Waste Management reached a deal to acquire a controlling stake in Avangard’s U.S. film recycling business. | Courtesy of Avangard Innovative
The largest curbside garbage and recycling hauler in North America will acquire and scale up Avangard Innovative’s U.S. plastics recycling business.
In a Sept. 13 press release, Waste Management (WM) disclosed it reached a deal to buy a majority stake in Avangard’s U.S. business, which it will rename Natura PCR. Natura PCR is currently the name of Avangard’s wholly owned subsidiary PCR production business and the brand name for the PCR itself.
The deal marks the second major instance this year of a huge garbage and recycling services company expanding down the recycled plastics supply chain. In March, Republic Services, the second largest hauler in North America, announced a project to build a plastics sorting and processing facility in Las Vegas.
The publicly traded companies cited increasing consumer packaged goods brand owner demand for recycled resin in packaging, both from voluntary recycled-content goals and mandatory minimum-recycled-content requirements coming into effect in multiple states.
Based in Waller, Texas, which is near Houston, Avangard Innovative recycles PE films used in the commercial sector into recycled resin used by a number of companies, including Hi-Cone Worldwide, which uses the pellets to produce six-pack carriers, and global chemical company Dow, which uses Natura PCR in its REVOLOOP line of PCR-content products. Rick Perez is founder and CEO of Avangard, and Jon Stephens is president of the Natura PCR business.
The release didn’t indicate whether existing company leadership would remain. It also didn’t disclose a dollar figure for the investment. Officials at WM and Avangard couldn’t be reached by Plastics Recycling Update for comment by deadline.
Planning significant growth
The announcement stated WM would acquire a controlling interest in the U.S. business and help grow its capabilities to produce about 400 million pounds of PCR annually in five years. Avangard’s website indicates the company currently has a capacity of 100 million pounds per year.
“This transaction helps the business quickly scale operations, maximize source feedstock and meet the continued rise in demand for environmental additives, such as recycled plastic resin,” Rick Perez, CEO and founder of Avangard Innovative, stated in the release. “After 30 years in the recycling business, WM’s significant involvement, coupled with the strong relationship with Dow and other customers, will set Natura PCR up to offer the most innovative end-to-end circular economy solution in the market.”
The release noted that WM already collects from commercial customers the scrap films that could feed Avangard’s plants. WM’s footprint and customer list can help generate increased volumes of scrap for recycling by Avangard.
“Today, there is so much untapped potential to reuse film – which impacts many of our commercial customers,” Jim Fish, WM’s president and CEO, stated in the release. “We can help our customers close the loop and bring more recycled materials to the store shelf.”
The WM release said Natura PCR will both expand capabilities at the Waller facility and build a new plant in the Midwest.
The release noted that Natura PCR, a standalone business, “will focus on the mechanical recycling of film and flexible plastics.” Avangard is also involved in chemical recycling of hard-to-recycle scrap. Earlier this year, Avangard agreed to form a joint venture with Honeywell, which would provide the technology at the Waller plant needed to break down mixed and contaminated scrap plastics and produce a liquid fit for introduction into naphtha crackers for the eventual production of new plastic.
The WM-Avangard transaction is expected to close in late 2022, subject to closing conditions that include regulatory approvals. After the transaction, Avangard and affiliated entities will still hold a collective minority equity position in Natura PCR.
The Avangard deal is the second time this year WM has invested in a downstream business. In January, Waste Management announced it would purchase a majority stake in Continuus Materials, which runs a Des Moines, Iowa facility that recycles low-value mixed paper and plastic scrap into commercial roofing boards.
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