Low selling price leads Mpact to halt recycling at Wadeville plant
Paper and plastic packaging manufacturer Mpact has decided to discontinue its polyethylene terephthalate (PET) recycling operation in Wadeville.
The company explained in a statement that the recycled PET selling price was below the cash cost to produce the material and would remain so for the foreseeable future.
Recycled PET has been sold at a discount to virgin material in South Africa to encourage its adoption and use in food and beverage packaging.
Recycled PET is sold at a premium to virgin PET in many countries, owing to its environmental benefits, and the total cost of production is often higher than that of virgin material.
The virgin PET price has declined significantly, owing to an oversupply globally. Recycled PET selling prices in South Africa have declined in line with the virgin price decline, owing to substitutability, even though there is no shortage of recycled PET supply.
Mpact’s Polymers business and the Industrial Development Corporation – a 31% shareholder in Mpact Polymers – are evaluating options for the business and its stakeholders.
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