Expanding stateside

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The advent of China’s National Sword campaign has Kathy Xuan of PARC Corp., Romeoville, Illinois, adding plastics recycling processing capacity in the United States.

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May 31, 2017
DeAnne Toto
Photos: John Merkle

When Kathy Xuan established PARC Corp. in 1996, China was just beginning to ramp up its buying of secondary materials, and “Operation Green Fence” and “National Sword” were not yet phrases in the lexicon of scrap processors based in the United States. Things have changed considerably since that time for the company, which purchases plastic scrap from postindustrial and postconsumer sources, shipping them to China for further processing into pellets at its own facility in Qingdao or at partner facilities.

The commodity super cycle fueled by China’s demand has wound down, and the country’s central government has introduced two separate policies in less than five years designed to improve the quality of recyclables that are entering China. The most recent of these policies is the National Sword customs clearance program, which was introduced in February of this year. Plastic scrap shipments have been an early target of the program, having been turned away or charged with stiff tariffs at ports in China.

Xuan describes the American plastics market as “comparatively more stable than Asian ones.” She continues, “In particular, China’s ‘Sword Action 2017’ made recyclable plastics import much harder than it used to be.”

Despite these new hurdles, which have increased costs, Xuan says “the Chinese policy successfully raised the entry barrier and quality control of China’s imports as well as banned illegal smuggling.”

However, National Sword and political changes occurring in China have led Xuan and PARC to expand the company’s processing capacity in the United States.

Getting to this point

Xuan says PARC has decided to duplicate its complete production line in China at its U.S. operations in Romeoville, Illinois, which also is where the company is headquartered. The additional equipment should be operating before the end of the third quarter.

The expansion of processing capabilities in Romeoville is the first of additional expansions Xuan says she has in mind in the United States.

This expansion and similar capacity additions would enable PARC to produce recycled plastic pellets in the U.S., which it could sell to China, rather than shipping reclaimed plastics to China for further processing. “This way, PARC can protect itself from China’s political change and step into the next era of ‘closed-loop recycling,’” Xuan says.

PARC began as an export brokerage operation, with Xuan selling 18 truckloads of material to China in 1996. The company opened its U.S. processing operations in a 16,000-square-foot warehouse in Naperville, Illinois, in 2001. Xuan says PARC quickly outgrew that location, moving to a 54,000-square-foot warehouse in Aurora, Illinois, one year later. In 2008, PARC relocated to its current 120,000-square-foot building in Romeoville.

The company added its processing facility in Qingdao in 2004. It sits on 7 acres of land and occupies a 300,000-square-foot building. The plant is equipped to warehouse, sort, prewash, bale, crush, grind, pelletize and otherwise modify incoming material, as well as package it.

While National Sword has raised the bar for importing plastic scrap into China, PARC’s operations in Qingdao have benefitted from National Sword, she says. The policy has wiped out small, unprofessional competitors. Xuan says large-scale, professionally run businesses in the plastics sector such as PARC remain as a result.

PARC also has offices in Beijing, Shanghai, Qingdao and Guangzhou, as well as three facilities it works with in the Chinese provinces of Guangdong, Zhejiang and Shandong that perform compounding for the company.

Its most recent addition occurred in January 2015, when it opened a facility in Oshkosh, Wisconsin. Like its Illinois plant, the Wisconsin location provides warehousing, transloading, sorting, baling, grinding and packaging.

PARC employs more than 500 people, the majority of which are based in China.

Xuan says she’s not certain how the company’s Qingdao operation will be affected in the future as PARC ramps up its processing capabilities in the U.S. However, she says the plant handles a large volume of the plastic scrap generated within China, which should help to lessen the impact of the transition.

According to its website, PARC’s goal “is to make recycling as easy as possible.” The company also seeks to maximize its clients’ cost savings by handling materials other recyclers cannot.

Areas of specialization

According to its website, PARC’s goal “is to make recycling as easy as possible.” The company also seeks to maximize its clients’ cost savings by handling materials other recyclers cannot.

The company handles a variety of plastic scrap, including polyethylene terephthalate (PET), high-density polyethylene (HDPE), low-density polyethylene (LDPE), polyvinyl chloride (PVC), polypropylene (PP), polystyrene (PS), acrylonitrile butadiene styrene (ABS) and expanded polystyrene (EPS). Xuan says PARC specializes in traditionally unrecyclable plastics, such as those used in flexible packaging. PET, PE and laminated flexible packaging comprise the majority of scrap the company handles.

Xuan’s interest in multilayer laminated plastic film scrap began in 2004, when she learned about the volume of this material that was going to landfill because recycling options did not exist. Making matters worse, she says, was that its use in packaging applications was forecasted to grow.

Xuan says it took PARC 10 years to develop the technology and to uncover applications for its reprocessed material. “Once sorted, the multilayer flexible films are ground and placed into extruders, which form plastic pellets,” she says.

PARC processes multilayer film scrap using this method in the U.S. and in China. The material represents more than half of the plastic scrap the company processes.

“The pelletized materials are then used in many applications worldwide,” Xuan says, offering examples such as pipes, pallets, dashboards, floorboards for sea containers and mobile toilets, to name a few.

“All of the products made from our recycled materials can be recycled,” she adds.

Most of the plastics PARC handles in North America pass through one of the company’s U.S. processing facilities. The company began doing this after China introduced Operation Green Fence in 2013. It was the best way to ensure the quality of the material it ships to China, Xuan says. Only postconsumer materials, such as mixed rigid plastics (MRP) and bottle bales, ship directly from the material recovery facilities (MRFs) PARC works with to China, Xuan says. This is only a small amount of the material the company deals in, however, as PARC primarily works directly with manufacturers that are generating plastic scrap.

Regarding the material that it exports from the U.S., apart from its own processing facility in China, PARC also ships material to Malaysia, Thailand, Indonesia, Vietnam, Taiwan and Hong Kong for processing. She says the companies PARC works with in Southeast Asia can ship their processed material into mainland China without import duties because of China’s trade agreement with the Association of Southeast Asian Nations (ASEAN).

Accidental recycler

Xuan, who was born and raised in China, ended up in the plastics recycling industry accidentally. “I majored in metallurgy during my undergraduate studies and international trade during my graduate studies in Beijing,” she says. Xuan then pursued a career in finance in Chicago.

“I didn’t know anything about plastic,” she told the Chicago Grid for an article on Xuan that appeared August 2013.

But Xuan’s timing was right, as China was embarking on a consumption boom that made it hungry for raw materials.

While she may have stumbled into a career in plastics recycling, Xuan did not stumble upon success, which took patience and persistence.

She says she is motivated by the future of the planet and by environmental stewardship. Through PARC’s business philosophy, “dedication to providing steady and trustworthy service as well as continued success through innovation and integrity,” Xuan says she, her staff and her clients “can aim for a brighter and greener future.”

The plastics recycling industry holds huge potential, she says, and PARC is well-positioned for continued success.

The author is managing editor of Recycling Today and can be reached at dtoto@gie.net.