PRCC's PET supply to expand its PET market share. Now, wTe is planning to focus its attention on the expansion and improvement of its Albany facility.

"The contract dispute between PRCC and CPP is presently in arbitration. The outcome of the process and the independent actions of the banks, creditors, and the State of California under its financial guarantees will determine whether or not the facility ever re-opens," said David Spencer, wTe's president. "It is unfortunate that a project with so much potential for doing good for PRCC, CPP and the state of California now stands idle."