Republic Services Gains Circularix as Newest rPET Client

Circularix, a rPET (recycled polyethylene terephthalate) manufacturer backed by Macquarie, is now operational in Pennsylvania, with plans for another facility to open later this year. This development represents the latest supply agreement for Republic Services, highlighting the increasing trend among recycling-related companies to enhance domestic processing capabilities in response to growing demand for rPET in packaging.

Established in 2022 through a collaboration between HPC Industries and Macquarie’s Commodities and Global Markets group, Circularix aims to build a total of five facilities in the U.S., collectively boasting an annual production capacity exceeding 275 million pounds of rPET resin. Following the Pennsylvania facility, future locations are slated for Florida, Texas, and West Coast states. Macquarie is providing comprehensive support to Circularix, offering assistance with project debt, equipment finance, FX hedging, and other risk management solutions to facilitate the company's future growth.

Circularix differentiates itself from previous businesses in the sector by purchasing flakes to convert into pellets. In contrast, CarbonLite, a notable player in the industry, shreds and washes baled PET (polyethylene terephthalate) before pelletizing it. This strategic shift underscores Circularix's innovative approach to rPET manufacturing.

Republic Services, a major player in waste management, has been actively expanding its presence in plastics recycling beyond the traditional MRF (materials recovery facility) stage. The company recently inaugurated its first polymer center in Las Vegas, anticipating an annual production capacity of over 100 million pounds of recycled plastics, including PET and other resin categories. Coca-Cola was previously announced as a customer for Republic's rPET offerings.

Republic's ambitious plans for polymer centers extend beyond Las Vegas, with an estimated total expenditure of $300 million for four facilities, including a $70 million investment in Las Vegas. Additionally, the company is set to allocate $160 million for multiple locations through a joint venture with Ravago, known as Blue Polymers.

The surge in demand for rPET from major brands, driven by voluntary commitments and specific state mandates, is identified as a key factor propelling Republic's expansion efforts. However, progress in achieving sustainability goals has been gradual, with some brands even reporting an uptick in the use of virgin plastic in recent years.

The partnership between Circularix and Republic Services exemplifies the industry's concerted efforts to meet the escalating demand for sustainable packaging materials. As Circularix's operations in Pennsylvania commence and plans for additional facilities take shape, the collaboration with Republic Services reflects a commitment to advancing the circular economy and promoting the use of recycled plastics in the production of everyday items.