Avangard to supply Dow with PCR pellets

Dow is aiming to have a significant supply of post-consumer resin products. | StanislauV/Shutterstock

Dow signed a deal to buy recycled polyethylene pellets from Avangard Innovative, allowing the petrochemical giant to provide recycled-content plastic to North American customers for the first time.

Dow, a global plastic and chemical company, announced today it will combine its virgin PE with Avangard Innovative's post-consumer resin (PCR), as part of the exclusive agreement. Potential end markets for the resulting recycled-content LLDPE and LDPE pellets include garbage bags, shrink wrap and protective packaging. The PCR-based pellets are expected to be available to Dow's customers later this year.

Avangard Innovative (AI) currently runs a film recycling facility in Houston capable of processing 48 million pounds per year of LDPE film. AI has announced significant growth recently. In September, the company said it would open three additional film recycling sites in Texas, Nevada and Mexico in 2020. Each plant is estimated to cost $30 million, and each would have a capacity of about 100 million pounds per year. The first to come on-line will be located near Houston.

"The combination of our collaboration with Dow and our planned expansion makes this a very exciting time for Avangard Innovative," Rick Perez, Avangard Innovative CEO, stated in a press release. "We’ve built film collection and sortation experience over 35 years, uniquely positioning us to deliver PCR materials that will allow Dow to develop circular products for its customers."

During a call with reporters, officials from Dow and AI emphasized how the collaboration builds on their different areas of expertise.

Jon Stephens of AI said the partnership is exciting because it combines AI's expertise on handling bales and producing consistent PCR with Dow's expertise in performance resins. He is president of Natural PCR, the operating entity for the manufacturing side of AI.

In its announcement, Dow emphasized the same point.

"This collaboration combines AI's waste collection and sortation technology with Dow's materials science expertise, application expertise and operational scale to bring a consistent processing, reliable supply of PCR-based LLDPE and LDPE to our customers throughout North America," Victor Zapata, Dow's recycling commercial director for Latin America and North America, stated in a press release.

During the call with reporters, Julie Zaniewski, director of sustainability for Dow, said Dow has done a lot of work with Avangard over the last several months to understand the PCR stream and its quality. Technical development will be needed to determine the type of end applications the recycled plastic can go into and the percentage of PCR that can be used in them, she said. Dow is not targeting food-contact applications for the PCR products.

Zaniewski said Dow is aiming to have a significant supply of PCR products, but she and Stephens declined to reveal how many pounds of PCR the Dow-AI agreement covers. Stephens also declined to discuss the relationship of the Dow agreement to AI's capacity expansion plans.

Zaniewski said they expect the deal to increase demand for recycled plastics. Many commitments to use PCR have been announced, but "we haven't seen significant on-the-ground demand yet," she said, "and this is a way for us to help stimulate that industry wide."

(Stephens and Zaniewski are on the board of the Association of Plastic Recyclers, which owns Resource Recycling, Inc., parent company for Plastics Recycling Update.)