Setting a high target

Photos courtesy of Advanced Drainage Systems Inc.

Advanced Drainage Systems Inc. (ADS) has become one of North America’s largest plastics recyclers, but the company has ambitious goals to grow much bigger to procure more reprocessed material for its own products.

ADS, based in Hilliard, Ohio, has recycling plants in North and South America. In December, it acquired privately owned Jet Polymer Recycling, based in Fort Payne, Alabama, which included three plants in Alabama and Georgia with capacity to recycle about 100 million pounds per year.

With the acquisition, publicly owned ADS now recycles about 650 million pounds of high-density polyethylene (HDPE) and polypropylene (PP) per year. The company has a goal to use 1 billion pounds of recycled resin annually by 2031.

“It is an ambitious goal, but our team thinks we can do it,” ADS Director of Sustainability Nicole Voss says. “At this point, we are tracking a little ahead of our plan.”

Voss says ADS' growth likely will come from expanding in-house recycling and possibly from additional acquisitions.

ADS reprocesses baled material in-house and buys ready-to-use HDPE pellets and flake from recyclers. The resin is used in its water-management products, including pipe and stormwater collection and storage products, as well as on-site septic system products.

In its most recent sustainability report for fiscal year 2021, which ended March 31, 2021, ADS reports purchasing 510 million pounds of recycled plastics. Overall, 47 percent of the resin ADS used in 2021 was recycled, down from 51 percent the previous year. Voss attributes the reduction in recycled resin to lack of availability of recycled material and lower prices for virgin resin.

In its most recent earnings report released in May for the year ending March 31, ADS reports purchasing more than 1.3 billion pounds of resin, but it did not break down recycled vs. virgin. The company reports net sales of $2.8 billion, up 39.7 percent from the previous year, and net income of $275 million.

In-house recycling

ADS Recycling is the company’s vertically integrated in-house recycling operation. Founded in 1966, ADS started buying recycled resin for its products more than 20 years ago to reduce overall resin costs.

ADS also started in-house recycling more than 20 years ago to guarantee availability and quality of recycled resin. Using recycled material now is a selling point as companies adopt green principles and look for sustainable products.

In fiscal year 2021, ADS estimates 66 percent of pipe revenue was derived from remanufactured products. ADS uses postconsumer and postindustrial material, but exact percentages were not available.

The company sources recycled material from more than 500 suppliers in North America. “Our internal reprocessing capability meets a little over half of our demand,” Voss says. “For the rest, we buy recycled pellets or flake from other recyclers. We are always working really hard to forge new partnerships for recycled content.”

She says ADS reminds suppliers that it is taking a single-use plastic jug that has a one-year lifespan and a 28 percent chance of hitting the recycling stream and turning it into a product with a lifespan of 50 to 100 years that is fully recyclable at the end of that life. “It is a real story—that the material is going into a durable product that is helping alleviate stormwater concerns and address climate change issues,” Voss says.

ADS likely will not try to ramp up in-house reprocessing enough to meet its total demand for material, so it will continue buying reprocessed material. “It works well the way it is now with buying a portion of it already reprocessed,” she says.

Ambitious goals

To meet its 1-billion-pounds-per-year goal, ADS says it plans to recycle more PP, is considering ways to use HDPE that contain fiber or even metal and could purchase certified recycled material derived from pyrolysis.

Sourcing material that contains fiber or metal is an interesting concept for ADS because these materials fall into the “hard-to-recycle” category.

“Recycling this material is something we would never tackle on our own, but if other companies have the capability and know-how, we might partner with them,” she says.

PP also is often considered difficult to recycle, and Voss says ADS is trying to show material recovery facility operators that it has value. “We are really pushing for that,” she says.

ADS joined The Recycling Partnership’s PP coalition, which is looking for ways to capture PP for mechanical recycling. “Capturing this valuable material and not letting it just get processed back to a monomer is important,” she says. “If you can mechanically recycle a plastic, there are less greenhouse gas emissions than if it were coming from virgin material.”

ADS also has partnered with Cyclyx International, which is trying to source and prepare low-value scrap plastics for chemical recycling. New Hampshire-based Cyclyx was founded by Agilyx and ExxonMobil Chemical.

“Exxon is looking at it from a chemical recycling standpoint, but I think they also want to make sure they are not taking the easily mechanical recycled parts of their stream through a chemical pyrolysis process,” Voss says.

ADS also is active in the U.S. Environmental Protection Agency’s America Recycles Pledge to address challenges to the recycling system.

The decision to use recycled resin and start in-house recycling were business decisions, but ADS has a strong ethos to be a sustainable company. The company is active in organizations that promote diverting plastic from landfills, and it supports local community projects to increase recycling.

“One of the pillars of our company is recycling,” Voss says. “Some of that is self-serving because we want more plastic to recycle. But increasing the recycling rate and adopting circular economy practices are the right things to do.”

The company’s most recent sustainability report points out that its experience in incorporating recycled materials into its products “has fundamentally changed—and ultimately shaped—our approach to environmental stewardship and the way the industry views and uses recycled plastic in construction projects.”

Voss says recycling also has become a focus for investors. “Our board asks what are we doing to be a sustainable company,” she says. “We recycle more than a half-billion pounds of plastic a year. That’s huge. That is a lot of plastic we are keeping out of landfills.”

The author is editor of Plastics Machinery & Manufacturing and can be contacted at rshinn@endeavorb2b.com.