Rising star

If necessity is the mother of invention, then Extrupet of Johannesburg, South Africa, is offering its customers, stakeholders and neighbors exactly what they need.

Throughout its 15-year history, the company has delivered products and services that are changing Africa’s recycling and manufacturing landscapes in many ways.

The company bills itself as one of the world’s most advanced PET (polyethylene terephthalate) recycling companies. It also holds the distinctions of being Africa’s first PET recycler and the continent’s first to manufacture a food-contact-grade recycled PET pellet.

Extrupet got its start from unusual circumstances, growing from a plan that was twofold: satisfying the region’s appetite for low-cost raw materials to feed a competitive textiles industry and the increasing need to divert postconsumer PET from South Africa’s landfills.

Along the way, the company has earned the admiration, accolades and support of an increasing number of retailers and consumer goods companies.

FROM TEXTILES TO BOTTLES

Extrupet’s story is one of sustainability, born of necessity rather than of publicity. The idea originated in 1999 in Nigeria, where the company’s founders owned interests in the textile manufacturing industry. Extrupet’s Joint Managing Director Chandru Wadhwani explains that the business was conceived as a two-year pilot project to deal with the rapidly growing stream of postconsumer PET in South Africa while at the same time supplying the founders’ textile company with recycled PET flake as a raw material to replace virgin PET imported from the Far East.

Before Extrupet’s founding, the Nigerian textile mill manufactured polyester fiber using imported virgin PET that had been processed through a Cape Town-based company.

Wadhwani recalls, “We got a phone call asking, ‘Is there any chance of your coming to South Africa to collect discarded PET from landfills to use as a raw material for our fiber factory?’”

At the time, Wadhwani, who had previously worked for another textile company in Nigeria, was working for a trading company in the United Kingdom. “I was doing my own thing, working elsewhere in 2000, and they approached me to say, ‘We need someone to run it,’” he remembers.

At the time, recycling postconsumer PET into polyester resin for reuse into fibre was a revolutionary idea in Africa. Wadhwani recalls responding with shock and skepticism at the idea, but he agreed to travel to Cape Town, nonetheless, to have a look at the operation.

Looking back at those concerns, Wadhwani now marvels at the progress the company has made. “The idea of using recycled PET to make fibre was new, and it was heaven-sent and very timely,” he says.

He relates how South Africa’s federal government was in need of a recycling plan for the growing stream of postconsumer PET in the country, which was burdening its landfills. Meanwhile, Nigeria’s once-booming textile industry was facing total devastation caused largely by low-cost imports.

“The challenge there was China could make the garment cheaper than we could make the fabric,” Wadhwani says.

The country, which was once home to 250 textile mills, now has only two, he says.

The PET recycling business was seen as a way to address both situations, Wadhwani explains.

“When that call came through, it was very opportune because it showed us a different way of doing this,” Wadhwani says. “That’s why we started investing in the use of recycled material.”

The plan was to collect the bottles in South Africa for processing by the new recycling company, with the resulting flakes being sent to Nigeria as a raw material for the textile factory. The owners planned to sell the business after the two-year pilot.

Wadhwani says he moved to South Africa in 2001 for what was supposed to be a two-year assignment to produce recycled PET flake in Cape Town. But, over the years, Wadhwani met his wife, a Vancouver native, and started a family. South Africa remains his home, and he continues to manage Extrupet.

“The idea was then after two years, to hand the business over, but it grew to such a scale that we decided to do it ourselves,” Wadhwani explains.

Coming to South Africa, Wadhwani says he was pleasantly surprised by the region’s beauty and its technologically advanced industrial sector, even though PET recycling was new to the region.

“We were at the forefront of development in South Africa,” he says. “We made a lot of mistakes, we spent a lot of money—we learned the hard way—but we invested a lot of time and effort.”

EVOLVING TECHNOLOGY

Extrupet’s operations began in 2001, and up to 2006, Wadhwani says, “the bulk of what we were producing went to the plant in Nigeria.” When operations began, the company was producing 200 tonnes per month of recycled fibre-grade flake.

As Wadhwani explains it, the company started with basic, entry-level European technology to process postconsumer PET on a small scale into textile-grade flakes for use in fibre applications. In 2004, the company added a second washing plant, doubling the plant’s capacity.

A turning point for the company came in 2005, Wadhwani says, when Extrupet relocated to the Johannesburg suburb of Wadeville and added extruding technology for pellet production.

“We then moved to our own dedicated site and brought in Italian and Germany technologies, and that process was modeled on European recycling,” he says. The company bought recycling equipment from Sorema of Italy and Herbold of Germany and an extruder from Erema of Austria, which allowed it to produce 1,500 tonnes of recycled PET pellets per month.

Extrupet expanded again in 2009, investing in a top-of-the-line Vacurema recycling system that produced a food-contact-grade pellet that could be sold into the PET sheeting and container markets. Output from the flaking plant next door was used as raw material for this process.

“That was our first foray into food-grade-PET recycling,” Wadhwani says. Integrating that technology and those systems took a few years, but eventually the capacity of the system was sold out. Local demand for the company’s food-contact-grade resin enabled Extrupet to embark on a R75 million ($4.9 million) expansion in 2014, added Starlinger iV+ bottle-to-bottle recycling technology.

The Starlinger technology has been approved by such multinational brand-owners as Coca Cola to recycle PET into resin for use in its bottles.

“The primary reason for that investment was, 1) we needed extra production capacity, and 2) we wanted to go with a technology that enjoyed the approval of brand owners,” Wadhwani says.

The technology allows for the production of material with various intrinsic viscosities as well as increased capacity, which in turn opened up new markets for Extrupet, he says.

