(NOMINATION FOR 2014 AUREA AWARD): Alwag - PET packaging recycling plant

In September 2013, Novi Sad-based Alwag opened in Nova Gajdobra a PET packaging recycling plant based on RPET flakes production through warm wash system. In the processing process, packaging is first ground and then washed on high temperatures and thus a semi-product of high level of cleanness which is sold to customers in food, pharmaceutical, textile industry, for production of asphalt, insulation foil and pipes of different profile and purpose.

This is the first company of this kind in Serbia which enables returning of dirty bottles which have been left for years at landfills in use, even in the food and beverage industry.

The annual capacity of PET packaging processing in Alwag totals 13.500 tons while the annual capacity of RPET flakes production totals 12.000 tons.

In Serbia, 60.000 tons of PET packaging is thrown away and only 12-15 % ends up in recycling. The fact that PET packaging decay time is a few hundred years increases the importance of the investment.

The innovative German technology was implemented in the plant and apart from the facility itself, additional facilities such as access roads, power station, boiler room, compressor station, gas station, and a waste water treatment system were built. The investment totals EUR 7 mil.

The plant opening generated about 40 jobs and it indirectly employed more than 200 associates who collect raw materials.

As of the beginning of production in September 2013, 1200 tons of RPET flakes were produced, 90% of which was exported to Austrian and Italian market.

INNOVATION

The new PET packaging and PET flakes production plant is based on an innovative renowed German producer’s equipement, B+B Anlagenbau GmbH, which has been operting in the field of recycling equipmenet based on a turn key system for 30 years. PET packaging recycling is carried out in three stages. The first stage is featured with RPET flakes production which are a semi-product for further processing stages. The second stage refers to RPET granules production and the third one RPET test tube and RPET foil further used in different industries.

At the moment, due to limited raw materials quantity, the first production stage of RPET flekica is done based on the so-called warm wash system.

Packaging from landfills to the section in Nova Gajdobra is transported in bundles, and the production process of RPET flakes is implemented in two stages – the first one is grinding where three different kinds of materials are ground : bottles, labels and CHEP and which are partly separated in the first and partly in the second. After the grinding, ground material is stored in large silos of 20t and it furher goes to the washing process i.e. in the second processing stage. Ground elements go through a boiler room which produces 800 kg water steam per hour and water is, with adding of certain detergents, heated to 85 degrees. PET packaging, which the bottles are made of, falls down while bungs and labels are split at the surface of water.

RPET flakes are of 3 - 12 milimeters size. They are dried after washing, filtered in colours and in the final stage they go through sensors for metal and other additives which could be found in material, thus producing completely clean product.

The RPET flakes are sold to customers in food, pharmaceutical, textile industry, for production of asphalt, insulation foil and pipes of different profile and purpose.

Alwag’s daily processing output is 50 tons of packaging waste or some 1.500.000 bottles which is some 13.500 tons per yeaar and the annual capacity of RPET flakes, totals 12.000 tons.

SOCIAL UTILITY

The Alwag’s project is aiming at solving the environmental pollution issue with RPET packaging recycling. In Serbia, 60.000 tons of PET packaging is thrown away and only 12-15 % ends up in recycling. The fact that the decay time of PET packaging is a few hundred years increases the importance of the investment.

Sorting and disposal of packaging waste which is after that recycled mostly depends on responsible citizens- collectors and few companies which deal with waste collection. The citizens of Serbia have not developed a habit of the proper waste disposal which decreases the landfill number. In Serbia, more than 80% of waste ends up in Serbia at illegal landfills and only 20% of packaging waste is recycled while developed countries recycle up to 80 %.

The factory for PET packaging recycling in Nova Gajdobra is a greenfield investment. The majority owner of Alwag is a family-run company Aling Conel with a 90% stake while the Austrian partner has a 10% stake.

The production complex is located in Nova Gajdobra-based industrial zone, a place near Novi Sad. Some 40 people were employed with the plant opening. Apart from engineers, technologists, environmentalists, recycling industry employs secondary raw materials collectors (more than 200) which often come from marginalized social groups. This kind of work provides social protection and material security to those people and includes them in legal flows. The project has a potential for further growth indirectly of employed collectors which will thus be able to provide their existance and material security for their families.

The plant could hire 100 workers more if it had sufficient raw materials quantity and this woud lead to terms which would enable stepping into the second investment stage (production of RPET granules) and thus offer even more quality product to the market. However, the waste collection process in Serbia is still based on public utility companies where goods ends up at landfills which makes raw packagnig dirty which decreases the level of its usage in processing (35-40% of packaging is unused in processing).

Apart from the hall construction, it was invested in access roads, infrastructure, transfer station and waste water cleaner, totalling almost EUR 800.000. Water after washing goes through special flows to a cleaner and thus clean water is returned to production.

Recycling is the youngest industrial branch in our country which generates growth in economic crisis. Statistical data show that Serbia, since it does not recycle in a sufficient quantity, loses some EUR 50 mil. With the opening of the Alwag’s RPET recycling plant, there is an option to decrease this loss during the next period.

This project, as a greenfield investment in this field, contributes to positive image of the country where domestic, private companies want to invest in this young industrial branch thus contributing environmental protection. Local public companies and private companies which operate in collection and sorting of packaging waste can generate an annnual profit of EUR 3,5 mil minumum which creates a positive business environment for further development of this young industry.

Apart from that, waste management in Serbia is a priority issue of the environmental protection and one of the most demanding areas when it comes to the compliance with the EU legislation. By the end of 2015, one third of the entire EU legislation refers to environmental protection and Serbia is obliged to present to the EU Commission negotiating position and start negotiations on Chapter 27 which refers to the environmental protection.

FINANCIAL POTENTIAL

The warm wash system in Awlag plant for za PET recycling provides RPET flakes of high level of cleanness sold as semi-product to customers in food, pharmaceutical, textile industry, for production of asphalt, insulation foil and pipes of different profile and purpose.

The investment in Nova Gajdobra totals EUR 7 mil and Alwag’s production focuses on export which is the core activity of a country development. Buyers of PET flakes are big companies which operate in the second stage of RPET packaging processing, i.e. production of granules and fibers and the demand at the European and world market is big.

As of September 2013, when the Awlag started its production, a total of 1200 tons of RPET flakes have been produced, 90% of which was exported to Austrian and Italian markets. With the implemenation of the most modern euqipment for the highest processing level, a high quality recyclate is iproduced which will generate multuple sales increase, bot at the local and foreign market.

Prices of RPET flakes depend on colour. Transparent (transparent packaging) is the most expensive and totals some EUR 850-900 per ton. If the conditions for the second investment stage were met, granules production, company profit would increase even more because this product prices total some EUR 1200 per ton. Althhough the new investment would require funds totalling EUR 2,5 mil, there is a reason for it but it is essentail to provide raw material.

Due to lack of raw material, Nova Gajdobra-based PET packaging recycling factory does not operate with full capacity. In Serbia, 60.000 tons of PET packaging is thrown away and if it were collected, Serbia would need four plants of this kind.

In 2014, the company is planning to produce some 5,000 t RPET flakes which is about half the plant capacity.

If the PET packaging recycling plant of the Alwag company is your favorite for the investment of the year, you can vote for this nomination at the official website of the Aurea Award.