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Chinese investment shows Britain the way

A new plastics facility in the northern English city of Leeds is almost certainly the UK’s first Chinese-owned recycling operation.

Innovative and smart businesses are always the first to benefit from change. As the American inventor and futurist Richard Buckminster Fuller said, ‘You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete’.

And so it is with the decades-old practice of sending western waste to China. With import restrictions becoming increasingly severe, Chinese processors originally moved their operations to other South-east Asian countries. But they, too, have erected similar barriers to the Chinese. Now Chinese investors are building a new model in the heart of one the UK’s oldest and most industrial cities, Leeds in west Yorkshire.

Film feedstock

Just over a year ago, a 23 000 sq m factory unit in a former copper works housed glass bottles piled to the ceiling. The occupant, a major glass manufacturer, opened a new distribution next door, freeing a third of the space for a new tenant, OSO Polymers.

What makes OSO almost unique in the UK plastics recycling sector is that it has been backed by Chinese entrepreneurs who can import the pellets produced in Leeds to make new plastics in China. What’s more, they are using lower quality post-consumer waste such as plastic shopping bags.

Recycling International was shown around the new facility a year after managing director Tong Shen first walked into the empty shell. ‘More people are trying to get into this industry,’ he says. ‘They can see the opportunity and this is a big change for this county. They will spend money and effort to find the right business model. That’s how business works in any country.’

Chinese equipment

Shen and the landlord spent around £1.4m (EUR 1.2 million) preparing the facility with new roofing, electrics and other services. In March, a consignment of 52 large containers arrived from China. They brought new equipment ordered specifically for the Leeds operation, the parts numbered and labelled. The specification was placed with the manufacturer in early 2018 and the equipment was ready by the end of 2018.

Also arriving last March was a team of contractors sent by the manufacturers to piece everything together. He says familiarity and cost reasons were the main reasons that OSO Polymers brought over Chinese plant.

‘We’d compared European manufacturers with the Chinese one and the Chinese was more cost-effective. We also know it better and the machines and technology being used at the moment have been proved for the last five to 10 years. We haven’t seen that many Western manufacturers upgrading for film reprocessing and Chinese manufacturers are catching up very fast at the moment. The quality and technology are of the same level compared to European machinery whilst we can also enjoy the cost-saving advantage, so both contributed to our final decision.’

Proven processes

The managing director is coy about saying too much about the specifics of the processing line for commercial reasons but the seven or so elements from the initial shearing through flotation to the final pelletising would be known to any processor of plastic scrap. The difference is the configuration.

‘The site design is based on proven processes already used in China, South Korea, and Malaysia. We tried to do this in Vietnam but it wasn’t established because of changes in the local government policies that can be sometimes very unpredictable. Under a new policy they don’t grant businesses a transitional period. But we have a facility in South Korea with a similar operation to what we have in the UK.’

Round-the-clock

The line was ready last August and a second line was due to be in operation this February. The original line produces 450 to 500 tonnes a month, operated by eight people on 12-hour shifts to ensure a 24-hour, seven-day-a-week operation. Two to three days a month are needed for maintenance but the lines have double units to reduce the impact of shutting down parts of the equipment.

The experience in Vietnam underlined the sense in not involving third party states in the production process. As the vast bulk of China’s recovered materials originate in Europe or the US so it made sense for OSO to do the processing in the UK. Currently, 95% of the pellets produced in Leeds go to China but Shen expects that to change.

‘All the raw materials for China come from Europe or the US so it makes sense for us to do the processing here. We want to have at least 50% of our products sold into the UK market and as much as possible: the UK’s closed loop recycling solution. All of the UK’s waste has to find a new home and, at the moment, other countries don’t have the infrastructure that China has built up for the last 20 years.’

Read the full company profile here.

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