LyondellBasell, SUEZ Start Plastics Recycling Venture
Zacks Investment Research | Mar 14, 2018 10:10PM ET
LyondellBasell Industries N.V. (NYSE:LYB) and SUEZ have completed a transaction that makes them 50/50 partner in the Netherlands-based premium plastics recycling company, Quality Circular Polymers (“QCP”).
Notably, this partnership is the first time that a major chemicals and plastics company has joined forces with a leading resource management company to contribute to the objectives of circular economy, which will gradually develop into a critical part of the plastic value chain.
For many years, LyondellBasell has been witnessing increased demand for reused and recycled plastics, particularly in Europe. The latest move helps the company to create an innovative system that can be scaled as the circular economy grows.
The two partners will be able to leverage their respective strengths through this joint business. LyondellBasell will apply its vast experience in product development, leadership in innovative plastic production technology and deep knowledge of key end markets including consumer goods, where it has strong presence. SUEZ, on the other hand will utilize its leading-edge technology solutions to improve the separation, identification and preparation of materials that will be used as feedstock at QCP.
The QCP plant, which is located in Sittard-Geleen, will transform used plastic material into virgin-replacement quality polypropylene (PP) and polyethylene (PE) materials. It is capable of converting consumer waste into 25,000 tons of high-density polyethylene (HDPE) and PP, with an objective to convert waste into 35,000 tons later this year and further into 100,000 tons by 2020.
The production capacity of the plant is capable of addressing the growing need for improving the sustainability profile of high-quality plastics in Europe. QCP's recycled products will be added by LyondellBasell in its existing range of PP and PE materials, which will help it meet the increasing customer demand, on par with the EU's Plastics Strategy.
Moreover, recycling plastics is also a key market for SUEZ that has nine dedicated operational facilities in Europe. Last year, SUEZ produced 150,000 tons of new plastic resources and processed 400,000 tons of plastic waste. The company aims to increase its processing capacity by 50% to 600,000 tons in 2020.
Shares of LyondellBasell have gained 13.8% in the past six months, outperforming the Zacks Investment Research
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