It is always good to see a market research report suggesting that your particular industry is projected to show substantial growth in the coming years. As such, we are thrilled with a brand-new report that shows exactly this for recycled plastics. It looks like our industry has nowhere to go but up right now.
The report, put together by Coherent Market Insights, suggests CAGR growth in recycled plastics of about 6.8% when measured from 2019 through 2027. If you are not familiar with the term, CAGR is an acronym that stands for ‘compound annual growth rate’. So compounding 6.8% year-on-year over the course of eight years ends up being pretty impressive growth.
Factors Driving the Growth
Coherent’s analysis suggests that there are two factors driving the expected growth. The first are concerns about landfilling and incineration of plastic waste. As the world becomes more aware of the pervasiveness of plastic waste, people want solutions.
The second factor is energy savings. Collectively, the world is looking to spend less money on energy production while simultaneously reducing the amount of fossil fuels we utilize. Recycling more plastic reduces the energy necessary to manufacture virgin plastic. Likewise, less virgin plastic means less dependence on fossil fuels.
Industrial Recycling Is More Effective
The report also points out some of the differences between post-consumer and post-industrial recycling. Seraphim Plastics is involved in the former. We take industrial plastic waste and transform it into a product that manufacturers can utilize in the manufacturing process. The product is known as regrind.
Our business model works because it is efficient and cost-effective. Our customers sort plastics ahead of time, meaning we don’t have to put the time and labor into that aspect. We can pick up a load of scrap plastic and turn it quickly into regrind without having to do anything else with it.
It works so well that we are able to buy scrap plastic from our customers. This creates a further incentive for them to do so. Why throw away that plastic purge when a company can turn it into cash? They win and so do we. It is the perfect illustration of why industrial recycling is more effective.
We Need Better Consumer Recycling
Post-consumer recycling involves all those plastics consumers throw into the recycling bins on a weekly basis. Normally, municipal recyclers are looking at things like water bottles, food containers, and so forth. But any plastic could theoretically be recycled if municipal recyclers had an efficient way to do so.
Unfortunately, consumer recycling isn’t as effective due to the nature of the beast. In our business, we can say to a customer that we only want their old plastic totes. We will not take anything else. So they keep the totes separate and call us when they have a full load. We don’t have to do anything else but pick up the totes and run them through a series of grinders.
Consumer plastic recycling involves many more steps. Recyclable materials need to be picked up and taken to a sorting facility. There, different types of recyclables need to be separated – materials like glass, paper, and the seven different types of plastic. From there, some of the materials need to be cleaned before they can be sent to the recyclers who actually turn them into usable materials.
Despite the differences between post-industrial and post-consumer plastic recycling, the industry is expecting significant growth overall for at least the next five years. That is good for companies like ours. It is also good for our customers, both the ones we buy from and the ones we sell to.