Prior to that the company was selling its resin for use in such applications as bottles for juice, salad dressings, oils and soaps. However, the resin could not be used to produce water or carbonated soft drink bottles, says Christo Spies, national sales and marketing manager for Extrupet. With its 2014 investment, the company was able to expand into producing raw materials for those additional bottle applications.

“With those, it’s such a big market, so from that point of view, it made sense,” Spies says.

Extrupet currently produces 2,500 tonnes per month of recycled PET pellets and flakes, of which 1,200 tonnes are food-contact-grade pellet.

Today Extrupet continues to produce PET flakes, pellets and food-contact-grade pellets, with about 75 percent of the company’s total production currently going to food-contact-grade applications. Extrupet has branded its food-contact-grade recycled PET resin under the name PhoenixPET, a line of products offering various technical specifications for consumer goods.

The Starlinger equipment added 14,000 tonnes of annual production capacity in addition to enabling the company to produce recycled PET that can be used in carbonated soft drink and water bottles as well as in all other forms of PET packaging. Wadhwani says the new equipment supplies a very specific segment of the market. According to Extrupet, the facility’s pellets can comprise 100 percent of the packaging manufactured from them.

The equipment was inaugurated in May 2015, and the plant celebrated its official opening in June, with a ceremony officiated by the country’s Minister of Environmental Affairs Edna Molewa.

GROUP OPERATIONS

Extrupet currently produces 2,500 tonnes per month of recycled PET pellets and flakes, of which 1,200 tonnes are food-contact-grade pellet.

Spies says 95% of the company’s feedstock comes from postconsumer materials that have been collected from landfills, while 5% is from other sources.

Collection companies bring the baled plastics to Extrupet, and Spies says the bales may contain various other polymers, such as high density polyethylene (HDPE), polypropylene (PP) or polyvinyl chloride (PVC), in addition to PET.

Wadhwani says that while some of the supplied material is separated at the source, the bulk of it is scavenged from landfills and sorted by small entrepreneurial companies. Extrupet works with around 50 of these companies, which bring material collected from all over South Africa.

Bales are broken, and the stream is conveyed to a large prewash plant. From there the PET materials are sorted in one of two equivalent sorting lines, and the PET bottles are conveyed to a grinder that produces PET flakes. The flakes are conveyed to a separation tank and then to optical sorting systems.

While Extrupet is the founders’ main operation, over the years they have established related businesses. The group operates an HDPE recycling and extrusion plant in Johannesburg, as well as a fibre production company in Cape Town called ProPET that can use the PET flakes and pellets not suitable for use in food-contact-grade applications. Another group company, ExtruWood, located in Johannesburg, recycles plastic scrap that cannot be used in other applications to make plastic planks and pallets. In all, the group operates two factories in Johannesburg, two in Cape Town and a small collection and processing facility on the island of Mauritius.

EARNING ACCOLADES

Having traveled the world during his tenure with Extrupet learning about the PET recycling process and visiting other PET recycling facilities, Wadhwani says Extrupet offers state-of-the-art PET recycling that he believes is world-class.

“We’ve had multiple companies send teams in to have a look at what we do, and in many instances the comments are that this is by far more advanced than what they’ve seen in Europe and in America,” he says.

Wadhwani adds that the company has had to overcome a great deal of skepticism about its processes to convince brand owners of the quality of Extrupet’s PhoenixPET, considering that the majority of its feedstock is recovered from landfills.

Extrupet has received a number of certifications and awards for its work. In 2010, at the request of a major retailer, PhoenixPET was certified under the British Retail Consortium (BRC) Global Standards for packaging. The safety and quality certification programme is used by more than 23,000 suppliers in 123 countries, with the certification issued through a worldwide network of accredited certification bodies.

Wadhwani says he believes Extrupet was the first recycling company in the world to have achieved the standard, and he says Extrupet is still the only non-European company to hold the certification. He also says he believes Extrupet is the only recycling plant worldwide to have received this accreditation. Currently, the company is working towards obtaining certification from multinational consumer goods companies, an achievement Wadhwani says he expects Extrupet to reach by early 2016.

“We’ve been involved in that since March of [2015], and a lot of these processes work at their own pace,” he says.

The process is an exhaustive list of tests and checks of the material and its use in contact with foods and liquids, Wadhwani says.

The Starlinger technology the company installed in 2014 already has earned the approval of brandowners such as Coca Cola, Wadhwani says. By undergoing a series of audits, he says he expects Extrupet will earn certification, as well.

Wadhwani continues, “We’re hoping by quarter one of 2016 to make some major announcements about brand owner approvals.”

The company received additional accolades in late 2015, when PhoenixPET received two awards: the WorldStar Award from the World Packaging Organisation and the Gold Award for Sustainability at the 2015 Institute of Packaging South Africa’s (IPSA) GoldPak Awards.

LOOKING AHEAD

Wadhwani says the availability of feedstock in the form of postconsumer PET is growing in South Africa. “What we don’t collect as a country grows faster than what we do,” he says, explaining that the country generates more material than can be recovered and recycled.

Even so, competition from low-priced imports is one of the biggest challenges for a company like Extrupet.

Spies says the company’s products are sold entirely in South Africa, where Extrupet supplies a fraction of the total demand for PET.

Even though PET is a valuable commodity, its prices haven’t changed much since 2009. Meanwhile, the market continues to be challenged by low-cost virgin PET from Asia.

Wadhwani also says local competition includes a new PET processing operation producing fibre-grade resin. “This means that to be in that fibre space is incredibly challenging, hence our drive to move more to bottle-to-bottle and less to textile grade,” he says.

While Spies says Extrupet’s PhoenixPET continues to be more economical than virgin material, the difference is not expansive, so the company has challenges to overcome. “We’ve got to remind the brand owners of what we’ve achieved,” he says.

The author is managing editor of Recycling Today Global Edition.