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Feature: How to grow in recycling

Founded in 1990 with the aim of recycling, reprocessing and marketing surplus and waste chemicals, Waste Exchange Services’ (WES) business strategy is to provide practical and environmentally responsible methods of recycling to industry.

Based in Redcar, Teeside, WES added plastic waste recycling to its repertoire in 1999 and has not looked back. Now the Waste and Resources Action Programme’s (WRAP) residual value guarantee (RVG) scheme has completed a deal guaranteeing a £780,000 Erema plastics extruder for the company. The extruder forms part of a £1.3 million investment that WES is making in niche plastics waste processing, with the finance package
arranged through Bank of Scotland Corporate.

WRAP’s investments manager Susannah McClintock says: “We are delighted that the eQuip RVG scheme has been able to assist WES in achieving its business objectives. The scheme was set up to help businesses like WES gain access to the specialist recycling equipment needed to grow and expand their recycling operations.

“We are particularly pleased to be assisting a business that is reprocessing niche plastics, which are traditionally difficult to recycle. This is one of the most powerful Erema machines in Europe, and will enable WES to double capacity to 14,000 tonnes per year.”

The company’s machinery is designed to process mainly polypropylene, polystyrene and polyethylene in any form – films, shredded, ground or granulated plastic and plastic pellets. It can handle soiled plastics, heavily printed or metallicised films, wet materials, fibrous waste, PP/PE mixtures and light paper contamination.

WES now has two processing lines, operating 24/7. Both are designed to convert scrap plastic into top-grade compound in one pass. The facility at Redcarcan take scrap in any form and combine it with additives to meet customer specification. WES recycled plastic is used in applications as varied as horticulture and drainage products – and not just in the UK. The company exports to various overseas markets, including France, Lebanonand the US.

In fact, demand has been such that the company has doubled its plastics reprocessing capacity every year. This has already involved some serious investment.

Managing director James Donaldson explains: “Our customers come first, so our priority is to keep pace with demand. We have therefore purchased equipment every year for the last five years. 2004 was the only exception, but only because we were moving into larger premises.”

Despite this continued investment, demand for high-grade plastics was still outstripping production capacity and the company needed to keep pace.“We needed to increase our recycling capacity by several thousand tonnes,” said Donaldson. “When we evaluated the investment, it came to around £1.3m. That is when we decided to explore alternative routes to outright purchase of the plant required. With help from Bank of Scotland Corporate, we decided to look seriously at financing options, and WRAP’s RVG scheme enabled us to lease this specialist equipment.”

Guarantee of value for leased equipment
The eQuip scheme guarantees the future residual value of leased recycling equipment. Historically, banks or lease finance providers have been reluctant to offer leases for new and specialist technologies such as the Erema extruder. With the residual value underwritten by e

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