Company signs three-year contract worth $42 million to supply high-molecular-weight HDPE to thermoformer.
Axion Recycled Plastics Inc., a newly created subsidiary of Axion International Holdings Inc., headquartered in New Providence, N.J., has signed a three-year contract to provide recycled plastics to an unnamed thermoplastics company. Axion says the contract will generate $42 million in revenue for the company and is renewable in 12-month increments.
Axion International says the signing of the contract follows its acquisition of Y City Recycling, a plastics scrap processing firm headquartered in Ohio in November, as well as the related launch of the company under the newly created subsidiary.
Following the acquisition of Y City Recycling, Steve Silverman, Axion president, noted, “Through this upstream vertical integration, we believe we will enhance our consolidated gross margins and capture market share in the recycling business by positioning Axion Recycled Plastics as a significant regional recycled materials processor and supplier in the Midwest and Southwest.”
Under the contract, the thermoformer has agreed to purchase high-molecular-weight high-density polyethylene (HDPE HMW) in monthly volume commitments from Axion Recycled Plastics.
“In such a short period, we have demonstrated immediate success for our newly launched subsidiary, Axion Recycled Plastics,” says Silverman. “In addition, the vertical integration of our operations enable an increased capacity to support our customers' needs. This contract strengthens our presence as a provider of reprocessed plastics and we anticipate receiving more contracts.”
Axion Recycled Plastics says it will manufacture the HDPE HMW pellet and tailor the material specifically to meet the customer's specifications. There also will be a return loop for packaging in place in a conscious effort to reuse as well as to recycle.