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Partner Interview
Published December 6, 2024

Eurocell: Recycling Costs & Economics

Executive Bio

Former Recycling Executive at Eurocell PLC

Interview Transcript

Disclaimer: This interview is for informational purposes only and should not be relied upon as a basis for investment decisions. In Practise is an independent publisher and all opinions expressed by guests are solely their own opinions and do not reflect the opinion of In Practise.

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So you left just before Darren joined, around February 2023?

April 2023, and they gave me six months. I agreed to disagree and left. They also brought someone else in operationally because one of my biggest issues was that the equipment didn't run as well as it should. I was used to running a brand new facility with £20 million spent on it, which ran smoothly. You can imagine how bad it was with outdated equipment at two sites that kept malfunctioning, costing a fortune. Every time a machine goes down, you lose 10 tons of material. At £1,200 a ton, you do the math; it adds up if it happens once a week. It was about getting an update in place. Our thoughts differed operationally and in how we dealt with customers. It was all very friendly. I still chat with the guy when I see him. It's all very nice, but business is business, isn't it?

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This leads nicely into the differences, not just between virgin and recycled material, but also a mix. Does a product made from a mix of virgin and recycled material perform or behave differently, or is it priced differently in the market?

The idea of recycling is that the cost per ton to make a recycled pellet should be cheaper. Back in the day, you could make a ton of white pellet for £800 to £900. As energy and supply chain costs increased, along with cost of living and wages, when I went to Eurocell, making a ton of white material was costing over £1,250. It was more expensive to make recycled material than to buy virgin material. At that stage, you might consider closing down recycling and sticking with virgin material, but that doesn't tell a good story.

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