BEIJING, Aug. 22, 2018 (Bloomberg) -China’s Yunnan Xintongji Plastic Engineering Co. not long ago employed 180 people making construction pipes fashioned from the 3 million pounds of plastic trash it imported from the U.S. each year. Then in January, the Chinese government pulled the plug on lots of American junk and demanded exporters send only the cleanest plastic and paper waste, free of contaminants such as grease and broken glass. Without access to raw materials, XTJ had to lay off all but 30 of its workers and began running at 20 percent capacity.
So XTJ and its U.S. exporter, Atlanta businessman Song Lin, got creative. They’re readying their own recycling plant south of Macon, Ga., to collect scrap plastic, clean it, and “pelletize” it before shipping it to China. Two other Chinese companies recently agreed to buy or build U.S. factories to acquire waste materials, some of which will be bound for the mainland, says Bill Moore, an Atlanta-based paper recycling consultant. And, based on his talks with industry contacts, a dozen more deals could be forthcoming, he says.
“These companies in China are absolutely starving for this material,” says another recycling consultant, Bob Gedert. “Many have said they will close up shop if they don’t get the materials.”
Modern economies depend on huge amounts of paper for everything from cardboard shipping boxes to packaging for consumer goods. But after decades of industrial expansion, China’s forest resources are largely tapped out, says Hannah Zhao, an economist covering recovered paper for RISI Inc., a forest products industry research firm. That’s made the country heavily dependent on imports of wastepaper, or “fiber” as it’s referred to in the business, to run its paper mills.
RISI is not responsible for the reliability or availability of content on external websites.