PreZero US Inc., headquartered in Los Angeles, has completed its purchase of Roplast Industries Inc., a polyethylene film and bag manufacturer based in Oroville, California. The move vertically integrates PreZero, allowing the company to deliver what it describes as closed-loop solutions that support the circular economy.
PreZero US, the U.S. subsidiary of German company PreZero International, was established in 2018. In 2020, PreZero announced investments totaling more than $100 million in plastics recycling facilities in California and South Carolina. These facilities in Jurupa Valley, California, and Westminster, South Carolina, are processing plastic film bales into low-density polyethylene (LDPE) and mixed rigid plastic bales into polypropylene (PP) and high-density polyethylene (HDPE) resins. The company estimates its planned processing capacity at more than 160 million pounds per year.
PreZero has partnered with Michigan-based ACI Plastics to operate these facilities.
In a 2020 interview with Recycling Today, Hendrik Dullinger, vice president of business development for PreZero US, said, "Since arriving in the U.S., PreZero’s strategy aims to focus on infrastructure and equipment investments, supplier/buyer partnerships and collaborations with local operating partners. All company activities aim towards scaling sustainable innovations that close the loop and support a circular economy.”
In addition to partnering with processors, Dullinger said PreZero partners with the manufacturing sector “to feed recycled materials back as a new raw material. This process is a critical contribution to closing the loop in a circular economy model, providing the most sustainable end-of-use outlets for materials throughout the value chain."
Founded in 1989, Roplast has the capacity to manufacture 30 million pounds of polyethylene film and bags annually that are sold across the U.S. to a variety of markets. The company operates from a 130,000-square-foot manufacturing facility and corporate office in Oroville. Roplast was a customer of PreZero's prior to the acquisition, says Maxwell Bracey, marketing manager for PreZero US.
Bracey says the company purchased Roplast because it "has an attractive customer base, giving PreZero the opportunity to deliver closed-loop solutions turning scraps into new bags. This will be a stable home for our PCR (postconsumer resin) in what can be volatile resin markets at times."
Bracey adds, "Roplast will continue to operate under its own name for our initial integration period and will eventually be brought into the PreZero brand family. The process is expected to take at least six months."
Roplast and PreZero have merged their operations just as California’s SB270 legislation requires bags and film sold in the state to contain 40 percent recycled content. In a news release about the acquisition, PreZero says it will supply PCR for Roplast’s production. Within 24 months of the acquisition, PreZero says it has the goal of supplying up to 15 million pounds of recycled LDPE per year for Roplast's film and bag production, bringing raw material sourcing, preproduction, processing and manufacturing together.
Bracey says PreZero will grow the PCR processing capabilities at the Roplast site in Northern California over the next couple of years. "Roplast will continue working with other PCR suppliers to achieve a desirable product mix and will not consume volumes from our South Carolina plant," he adds.
In 2016, Roplast opened its REvolve recycling facility, where it reprocesses feedstock collected from its retail and grocery chain partners into PCR for its reusable bag production. According to the company's website, Roplast was awarded a grant by California’s Department of Resources Recycling and Recovery to purchase a washing line for polyethylene scrap that it planned to install at its REvolve operation in 2020. The company says this line rounded out its PCR production operation, enabling it to supply about half Roplast's raw material needs.
“PreZero is here to change the recycling industry in the U.S., and this is just the next step in that progression,” says PreZero US CEO Hernan de la Vega. “By bringing Roplast into our PreZero family, we add the key component of manufacturing, which guarantees a viable end market for the resins we are already producing. I’m most excited for our customers as this extends our capabilities to close the loop with them. The film and bags they buy from Roplast can be collected and processed at the material end of life by PreZero’s state-of-the-art facilities. Then we can supply the same quality products back to our original customers.”
Roplast co-founder Robert Bateman adds, “We have long believed that the future of our business is in reusable bags, recycling postconsumer scrap and reuse. PreZero brings the resources and network to make this prospect a reality on a large scale. This is the right company to buy Roplast."
Regarding future acquisitions, Bracey says PreZero US is "keeping an open mind for M&A opportunities and at the same time will work on our organic growth with a focus on the PCR space for the next couple of years."
*This article was updated March 3 to include comments from Maxwell Bracey, marketing manager at PreZero US.