AZEK Company has joined several other recycled resin end users in experiencing a softening of demand, resulting in falling sales.
The Chicago-based manufacturer, which recycles post-consumer polyethylene into composite lumber products, tallied $216 million in sales during the last calendar quarter of 2022, a year-over-year drop of 16.7%.
The company’s net income actually a loss of $26 million during the quarter. During the fourth quarter of 2021, AZEK had enjoyed a positive net income of $17 million.
During the 2022 fiscal year, AZEK recycled about 500 million pounds of recovered materials, including PE, PVC and wood fiber. For the 2022 fiscal year, which is the 12 months that ended Sept. 30, 2022, AZEK reported $1.36 billion in sales, up 15% from the year prior. But the company’s net income of $75 million was down 19% from the prior fiscal year.
AZEK is not alone in reporting softening demand. Advanced Drainage Systems (ADS), which recycles HDPE and PP into water management products, and Unifi, which recycles PET into the REPREVE brand of polyester, both recently reported falling sales numbers.
A direct competitor to AZEK, Trex, which also recycles PE film into composite lumber, last reported its quarterly financial numbers at the end of December. In that filing, Trex also disclosed lower sales and profits. Trex is expected to release its annual financial report later this month.
Meanwhile, in its latest reports, AZEK noted progress toward its goal of increasing recycled content. In a press release, the company’s CEO, Jesse Singh, said that the company struck scrap supply deals with thredUP and Trusscore.
In a Feb. 8 conference call with investors, Singh elaborated on those agreements, noting that online clothing retailer thredUP will supply PE mailer bags and post-industrial PE film to AZEK’s PE recycling facility in Wilmington, Ohio, and PVC wall and ceiling board manufacturer Trusscore will provide PVC production scrap, which AZEK’s Return Polymers business unit will recycle.
During the call, Singh also pointed to increased use of recycled PVC. In the company’s advanced PVC board product, AZEK now has over 60% recycled content in the core of the board.
AZEK aims to recycle 1 billion pounds annually, Singh noted.
