Downturn hits waste industry

Recyclers are struggling to find a profitable use for our used bottles and containers as the global downturn hits demand for recycled materials.

Recyclers of New Zealand head Bruce Gledhill said countries in Southeast Asia - the main buyers of New Zealand's used plastic and aluminium cans - were buying less.

As a result some companies were having to stockpile recycling they had collected from the kerb. "There's a lot of stockpiling. There's a lot of loss-taking going on," he said.

Tony Nowell, governing board chairman of the cross-industry recycling agreement, the Packaging Accord, said community-funded recycling operations were coping better than their commercial rivals because they did not need to make a profit to survive.

Some for-profit companies could end up refusing to collect recycling because they had nowhere to put it.

"The recycle markets around the world have collapsed in this current downturn. Those companies that have been significantly using the markets to support their operations are in quite deep trouble at the moment."

Commodity prices had fallen across the board, but Mr Gledhill said demand for recycled material had been hit harder than for new material because it was seen as a second-best option. "When oil was going up, the secondary commodity market was going up like a rocket," he said. "Then it just hit the wall."

Mr Gledhill said almost all of the plastic containers and most of the aluminium cans New Zealanders put out for recycling were packaged and sent overseas, un-recycled, to be turned into new products.

About 60 per cent of steel cans and 30 per cent of glass was sent overseas.

Mr Nowell said the New Zealand recycling industry was not big enough to handle some of the more specialised plastic recycling.

About half the plastic packaging used in New Zealand was imported. When recycled material was used, it might make up only 10 per cent of the plastic in a product, he said.

Local Government NZ spokeswoman Irene Clarke said a number of councils had been approached by recycling contractors who were having problems. But she said arrangements differed from council to council and many operators were not affected.

Finding new ways reuse the packaging will be part of cross-industry discussions to replace the Packaging Accord 2004, which expires in June.

Representatives from councils, community groups, businesses and recycling companies met on Thursday to begin negotiating a replacement.

Since the accord New Zealanders have increased packaging recycling by 17 per cent, compared with a 5.4 per cent rise in consumption.

When glass bottles proved uneconomic to move from the South Island to glass smelters in Auckland, companies which used glass packaging agreed to a levy to allow glass to be broken up and used in roading.

The voluntary accord was signed between packaging industry body the Packaging Council, the Ministry for the Environment, Local Government New Zealand and Recycling Operators of New Zealand.

WHAT WE SEND AWAY

* 95 per cent of plastic
* most aluminium cans
* 60 per cent of steel cans
* 30 per cent of our glass

Source: Recyclers of New Zealand