Britain’s biggest recycler of plastic milk bottles is facing possible collapse after being squeezed between a slump in global oil prices and a supermarket price war.
Closed Loop Recycling, based in Dagenham, could be forced to call in administrators within days because clients have cut back on buying recycled plastic.
The company, which produces more than 80% of recycled plastic used in the UK’s milk bottles, matches its prices closely to the cost of virgin plastic in order to attract and retain customers. But the prices that can be achieved for recycled material has fallen nearly 40% in the past nine months as the oil price has dropped.
The slump in global oil prices has already caused the collapse of at least two other recycling firms in the past four months as the price of reprocessed plastic in the open market has become between £300 and £500 per tonne more expensive than virgin plastic.
Chris Dow, chief executive of Closed Loop, said the company was in urgent need of financial support: “Our customers want to buy recycled plastic but they don’t want to pay more [than virgin plastic]. Without the support of the industry or the government it is inevitable we will go into administration.”
Prices do in fact work. They measure the resources (of course, they only measure the resources that are being measured by prices) being used to produce something. Thus, if recycled plastic costs £300 – £500 per tonne more than virgin plastic then therefore recycled must be using more resources than virgin. £300 – £500 a tonne more in fact.
Recycling’s a great idea when you make a profit at it. And it makes us all poorer when it makes a loss. So, when it makes a loss don’t do it.