National Harbor, Md. — As strange as this sounds, the pandemic was good for plastics recyclers. But reclaimers now face challenging conditions amid lower pricing and higher costs.
Gobi Saha has seen the highs and the lows of the recycled resin market over and over again in his 31 years of owning Kal-Polymers Inc., which has reprocessing operations in Flowery Branch, Ga., near Atlanta, and Mississauga, Ontario, near Toronto.
"Pandemic time, the business was booming. We couldn't keep up with supply [demands]. All of our lines were sold out," he said. Fueled by the increased use of packaged goods during the pandemic, plastics flowed through Kal-Polymer processing lines at such a rate that the company was turning down business.
But that was then, and this is now.
"We are feeling the pinch," Saha said, as lower resin prices are putting the squeeze on profitability to such an extent that Kal-Polymers is looking at several ways to cut costs and improve productivity, including increasing the use of automation and negotiating with customers. Staff also has been cut.
"For recycling, it becomes very difficult because we have a fixed cost for processing and handling," he said, despite lower selling prices for end products. "We are working hard with sources to give us adjusted price so we can still process material and cut down our losses."
Labor continues to vex the company as well. When businesses was booming, Kal-Polymers had difficulty attracting enough labor to keep up with demand. That also caused the company to increase wages to attract employees.
"It's the first time happening in my lifetime, the shortage of labor," Saha said while standing at his booth at the recent Plastics Recycling Conference in National Harbor. "That drove the labor cost so high. That hasn't come down with the slowdown."
The recycler believes the recycling market will continue to face problems until inflation is under control. He predicted that could happen later this year.